SOURCE: Northwest Pipe Company

April 23, 2008 05:00 ET

Northwest Pipe Reports First Quarter Results

VANCOUVER, WA--(Marketwire - April 23, 2008) - Northwest Pipe Company (NASDAQ: NWPX) today reported results for the first quarter of 2008. Sales for the quarter ended March 31, 2008 were $94.0 million compared to $90.7 million in the first quarter of 2007. Net income for the first quarter was $5.0 million, or $0.54 per diluted share, compared to $4.5 million, or $0.49 per diluted share, in the first quarter of 2007.

Water Transmission

In the first quarter of 2008, sales were $63.9 million for the Water Transmission Group, compared to sales of $67.8 million in the first quarter of 2007. Gross profit in the first quarter of 2008 was $14.5 million for this Group, or 22.6% of sales compared to gross profit of $13.8 million, or 20.4% of sales, in the first quarter of 2007. "Overall volume was a little lower than we expected, while margins were a little stronger, resulting in a solid performance," said Brian W. Dunham, president and chief executive officer of the Company. The results for Water Transmission include the results of operations for the Monterrey, Mexico plant which were previously reported separately.

Tubular Products

The Tubular Products Group recorded sales of $30.1 million and gross profit of $3.3 million, or 11.1% of sales, in the first quarter of 2008, compared to sales of $23.0 million and gross profit of $2.3 million, or 10.1% of sales, in the first quarter of 2007. "We are seeing significant increases in our sales of energy products and continuing growth in pipe for fire protection and agricultural applications," said Mr. Dunham. "We saw steady improvement in gross margins throughout the quarter and expect that trend to continue for the next few months."

Outlook

The Company reported a strong backlog of $195 million as of March 31, 2008. "We expect Water Transmission volume to strengthen throughout the year beginning with a small improvement in the second quarter," said Dunham. "We expect strong Water Transmission bookings in the second quarter which should increase the backlog and help drive significant revenue growth in the second half of 2008."

The Tubular Products Group is expected to generate somewhat higher volumes in the next two quarters, with strong demand coming from energy, fire protection and agricultural markets. Margins may also increase if current trends continue.

"Steel prices and lead times continue to increase," said Mr. Dunham. "In Tubular Products, we have been generally successful in reflecting cost increases in our prices. We stay close to the trends in steel costs and lead times in both Groups and we continue to manage our purchases to ensure adequate supply at the best possible prices."

About Northwest Pipe Company

Northwest Pipe Company manufactures welded steel pipe and other products in two business groups. Its Water Transmission Group is the leading supplier of large diameter, high-pressure steel pipe products that are used primarily for water infrastructure in North America. Its Tubular Products Group manufactures smaller diameter steel pipe for a wide range of applications including construction, agricultural, energy, traffic and other commercial and industrial uses. The Company is headquartered in Vancouver, Washington and has ten manufacturing facilities across the United States and Mexico.

Forward-Looking Statements

Statements in this press release by Brian Dunham and statements in the "Outlook" section of this press release are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as should, expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements reflect management's current views and estimates of future economic and market circumstances, industry conditions, Company performance and financial results. Actual results could vary materially from the description contained herein due to many factors, including project delays, changes in bidding activity, market demand, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, competitive environment. These and other risks are described in the Company's reports to the Securities and Exchange Commission. The forward-looking statements we make today speak only as of today and we do not undertake any obligation to update any such statements to reflect events or circumstances occurring after today.

Conference Call

The Company's first quarter 2008 earnings conference call will be held on Wednesday, April 23, 2008, at 8:00 a.m. PDT via live internet webcast. The conference broadcast can be accessed at the "Investor Relations" section of the Company's website located at http://www.nwpipe.com. For those unable to listen to the live broadcast, a replay will be available at the Investor Relations section of the Company's website (www.nwpipe.com) or by dialing 800-934-9421 approximately one hour after the event.

                          NORTHWEST PIPE COMPANY
              CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
    (Dollar and share amounts in thousands, except per share amounts)

                                                      ---------------------
                                                       Three Months Ended
                                                            March 31
                                                      ---------------------
                                                        2008        2007
                                                      ---------   ---------

Net Sales:
  Water Transmission                                  $  63,869   $  67,754
  Tubular Products                                       30,134      22,982
                                                      ---------   ---------
     Net Sales                                           94,003      90,736

Cost of Sales:
  Water Transmission                                     49,416      53,960
  Tubular Products                                       26,802      20,672
                                                      ---------   ---------
     Total Cost of Sales                                 76,218      74,632

Gross Profit:
  Water Transmission                                     14,453      13,794
  Tubular Products                                        3,332       2,310
                                                      ---------   ---------
     Gross Profit                                        17,785      16,104

Selling, General, and Administrative                      7,961       7,302
                                                      ---------   ---------

Operating Income                                          9,824       8,802

Interest Expense, Net                                     1,806       1,604
                                                      ---------   ---------

Income Before Income Taxes                                8,018       7,198

Provision for Income Taxes                                2,971       2,664
                                                      ---------   ---------

Net Income                                            $   5,047   $   4,534
                                                      =========   =========

Basic Earnings per Share                              $    0.56   $    0.51
                                                      =========   =========

Diluted Earnings per Share                            $    0.54   $    0.49
                                                      =========   =========

Shares Used in Per Share Calculation:
  Basic                                                   9,087       8,924
                                                      =========   =========
  Diluted                                                 9,307       9,213
                                                      =========   =========



                          NORTHWEST PIPE COMPANY
        CONDENSED SELECTED BALANCE SHEET AND OTHER DATA (Unaudited)
                      (Dollar amounts in thousands)


                                                   March 31,   December 31,
                                                     2008          2007
                                                 ------------  ------------
Assets:
  Cash and Cash Equivalents                      $        342  $        234
  Trade and Other Receivables, Net                     54,498        49,300
  Costs and Estimated Earnings in Excess
   of Billings on Uncompleted Contracts               120,967       121,058
  Inventories                                          59,458        62,805
  Other Current Assets                                  9,797        10,487
                                                 ------------  ------------
     Total Current Assets                             245,062       243,884
  Property and Equipment, Net                         184,207       179,977
  Other Assets                                         29,680        29,702
                                                 ------------  ------------
     Total Assets                                $    458,949  $    453,563
                                                 ============  ============

Liabilities:
  Current Maturities of Long-Term Debt           $      6,506  $      5,851
  Accounts Payable                                     31,151        41,684
  Accrued Liabilities                                  13,843        12,311
  Billings in Excess of Costs and Estimated
   Earnings on Uncompleted Contracts                    1,372         2,514
                                                 ------------  ------------
     Total Current Liabilities                         52,872        62,360
  Long-Term Note Payable to Financial
   Institution                                         65,222        54,415
  Other Long-Term Debt, Less Current Maturities        35,933        38,921
  Other Liabilities                                    41,709        41,585
                                                 ------------  ------------
     Total Liabilities                                195,736       197,281

Stockholders' Equity                                  263,213       256,282
                                                 ------------  ------------
     Total Liabilities and Stockholders' Equity  $    458,949  $    453,563
                                                 ============  ============

Contact Information

  • CONTACTS:

    Brian Dunham
    Chief Executive Officer
    360-397-6300

    Stephanie Welty
    Chief Financial Officer
    360-397-6323