SOURCE: Northwest Pipe Company

October 22, 2008 07:00 ET

Northwest Pipe Reports Record Results

VANCOUVER, WA--(Marketwire - October 22, 2008) - Northwest Pipe Company (NASDAQ: NWPX) today reported record sales and earnings for the third quarter of 2008. Sales in the third quarter ended September 30, 2008 were $123.4 million compared to $92.0 million in the same quarter of 2007. Net income in the quarter was $10.2 million, compared to $5.1 million in the third quarter of 2007. Per share earnings were $1.09 in the third quarter of 2008 compared to $0.55 per share in 2007.

Water Transmission Results

Revenues for the Water Transmission Group were $77.5 million in the third quarter of 2008, compared to $66.8 million in 2007. Gross profit in 2008 was $14.3 million, or 18.4% of sales, compared to $14.2 million, or 21.3% of sales in 2007.

"We are pleased once again to report strong revenue in our Water Transmission Group," said Brian W. Dunham, president and chief executive officer of the Company. "While revenues were a little higher than expected, the gross margin was slightly lower. The decrease was primarily due to higher raw material costs embedded in the cost of our products."

Tubular Products Results

The Tubular Products Group sales were $45.9 million in the third quarter of 2008, compared to $25.2 million in 2007. Gross profit for the quarter was $12.6 million, or 27.3% of sales, compared to $3.1 million, or 12.2% of sales for 2007.

"This was obviously another very strong quarter for the Tubular Products Group, with a 23% sequential increase in sales over the second quarter of this year, and record margins. While some of our markets slowed due to economic conditions, we continued to see strong demand from the energy market throughout the period," said Dunham.

Outlook

The Company reported backlog of $235 million as of September 30th. "The backlog, although down from last quarter, is still very strong," said Dunham. Bidding activity for the Water Transmission Group over the past three months was lower than expected, but several projects were delayed into the fourth quarter. "At this time, we expect growth in the backlog through the end of the year, which should leave us in a very strong position entering into 2009," noted Dunham. "Conversely, we are expecting lower water transmission sales in the fourth quarter due to a major project postponement, as well as normal seasonality."

"In the Tubular Products Group, we are expecting another strong quarter due to energy sales, which we hope will offset weakness in some of our other markets. Slowing demand in parts of our business, along with falling steel costs which may lead to lower pricing, could combine to make it difficult to maintain our current high margin, but our overall results should be solid."

"As we look beyond 2008," continued Dunham, "the long term trends for most of our products look strong. Infrastructure spending, energy development and agriculture all look positive, especially as financial markets stabilize. However, concerns over current economic conditions and the credit markets certainly must be addressed. Looking into next year, we see mixed signals but we continue to be optimistic about our 2009 prospects given that the outlook for our two largest product lines, water transmission and energy, continues to be positive," Dunham stated. "As financial markets stabilize and the economy recovers, we believe we will be well positioned to continue our growth and capitalize on strong positions within our core markets."

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 energy, construction, agricultural, 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 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, changes in domestic or international business and economic conditions, changes in domestic or international financial markets, and other risks described from time to time 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 third quarter 2008 earnings conference call will be held on Wednesday, October 22, 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 888-277-5031 pass code 6301 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    Nine Months Ended
                                     September 30          September 30
                                 --------------------  --------------------
                                   2008       2007       2008       2007
                                 ---------  ---------  ---------  ---------

Net Sales:
  Water Transmission             $  77,512  $  66,773  $ 216,242  $ 207,504
  Tubular Products                  45,913     25,209    113,292     77,109
                                 ---------  ---------  ---------  ---------
    Net Sales                      123,425     91,982    329,534    284,613

Cost of Sales:
  Water Transmission                63,251     52,558    172,750    164,331
  Tubular Products                  33,363     22,127     87,570     68,089
                                 ---------  ---------  ---------  ---------
    Total Cost of Sales             96,614     74,685    260,320    232,420

Gross Profit:
  Water Transmission                14,261     14,215     43,492     43,173
  Tubular Products                  12,550      3,082     25,722      9,020
                                 ---------  ---------  ---------  ---------
    Gross Profit                    26,811     17,297     69,214     52,193

Selling, General, and
 Administrative                      8,996      7,598     26,242     22,873
                                 ---------  ---------  ---------  ---------

Operating Income                    17,815      9,699     42,972     29,320

Interest Expense, Net                1,332      1,653      4,467      5,090
                                 ---------  ---------  ---------  ---------

Income Before Income Taxes          16,483      8,046     38,505     24,230

Provision for Income Taxes           6,256      2,977     14,832      8,965
                                 ---------  ---------  ---------  ---------

Net Income                       $  10,227  $   5,069  $  23,673  $  15,265
                                 =========  =========  =========  =========

Basic Earnings per Share         $    1.12  $    0.57  $    2.59  $    1.71
                                 =========  =========  =========  =========

Diluted Earnings per Share       $    1.09  $    0.55  $    2.53  $    1.65
                                 =========  =========  =========  =========

Shares Used in Per Share
 Calculation:

  Basic                              9,169      8,971      9,136      8,945
                                 =========  =========  =========  =========
  Diluted                            9,370      9,242      9,345      9,225
                                 =========  =========  =========  =========




              CONDENSED SELECTED BALANCE SHEET (Unaudited)
                      (Dollar amounts in thousands)


                                               September 30,  December 31,
                                                   2008           2007
                                               -------------  -------------
Assets:
  Cash and Cash Equivalents                    $          71  $         234
  Trade and Other Receivables, Net                    74,331         49,300
  Costs and Estimated Earnings in Excess
   of Billings on Uncompleted Contracts              112,588        121,058
  Inventories                                        100,002         62,805
  Other Current Assets                                 9,328         10,487
                                               -------------  -------------
    Total Current Assets                             296,320        243,884
  Property and Equipment, Net                        189,772        179,977
  Other Assets                                        29,615         29,702
                                               -------------  -------------
    Total Assets                               $     515,707  $     453,563
                                               =============  =============

Liabilities:
  Current Maturities of Long-Term Debt         $       6,530  $       5,851
  Accounts Payable                                    57,204         41,684
  Accrued Liabilities                                 17,370         12,311
  Billings in Excess of Cost and Estimated
   Earnings on Uncompleted Contracts                   1,598          2,514
                                               -------------  -------------
    Total Current Liabilities                         82,702         62,360
  Long-Term Note Payable to Financial
   Institution                                        75,226         54,415
  Other Long-Term Debt, Less Current
   Maturities                                         34,019         38,921
  Other Liabilities                                   40,425         41,585
                                               -------------  -------------
    Total Liabilities                                232,372        197,281

Stockholders' Equity                                 283,335        256,282
                                               -------------  -------------
    Total Liabilities and Stockholders' Equity $     515,707  $     453,563
                                               =============  =============

Contact Information

  • CONTACT:
    Brian Dunham
    Chief Executive Officer
    360-397-6250