VANCOUVER, WA--(Marketwired - Aug 4, 2014) - Northwest Pipe Company (
Second Quarter 2014 Results
Net sales from continuing operations for the quarter ended June 30, 2014 increased 16.0% to $102.0 million compared to $87.9 million for the quarter ended June 30, 2013. Gross profit was $11.3 million (11.1% of net sales from continuing operations) in the second quarter of 2014, a decrease from $15.2 million (17.3% of net sales from continuing operations) in the second quarter of 2013. Income from continuing operations for the second quarter of 2014 was $3.2 million or $0.33 per diluted share compared to income from continuing operations of $5.5 million or $0.59 per diluted share for the second quarter of 2013.
Water Transmission sales increased 7.0% to $62.2 million in the second quarter of 2014 from $58.1 million in the second quarter of 2013. The increase in net sales was due to higher volumes primarily attributed to the Integrated Pipeline ("IPL") Project, which started production in mid-May. Water Transmission gross profit decreased to $11.5 million (18.5% of segment net sales) in the second quarter of 2014 from $12.1 million (20.9% of segment net sales) in the same quarter of 2013. Water Transmission gross profit decreased in total and as a percent of net sales due to the mix of projects as compared to the same period a year ago. In addition, increased competition has compressed margins on projects that were produced in the second quarter and bid during the recent Water Transmission market slowdown.
Tubular Products sales from continuing operations increased 33.5% to $39.8 million in the second quarter of 2014 from $29.8 million in the second quarter of 2013, driven by a 37% increase in tons sold partially offset by a 3% decrease in sales prices. Sales volumes increased from 29,800 tons in the second quarter of 2013 to 40,900 tons in the second quarter of 2014. Tubular Products gross profit from continuing operations decreased by 105.6% to a $0.2 million gross loss (negative 0.4% of segment net sales from continuing operations) in the second quarter of 2014 from $3.1 million gross profit (10.4% of segment net sales from continuing operations) in the second quarter of 2013. Gross profit was negatively impacted by higher steel costs in relation to the lower sales prices coupled with a $1.6 million lower of cost or market adjustment in the second quarter.
As of June 30, 2014, the backlog of orders in the Water Transmission segment was approximately $143 million compared to a backlog of orders of $115 million as of June 30, 2013. The backlog includes confirmed orders, including the balance of projects in process, and projects for which the Company has been notified that it was the successful bidder even though a binding agreement has not been executed.
Outlook
The Company's financial performance is expected to improve in the third quarter with the higher levels of production in the Water Transmission segment. "The IPL and other projects are expected to push third quarter Water Transmission margins into the high teens," said Scott Montross, President and Chief Executive Officer of the Company. "We have recently completed the modernization project at our Atchison facility and are seeing improving volumes and enhanced product mix, but high levels of imports continue to have a negative impact on the line pipe market. In the near term we expect margins in the low single digits for the Tubular Products segment."
Conference Call
The Company will hold its second quarter 2014 earnings conference call on Tuesday, August 5, 2014 at 8:00 am PDT. The live call can be accessed by dialing 1-888-810-4934 passcode NWPIPE. For those unable to attend the live call, a replay will be available approximately one hour after the event and will remain available until Friday, September 5, 2014 by dialing 1-800-337-6558 passcode 6301.
About Northwest Pipe Company
Northwest Pipe Company is a leading manufacturer of welded steel pipe and tube products. The Tubular Products Group operates a state of the art electric resistance weld mill facility. The Tubular Products portfolio serves a wide-range of markets and its quality certified pipe and tube products are good for applications including: oil and gas, structural industrial, fire protection, low pressure and agricultural. The Water Transmission Group is the largest manufacturer of engineered steel pipe water systems in North America. With eight Water Transmission manufacturing facilities, the Group is positioned to meet North America's growing needs for water and wastewater infrastructure. The Water Transmission Group serves a wide-range of markets and their solution-based products are a perfect fit for applications including: water transmission, plant piping, energy, tunnels, river crossings, structural, industrial and construction. The Company is headquartered in Vancouver, Washington and has manufacturing facilities in the United States and Mexico.
Forward-Looking Statements
Statements in this press release by Scott Montross are "forward-looking" statements within the meaning of the Securities Litigation Reform Act of 1995 and Section 21E of the Exchange Act that are based on current expectations, estimates and projections about our business, management's beliefs, and assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements as a result of a variety of important factors. While it is impossible to identify all such factors, those that could cause actual results to differ materially from those estimated by us include changes in demand and market prices for our products, product mix, bidding activity, the timing of customer orders and deliveries, production schedules, the price and availability of raw materials, excess or shortage of production capacity, international trade policy and regulations and other risks discussed in our Annual Report on Form 10-K for the year ended December 31, 2013 and from time to time in our other Securities and Exchange Commission filings and reports. Such forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. If we do update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements.
| NORTHWEST PIPE COMPANY | ||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||||||||
| (Dollar and share amounts in thousands, except per share amounts) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||
| Net sales: | ||||||||||||||||||
| Water Transmission | $ | 62,205 | $ | 58,148 | $ | 105,204 | $ | 136,761 | ||||||||||
| Tubular Products | 39,783 | 29,794 | 79,431 | 58,516 | ||||||||||||||
| Net sales | 101,988 | 87,942 | 184,635 | 195,277 | ||||||||||||||
| Cost of sales: | ||||||||||||||||||
| Water Transmission | 50,714 | 46,023 | 92,045 | 104,766 | ||||||||||||||
| Tubular Products | 39,957 | 26,709 | 76,959 | 52,382 | ||||||||||||||
| Total cost of sales | 90,671 | 72,732 | 169,004 | 157,148 | ||||||||||||||
| Gross profit (loss): | ||||||||||||||||||
| Water Transmission | 11,491 | 12,125 | 13,159 | 31,995 | ||||||||||||||
| Tubular Products | (174 | ) | 3,085 | 2,472 | 6,134 | |||||||||||||
| Total gross profit | 11,317 | 15,210 | 15,631 | 38,129 | ||||||||||||||
| Selling, general and administrative expense | 5,918 | 5,941 | 11,358 | 11,971 | ||||||||||||||
| Operating income (loss) | ||||||||||||||||||
| Water Transmission | 9,543 | 10,499 | 9,244 | 28,532 | ||||||||||||||
| Tubular Products | (589 | ) | 2,774 | 1,705 | 5,509 | |||||||||||||
| Corporate | (3,555 | ) | (4,004 | ) | (6,676 | ) | (7,883 | ) | ||||||||||
| Operating income | 5,399 | 9,269 | 4,273 | 26,158 | ||||||||||||||
| Other income (expense) | 26 | 4 | (37 | ) | (37 | ) | ||||||||||||
| Interest income | 82 | 60 | 163 | 243 | ||||||||||||||
| Interest expense | 569 | 867 | 1,339 | 1,824 | ||||||||||||||
| Income before income taxes from continuing operations | 4,938 | 8,466 | 3,060 | 24,540 | ||||||||||||||
| Income tax expense | 1,756 | 2,919 | 1,089 | 8,017 | ||||||||||||||
| Income from continuing operations | 3,182 | 5,547 | 1,971 | 16,523 | ||||||||||||||
| Income (loss) from discontinued operations | 10 | 14 | (10,883 | ) | (1,456 | ) | ||||||||||||
| Net income (loss) | $ | 3,192 | $ | 5,561 | $ | (8,912 | ) | $ | 15,067 | |||||||||
| Basic earnings (loss) per share | ||||||||||||||||||
| Continuing operations | $ | 0.34 | $ | 0.59 | $ | 0.21 | $ | 1.75 | ||||||||||
| Discontinued operations | - | - | (1.15 | ) | (0.15 | ) | ||||||||||||
| Total | $ | 0.34 | $ | 0.59 | $ | (0.94 | ) | $ | 1.60 | |||||||||
| Diluted earnings (loss) per share | ||||||||||||||||||
| Continuing operations | $ | 0.33 | $ | 0.59 | $ | 0.21 | $ | 1.74 | ||||||||||
| Discontinued operations | - | - | (1.14 | ) | (0.15 | ) | ||||||||||||
| Total | $ | 0.33 | $ | 0.59 | $ | (0.93 | ) | $ | 1.59 | |||||||||
| Shares used in per share calculations: | ||||||||||||||||||
| Basic | 9,513 | 9,443 | 9,510 | 9,440 | ||||||||||||||
| Diluted | 9,605 | 9,481 | 9,596 | 9,474 | ||||||||||||||
| NORTHWEST PIPE COMPANY | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||
| (Dollar amounts in thousands) | ||||||||
| June 30, | December 31, | |||||||
| 2014 | 2013 | |||||||
| Assets: | ||||||||
| Cash and cash equivalents | $ | 75 | $ | 588 | ||||
| Trade and other receivables, net | 47,560 | 72,470 | ||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | 49,466 | 50,468 | ||||||
| Inventories | 64,068 | 110,392 | ||||||
| Other current assets | 18,342 | 9,662 | ||||||
| Total current assets | 179,511 | 243,580 | ||||||
| Property and equipment, net | 134,235 | 143,061 | ||||||
| Other assets | 42,074 | 46,818 | ||||||
| Total assets | $ | 355,820 | $ | 433,459 | ||||
| Liabilities: | ||||||||
| Current maturities of long-term debt | $ | 974 | $ | 7,930 | ||||
| Accounts payable | 16,638 | 21,731 | ||||||
| Accrued liabilities | 10,410 | 15,194 | ||||||
| Billings in excess of cost and estimated earnings on uncompleted contracts | 5,371 | 3,368 | ||||||
| Total current liabilities | 33,393 | 48,223 | ||||||
| Note payable to financial institution | 39,924 | 87,919 | ||||||
| Other long-term debt, less current maturities | 1,105 | 6,322 | ||||||
| Other long-term liabilities | 28,447 | 29,145 | ||||||
| Total liabilities | 102,869 | 171,609 | ||||||
| Stockholders' equity | 252,951 | 261,850 | ||||||
| Total liabilities and stockholders' equity | $ | 355,820 | $ | 433,459 | ||||
Contact Information:
CONTACT:
Robin Gantt
Chief Financial Officer
360-397-6250