SOURCE: Northwest Pipe Company

Northwest Pipe Company

November 04, 2013 17:41 ET

Northwest Pipe Reports Third Quarter 2013 Results and Announces Conference Call

VANCOUVER, WA--(Marketwired - Nov 4, 2013) - Northwest Pipe Company (NASDAQ: NWPX) today announced its third quarter 2013 financial results. The Company will broadcast its third quarter 2013 earnings conference call on Tuesday, November 5, 2013, at 8:00 am PST.

Third Quarter 2013 Results

Net sales for the quarter ended September 30, 2013 decreased 10.5% to $103.0 million compared to $115.1 million in the quarter ended September 30, 2012. Gross profit was $8.8 million (8.6% of net sales) in the third quarter of 2013, a decrease from $11.6 million (10.1% of net sales) in the third quarter of 2012. Operating income was $2.8 million in the third quarter of 2013, a decrease from $4.0 million in the third quarter of 2012. Net income for the third quarter of 2013 was $1.0 million or $0.11 per diluted share compared to $3.4 million or $0.36 per diluted share for the third quarter of 2012.

Water Transmission net sales decreased by 26.2% to $46.8 million in the third quarter of 2013 from $63.5 million in the third quarter of 2012. The decrease in net sales was due to a 60% decrease in tons produced, offset by an increase in downstream fabrication services on pipe produced in prior periods. Water Transmission gross profit decreased to $7.9 million (16.9% of segment net sales) in the third quarter of 2013 from $9.7 million (15.2% of segment net sales) in the same period of 2012.

Tubular Products net sales increased 8.9% to $56.2 million in the third quarter of 2013 from $51.6 million in the third quarter of 2012, driven by a 20% increase in tons sold from 42,900 tons in the third quarter of 2012 to 51,400 tons in the third quarter of 2013, partially offset by a 9% decrease in average selling price per ton. Tubular Products gross profit decreased by 54.1% to $0.9 million (1.6% of segment net sales) in the third quarter of 2013 from $1.9 million (3.7% of segment net sales) in the third quarter of 2012.

As of September 30, 2013, the backlog of orders in the Water Transmission segment was approximately $108 million compared to a backlog of orders of $241 million as of September 30, 2012. The backlog contains confirmed orders, including the balance of projects in process, and projects for which the Company has been notified that it is the successful bidder even though a binding agreement has not been executed.


"We believe the fourth quarter may be even more challenging than the third quarter. The Water Transmission segment is expected to have a similar amount of net sales, with expected gross margin in the mid-teens," said Scott Montross, President and Chief Executive Officer of the Company. "We have not yet seen any significant improvement in our oil country tubular goods business, therefore we expect to see gross margin in the low positive single-digits."

As previously announced, the Company is in the process of exploring strategic alternatives for its oil country tubular goods business, which could include potential acquisitions, divestitures and joint-ventures. No decision has been made at this time to enter into any transaction and there can be no assurance that the exploration of alternatives will result in a transaction or as to the terms, conditions or timetable of any such transaction. It is the Company's policy not to comment on any specific discussions or any potential corporate transaction unless and until it enters into a definitive agreement with respect to such transaction.

Conference Call

The Company will hold its third quarter 2013 earnings conference call on Tuesday, November 5, 2013 at 8:00 am PST. 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, November 29, 2013 by dialing 1-203-369-1021 passcode 6301.

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 products including energy, construction, agriculture and industrial systems. The Company is headquartered in Vancouver, Washington and has nine manufacturing facilities across 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, 2012 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.

(Dollar and share amounts in thousands, except per share amounts)  
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2013     2012     2013     2012  
Net sales:                                
  Water Transmission   $ 46,835     $ 63,487     $ 183,596     $ 180,968  
  Tubular Products     56,187       51,612       176,761       207,347  
    Net sales     103,022       115,099       360,357       388,315  
Cost of sales:                                
  Water Transmission     38,903       53,806       143,669       153,439  
  Tubular Products     55,307       49,693       171,004       193,199  
    Total cost of sales     94,210       103,499       314,673       346,638  
Gross profit:                                
  Water Transmission     7,932       9,681       39,927       27,529  
  Tubular Products     880       1,919       5,757       14,148  
    Total gross profit     8,812       11,600       45,684       41,677  
Selling, general, and administrative expense     5,972       7,571       18,644       21,499  
Operating income (loss):                                
  Water Transmission     6,306       6,969       34,838       21,123  
  Tubular Products     93       1,134       3,644       11,981  
  Corporate     (3,559 )     (4,074 )     (11,442 )     (12,926 )
    Operating income     2,840       4,029       27,040       20,178  
Other expense     242       49       279       51  
Interest income     (141 )     (35 )     (384 )     (122 )
Interest expense     977       1,305       2,982       4,471  
Income before income taxes     1,762       2,710       24,163       15,778  
Provision for (benefit from) income taxes     746       (686 )     8,080       4,044  
Net income   $ 1,016     $ 3,396     $ 16,083     $ 11,734  
Basic earnings per share   $ 0.11     $ 0.36     $ 1.70     $ 1.25  
Diluted earnings per share   $ 0.11     $ 0.36     $ 1.69     $ 1.25  
Shares used in per share calculations:                                
  Basic     9,449       9,383       9,443       9,375  
  Diluted     9,517       9,499       9,498       9,458  
(Dollar amounts in thousands)
    September 30,   December 31,
    2013   2012
  Cash and cash equivalents   $ 33   $ 46
  Trade and other receivables, net     64,609     41,498
  Costs and estimated earnings in excess of billings on uncompleted contracts     51,066     73,314
  Inventories     109,945     113,545
  Other current assets     8,324     7,735
    Total current assets     233,977     236,138
  Property and equipment, net     162,616     152,545
  Other assets     37,120     33,739
    Total assets   $ 433,713   $ 422,422
  Current maturities of long-term debt   $ 10,134   $ 9,009
  Accounts payable     22,063     21,042
  Accrued liabilities     19,744     32,217
  Billings in excess of cost and estimated earnings on uncompleted contracts     4,005     6,478
    Total current liabilities     55,946     68,746
  Note payable to financial institution     59,951     47,533
  Other long-term debt, less current maturities     8,319     15,536
  Other long-term liabilities     32,258     31,175
    Total liabilities     156,474     162,990
Stockholders' equity     277,239     259,432
    Total liabilities and stockholders' equity   $ 433,713   $ 422,422

Contact Information

    Robin Gantt
    Chief Financial Officer