Northwest Pipe Reports Third Quarter 2014 Results and Announces Conference Call


VANCOUVER, WA--(Marketwired - Nov 3, 2014) - Northwest Pipe Company (NASDAQ: NWPX) today announced its financial results for the quarter ended September 30, 2014. The Company will broadcast its third quarter 2014 earnings conference call on Tuesday, November 4, 2014, at 8:00 am PST.

Third Quarter 2014 Results

Net sales from continuing operations for the quarter ended September 30, 2014 increased 48.4% to $116.5 million compared to $78.5 million for the quarter ended September 30, 2013. Gross profit was $15.8 million (13.6% of net sales from continuing operations) in the third quarter of 2014, an increase from $11.3 million (14.3% of net sales from continuing operations) in the third quarter of 2013. Income from continuing operations for the third quarter of 2014 was $5.9 million or $0.61 per diluted share compared to income from continuing operations of $2.7 million or $0.29 per diluted share for the third quarter of 2013. 

Water Transmission sales increased 64.1% to $76.9 million in the third quarter of 2014 from $46.8 million in the third quarter of 2013. The increase in net sales was due to higher volumes primarily attributed to the IPL project, which started production in mid-May. Water Transmission gross profit increased to $16.6 million (21.5% of segment net sales) in the third quarter of 2014 from $7.9 million (16.9% of segment net sales) in the same quarter of 2013. Water Transmission gross profit increased in total and as a percent of net sales due to increased volume and the mix of projects as compared to the same period a year ago. 

Tubular Products sales from continuing operations increased 25.1% to $39.6 million in the third quarter of 2014 from $31.7 million in the third quarter of 2013, driven by a 23% increase in tons sold coupled with a 2% increase in sales prices. Sales volumes increased from 32,400 tons in the third quarter of 2013 to 39,700 tons in the third quarter of 2014. Tubular Products had a gross loss from continuing operations of $0.7 million (negative 1.9% of segment net sales from continuing operations) in the third quarter of 2014 compared to a $3.3 million gross profit (10.5% of segment net sales from continuing operations) in the third quarter of 2013. Gross profit was negatively impacted by higher steel costs in relation to sales prices.

As of September 30, 2014, the backlog of orders in the Water Transmission segment was approximately $138 million compared to a backlog of orders of $108 million as of September 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 come under increasing pressure in the fourth quarter compared to the third quarter. The extremely aggressive bidding posture in the Water Transmission market is expected to drive margins into the low teens," said Scott Montross, President and Chief Executive Officer of the company. "Even with the gains in efficiency and volume driven by our Atchison modernization project, we expect near term margins to be around break-even for the Tubular Products segment due to continued pressure from imports in the line pipe market."

Conference Call

The Company will hold its third quarter 2014 earnings conference call on Tuesday, November 4, 2014 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, December 5, 2014 by dialing 1-800-839-2338 passcode 6301.

About Northwest Pipe Company

Northwest Pipe Company is a leading manufacturer of welded steel pipe and tube products. 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 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 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     Nine Months Ended  
    September 30,     September 30,  
    2014     2013     2014     2013  
                                 
Net sales:                                
  Water Transmission   $ 76,857     $ 46,835     $ 182,061     $ 183,596  
  Tubular Products     39,648       31,692       119,079       90,208  
    Net sales     116,505       78,527       301,140       273,804  
                                 
Cost of sales:                                
  Water Transmission     60,298       38,903       152,343       143,669  
  Tubular Products     40,387       28,370       117,346       80,752  
    Total cost of sales     100,685       67,273       269,689       224,421  
                                 
Gross profit (loss):                                
  Water Transmission     16,559       7,932       29,718       39,927  
  Tubular Products     (739 )     3,322       1,733       9,456  
    Total gross profit     15,820       11,254       31,451       49,383  
                                 
Selling, general and administrative expense     6,489       5,556       17,847       17,527  
                                 
Operating income (loss)                                
  Water Transmission     14,429       6,306       23,673       34,838  
  Tubular Products     (1,155 )     2,951       550       8,460  
  Corporate     (3,943 )     (3,559 )     (10,619 )     (11,442 )
    Operating income     9,331       5,698       13,604       31,856  
                                 
Other income (expense)     39       (242 )     2       (279 )
Interest income     220       94       383       337  
Interest expense     (457 )     (893 )     (1,796 )     (2,717 )
                                 
Income before income taxes from continuing operations     9,133       4,657       12,193       29,197  
                                 
Income tax expense     3,275       1,923       4,364       9,940  
                                 
Income from continuing operations     5,858       2,734       7,829       19,257  
                                 
Income (loss) from discontinued operations     (837 )     (1,718 )     (11,720 )     (3,174 )
                                 
Net income (loss)   $ 5,021     $ 1,016     $ (3,891 )   $ 16,083  
                                 
Basic earnings (loss) per share                                
  Continuing operations   $ 0.62     $ 0.29     $ 0.82     $ 2.04  
  Discontinued operations     (0.09 )     (0.18 )     (1.23 )     (0.34 )
                                 
  Total   $ 0.53     $ 0.11     $ (0.41 )   $ 1.70  
                                 
Diluted earnings (loss) per share                                
  Continuing operations   $ 0.61     $ 0.29     $ 0.82     $ 2.03  
  Discontinued operations     (0.09 )     (0.18 )     (1.23 )     (0.34 )
                                 
  Total   $ 0.52     $ 0.11     $ (0.41 )   $ 1.69  
                                 
Shares used in per share calculations:                                
  Basic     9,519       9,449       9,513       9,443  
  Diluted     9,616       9,517       9,595       9,498  
                                   
                                   
 
 
NORTHWEST PIPE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands)
 
    September 30,   December 31,
    2014   2013
Assets:            
  Cash and cash equivalents   $ 72   $ 588
  Trade and other receivables, net     47,544     72,470
  Costs and estimated earnings in excess of billings on uncompleted contracts     55,774     50,468
  Inventories     77,272     110,392
  Other current assets     15,191     9,662
    Total current assets     195,853     243,580
  Property and equipment, net     132,097     143,061
  Other assets     41,046     46,818
    Total assets   $ 368,996   $ 433,459
             
Liabilities:            
  Current maturities of long-term debt   $ 998   $ 7,930
  Accounts payable     21,978     21,731
  Accrued liabilities     10,301     15,194
  Billings in excess of cost and estimated earnings on uncompleted contracts     1,312     3,368
    Total current liabilities     34,589     48,223
  Note payable to financial institution     46,649     87,919
  Other long-term debt, less current maturities     846     6,322
  Other long-term liabilities     27,950     29,145
    Total liabilities     110,034     171,609
             
Stockholders' equity     258,962     261,850
    Total liabilities and stockholders' equity   $ 368,996   $ 433,459
                 
                 

Contact Information:

CONTACT:
Robin Gantt
Chief Financial Officer
360-397-6250