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: Brian Dunham Chief Executive Officer 360-397-6250
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