Northwest Pipe Reports Full Year 2013 Results and Announces Conference Call
March 17 2014 - 8:00AM
Marketwired
Northwest Pipe Reports Full Year 2013 Results and Announces
Conference Call
VANCOUVER, WA--(Marketwired - Mar 17, 2014) - Northwest Pipe
Company (NASDAQ: NWPX) today announced its financial results for
the year ended December 31, 2013. The Company will broadcast
its fourth quarter 2013 earnings conference call on Monday, March
17, 2014, at 10:00 am PDT.
Full Year 2013 Results
Net sales for the year ended December 31, 2013 decreased 9.3% to
$475.6 million compared to $524.5 million for the year ended
December 31, 2012. Gross profit was $52.5 million (11.0% of
net sales) in 2013, a decrease from $56.2 million (10.7% of net
sales) in 2012. A non-cash fixed asset impairment charge of $27.5
million was recorded in 2013. Net loss for 2013 was $0.9
million or $0.10 per diluted share. Excluding the non-cash
impairment charge, adjusted net income for 2013 was $16.4 million
or $1.72 per diluted share compared to net income of $16.2 million
or $1.72 per diluted share for 2012.
Water Transmission sales decreased by 15.9% to $226.4 million in
2013 from $269.2 million in 2012. The decrease in net sales
was due to continued weakness in municipal markets. Water
Transmission gross profit increased to $47.0 million (20.7% of
segment net sales) in 2013 from $45.1 million (16.7% of segment net
sales) in the prior year. Water Transmission gross profit
increased in total and as a percent of sales due to cost reduction
initiatives, particularly overhead costs, man hours and quality
costs.
Tubular Products sales decreased 2.4% to $249.1 million in 2013
from $255.3 million in 2012, driven by a 10% decrease in average
selling price per ton and partially offset by a 9% increase in tons
sold from 206,200 tons in 2012 to 224,300 tons in
2013. Tubular Products gross profit decreased by 50.7% to $5.5
million (2.2% of segment net sales) in 2013 from $11.1 million
(4.4% of segment net sales) in 2012. Gross profit was
negatively impacted by $4.9 million in lower of cost or market
inventory adjustments.
The carrying value of fixed assets is required to be tested
whenever events or circumstances indicate its carrying value is not
recoverable. This test was performed in conjunction with the
preparation of the financial statements, and a non-cash impairment
charge of $27.5 million was recorded for the property and equipment
at the Company's Bossier City, LA facility, which produces oil
country tubular goods. The impairment was driven primarily by
the adverse price and volume effects due to the continued high
level of tubular product imports and additional domestic tubular
manufacturing capacity. The impairment charge has no impact on
the company's liquidity.
As of December 31, 2013, the backlog of orders in the Water
Transmission segment was approximately $103 million. This
compared to a backlog of orders of $173 million as of December 31,
2012. The backlog includes confirmed orders, including the balance
of projects in process, and projects for which the Company has been
notified that we are the successful bidder even though a binding
agreement has not been executed.
Outlook
"We believe the first quarter of 2014 will be as challenging as
the fourth quarter. The Water Transmission segment is expected to
have a similar amount of net sales, with expected gross margin in
the high single digits," 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 tubular products gross margin to be around
breakeven."
As previously announced, the Company is in the process of
exploring strategic alternatives for its oil country tubular goods
business. 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 2013 earnings conference call on
Monday, March 17, 2014 at 10:00 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, April 18, 2014 by dialing 1-800-677-1579 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 three
technologically-advanced electric resistance weld mill facilities.
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, 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.
Non-GAAP Financial Measures
The Company is presenting adjusted net income and adjusted net
income per diluted share, which are non-GAAP measures, to better
enable investors and others to assess our results and compare them
with our competitors.
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NORTHWEST PIPE COMPANY |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) |
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(Dollar and share amounts in thousands, except per
share amounts) |
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Three Months Ended |
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Full Year Ended |
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December 31, |
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December 31, |
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2013 |
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2012 |
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2013 |
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2012 |
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Net sales: |
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Water Transmission |
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$ |
42,831 |
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$ |
88,235 |
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$ |
226,427 |
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$ |
269,203 |
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Tubular Products |
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72,368 |
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|
47,953 |
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|
249,129 |
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|
255,300 |
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Net
sales |
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115,199 |
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136,188 |
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475,556 |
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524,503 |
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Cost of sales: |
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Water Transmission |
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35,805 |
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70,713 |
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179,474 |
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224,152 |
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Tubular Products |
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72,619 |
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50,954 |
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243,623 |
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244,153 |
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Total
cost of sales |
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108,424 |
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121,667 |
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423,097 |
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468,305 |
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Gross profit (loss): |
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Water Transmission |
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7,026 |
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17,522 |
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46,953 |
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45,051 |
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Tubular Products |
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(251 |
) |
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(3,001 |
) |
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5,506 |
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11,147 |
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Total
gross profit |
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6,775 |
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14,521 |
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52,459 |
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56,198 |
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Selling, general, and administrative expense |
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5,566 |
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7,139 |
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24,210 |
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28,638 |
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Impairment of fixed assets |
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27,500 |
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- |
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27,500 |
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- |
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Operating income (loss): |
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Water Transmission |
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5,505 |
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15,155 |
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40,343 |
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36,278 |
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Tubular Products |
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(28,487 |
) |
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(3,646 |
) |
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(24,843 |
) |
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8,335 |
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Corporate |
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(3,309 |
) |
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(4,127 |
) |
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(14,751 |
) |
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(17,053 |
) |
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Operating income (loss) |
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(26,291 |
) |
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|
7,382 |
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|
749 |
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27,560 |
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Other expense |
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10 |
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|
288 |
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289 |
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339 |
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Interest income |
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(72 |
) |
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(38 |
) |
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(456 |
) |
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(160 |
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Interest expense |
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|
983 |
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1,145 |
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3,965 |
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5,616 |
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Income (loss) before income taxes |
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(27,212 |
) |
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5,987 |
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(3,049 |
) |
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21,765 |
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Provision for (benefit from) income taxes |
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(10,206 |
) |
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1,477 |
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(2,126 |
) |
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5,521 |
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Net income (loss) |
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$ |
(17,006 |
) |
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$ |
4,510 |
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$ |
(923 |
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$ |
16,244 |
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Basic earnings (loss) per share |
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$ |
(1.80 |
) |
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$ |
0.48 |
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$ |
(0.10 |
) |
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$ |
1.73 |
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Diluted earnings (loss) per share |
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$ |
(1.80 |
) |
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$ |
0.48 |
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$ |
(0.10 |
) |
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$ |
1.72 |
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Shares used in per share calculations: |
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Basic |
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9,449 |
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9,383 |
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9,445 |
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9,377 |
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Diluted |
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|
9,449 |
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|
9,479 |
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|
9,445 |
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9,445 |
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NORTHWEST PIPE COMPANY |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
(Dollar amounts in thousands) |
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December 31, |
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December 31, |
|
2013 |
|
2012 |
Assets: |
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Cash and cash equivalents |
$ |
588 |
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$ |
46 |
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Trade and other receivables, net |
|
72,470 |
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|
41,498 |
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Costs and estimated earnings in excess of billings on
uncompleted contracts |
|
50,468 |
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|
73,314 |
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Inventories |
|
110,392 |
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|
113,545 |
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Other current assets |
|
9,662 |
|
|
7,735 |
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Total
current assets |
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243,580 |
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|
236,138 |
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Property and equipment, net |
|
143,061 |
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152,545 |
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Other assets |
|
46,818 |
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|
33,739 |
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Total
assets |
$ |
433,459 |
|
$ |
422,422 |
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Liabilities: |
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|
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Current maturities of long-term debt |
$ |
7,930 |
|
$ |
9,009 |
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Accounts payable |
|
21,731 |
|
|
21,042 |
|
Accrued liabilities |
|
15,194 |
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|
32,217 |
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Billings in excess of cost and estimated earnings on
uncompleted contracts |
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3,368 |
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|
6,478 |
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Total
current liabilities |
|
48,223 |
|
|
68,746 |
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Note payable to financial institution |
|
87,919 |
|
|
47,533 |
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Other long-term debt, less current maturities |
|
6,322 |
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|
15,536 |
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Other long-term liabilities |
|
29,145 |
|
|
31,175 |
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Total
liabilities |
|
171,609 |
|
|
162,990 |
|
|
|
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Stockholders' equity |
|
261,850 |
|
|
259,432 |
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Total liabilities and stockholders' equity |
$ |
433,459 |
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$ |
422,422 |
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CONTACT: Robin Gantt Chief Financial Officer 360-397-6250
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