VANCOUVER, Wash., May 7,
2020 /PRNewswire/ -- Northwest Pipe Company (NASDAQ: NWPX), an
industry leader of engineered pipeline systems for water
infrastructure, today announced its financial results for the first
quarter ended March 31, 2020. The Company will broadcast its
first quarter 2020 earnings conference call on Friday, May 8,
2020 at 7:00 a.m. PDT.
First Quarter 2020 Results
Net sales increased 10.0% to $68.9 million in the first quarter of 2020
from $62.6 million in the first
quarter of 2019 primarily due to an $8.0 million contribution from the Company's
recently acquired Geneva Pipe Company, Inc. ("Geneva")
operations. Legacy revenues decreased slightly from the first
quarter of 2019 due to a 12% decrease in tons produced, partially
offset by a 10% increase in selling price per ton.
Gross profit increased 45.8% to $9.6 million, or 13.9% of net sales, in the
first quarter of 2020 from $6.6 million, or 10.5% of net sales, in the
first quarter of 2019 primarily due to improved product pricing in
the Company's steel pressure pipe business and the margin
contribution from Geneva. Included in gross profit in the first
quarter of 2020 was $0.5 million
of acquisition-related charges and $0.4 million in incremental production costs
resulting from the fire at the Company's Saginaw facility in
April 2019.
Net income was $0.6 million,
or $0.06 per diluted share, in the
first quarter of 2020 compared to $2.2 million, or $0.22 per diluted share, in the first quarter of
2019. Adjusted net income was $3.2 million, or $0.33 per diluted share, in the first quarter of
2020. Adjusted net income excluded $2.5 million of acquisition-related
transaction costs, $0.6 million
of acquisition-related charges, $0.4 million in incremental production costs
resulting from the fire at the Company's Saginaw facility, and the
tax impact of these items of $0.9 million. There were no adjustments to
consider in the first quarter of 2019. See the Company's
"Reconciliation of Non-GAAP Financial Measures" in the table
below.
Backlog represents the balance of remaining performance
obligations under signed contracts for water infrastructure steel
pipe projects. Backlog was $170 million as of March 31,
2020 compared to $199 million as of December 31, 2019 and
$167 million as of March 31, 2019. The Company also has
projects for which it has been notified that it is the successful
bidder, but a binding agreement has not been executed ("confirmed
orders"). Backlog including confirmed orders was $224 million
as of March 31, 2020 compared to $258 million as of
December 31, 2019 and $242 million as of March 31,
2019.
Management Commentary
"The COVID-19 pandemic has had a major impact on society and the
economy. However, we continue to operate all of our plants with the
exception of the San Luis Río Colorado facility in Mexico which the Mexican government required
us to temporarily close. Fortunately, we have more than enough
capacity at our remaining plants to absorb current and future
orders for this facility," said Scott
Montross, President and CEO of Northwest Pipe Company.
"Before taking into account purchase accounting associated with our
acquisition of Geneva, first quarter revenue and margins were
in-line with our projections from the previous earnings call.
Furthermore, even though steel pressure pipe backlog declined, as
we projected, it remains very elevated by historic standards. Our
order book for the concrete pipe and precast business is very
strong as we head into the traditionally busy time of the
year."
Acquisition of Geneva Pipe Company, Inc.
On January 31, 2020, the Company completed the acquisition
of Geneva, a concrete pipe and precast concrete products
manufacturer based in Utah, for
$49.4 million. The acquisition
was funded with a combination of cash on hand and proceeds from the
Company's amended credit agreement. This acquisition expanded the
Company's water infrastructure product capabilities by adding
additional reinforced concrete pipe capacity and a full line of
precast concrete products including storm drains and manholes,
catch basins, vaults, and curb inlets as well as innovative lined
products that extend the life of concrete pipe and manholes for
sewer applications. For the year ended December 31, 2019,
Geneva's total revenue was approximately $43 million.
Balance Sheet Details
Total cash and cash equivalents were $9.7 million as of March 31, 2020, down
from $31.0 million as of
December 31, 2019 due to the Company's acquisition of
Geneva.
In connection with the acquisition of Geneva, the Company
amended and extended its credit agreement. Among other
modifications, the amendment increased the aggregate borrowing
capacity available to the Company for revolving loans and letters
of credit from $60 million to an aggregate amount of up to
$90 million, including a term loan, and extended the maturity
date from October 25, 2023 to October 25, 2024. As of
March 31, 2020, the Company had approximately $16 million
of outstanding term loan borrowings and no borrowings under the
revolving line of credit. As of March 31, 2020, the Company
had additional borrowing capacity of approximately
$60 million.
Conference Call Details
A conference call and simultaneous webcast to discuss the
Company's first quarter 2020 financial results will be held on
Friday, May 8, 2020 at 7:00 a.m. PDT. The call will
be broadcast live over the Internet hosted on the Investor
Relations section of the Company's website at www.nwpipe.com and
will be archived online upon completion of the conference call. For
those unable to listen to the live call, a replay will be available
approximately one hour after the event and will remain available
until Friday, May 22, 2020 by dialing 1‑877‑344‑7529 in the
U.S. or 1‑412‑317‑0088 internationally and entering the replay
access code: 10143332.
About Northwest Pipe Company
Founded in 1966, Northwest Pipe Company is the largest
manufacturer of engineered steel water pipeline systems in
North America. The Company
produces high-quality engineered steel water pipe, precast and
reinforced concrete products through Geneva
Pipe and Precast, Permalok® steel casing pipe, bar-wrapped
concrete cylinder pipe as well as custom linings, coatings, joints,
and one of the largest offerings of fittings and specialized
components in North America.
Northwest Pipe Company provides solution-based products for a wide
range of markets including water transmission and infrastructure,
water and wastewater plant piping, structural stormwater and sewer
systems, trenchless technology, and pipeline rehabilitation.
Strategically positioned to meet growing water and wastewater
infrastructure needs, the Company is headquartered in Vancouver, Washington, and has manufacturing
facilities across North
America.
Forward-Looking Statements
Statements in this press release by Scott Montross are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995 and Section 21E of the Securities Exchange Act of
1934, as amended, that are based on current expectations,
estimates, and projections about the Company's 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 the Company include
changes in demand and market prices for its products, product mix,
bidding activity, the timing of customer orders and deliveries,
production schedules, the price and availability of raw materials,
price and volume of imported product, excess or shortage of
production capacity, international trade policy and regulations,
changes in tariffs and duties imposed on imports and exports and
related impacts on the Company, the Company's ability to identify
and complete internal initiatives and/or acquisitions in order to
grow its business, the Company's ability to effectively integrate
Geneva and other acquisitions into its business and operations and
achieve significant administrative and operational cost synergies
and accretion to financial results, the impacts of recent U.S. tax
reform legislation on the Company's results of operations, the
adequacy of the Company's insurance coverage, operating problems at
the Company's manufacturing operations including fires, explosions,
inclement weather, natural disasters, and the impact of pandemics,
epidemics, or other public health emergencies, such as the recent
outbreak of coronavirus disease 2019 ("COVID‑19"), and other risks
discussed in the Company's Annual Report on Form 10‑K for the
year ended December 31, 2019 and from time to time in its
other Securities and Exchange Commission filings and reports. Such
forward-looking statements speak only as of the date on which they
are made, and the Company does not undertake any obligation to
update any forward-looking statement to reflect events or
circumstances after the date of this release. If the Company does
update or correct one or more forward-looking statements, investors
and others should not conclude that it 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 backlog including confirmed orders,
adjusted net income, and adjusted diluted net income per share.
These non-GAAP financial measures are provided to better enable
investors and others to assess the Company's results and compare
them with its competitors. This should be considered a supplement
to, and not a substitute for, or superior to, financial measures
calculated in accordance with GAAP.
For more information, visit www.nwpipe.com.
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
Three Months
Ended March 31,
|
|
2020
|
|
2019
|
|
|
|
|
|
|
Net
sales
|
$
|
68,923
|
|
$
|
62,643
|
Cost of
sales
|
|
59,344
|
|
|
56,072
|
Gross
profit
|
|
9,579
|
|
|
6,571
|
Selling,
general, and administrative expense
|
|
7,945
|
|
|
4,247
|
Operating
income
|
|
1,634
|
|
|
2,324
|
Other income
(expense)
|
|
(401)
|
|
|
159
|
Interest
income
|
|
22
|
|
|
4
|
Interest
expense
|
|
(219)
|
|
|
(131)
|
Income before
income taxes
|
|
1,036
|
|
|
2,356
|
Income tax
expense
|
|
472
|
|
|
191
|
Net
income
|
$
|
564
|
|
$
|
2,165
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
Basic
|
$
|
0.06
|
|
$
|
0.22
|
Diluted
|
$
|
0.06
|
|
$
|
0.22
|
|
|
|
|
|
|
Shares used in
per share calculations:
|
|
|
|
|
|
Basic
|
|
9,751
|
|
|
9,735
|
Diluted
|
|
9,829
|
|
|
9,735
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
9,656
|
|
$
|
31,014
|
|
|
Trade and other
receivables, net
|
|
38,789
|
|
|
38,026
|
|
|
Contract
assets
|
|
79,350
|
|
|
91,186
|
|
|
Inventories
|
|
39,259
|
|
|
30,654
|
|
|
Prepaid expenses and
other
|
|
4,375
|
|
|
4,159
|
|
|
Total current
assets
|
|
171,429
|
|
|
195,039
|
|
Property and
equipment, net
|
|
108,315
|
|
|
99,631
|
|
Operating lease
right-of-use assets
|
|
28,678
|
|
|
7,683
|
|
Goodwill
|
|
22,985
|
|
|
-
|
|
Intangible assets,
net
|
|
11,997
|
|
|
1,231
|
|
Other
assets
|
|
5,709
|
|
|
6,661
|
|
|
Total
assets
|
$
|
349,113
|
|
$
|
310,245
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
2,891
|
|
$
|
-
|
|
|
Accounts
payable
|
|
17,933
|
|
|
15,493
|
|
|
Accrued
liabilities
|
|
10,670
|
|
|
12,150
|
|
|
Contract
liabilities
|
|
7,882
|
|
|
12,281
|
|
|
Current portion of
operating lease liabilities
|
|
2,450
|
|
|
1,642
|
|
|
Total current
liabilities
|
|
41,826
|
|
|
41,566
|
|
Long-term debt, less
current portion
|
|
12,788
|
|
|
-
|
|
Operating lease
liabilities, less current portion
|
|
25,264
|
|
|
6,247
|
|
Deferred income
taxes
|
|
10,293
|
|
|
4,265
|
|
Other long-term
liabilities
|
|
9,757
|
|
|
10,009
|
|
|
Total
liabilities
|
|
99,928
|
|
|
62,087
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
249,185
|
|
|
248,158
|
|
|
Total liabilities and
stockholders' equity
|
$
|
349,113
|
|
$
|
310,245
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2020
|
|
2019
|
|
|
|
|
Net income, as
reported
|
$
564
|
|
$
2,165
|
Adjustments for non-recurring
items:
|
|
|
|
Acquisition-related
transaction costs
|
2,517
|
|
-
|
Saginaw fire
incremental production costs
|
392
|
|
-
|
Amortization of
acquired intangibles
|
346
|
|
-
|
Acquisition-related
inventory charges
|
266
|
|
-
|
Estimated tax impact
of non-recurring items
|
(880)
|
|
-
|
Adjusted net
income
|
$
3,205
|
|
$
2,165
|
|
|
|
|
Diluted net income
per share, as reported
|
$
0.06
|
|
$
0.22
|
|
|
|
|
Adjusted diluted net
income per share
|
$
0.33
|
|
$
0.22
|
Contact:
Aaron
Wilkins
Chief Financial Officer
Northwest Pipe Company
(360) 397-6294 • investors@nwpipe.com
Or Addo Investor Relations
(310) 829-5400
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SOURCE Northwest Pipe Company