VANCOUVER, Wash., Aug. 4,
2020 /PRNewswire/ -- Northwest Pipe Company (NASDAQ: NWPX), an
industry leader of engineered pipeline systems for water
infrastructure, today announced its financial results for the
second quarter ended June 30, 2020. The Company will broadcast
its second quarter 2020 earnings conference call on Wednesday,
August 5, 2020 at 7:00 a.m. PDT.
Second Quarter 2020 Results
Net sales increased 1.1% to $70.0 million in the second quarter of 2020
from $69.2 million in the second
quarter of 2019 due to a $12.4 million contribution from the
Company's recently acquired Geneva Pipe Company, Inc.
("Geneva") operations. Legacy revenue decreased from the second
quarter of 2019 due to a 31% decrease in tons produced as a result
of the shut-down of the Company's San Luis Río Colorado ("SLRC") facility and changes in
project timing, which were partially offset by a 20% increase in
selling price per ton.
Gross profit increased 57.7% to $13.0 million, or 18.5% of net sales, in the
second quarter of 2020 from $8.2 million, or 11.9% of net sales, in the
second quarter of 2019 primarily due to improved product pricing in
the Company's steel pressure pipe business and the margin
contribution from Geneva. This was partially offset by decreased
production volume as well as costs associated with the shut-down of
the Company's SLRC facility. Since lifting restrictions previously
imposed, the Mexican authorities have allowed for weekly increases
to the Company's workforce beginning in June. Additionally, as a
result of the fire at the Company's Saginaw facility in
April 2019, $1.8 million of business interruption
insurance recovery was recorded in the second quarter of 2020,
compared to $3.2 million of
incremental production costs in the second quarter of 2019.
Net income was $6.0 million,
or $0.61 per diluted share, in the
second quarter of 2020 compared to $3.0 million, or $0.31 per diluted share, in the second quarter of
2019. After considering non-recurring items, adjusted net income
was $4.4 million, or
$0.45 per diluted share, in the
second quarter of 2020, compared to $5.4 million, or $0.55 per diluted share, in the second 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 approximately $159 million as
of June 30, 2020 compared to $170 million as of
March 31, 2020 and $180 million as of June 30, 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 $246 million as of June 30,
2020 compared to $224 million as of March 31, 2020
and $276 million as of June 30, 2019.
Management Commentary
"Our SLRC Mexico facility was ordered to be shut-down by the
Mexican authorities in early April due to COVID-19 and was idle for
the majority of the second quarter, which had an overall adverse
impact on our revenue and gross profit," said Scott Montross, President and CEO of Northwest
Pipe Company. "As of June
1st, we received authorization to resume partial
operations at SLRC and are working toward normal production levels.
We are pleased to now be operating all of our production facilities
through the pandemic. Although second quarter revenue in our
legacy business was lower year-over-year due to the shut-down of
the SLRC facility and changes in job timing, bidding activity has
remained strong, which resulted in an improved backlog and strong
precast order book. Due to the complex nature of the impact of
COVID-19 on the economy, it is difficult to make forward-looking
projections on our revenue and margins though we firmly believe the
structure of our business remains solid."
Balance Sheet Details
Total cash and cash equivalents were $19.2 million as of June 30, 2020, up
from $9.7 million as of
March 31, 2020 primarily due to changes in working capital
which more than offset cash outflows for capital expenditures and
debt service.
As of June 30, 2020, the Company had $15.4 million of outstanding term loan
borrowings and no borrowings under its revolving line of credit
with additional borrowing capacity of $55.1 million.
Conference Call Details
A conference call and simultaneous webcast to discuss the
Company's second quarter 2020 financial results will be held on
Wednesday, August 5, 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 investor.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 Wednesday, August 19, 2020 by dialing
1–877–344–7529 in the U.S. or 1–412–317–0088 internationally and
entering the replay access code: 10146390.
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. The 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.
Contact:
Aaron
Wilkins
Chief Financial Officer
Northwest Pipe Company
(360) 397-6294 • investors@nwpipe.com
Or Addo Investor Relations
(310) 829-5400
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
|
69,971
|
|
$
|
69,203
|
|
$
|
138,894
|
|
$
|
131,846
|
Cost of
sales
|
|
57,013
|
|
|
60,985
|
|
|
116,357
|
|
|
117,057
|
Gross
profit
|
|
12,958
|
|
|
8,218
|
|
|
22,537
|
|
|
14,789
|
Selling,
general, and administrative expense
|
|
5,584
|
|
|
4,705
|
|
|
13,529
|
|
|
8,952
|
Operating
income
|
|
7,374
|
|
|
3,513
|
|
|
9,008
|
|
|
5,837
|
Other
income
|
|
1,059
|
|
|
25
|
|
|
658
|
|
|
184
|
Interest
income
|
|
11
|
|
|
3
|
|
|
33
|
|
|
7
|
Interest
expense
|
|
(262)
|
|
|
(120)
|
|
|
(481)
|
|
|
(251)
|
Income before
income taxes
|
|
8,182
|
|
|
3,421
|
|
|
9,218
|
|
|
5,777
|
Income tax
expense
|
|
2,184
|
|
|
447
|
|
|
2,656
|
|
|
638
|
Net
income
|
$
|
5,998
|
|
$
|
2,974
|
|
$
|
6,562
|
|
$
|
5,139
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.61
|
|
$
|
0.31
|
|
$
|
0.67
|
|
$
|
0.53
|
Diluted
|
$
|
0.61
|
|
$
|
0.31
|
|
$
|
0.67
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
9,792
|
|
|
9,736
|
|
|
9,771
|
|
|
9,736
|
Diluted
|
|
9,808
|
|
|
9,753
|
|
|
9,832
|
|
|
9,745
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
19,206
|
|
$
|
31,014
|
|
|
Trade and other
receivables, net
|
|
39,204
|
|
|
38,026
|
|
|
Contract
assets
|
|
74,902
|
|
|
91,186
|
|
|
Inventories
|
|
35,425
|
|
|
30,654
|
|
|
Prepaid expenses and
other
|
|
3,809
|
|
|
4,159
|
|
|
Total current
assets
|
|
172,546
|
|
|
195,039
|
|
Property and
equipment, net
|
|
108,789
|
|
|
99,631
|
|
Operating lease
right-of-use assets
|
|
29,645
|
|
|
7,683
|
|
Goodwill
|
|
22,985
|
|
|
-
|
|
Intangible assets,
net
|
|
11,424
|
|
|
1,231
|
|
Other
assets
|
|
6,323
|
|
|
6,661
|
|
|
Total
assets
|
$
|
351,712
|
|
$
|
310,245
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
3,133
|
|
$
|
-
|
|
|
Accounts
payable
|
|
13,014
|
|
|
15,493
|
|
|
Accrued
liabilities
|
|
11,876
|
|
|
12,150
|
|
|
Contract
liabilities
|
|
4,731
|
|
|
12,281
|
|
|
Current portion of
operating lease liabilities
|
|
2,340
|
|
|
1,642
|
|
|
Total current
liabilities
|
|
35,094
|
|
|
41,566
|
|
Long-term
debt
|
|
12,032
|
|
|
-
|
|
Operating lease
liabilities
|
|
26,428
|
|
|
6,247
|
|
Deferred income
taxes
|
|
12,202
|
|
|
4,265
|
|
Other long-term
liabilities
|
|
10,448
|
|
|
10,009
|
|
|
Total
liabilities
|
|
96,204
|
|
|
62,087
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
255,508
|
|
|
248,158
|
|
|
Total liabilities and
stockholders' equity
|
$
|
351,712
|
|
$
|
310,245
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Net
income, as reported
|
$
5,998
|
|
$
2,974
|
|
$
6,562
|
|
$
5,139
|
Adjustments for
non-recurring items:
|
|
|
|
|
|
|
|
Acquisition-related transaction costs
|
67
|
|
9
|
|
2,584
|
|
9
|
Saginaw fire incremental production costs (insurance recoveries),
net
|
(1,791)
|
|
3,247
|
|
(1,399)
|
|
3,247
|
Saginaw fire gain on property and equipment replacement
|
(951)
|
|
-
|
|
(951)
|
|
-
|
Amortization of acquired intangibles
|
519
|
|
-
|
|
865
|
|
-
|
Acquisition-related inventory charges
|
-
|
|
-
|
|
266
|
|
-
|
Estimated tax impact of non-recurring items
|
539
|
|
(851)
|
|
(341)
|
|
(851)
|
Adjusted
net income
|
$
4,381
|
|
$
5,379
|
|
$
7,586
|
|
$
7,544
|
|
|
|
|
|
|
|
|
|
Diluted
net income per share, as reported
|
$
0.61
|
|
$
0.31
|
|
$
0.67
|
|
$
0.53
|
|
|
|
|
|
|
|
|
|
Adjusted
diluted net income per share
|
$
0.45
|
|
$
0.55
|
|
$
0.77
|
|
$
0.77
|
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SOURCE Northwest Pipe Company