VANCOUVER, Wash., Nov. 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 third quarter ended September 30, 2020. The
Company will broadcast its third quarter 2020 earnings conference
call on Thursday, November 5, 2020 at
7:00 a.m. PT.
Third Quarter 2020 Results
Net sales increased 3.2% to $77.6 million in the third quarter of 2020
from $75.2 million in the third
quarter of 2019 due to a $12.5 million contribution from the
Company's acquired Geneva Pipe and
Precast Company ("Geneva") operations. Legacy revenue decreased
from the third quarter of 2019 due to a 37% decrease in tons
produced as a result of project timing, partially offset by a 37%
increase in selling price per ton due to a change in product
mix.
Gross profit increased 0.9% to $15.6 million, or 20.1% of net sales, in the
third quarter of 2020 from $15.5 million, or 20.6% of net sales, in the
third quarter of 2019, primarily due to the margin contribution
from Geneva, partially offset by lower production volume at legacy
facilities.
Net income was $7.3 million,
or $0.73 per diluted share, in the
third quarter of 2020 compared to $10.7 million, or $1.10 per diluted share, in the third quarter of
2019. The third quarter of 2020 included increased selling,
general, and administrative expenses of $0.8 million primarily due to the addition
of Geneva and higher compensation expenses. The third quarter of
2019 included other income of $2.3 million related to a legal settlement,
and a lower than normal estimated income tax rate of 19.0% impacted
by the estimated changes in the Company's valuation allowance.
After considering non-recurring items, adjusted net income was
$7.7 million, or $0.78 per diluted share, in the third quarter of
2020, compared to $8.9 million,
or $0.91 per diluted share, in the
third 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 $143 million as
of September 30, 2020 compared to $159 million as of
June 30, 2020 and $211 million as of September 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 $231 million as of September 30, 2020 compared
to $246 million as of June 30, 2020 and $270 million
as of September 30, 2019.
Management Commentary
"Despite experiencing COVID–19 related project and bidding
delays in the second half of the year, our third quarter produced
solid revenue and a gross profit margin that exceeded 20%. The
bidding delays caused our quarter ending backlog to moderate down
to $231 million, a level that is still very high by historic
standards and that represents the ninth straight quarter over
$200 million," said Scott
Montross, President and CEO of the Company. "Due to customer
driven project delays, we expect fourth quarter revenues and the
resulting gross profit margin to be lower than the third quarter.
However, as we look into 2021, the structure of our business
remains strong."
Balance Sheet Details
Total cash and cash equivalents were $30.4 million as of September 30, 2020,
up from $19.2 million as of
June 30, 2020 primarily due to increased operating cash
flows.
As of September 30, 2020, the Company had $14.6 million of outstanding term loan
borrowings and no borrowings under its revolving line of credit
with additional borrowing capacity of approximately
$55 million.
Conference Call Details
A conference call and simultaneous webcast to discuss the
Company's third quarter 2020 financial results will be held on
Thursday, November 5, 2020 at 7:00 a.m. PT. 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 Thursday, November 19, 2020 by dialing
1–877–344–7529 in the U.S. or 1–412–317–0088 internationally and
entering the replay access code: 10148734.
About Northwest Pipe Company
Founded in 1966, Northwest Pipe Company is a leading
manufacturer for water related infrastructure products. In addition
to being the largest manufacturer of engineered steel water
pipeline systems in North America,
the Company produces high-quality precast and reinforced concrete
products, 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.
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 piping 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, 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 September 30,
|
|
Nine Months
Ended September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
|
77,632
|
|
$
|
75,226
|
|
$
|
216,526
|
|
$
|
207,072
|
Cost of
sales
|
|
62,013
|
|
|
59,751
|
|
|
178,370
|
|
|
176,808
|
Gross
profit
|
|
15,619
|
|
|
15,475
|
|
|
38,156
|
|
|
30,264
|
Selling,
general, and administrative expense
|
5,656
|
|
|
4,900
|
|
|
19,185
|
|
|
13,852
|
Operating
income
|
|
9,963
|
|
|
10,575
|
|
|
18,971
|
|
|
16,412
|
Other
income
|
|
157
|
|
|
2,792
|
|
|
815
|
|
|
2,976
|
Interest
income
|
|
16
|
|
|
23
|
|
|
49
|
|
|
30
|
Interest
expense
|
|
(238)
|
|
|
(114)
|
|
|
(719)
|
|
|
(365)
|
Income before
income taxes
|
|
9,898
|
|
|
13,276
|
|
|
19,116
|
|
|
19,053
|
Income tax
expense
|
|
2,631
|
|
|
2,529
|
|
|
5,287
|
|
|
3,167
|
Net
income
|
$
|
7,267
|
|
$
|
10,747
|
|
$
|
13,829
|
|
$
|
15,886
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.74
|
|
$
|
1.10
|
|
$
|
1.41
|
|
$
|
1.63
|
Diluted
|
$
|
0.73
|
|
$
|
1.10
|
|
$
|
1.40
|
|
$
|
1.63
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
per share calculations:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
9,802
|
|
|
9,745
|
|
|
9,782
|
|
|
9,739
|
Diluted
|
|
9,861
|
|
|
9,785
|
|
|
9,851
|
|
|
9,762
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
30,363
|
|
$
|
31,014
|
|
|
Trade and other
receivables, net
|
|
43,624
|
|
|
38,026
|
|
|
Contract
assets
|
|
76,276
|
|
|
91,186
|
|
|
Inventories
|
|
31,945
|
|
|
30,654
|
|
|
Prepaid expenses and
other
|
|
3,374
|
|
|
4,159
|
|
|
Total current
assets
|
|
185,582
|
|
|
195,039
|
|
Property and
equipment, net
|
|
109,172
|
|
|
99,631
|
|
Operating lease
right-of-use assets
|
|
31,538
|
|
|
7,683
|
|
Goodwill
|
|
22,985
|
|
|
-
|
|
Intangible assets,
net
|
|
11,116
|
|
|
1,231
|
|
Other
assets
|
|
6,432
|
|
|
6,661
|
|
|
Total
assets
|
$
|
366,825
|
|
$
|
310,245
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
3,132
|
|
$
|
-
|
|
|
Accounts
payable
|
|
13,702
|
|
|
15,493
|
|
|
Accrued
liabilities
|
|
14,046
|
|
|
12,150
|
|
|
Contract
liabilities
|
|
4,540
|
|
|
12,281
|
|
|
Current portion of
operating lease liabilities
|
|
2,303
|
|
|
1,642
|
|
|
Total current
liabilities
|
|
37,723
|
|
|
41,566
|
|
Long-term
debt
|
|
11,244
|
|
|
-
|
|
Operating lease
liabilities
|
|
28,448
|
|
|
6,247
|
|
Deferred income
taxes
|
|
14,611
|
|
|
4,265
|
|
Other long-term
liabilities
|
|
11,107
|
|
|
10,009
|
|
|
Total
liabilities
|
|
103,133
|
|
|
62,087
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
263,692
|
|
|
248,158
|
|
|
Total liabilities and
stockholders' equity
|
$
|
366,825
|
|
$
|
310,245
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Net
income, as reported
|
$
7,267
|
|
$
10,747
|
|
$
13,829
|
|
$
15,886
|
Adjustments for
non-recurring items:
|
|
|
|
|
|
|
|
Acquisition-related transaction costs
|
40
|
|
506
|
|
2,624
|
|
515
|
Saginaw fire incremental production costs (insurance recoveries),
net
|
-
|
|
(304)
|
|
(1,399)
|
|
2,943
|
Saginaw fire gain on property and equipment replacement
|
-
|
|
(431)
|
|
(951)
|
|
(431)
|
Amortization of acquired intangibles
|
518
|
|
-
|
|
1,383
|
|
-
|
Acquisition-related inventory charges
|
-
|
|
-
|
|
266
|
|
-
|
Legal settlement other income
|
-
|
|
(2,284)
|
|
-
|
|
(2,284)
|
Estimated tax impact of non-recurring items
|
(140)
|
|
657
|
|
(481)
|
|
(194)
|
Adjusted
net income
|
$
7,685
|
|
$
8,891
|
|
$
15,271
|
|
$
16,435
|
|
|
|
|
|
|
|
|
|
Diluted
net income per share, as reported
|
$
0.73
|
|
$
1.10
|
|
$
1.41
|
|
$
1.63
|
|
|
|
|
|
|
|
|
|
Adjusted
diluted net income per share
|
$
0.78
|
|
$
0.91
|
|
$
1.55
|
|
$
1.68
|
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SOURCE Northwest Pipe Company