VANCOUVER, Wash., Aug. 4, 2021 /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, 2021. The
Company will broadcast its second quarter 2021 earnings conference
call on Thursday, August 5, 2021 at
7:00 a.m. PT.
Second Quarter 2021 Results
Net sales increased 5.5% to $73.8 million in the second quarter of 2021
from $70.0 million in the second
quarter of 2020. The increase was primarily due to higher shipments
from the Geneva Pipe and Precast Company ("Geneva") operations acquired in January 2020, which contributed $15.0 million in the second quarter of 2021
compared to $12.4 million in the
second quarter of 2020. Net sales were relatively consistent at the
Company's steel pipe facilities for the second quarter of 2021
compared to the second quarter of 2020.
Gross profit decreased 26.4% to $9.5 million, or 12.9% of net sales, in the
second quarter of 2021 from $13.0 million, or 18.5% of net sales, in the
second quarter of 2020, primarily due to the combination of changes
in product mix and pressure on project pricing realized at the
Company's steel pipe facilities, partially offset by increased
gross profit on higher precast concrete revenues. Gross profit in
the second quarter of 2020 included $1.8 million of business interruption
insurance recovery, net of incremental production costs, resulting
from the fire at the Company's Saginaw,
Texas facility in April
2019.
Net income was $2.1 million,
or $0.21 per diluted share, in the
second quarter of 2021 compared to $6.0 million, or $0.61 per diluted share, in the second quarter of
2020. The second quarter of 2020 included $2.7 million of pre-tax net insurance
recoveries and gains resulting from the fire at the Company's
Saginaw facility, and $0.1 million of pre-tax acquisition-related
transaction costs. After considering non-recurring items, adjusted
net income was $4.0 million, or
$0.41 per diluted share, in the
second quarter of 2020. There were no adjustments to consider in
the second quarter of 2021. 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 products for which revenue is recognized over time. Backlog
was approximately $195 million as of June 30, 2021
compared to $178 million as of March 31, 2021 and
$159 million as of June 30, 2020. 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 $234 million
as of June 30, 2021 compared to $210 million as of
March 31, 2021 and $246 million as of June 30,
2020.
Management Commentary
"As we expected, the second quarter continued to be challenging
for the steel pressure pipe business. The combination of steel
delivery issues, customer-driven delays on existing orders, and the
associated bidding pressure that occurred due to the significant
project bidding delays over the past few quarters negatively
affected our second quarter production levels as well as our
margins," said Scott Montross,
President and CEO of the Company. "We saw project bidding begin to
stabilize and improve during the second quarter which resulted in a
steel pressure pipe backlog that grew to $234 million. The
precast concrete business remained very strong during the quarter,
offsetting slowness in the steel pressure pipe business, and
leading to an order book that remains at a historically high
level."
Mr. Montross continued, "We expect steel pressure pipe
bidding strength and stability to continue to improve in the second
half of the year. However, we anticipate that our steel pressure
pipe revenue and margin recovery will be slow in the beginning of
the second half of 2021 given the ripple effects we will continue
to experience from steel delivery delays and existing job and
project bidding delays. This is in addition to the lingering effect
of market panic bidding and the resulting margin pressure that
occurred due to significant bidding delays in the second half of
2020 and early 2021. That said, we believe a stronger bidding
environment in the second half of 2021, coupled with our growing
backlog, should support improved revenue and margins as we move
into the latter part of 2021 and into 2022. In addition, the
precast concrete business is expected to remain strong during the
second half of 2021."
Balance Sheet Details
Total cash and cash equivalents were $23.2 million as of June 30, 2021, down
from $29.9 million as of
March 31, 2021 primarily due to a $7.6 million repayment of the term loan
completed as part of the second quarter refinancing.
On June 30, 2021, the Company entered into a new credit
agreement, increasing the aggregate borrowing capacity available to
the Company for revolving loans and letters of credit to
$100 million through June 30, 2024.
As of June 30, 2021, the Company had no outstanding
revolving loan borrowings, with additional borrowing capacity of
approximately $98 million. As of March 31, 2021, the
Company had $8.4 million of
outstanding term loan borrowings and no outstanding revolving loan
borrowings, with additional revolving loan borrowing capacity of
approximately $52 million.
Conference Call Details
A conference call and simultaneous webcast to discuss the
Company's second quarter 2021 financial results will be held on
Thursday, August 5, 2021 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 three hours after the event and will remain
available until Thursday, August 19, 2021 by dialing
1–844–512–2921 in the U.S. or 1–412–317–6671 internationally and
entering the replay access code: 10015713.
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 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.
Please visit www.nwpipe.com for more information.
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 and order cancelations, timing of customer orders
and deliveries, production schedules, price and availability of raw
materials, 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,
impacts of recent U.S. tax reform legislation on the Company's
results of operations, adequacy of the Company's insurance
coverage, operating problems at the Company's manufacturing
operations including fires, explosions, inclement weather, and
natural disasters, impacts of pandemics, epidemics, or other public
health emergencies, such as coronavirus disease 2019, and other
risks discussed in the Company's Annual Report on Form 10–K
for the year ended December 31, 2020 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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
|
73,812
|
|
$
|
69,971
|
|
$
|
146,123
|
|
$
|
138,894
|
Cost of
sales
|
|
64,274
|
|
|
57,013
|
|
|
127,810
|
|
|
116,357
|
Gross
profit
|
|
9,538
|
|
|
12,958
|
|
|
18,313
|
|
|
22,537
|
Selling,
general, and administrative expense
|
|
6,337
|
|
|
5,584
|
|
|
12,167
|
|
|
13,529
|
Operating
income
|
|
3,201
|
|
|
7,374
|
|
|
6,146
|
|
|
9,008
|
Other
income
|
|
30
|
|
|
1,059
|
|
|
89
|
|
|
658
|
Interest
income
|
|
-
|
|
|
11
|
|
|
-
|
|
|
33
|
Interest
expense
|
|
(348)
|
|
|
(262)
|
|
|
(575)
|
|
|
(481)
|
Income before
income taxes
|
|
2,883
|
|
|
8,182
|
|
|
5,660
|
|
|
9,218
|
Income tax
expense
|
|
752
|
|
|
2,184
|
|
|
1,354
|
|
|
2,656
|
Net
income
|
$
|
2,131
|
|
$
|
5,998
|
|
$
|
4,306
|
|
$
|
6,562
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.22
|
|
$
|
0.61
|
|
$
|
0.44
|
|
$
|
0.67
|
Diluted
|
$
|
0.21
|
|
$
|
0.61
|
|
$
|
0.43
|
|
$
|
0.67
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
9,861
|
|
|
9,792
|
|
|
9,837
|
|
|
9,771
|
Diluted
|
|
9,915
|
|
|
9,808
|
|
|
9,920
|
|
|
9,832
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
23,198
|
|
$
|
37,927
|
|
|
Trade and other
receivables, net
|
|
33,778
|
|
|
42,680
|
|
|
Contract
assets
|
|
90,504
|
|
|
76,985
|
|
|
Inventories
|
|
30,029
|
|
|
29,177
|
|
|
Prepaid expenses and
other
|
|
4,035
|
|
|
5,194
|
|
|
Total current
assets
|
|
181,544
|
|
|
191,963
|
|
Property and
equipment, net
|
|
110,007
|
|
|
110,184
|
|
Operating lease
right-of-use assets
|
|
33,522
|
|
|
30,813
|
|
Goodwill
|
|
22,985
|
|
|
22,985
|
|
Intangible assets,
net
|
|
9,887
|
|
|
10,518
|
|
Other
assets
|
|
6,164
|
|
|
6,552
|
|
|
Total
assets
|
$
|
364,109
|
|
$
|
373,015
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
-
|
|
$
|
7,701
|
|
|
Accounts
payable
|
|
15,460
|
|
|
12,993
|
|
|
Accrued
liabilities
|
|
14,988
|
|
|
16,814
|
|
|
Contract
liabilities
|
|
2,722
|
|
|
6,189
|
|
|
Current portion of
operating lease liabilities
|
|
2,406
|
|
|
2,204
|
|
|
Total current
liabilities
|
|
35,576
|
|
|
45,901
|
|
Long-term
debt
|
|
-
|
|
|
5,888
|
|
Operating lease
liabilities
|
|
30,631
|
|
|
27,911
|
|
Deferred income
taxes
|
|
12,548
|
|
|
12,481
|
|
Other long-term
liabilities
|
|
10,642
|
|
|
11,208
|
|
|
Total
liabilities
|
|
89,397
|
|
|
103,389
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
274,712
|
|
|
269,626
|
|
|
Total liabilities and
stockholders' equity
|
$
|
364,109
|
|
$
|
373,015
|
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,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Net
income, as reported
|
$
2,131
|
|
$
5,998
|
|
$
4,306
|
|
$
6,562
|
Adjustments for
non-recurring items:
|
|
|
|
|
|
|
|
Acquisition-related transaction costs
|
-
|
|
67
|
|
-
|
|
2,584
|
Saginaw fire insurance recoveries, net
|
-
|
|
(1,791)
|
|
-
|
|
(1,399)
|
Saginaw fire gain on property and equipment replacement
|
-
|
|
(951)
|
|
-
|
|
(951)
|
Acquisition-related inventory charges
|
-
|
|
-
|
|
-
|
|
266
|
Estimated tax impact of non-recurring items
|
-
|
|
668
|
|
-
|
|
(125)
|
Adjusted
net income
|
$
2,131
|
|
$
3,991
|
|
$
4,306
|
|
$
6,937
|
|
|
|
|
|
|
|
|
|
Diluted
net income per share, as reported
|
$
0.21
|
|
$
0.61
|
|
$
0.43
|
|
$
0.67
|
|
|
|
|
|
|
|
|
|
Adjusted
diluted net income per share
|
$
0.21
|
|
$
0.41
|
|
$
0.43
|
|
$
0.71
|
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SOURCE Northwest Pipe Company