VANCOUVER, Wash., Nov. 8, 2021 /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, 2021. The
Company will broadcast its third quarter 2021 earnings conference
call on Tuesday, November 9, 2021 at
7:00 a.m. PT.
Third Quarter 2021 Results
Net sales increased 9.0% to $84.6 million in the third quarter of 2021
from $77.6 million in the third
quarter of 2020. This increase was due to both higher pricing and
shipments of precast concrete products, which contributed
$2.6 million of the third
quarter increase, as well as a 7% increase in net sales at the
Company's steel pipe facilities, which is attributable to a 17%
increase in selling price per ton due to increased materials costs
and changes in product mix, partially offset by a 9% decrease in
tons produced resulting from changes in project timing.
Gross profit decreased 20.8% to $12.4 million, or 14.6% of net sales, in the
third quarter of 2021 from $15.6 million, or 20.1% of net sales, in the
third 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.
Net income was $4.9 million,
or $0.50 per diluted share, in the
third quarter of 2021 compared to $7.3 million, or $0.73 per diluted share, in the third quarter of
2020. The third quarter of 2021 included $0.6 million of pre-tax acquisition related
transactions costs associated with the ParkUSA acquisition. After
considering non-recurring items, adjusted net income was
$5.4 million, or $0.54 per diluted share, in the third quarter of
2021, compared to $7.3 million,
or $0.74 per diluted share, in the
third quarter of 2020. 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 $191 million as of September 30,
2021 compared to $195 million as of June 30, 2021 and
$143 million as of September 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
$273 million as of September 30, 2021 compared to
$234 million as of June 30, 2021 and $231 million as
of September 30, 2020.
Management Commentary
"We are very excited about our acquisition of ParkUSA, which was
executed early in the fourth quarter. This was the natural next
step in our precast concrete related growth strategy, which is
expected to be immediately accretive and provide organic growth
opportunities for the Company. Our third quarter precast revenues
remained at elevated levels with strong margins that have continued
to rise. Our existing precast and ParkUSA's order books are both at
historically high levels as we move into the traditionally slower
time of the year for precast shipments. The existing precast
business is expected to have slightly higher revenue and margins
than in the fourth quarter of 2020. We expect to carry strong
momentum into 2022 with our precast related business," said
Scott Montross, President and Chief
Executive Officer of the Company.
"Third quarter water transmission project bidding volume
improved, but at a slower than expected rate as COVID–19 related
delays continue to push bidding into 2022. However, despite the
slower improvement in bidding, we ended the quarter with a near
record backlog of $273 million. The quality of the backlog has
also continued to improve in 2021, leading to higher third quarter
water transmission revenues and upward movement of margins. As we
move into the time of the year affected by major holidays and
weather events, we expect water transmission revenue to be a little
lower than third quarter. However, we expect the upward movement of
backlog and margins to continue through year end and lead to a
stronger start to 2022."
Acquisition of ParkUSA
The Company continued to execute on its growth strategy by
completing the acquisition of ParkUSA, a precast concrete and steel
fabrication-based company that develops and manufactures water,
wastewater, and environmental solutions, on October 5, 2021
for cash consideration of $87.4 million. The acquisition was funded
through borrowings on the Company's line of credit. For the year
ended December 31, 2020, ParkUSA's total revenue was
approximately $66.5 million.
Subsequent to this acquisition, the Company entered into an
amendment to its credit agreement that provides for
$125 million in total availability under the line of
credit.
Balance Sheet Details
Total cash and cash equivalents were $3.2 million as of September 30, 2021,
down from $23.2 million as of
June 30, 2021 primarily due to changes in working capital.
As of September 30, 2021, the Company had $2.2 million of outstanding revolving loan
borrowings, $1.6 million of
outstanding letters of credit, and additional borrowing capacity of
approximately $96 million. Near-term repayment of outstanding
debt will be a priority and derived from the cash flows of the
combined business.
Conference Call Details
A conference call and simultaneous webcast to discuss the
Company's third quarter 2021 financial results will be held on
Tuesday, November 9, 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 one hour after the event and will remain
available until Tuesday, November 23, 2021 by dialing
1–877-344-7529 in the U.S. or 1–412-317-0088 internationally and
entering the replay access code: 10160825.
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 manufactures high-quality precast and reinforced
concrete products; water, wastewater, and stormwater equipment;
steel casing pipe; bar-wrapped concrete cylinder pipe; and one of
the largest offerings of pipeline system joints, fittings, and
specialized components. Strategically positioned to meet growing
water and wastewater infrastructure needs, Northwest Pipe Company
provides solution-based products for a wide range of markets under
the ParkUSA, Geneva Pipe and
Precast, and Permalok® lines. The Company's diverse team is
committed to quality and innovation while demonstrating the
Company's core values of accountability, commitment, and teamwork.
The Company is headquartered in Vancouver, Washington, and has 13
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 ParkUSA, Geneva Pipe and Precast Company, 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 September 30,
|
|
Nine Months
Ended September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
|
84,643
|
|
$
|
77,632
|
|
$
|
230,766
|
|
$
|
216,526
|
Cost of
sales
|
|
72,280
|
|
|
62,013
|
|
|
200,090
|
|
|
178,370
|
Gross
profit
|
|
12,363
|
|
|
15,619
|
|
|
30,676
|
|
|
38,156
|
Selling,
general, and administrative expense
|
|
5,562
|
|
|
5,656
|
|
|
17,729
|
|
|
19,185
|
Operating
income
|
|
6,801
|
|
|
9,963
|
|
|
12,947
|
|
|
18,971
|
Other
income
|
|
171
|
|
|
157
|
|
|
260
|
|
|
815
|
Interest
income
|
|
-
|
|
|
16
|
|
|
-
|
|
|
49
|
Interest
expense
|
|
(112)
|
|
|
(238)
|
|
|
(687)
|
|
|
(719)
|
Income before
income taxes
|
|
6,860
|
|
|
9,898
|
|
|
12,520
|
|
|
19,116
|
Income tax
expense
|
|
1,914
|
|
|
2,631
|
|
|
3,268
|
|
|
5,287
|
Net
income
|
$
|
4,946
|
|
$
|
7,267
|
|
$
|
9,252
|
|
$
|
13,829
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.50
|
|
$
|
0.74
|
|
$
|
0.94
|
|
$
|
1.41
|
Diluted
|
$
|
0.50
|
|
$
|
0.73
|
|
$
|
0.93
|
|
$
|
1.40
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
9,871
|
|
|
9,802
|
|
|
9,849
|
|
|
9,782
|
Diluted
|
|
9,921
|
|
|
9,861
|
|
|
9,918
|
|
|
9,851
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
3,188
|
|
$
|
37,927
|
|
|
Trade and other
receivables, net
|
|
38,885
|
|
|
42,680
|
|
|
Contract
assets
|
|
111,239
|
|
|
76,985
|
|
|
Inventories
|
|
43,042
|
|
|
29,177
|
|
|
Prepaid expenses and
other
|
|
1,915
|
|
|
5,194
|
|
|
Total current
assets
|
|
198,269
|
|
|
191,963
|
|
Property and
equipment, net
|
|
111,157
|
|
|
110,184
|
|
Operating lease
right-of-use assets
|
|
32,769
|
|
|
30,813
|
|
Goodwill
|
|
22,985
|
|
|
22,985
|
|
Intangible assets,
net
|
|
9,571
|
|
|
10,518
|
|
Other
assets
|
|
6,216
|
|
|
6,552
|
|
|
Total
assets
|
$
|
380,967
|
|
$
|
373,015
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
-
|
|
$
|
7,701
|
|
|
Accounts
payable
|
|
20,148
|
|
|
12,993
|
|
|
Accrued
liabilities
|
|
17,406
|
|
|
16,814
|
|
|
Contract
liabilities
|
|
5,388
|
|
|
6,189
|
|
|
Current portion of
operating lease liabilities
|
|
2,401
|
|
|
2,204
|
|
|
Total current
liabilities
|
|
45,343
|
|
|
45,901
|
|
Borrowings on line of
credit
|
|
2,153
|
|
|
-
|
|
Long-term
debt
|
|
-
|
|
|
5,888
|
|
Operating lease
liabilities
|
|
30,004
|
|
|
27,911
|
|
Deferred income
taxes
|
|
12,391
|
|
|
12,481
|
|
Other long-term
liabilities
|
|
10,767
|
|
|
11,208
|
|
|
Total
liabilities
|
|
100,658
|
|
|
103,389
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
280,309
|
|
|
269,626
|
|
|
Total liabilities and
stockholders' equity
|
$
|
380,967
|
|
$
|
373,015
|
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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Net
income, as reported
|
$ 4,946
|
|
$ 7,267
|
|
$ 9,252
|
|
$ 13,829
|
Adjustments for
non-recurring items:
|
|
|
|
|
|
|
|
Acquisition-related transaction costs
|
564
|
|
40
|
|
800
|
|
2,624
|
Saginaw fire insurance recoveries, net
|
-
|
|
-
|
|
-
|
|
(1,399)
|
Saginaw fire gain on property and equipment replacement
|
-
|
|
-
|
|
-
|
|
(951)
|
Acquisition-related inventory charges
|
-
|
|
-
|
|
-
|
|
266
|
Estimated tax impact of non-recurring items
|
(140)
|
|
(10)
|
|
(198)
|
|
(135)
|
Adjusted
net income
|
$ 5,370
|
|
$ 7,297
|
|
$ 9,854
|
|
$ 14,234
|
|
|
|
|
|
|
|
|
Diluted
net income per share, as reported
|
$
0.50
|
|
$
0.73
|
|
$
0.93
|
|
$
1.40
|
|
|
|
|
|
|
|
|
Adjusted
diluted net income per share
|
$
0.54
|
|
$
0.74
|
|
$
0.99
|
|
$
1.44
|
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SOURCE Northwest Pipe Company