- Annual net sales of $457.7
million increased 37.3% year-over-year
- Record annual gross profit of $85.9
million increased 94.0% year-over-year
- Record annual net income of $3.11 per diluted share; adjusted net income of
$3.35 per diluted share
- Backlog1 of $274
million; backlog including confirmed
orders2 of $372
million for the Engineered Steel Pressure Pipe segment
("SPP"), a new record
- Order book3 of $64 million for the Precast Infrastructure and
Engineered Systems segment ("Precast")
VANCOUVER, Wash., March 15,
2023 /PRNewswire/ -- Northwest Pipe Company (NASDAQ:
NWPX) (the "Company"), a leading manufacturer of water-related
infrastructure including engineered steel water pipeline systems;
stormwater and wastewater technology products; high-quality precast
and reinforced concrete products; pump lift stations; steel casing
pipe, bar-wrapped concrete cylinder pipe, and one of the largest
offerings of pipeline system joints, fittings, and specialized
components, today announced its financial results for the fourth
quarter and full year ended December 31,
2022. The Company will broadcast its fourth quarter and full
year 2022 earnings conference call on Thursday, March 16, 2023 at 7:00 a.m. PT.
Management Commentary
"After a slow first quarter, our Engineered Steel Pressure Pipe
business gained strength throughout 2022 resulting in a record
annual revenue of $307.6 million. We ended the year with a
record backlog including confirmed orders of $372 million due
to the strong bidding that we experienced in the second half of the
year which allowed our backlog to continue to improve in terms of
both size and margin quality," said Scott
Montross, President and Chief Executive Officer of Northwest
Pipe Company. "Precast Infrastructure and Engineered Systems
generated a record annual revenue of $150.1 million and a strong gross margin of
27.6%, despite challenges related to the implementation of a new
business system at our ParkUSA facilities. Our Precast order book
ended 2022 at $64 million in this segment of the business,
down 14% from the third quarter of 2022 due to the current
uncertainty in the residential housing market and the resulting
impact primarily on our Geneva business."
Mr. Montross continued, "We expect that the first quarter
of 2023 will be challenging, similar to what we saw in the first
quarter of 2022. Even with the record backlog including confirmed
orders in SPP, there are customer driven delays affecting the
production timing of near-term projects as well as severe weather
events that have led to unscheduled downtime time at various SPP
facilities. These weather events have also caused unscheduled
downtime in our Precast business, further suppressing the first
quarter which is already the seasonally slow time of year. After
the anticipated slow first quarter, the SPP business levels are
expected to normalize similar to what we experienced in 2022. The
Precast segment is likely to be moderately affected by the
uncertainty in the residential housing market near term but is
still expected to have a solid year."
Fourth Quarter 2022 Financial Results
Consolidated
- Net sales increased 4.2% to $106.8
million from $102.5 million in
the fourth quarter of 2021.
- Gross profit increased 61.1% to $21.9
million, or 20.5% of net sales, from $13.6 million, or 13.2% of net sales, in the
fourth quarter of 2021.
- Net income was $8.0 million, or
$0.79 per diluted share, compared to
$2.3 million, or $0.23 per diluted share, in the fourth quarter of
2021.
- Adjusted net income was $8.5
million, or $0.85 per diluted
share, compared to $6.6 million, or
$0.67 per diluted share, in the
fourth quarter of 2021. Adjusted net income, which is a non-GAAP
financial measure, is reconciled to net income in the table titled
"Reconciliation of Non-GAAP Financial Measures" below.
Engineered Steel Pressure Pipe Segment (SPP)
- SPP net sales increased 0.8% to $72.1
million from $71.6 million in
the fourth quarter of 2021 driven by a 28% increase in tons
produced resulting from changes in project timing, partially offset
by a 21% decrease in selling price per ton due to decreased raw
materials costs.
- SPP gross profit increased 38.2% to $12.0 million, or 16.6% of SPP net sales, from
$8.7 million, or 12.1% of SPP net
sales, in the fourth quarter of 2021 primarily due to increased
production volumes and reduced raw materials costs.
- SPP backlog was $274 million as
of December 31, 2022 compared to
$295 million as of September 30, 2022 and $183 million as of December 31, 2021. Backlog including confirmed
orders was $372 million as of
December 31, 2022 compared to
$347 million as of September 30, 2022 and $290 million as of December 31, 2021.
Precast Infrastructure and Engineered Systems Segment
(Precast)
- Precast net sales increased 12.1% to $34.7 million from $31.0
million in the fourth quarter of 2021 primarily due to the
Park Environmental Equipment, LLC ("ParkUSA") operations, which
contributed $20.3 million in net
sales in the fourth quarter of 2022 compared to $18.0 million in net sales in the fourth quarter
of 2021. In addition, net sales at the Company's pre-existing
Precast operations increased 11.3% compared to the fourth quarter
of 2021 resulting from a 40% increase in selling prices due to high
demand for the Company's concrete products coupled with increased
material costs, partially offset by a 21% decrease in volume
shipped due to unscheduled equipment downtime and changes in
product mix.
- Precast gross profit increased 101.4% to $9.9 million, or 28.5% of Precast net sales, from
$4.9 million, or 15.9% of Precast net
sales, in the fourth quarter of 2021 primarily due to contributions
from the ParkUSA operations as well as improved pricing at the
Company's pre-existing Precast operations.
- Precast order book was $64
million as of December 31,
2022 compared to $74 million
as of September 30, 2022 and
$51 million as of December 31, 2021.
Full Year 2022 Financial Results
Consolidated
- Net sales increased 37.3% to $457.7
million in 2022 from $333.3
million in 2021.
- Gross profit increased 94.0% to $85.9
million, or 18.8% of net sales, in 2022 from $44.3 million, or 13.3% of net sales, in
2021.
- Net income was $31.1 million, or
$3.11 per diluted share, in 2022
compared to $11.5 million, or
$1.16 per diluted share, in
2021.
- Adjusted net income was $33.6
million, or $3.35 per diluted
share, in 2022 compared to $16.5
million, or $1.66 per diluted
share, in 2021. See the Company's "Reconciliation of Non-GAAP
Financial Measures" in the table below.
Engineered Steel Pressure Pipe Segment (SPP)
- SPP net sales increased 18.4% to $307.6
million in 2022 from $259.8
million in 2021 driven by a 20% increase in selling price
per ton due to increased raw materials costs, partially offset by a
1% decrease in tons produced resulting from changes in project
timing.
- SPP gross profit increased 42.2% to $44.5 million, or 14.5% of SPP net sales, in 2022
from $31.3 million, or 12.0% of SPP
net sales, in 2021 due to improved product pricing. SPP gross
profit in 2022 was reduced, in part, by a $2.0 million product liability settlement reserve
recorded in the first quarter of 2022.
Precast Infrastructure and Engineered Systems Segment
(Precast)
- Precast net sales increased 104.2% to $150.1 million in 2022 from $73.5 million in 2021 primarily due to the
ParkUSA operations acquired in October
2021, which contributed $84.7
million and $18.0 million in
net sales for 2022 and 2021, respectively. In addition, net sales
at the Company's pre-existing Precast operations increased 17.9%
from 2021 due to a 45% increase in selling prices resulting from
high demand for the Company's concrete products coupled with
increased material costs, partially offset by an 18% decrease in
volume shipped due to unscheduled equipment downtime and changes in
product mix.
- Precast gross profit increased 219.0% to $41.4 million, or 27.6% of Precast net sales, in
2022 from $13.0 million, or 17.7% of
Precast net sales, in 2021 due to contributions from the ParkUSA
operations, as well as improved pricing at the pre-existing Precast
operations. Precast gross profit in 2021 was reduced by
$2.3 million of acquisition-related
fair value inventory charges.
Liquidity Details
As of December 31, 2022, the Company had $83.7 million of outstanding revolving loan
borrowings and additional borrowing capacity of approximately
$40 million. The Company expects to have sufficient credit
available to support its operations for at least the next twelve
months with near-term repayment of outstanding debt remaining a
high priority.
Conference Call Details
A conference call and simultaneous webcast to discuss the
Company's fourth quarter 2022 financial results will be held on
Thursday, March 16, 2023, at 7:00 a.m.
Pacific Time. The call will be broadcast live 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, March 30, 2023, by
dialing 1-844-512-2921 in the U.S. or 1-412-317-6671
internationally and entering the replay access code: 13736353.
About Northwest Pipe Company
Founded in 1966, Northwest Pipe Company is a leading
manufacturer of water-related infrastructure products. In addition
to being the largest manufacturer of engineered steel water
pipeline systems in North America,
the Company manufactures stormwater and wastewater technology
products; high-quality precast and reinforced concrete products;
pump lift stations; 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, Permalok®, and
Northwest Pipe Company 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, economic
uncertainty and associated trends in macroeconomic conditions,
including potential recession, inflation, and the state of the
housing market, interest rate risk and changes in market interest
rates, including the impact on the Company's customers and related
demand for its products, 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 and other acquisitions into its business and operations and
achieve significant administrative and operational cost synergies
and accretion to financial results, effects of security breaches,
computer viruses, and cybersecurity incidents, impacts of U.S. tax
reform legislation on the Company's results of operations, adequacy
of the Company's insurance coverage, supply chain challenges, labor
shortages, ongoing military conflicts in Ukraine and related consequences, operating
problems at the Company's manufacturing operations including fires,
explosions, inclement weather, and floods and other natural
disasters, material weaknesses in our internal control over
financial reporting and our ability to remediate such weaknesses,
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, 2021 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 ongoing operating
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
investors@nwpipe.com
Or Addo Investor Relations
nwpx@addo.com
________________
1
|
Northwest Pipe Company
defines "backlog" as the balance of remaining performance
obligations under signed contracts for Engineered Steel Pressure
Pipe products for which revenue is recognized over time.
|
2
|
Northwest Pipe Company
defines "confirmed orders" as Engineered Steel Pressure Pipe
projects for which the Company has been notified that it is the
successful bidder, but a binding agreement has not been
executed.
|
3
|
Northwest Pipe Company
defines "order book" as unfulfilled orders outstanding at the
measurement date for its Precast Infrastructure and Engineered
Systems segment.
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except
per share amounts)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
$
|
72,126
|
|
|
$
|
71,579
|
|
|
$
|
307,572
|
|
|
$
|
259,823
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
34,702
|
|
|
|
30,968
|
|
|
|
150,093
|
|
|
|
73,490
|
|
Total net
sales
|
|
|
106,828
|
|
|
|
102,547
|
|
|
|
457,665
|
|
|
|
333,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
60,143
|
|
|
|
62,911
|
|
|
|
263,099
|
|
|
|
228,542
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
24,814
|
|
|
|
26,058
|
|
|
|
108,711
|
|
|
|
60,517
|
|
Total cost of
sales
|
|
|
84,957
|
|
|
|
88,969
|
|
|
|
371,810
|
|
|
|
289,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
11,983
|
|
|
|
8,668
|
|
|
|
44,473
|
|
|
|
31,281
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
9,888
|
|
|
|
4,910
|
|
|
|
41,382
|
|
|
|
12,973
|
|
Total gross
profit
|
|
|
21,871
|
|
|
|
13,578
|
|
|
|
85,855
|
|
|
|
44,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
|
|
10,885
|
|
|
|
10,493
|
|
|
|
41,034
|
|
|
|
28,222
|
|
Operating
income
|
|
|
10,986
|
|
|
|
3,085
|
|
|
|
44,821
|
|
|
|
16,032
|
|
Other income
|
|
|
41
|
|
|
|
68
|
|
|
|
97
|
|
|
|
328
|
|
Interest
expense
|
|
|
(1,175)
|
|
|
|
(515)
|
|
|
|
(3,568)
|
|
|
|
(1,202)
|
|
Income before income
taxes
|
|
|
9,852
|
|
|
|
2,638
|
|
|
|
41,350
|
|
|
|
15,158
|
|
Income tax
expense
|
|
|
1,891
|
|
|
|
367
|
|
|
|
10,201
|
|
|
|
3,635
|
|
Net income
|
|
$
|
7,961
|
|
|
$
|
2,271
|
|
|
$
|
31,149
|
|
|
$
|
11,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.80
|
|
|
$
|
0.23
|
|
|
$
|
3.14
|
|
|
$
|
1.17
|
|
Diluted
|
|
$
|
0.79
|
|
|
$
|
0.23
|
|
|
$
|
3.11
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
9,927
|
|
|
|
9,871
|
|
|
|
9,914
|
|
|
|
9,854
|
|
Diluted
|
|
|
10,061
|
|
|
|
9,954
|
|
|
|
10,012
|
|
|
|
9,928
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In
thousands)
|
|
|
|
December 31,
|
|
|
2022
|
|
|
2021
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,681
|
|
|
$
|
2,997
|
|
Trade and other
receivables, net
|
|
|
71,563
|
|
|
|
52,664
|
|
Contract
assets
|
|
|
121,778
|
|
|
|
107,170
|
|
Inventories
|
|
|
71,029
|
|
|
|
59,651
|
|
Prepaid expenses and
other
|
|
|
10,689
|
|
|
|
5,744
|
|
Total current
assets
|
|
|
278,740
|
|
|
|
228,226
|
|
Property and
equipment, net
|
|
|
133,166
|
|
|
|
121,266
|
|
Operating lease
right-of-use assets
|
|
|
93,124
|
|
|
|
98,507
|
|
Goodwill
|
|
|
55,504
|
|
|
|
53,684
|
|
Intangible assets,
net
|
|
|
35,264
|
|
|
|
39,376
|
|
Other
assets
|
|
|
5,542
|
|
|
|
6,620
|
|
Total
assets
|
|
$
|
601,340
|
|
|
$
|
547,679
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current
debt
|
|
$
|
10,756
|
|
|
$
|
-
|
|
Accounts
payable
|
|
|
26,968
|
|
|
|
32,267
|
|
Accrued
liabilities
|
|
|
30,957
|
|
|
|
24,498
|
|
Contract
liabilities
|
|
|
17,456
|
|
|
|
2,623
|
|
Current portion of
operating lease liabilities
|
|
|
4,702
|
|
|
|
4,704
|
|
Total current
liabilities
|
|
|
90,839
|
|
|
|
64,092
|
|
Borrowings on line of
credit
|
|
|
83,696
|
|
|
|
86,761
|
|
Operating lease
liabilities
|
|
|
89,472
|
|
|
|
93,725
|
|
Deferred income
taxes
|
|
|
11,402
|
|
|
|
10,984
|
|
Other long-term
liabilities
|
|
|
7,657
|
|
|
|
8,734
|
|
Total
liabilities
|
|
|
283,066
|
|
|
|
264,296
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
318,274
|
|
|
|
283,383
|
|
Total liabilities and
stockholders' equity
|
|
$
|
601,340
|
|
|
$
|
547,679
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands, except
per share amounts)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, as
reported
|
|
$
|
7,961
|
|
|
$
|
2,271
|
|
|
$
|
31,149
|
|
|
$
|
11,523
|
|
Adjustments for
non-recurring items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
transaction costs
|
|
|
-
|
|
|
|
2,587
|
|
|
|
59
|
|
|
|
3,387
|
|
Amortization of
acquired intangibles (1)
|
|
|
750
|
|
|
|
879
|
|
|
|
3,173
|
|
|
|
879
|
|
Acquisition-related
fair value inventory charges
|
|
|
-
|
|
|
|
2,319
|
|
|
|
-
|
|
|
|
2,319
|
|
Estimated tax impact
of non-recurring items
|
|
|
(179)
|
|
|
|
(1,432)
|
|
|
|
(793)
|
|
|
|
(1,630)
|
|
Adjusted net
income
|
|
$
|
8,532
|
|
|
$
|
6,624
|
|
|
$
|
33,588
|
|
|
$
|
16,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share, as reported
|
|
$
|
0.79
|
|
|
$
|
0.23
|
|
|
$
|
3.11
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted net
income per share
|
|
$
|
0.85
|
|
|
$
|
0.67
|
|
|
$
|
3.35
|
|
|
$
|
1.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amortization of
acquired intangibles represents amortization of ParkUSA intangible
assets only and is included for comparability purposes between 2022
and 2021.
|
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SOURCE Northwest Pipe Company