- Net sales of $118.5 million
increased 60.6% year-over-year
- Gross profit of $24.1 million
increased 152.5% year-over-year
- Net income of $0.97 per
diluted share; adjusted net income of $1.04 per diluted share
- Record quarterly profits and revenues for both of the
recently acquired Precast Infrastructure and Engineered Systems
segment ("Precast") businesses
- Backlog1 of $303
million; backlog including confirmed
orders2 of $338
million for the Engineered Steel Pressure Pipe segment
("SPP")
- Record order book3 of $75 million for Precast
VANCOUVER, Wash., Aug. 8, 2022
/PRNewswire/ -- Northwest Pipe Company (NASDAQ: NWPX) (the
"Company"), a leading manufacturer of water-related infrastructure
including engineered pipeline systems and precast products, today
announced its financial results for the second quarter ended
June 30, 2022. The Company will broadcast its second quarter
2022 earnings conference call on Monday, August 8, 2022 at
2:00 p.m. PT.
Management Commentary
"The integration of ParkUSA is on schedule and we remain very
excited about the potential of our newest acquisition. Our Precast
business continued to be very strong during the second quarter,
producing revenue of $41.4 million, a gross margin of 31.3% and a
record order book that ended the quarter at nearly
$75 million. Despite some of the current economic headwinds,
we expect the Precast business to remain strong for the near term,"
said Scott Montross, President and
Chief Executive Officer of Northwest Pipe Company.
Mr. Montross continued, "Our Engineered Steel Pressure Pipe
business continued to experience solid bidding and ended the second
quarter with a strong backlog including confirmed orders of
$338 million. While the first half of 2022 was projected to be
the high-water mark for backlog, we expect it to remain fairly high
compared to historical standards for the balance of the year. In
the second quarter, our SPP business generated revenue of
$77.1 million and gross margins
of 14.4%. For the third quarter of 2022, our SPP business was on
track to generate similar revenue and improving margins compared to
the second quarter of 2022. However, recent severe weather events
in late July and early August forced shutdowns at both our
Adelanto, California and
St. Louis, Missouri plants
due to flooding which may adversely impact our revenue and margins
if the shutdowns become extended. As such, we currently anticipate
our third quarter SPP revenue could be down slightly from the
second quarter of 2022 with gross margins that are flat to modestly
higher."
Second Quarter 2022 Financial Results
Consolidated
- Net sales increased 60.6% to $118.5
million from $73.8 million in
the second quarter of 2021.
- Gross profit increased 152.5% to $24.1
million, or 20.3% of net sales, from $9.5 million, or 12.9% of net sales, in the
second quarter of 2021.
- Net income was $9.7 million, or
$0.97 per diluted share, compared to
$2.1 million, or $0.21 per diluted share, in the second quarter of
2021.
- Adjusted net income was $10.3
million, or $1.04 per diluted
share, compared to $2.2 million, or
$0.22 per diluted share, in the
second 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 31.2% to $77.1
million from $58.7 million in
the second quarter of 2021 driven by a 35% increase in selling
price per ton due to increased materials costs and changes in
product mix, partially offset by a 3% decrease in tons produced
resulting from changes in project timing.
- SPP gross profit increased 67.9% to $11.1 million, or 14.4% of SPP net sales,
compared to $6.6 million, or 11.3% of
SPP net sales, in the second quarter of 2021 primarily due to
changes in product mix.
- SPP backlog was approximately $303
million as of June 30, 2022
compared to $200 million as of
March 31, 2022 and $195 million as of June
30, 2021. Backlog including confirmed orders was
$338 million as of June 30, 2022 compared to $341 million as of March
31, 2022 and $234 million as
of June 30, 2021.
Precast Infrastructure and Engineered Systems Segment
(Precast)
- Precast net sales increased 175.2% to $41.4 million from $15.1
million in the second quarter of 2021 primarily due to the
Park Environmental Equipment, LLC ("ParkUSA") operations acquired
in October 2021, which contributed
$24.2 million in net sales. In
addition, the segment realized a 14% increase in net sales at the
pre-existing precast operations resulting from a 54% increase in
selling prices due to the high demand for the Company's concrete
products coupled with increased material costs, partially offset by
a 26% decrease in volume shipped due to changes in product
mix.
- Precast gross profit increased 343.9% to $13.0 million, or 31.3% of Precast net sales,
from $2.9 million, or 19.4% of
Precast net sales, in the second quarter of 2021 due to
contributions from the ParkUSA operations, as well as improved
pricing at the pre-existing precast operations.
- Precast order book was approximately $75
million as of June 30, 2022
compared to $66 million as of
March 31, 2022 and $24 million as of June 30,
2021. The quarter ended December 31,
2021 was the first period that included the order book for
ParkUSA.
Liquidity Details
As of June 30, 2022, the Company had $86.7 million of outstanding revolving loan
borrowings and additional borrowing capacity of approximately
$37 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 second quarter 2022 financial results will be held on
Monday, August 8, 2022 at 2:00 p.m. PT. 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 Monday,
August 22, 2022 by dialing 1‑844-512-2921 in the U.S. or
1‑412-317-6671 internationally and entering the replay access code:
10019896.
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, fluctuations in
interest rate risk and changes in market interest rates, 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, 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, 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
(360) 397‑6294 • investors@nwpipe.com
Or Addo Investor Relations
(310) 829‑5400
_______________________________
|
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
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
$
|
77,068
|
|
|
$
|
58,748
|
|
|
$
|
151,783
|
|
|
$
|
118,805
|
|
Precast Infrastructure
and
Engineered Systems
|
|
|
41,454
|
|
|
|
15,064
|
|
|
|
76,070
|
|
|
|
27,318
|
|
Total net
sales
|
|
|
118,522
|
|
|
|
73,812
|
|
|
|
227,853
|
|
|
|
146,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
65,963
|
|
|
|
52,133
|
|
|
|
133,489
|
|
|
|
105,036
|
|
Precast Infrastructure
and
Engineered Systems
|
|
|
28,479
|
|
|
|
12,141
|
|
|
|
55,498
|
|
|
|
22,774
|
|
Total cost of
sales
|
|
|
94,442
|
|
|
|
64,274
|
|
|
|
188,987
|
|
|
|
127,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
11,105
|
|
|
|
6,615
|
|
|
|
18,294
|
|
|
|
13,769
|
|
Precast Infrastructure
and
Engineered Systems
|
|
|
12,975
|
|
|
|
2,923
|
|
|
|
20,572
|
|
|
|
4,544
|
|
Total gross
profit
|
|
|
24,080
|
|
|
|
9,538
|
|
|
|
38,866
|
|
|
|
18,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
expense
|
|
|
10,127
|
|
|
|
6,337
|
|
|
|
19,495
|
|
|
|
12,167
|
|
Operating
income
|
|
|
13,953
|
|
|
|
3,201
|
|
|
|
19,371
|
|
|
|
6,146
|
|
Other income
|
|
|
1
|
|
|
|
30
|
|
|
|
45
|
|
|
|
89
|
|
Interest
expense
|
|
|
(869)
|
|
|
|
(348)
|
|
|
|
(1,429)
|
|
|
|
(575)
|
|
Income before income
taxes
|
|
|
13,085
|
|
|
|
2,883
|
|
|
|
17,987
|
|
|
|
5,660
|
|
Income tax
expense
|
|
|
3,412
|
|
|
|
752
|
|
|
|
4,755
|
|
|
|
1,354
|
|
Net income
|
|
$
|
9,673
|
|
|
$
|
2,131
|
|
|
$
|
13,232
|
|
|
$
|
4,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.98
|
|
|
$
|
0.22
|
|
|
$
|
1.34
|
|
|
$
|
0.44
|
|
Diluted
|
|
$
|
0.97
|
|
|
$
|
0.21
|
|
|
$
|
1.33
|
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
9,918
|
|
|
|
9,861
|
|
|
|
9,900
|
|
|
|
9,837
|
|
Diluted
|
|
|
9,968
|
|
|
|
9,915
|
|
|
|
9,971
|
|
|
|
9,920
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
June 30,
2022
|
|
|
December 31,
2021
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,543
|
|
|
$
|
2,997
|
|
Trade and other
receivables, net
|
|
|
63,047
|
|
|
|
52,664
|
|
Contract
assets
|
|
|
125,158
|
|
|
|
107,170
|
|
Inventories
|
|
|
74,247
|
|
|
|
59,651
|
|
Prepaid expenses and
other
|
|
|
3,837
|
|
|
|
5,744
|
|
Total current
assets
|
|
|
269,832
|
|
|
|
228,226
|
|
Property and
equipment, net
|
|
|
124,651
|
|
|
|
121,266
|
|
Operating lease
right-of-use assets
|
|
|
95,628
|
|
|
|
98,507
|
|
Goodwill
|
|
|
53,684
|
|
|
|
53,684
|
|
Intangible assets,
net
|
|
|
37,073
|
|
|
|
39,376
|
|
Other
assets
|
|
|
5,715
|
|
|
|
6,620
|
|
Total
assets
|
|
$
|
586,583
|
|
|
$
|
547,679
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
49,640
|
|
|
$
|
32,267
|
|
Accrued
liabilities
|
|
|
29,240
|
|
|
|
24,498
|
|
Contract
liabilities
|
|
|
8,127
|
|
|
|
2,623
|
|
Current portion of
operating lease liabilities
|
|
|
4,769
|
|
|
|
4,704
|
|
Total current
liabilities
|
|
|
91,776
|
|
|
|
64,092
|
|
Borrowings in line of
credit
|
|
|
86,713
|
|
|
|
86,761
|
|
Operating lease
liabilities
|
|
|
91,374
|
|
|
|
93,725
|
|
Deferred income
taxes
|
|
|
11,285
|
|
|
|
10,984
|
|
Other long-term
liabilities
|
|
|
8,491
|
|
|
|
8,734
|
|
Total
liabilities
|
|
|
289,639
|
|
|
|
264,296
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
296,944
|
|
|
|
283,383
|
|
Total liabilities and
stockholders' equity
|
|
$
|
586,583
|
|
|
$
|
547,679
|
|
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,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, as
reported
|
|
$
|
9,673
|
|
|
$
|
2,131
|
|
|
$
|
13,232
|
|
|
$
|
4,306
|
|
Adjustments for
non-recurring
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
transaction
costs
|
|
|
36
|
|
|
|
90
|
|
|
|
59
|
|
|
|
236
|
|
Amortization of
acquired
intangibles(1)
|
|
|
793
|
|
|
|
-
|
|
|
|
1,672
|
|
|
|
-
|
|
Estimated tax impact
of non-recurring items
|
|
|
(205)
|
|
|
|
(22)
|
|
|
|
(428)
|
|
|
|
(58)
|
|
Adjusted net
income
|
|
$
|
10,297
|
|
|
$
|
2,199
|
|
|
$
|
14,535
|
|
|
$
|
4,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share, as
reported
|
|
$
|
0.97
|
|
|
$
|
0.21
|
|
|
$
|
1.33
|
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted net
income per
share
|
|
$
|
1.04
|
|
|
$
|
0.22
|
|
|
$
|
1.46
|
|
|
$
|
0.45
|
|
|
|
(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