- Annual net sales of $333.3
million increased 16.6% year-over-year
- Record full-year sales levels achieved at both recently
acquired precast companies
- Backlog of $183 million;
record backlog including confirmed orders of $290 million for the Engineered Steel Pressure
Pipe segment
- Record order book of $51
million for the Precast Infrastructure and Engineered
Systems segment
- Annual net income of $1.16 per
diluted share; adjusted net income of $1.66 per diluted share
- Completed acquisition of Park Environmental Equipment, LLC
("ParkUSA") on October 5, 2021 for
approximately $88.4 million
VANCOUVER, Wash.,
March 15, 2022
/PRNewswire/ -- Northwest Pipe Company (NASDAQ: NWPX) (the
"Company"), an industry leader of engineered pipeline systems for
water infrastructure and high-quality precast and reinforced
concrete products, today announced its financial results for the
fourth quarter and full year ended December 31, 2021. The
Company will broadcast its fourth quarter and full year 2021
earnings conference call on Wednesday, March 16, 2022 at
7:00 a.m. PT.
Acquisition of ParkUSA
As previously announced, the Company completed 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
approximately $88.4 million,
subject to a post-closing adjustment based on changes in net
working capital. The acquisition was funded through borrowings on
the Company's line of credit.
Effective in the fourth quarter of 2021, the Company revised its
reporting structure to better align with its internal management
structure and the financial information used to assess its
performance and allocate resources. As such, the Company is
reporting on two operating segments: 1) Engineered Steel
Pressure Pipe and 2) Precast Infrastructure and Engineered
Systems.
Management Commentary
"We remain very excited about our recent acquisition of ParkUSA.
ParkUSA's product portfolio of precast related environmental
solutions and engineered water control systems serves both the
commercial and residential construction markets. We expect the
business to be immediately accretive and to create organic growth
opportunities throughout the Company," said Scott Montross, President and Chief Executive
Officer of Northwest Pipe Company.
Mr. Montross continued, "The significant number of project
bidding delays that we experienced during 2021 resulted in one of
the smallest tonnage water transmission bidding years we have seen
in a very long time. In combination with a small market, a volatile
steel market with significant delivery disruptions and customer
driven production delays of orders already in backlog, created
downward pressure on margins. Despite the headwinds, we ended the
year with a record backlog including confirmed orders of
$290 million, which is expected to continue to grow in size
and quality due to very strong bidding we experienced so far in the
first quarter of 2022. However, we expect water transmission
margins to remain muted in the first quarter of 2022 as we work
through older backlog, and anticipate margin expansion beginning in
the second quarter of 2022."
Mr. Montross concluded, "Our precast concrete business was
strong throughout 2021 producing a record level of revenue, strong
gross profit, and a record order book of $51 million as of
December 31, 2021. Despite owning ParkUSA for less than a full
quarter, the business contributed $18 million in revenue to
our fourth quarter results. Our growing precast related business
continues to gain strength in its ability to off-set slower periods
in the water transmission market. Based on the current precast
related market strength, we are entering 2022 with solid momentum
and expect the precast business to remain strong for the near
term."
Fourth Quarter 2021 Financial Results
Consolidated
- Net sales increased 47.8% to $102.5
million in the fourth quarter of 2021 from $69.4 million in the fourth quarter of 2020. Net
sales in the fourth quarter of 2021 included $18.0 million from the recently acquired ParkUSA
operations.
- Gross profit increased 9.8% to $13.6
million, or 13.2% of net sales, in the fourth quarter of
2021 from $12.4 million, or 17.8% of
net sales, in the fourth quarter of 2020.
- Net income was $2.3 million, or
$0.23 per diluted share, in the
fourth quarter of 2021 compared to $5.2
million, or $0.53 per diluted
share, in the fourth quarter of 2020.
- Adjusted net income was $6.6
million, or $0.67 per diluted
share, in the fourth quarter of 2021 compared to $5.4 million, or $0.54 per diluted share, in the fourth quarter of
2020. 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 23.2% to $71.6
million in the fourth quarter of 2021 from $58.1 million in the fourth quarter of 2020
driven by a 45% increase in selling price per ton due to increased
materials costs and changes in product mix, partially offset by a
15% decrease in tons produced resulting from changes in project
timing.
- SPP gross profit decreased 20.5% to $8.7
million, or 12.1% of SPP net sales, in the fourth quarter of
2021 from $10.9 million, or 18.8% of
SPP net sales, in the fourth quarter of 2020 due to the combination
of changes in product mix and pressure on project pricing.
- SPP backlog1 was approximately $183 million as of December 31, 2021 compared to $191 million as of September 30, 2021 and $167 million as of December 31, 2020. Backlog including confirmed
orders2 was $290 million
as of December 31, 2021 compared to
$273 million as of September 30, 2021 and $221 million as of December 31, 2020.
Precast Infrastructure and Engineered Systems Segment
("Precast")
- Precast net sales increased 174.2% to $31.0 million in the fourth quarter of 2021 from
$11.3 million in the fourth quarter
of 2020 primarily due to the ParkUSA operations, which contributed
$18.0 million in Precast net sales
during the fourth quarter of 2021.
- Precast gross profit increased 237.5% to $4.9 million, or 15.9% of Precast net sales, in
the fourth quarter of 2021 from $1.5
million, or 12.9% of Precast net sales, in the fourth
quarter of 2020 due to contributions from the ParkUSA operations,
as well as higher prices and production volume at the Geneva Pipe
and Precast Company ("Geneva")
operations. Precast gross profit in the fourth quarter of 2021 was
reduced by $2.3 million in higher
acquisition-related fair value inventory charges.
- Precast order book3 was approximately
$51 million as of December 31, 2021 compared to $24 million as of September 30, 2021 and $11
million as of December 31,
2020. December 31, 2021 is the
first period that includes the order book for ParkUSA.
Full Year 2021 Financial Results
Consolidated
- Net sales increased 16.6% to $333.3
million in 2021 from $285.9
million in 2020.
- Gross profit decreased 12.4% to $44.3
million, or 13.3% of net sales in 2021 from $50.5 million, or 17.7% of net sales, in
2020.
- Net income was $11.5 million, or
$1.16 per diluted share, in 2021
compared to $19.1 million, or
$1.93 per diluted share, in
2020.
- Adjusted net income was $16.5
million, or $1.66 per diluted
share, in 2021 compared to $19.6
million, or $1.99 per diluted
share, in 2020. See the Company's "Reconciliation of Non-GAAP
Financial Measures" in the table below.
Engineered Steel Pressure Pipe Segment (SPP)
- SPP net sales increased 7.5% to $259.8
million in 2021 from $241.7
million in 2020 driven by a 15% increase in selling price
per ton due to increased materials costs and changes in product
mix, partially offset by a 6% decrease in tons produced resulting
from changes in project timing.
- SPP gross profit decreased 29.4% to $31.3 million, or 12.0% of SPP net sales, in 2021
from $44.3 million, or 18.3% of SPP
net sales, in 2020 due to the combination of changes in product mix
and pressure on project pricing. Additionally, as a result of the
fire at the Company's Saginaw facility in April 2019, $1.4
million of business interruption insurance recovery (net of
incremental production costs) was recorded in 2020.
Precast Infrastructure and Engineered Systems Segment
(Precast)
- Precast net sales increased 66.2% to $73.5 million in 2021 from $44.2 million in 2020 primarily due to the
acquisition of ParkUSA in October
2021, which contributed $18.0
million in Precast net sales during the fourth quarter of
2021, as well as a 26% increase in sales at the Geneva operations acquired in late
January 2020 due to an 18% increase
in shipments and a 6% increase in selling prices.
- Precast gross profit increased 108.4% to $13.0 million, or 17.7% of Precast net sales, in
2021 from $6.2 million, or 14.1% of
Precast net sales, in 2020 due to contributions from the
acquisition of ParkUSA, as well as higher prices and production
volume at the Geneva operations.
Precast gross profit in 2021 was reduced by $2.1 million in higher acquisition-related fair
value inventory charges.
Liquidity Details
As of December 31, 2021, the Company had $86.8 million of outstanding revolving loan
borrowings, $1.6 million of
outstanding letters of credit, 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 fourth quarter and full year 2021 financial results will
be held on Wednesday, March 16, 2022 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 Wednesday,
March 30, 2022 by dialing 1–844-512-2921 in the U.S. or
1–412-317-6671 internationally and entering the replay access code:
13726286.
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, 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, 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, supply chain challenges, labor
shortages, ongoing military conflicts in the Ukraine and related consequences, 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 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
###
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,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
$
|
71,579
|
|
|
$
|
58,086
|
|
|
$
|
259,823
|
|
|
$
|
241,690
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
30,968
|
|
|
|
11,295
|
|
|
|
73,490
|
|
|
|
44,217
|
|
Total net
sales
|
|
|
102,547
|
|
|
|
69,381
|
|
|
|
333,313
|
|
|
|
285,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
62,911
|
|
|
|
47,179
|
|
|
|
228,542
|
|
|
|
197,397
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
26,058
|
|
|
|
9,839
|
|
|
|
60,517
|
|
|
|
37,991
|
|
Total cost of
sales
|
|
|
88,969
|
|
|
|
57,018
|
|
|
|
289,059
|
|
|
|
235,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
8,668
|
|
|
|
10,907
|
|
|
|
31,281
|
|
|
|
44,293
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
4,910
|
|
|
|
1,456
|
|
|
|
12,973
|
|
|
|
6,226
|
|
Total gross
profit
|
|
|
13,578
|
|
|
|
12,363
|
|
|
|
44,254
|
|
|
|
50,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
|
|
10,493
|
|
|
|
5,769
|
|
|
|
28,222
|
|
|
|
24,954
|
|
Operating
income
|
|
|
3,085
|
|
|
|
6,594
|
|
|
|
16,032
|
|
|
|
25,565
|
|
Other
income
|
|
|
68
|
|
|
|
138
|
|
|
|
328
|
|
|
|
953
|
|
Interest
income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
49
|
|
Interest
expense
|
|
|
(515)
|
|
|
|
(214)
|
|
|
|
(1,202)
|
|
|
|
(933)
|
|
Income before income
taxes
|
|
|
2,638
|
|
|
|
6,518
|
|
|
|
15,158
|
|
|
|
25,634
|
|
Income tax
expense
|
|
|
367
|
|
|
|
1,297
|
|
|
|
3,635
|
|
|
|
6,584
|
|
Net income
|
|
$
|
2,271
|
|
|
$
|
5,221
|
|
|
$
|
11,523
|
|
|
$
|
19,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.23
|
|
|
$
|
0.54
|
|
|
$
|
1.17
|
|
|
$
|
1.95
|
|
Diluted
|
|
$
|
0.23
|
|
|
$
|
0.53
|
|
|
$
|
1.16
|
|
|
$
|
1.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
9,871
|
|
|
|
9,805
|
|
|
|
9,854
|
|
|
|
9,788
|
|
Diluted
|
|
|
9,954
|
|
|
|
9,902
|
|
|
|
9,928
|
|
|
|
9,873
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,997
|
|
|
$
|
37,927
|
|
Trade and other
receivables, net
|
|
|
52,664
|
|
|
|
42,680
|
|
Contract
assets
|
|
|
107,170
|
|
|
|
76,985
|
|
Inventories
|
|
|
59,651
|
|
|
|
29,177
|
|
Prepaid expenses and
other
|
|
|
5,744
|
|
|
|
5,194
|
|
Total current
assets
|
|
|
228,226
|
|
|
|
191,963
|
|
Property and
equipment, net
|
|
|
121,266
|
|
|
|
110,184
|
|
Operating lease
right-of-use-assets
|
|
|
98,507
|
|
|
|
30,813
|
|
Goodwill
|
|
|
53,684
|
|
|
|
22,985
|
|
Intangible assets,
net
|
|
|
39,376
|
|
|
|
10,518
|
|
Other
assets
|
|
|
6,620
|
|
|
|
6,552
|
|
Total
assets
|
|
$
|
547,679
|
|
|
$
|
373,015
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
-
|
|
|
$
|
7,701
|
|
Accounts
payable
|
|
|
32,267
|
|
|
|
12,993
|
|
Accrued
liabilities
|
|
|
24,498
|
|
|
|
16,814
|
|
Contract
liabilities
|
|
|
2,623
|
|
|
|
6,189
|
|
Current portion of
operating lease liabilities
|
|
|
4,704
|
|
|
|
2,204
|
|
Total current
liabilities
|
|
|
64,092
|
|
|
|
45,901
|
|
Borrowings on line of
credit
|
|
|
86,761
|
|
|
|
-
|
|
Long-term debt, less
current portion
|
|
|
-
|
|
|
|
5,888
|
|
Operating lease
liabilities, less current portion
|
|
|
93,725
|
|
|
|
27,911
|
|
Deferred income
taxes
|
|
|
10,984
|
|
|
|
12,481
|
|
Other long-term
liabilities
|
|
|
8,734
|
|
|
|
11,208
|
|
Total
liabilities
|
|
|
264,296
|
|
|
|
103,389
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
283,383
|
|
|
|
269,626
|
|
Total liabilities and
stockholders' equity
|
|
$
|
547,679
|
|
|
$
|
373,015
|
|
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,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, as
reported
|
|
$
|
2,271
|
|
|
$
|
5,221
|
|
|
$
|
11,523
|
|
|
$
|
19,050
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
transaction costs
|
|
|
2,587
|
|
|
|
207
|
|
|
|
3,387
|
|
|
|
2,831
|
|
Amortization of
acquired intangibles4
|
|
|
879
|
|
|
|
-
|
|
|
|
879
|
|
|
|
-
|
|
Acquisition-related
fair value inventory charges
|
|
|
2,319
|
|
|
|
-
|
|
|
|
2,319
|
|
|
|
266
|
|
Saginaw fire insurance
recoveries, net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,399)
|
|
Saginaw fire gain on
property and equipment replacement
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(951)
|
|
Estimated tax impact
of adjustments
|
|
|
(1,432)
|
|
|
|
(50)
|
|
|
|
(1,630)
|
|
|
|
(185)
|
|
Adjusted net
income
|
|
$
|
6,624
|
|
|
$
|
5,378
|
|
|
$
|
16,478
|
|
|
$
|
19,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
share, as reported
|
|
$
|
0.23
|
|
|
$
|
0.53
|
|
|
$
|
1.16
|
|
|
$
|
1.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
income per share
|
|
$
|
0.67
|
|
|
$
|
0.54
|
|
|
$
|
1.66
|
|
|
$
|
1.99
|
|
____________________
|
1 Northwest
Pipe Company defines "backlog" as the balance of remaining
performance obligations under signed contracts for water
infrastructure steel pipe products for which revenue is recognized
over time.
|
2 Northwest
Pipe Company defines "confirmed orders" as water infrastructure
steel 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. Cancelations against outstanding orders
are measured in the period they are received.
|
4
Amortization of acquired intangibles represents amortization of
ParkUSA intangible assets only and is included for comparability
purposes between 2021 and 2020.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/northwest-pipe-company-announces-fourth-quarter-and-full-year-2021-financial-results-301503390.html
SOURCE Northwest Pipe Company