- Net sales of $109.3 million
increased 51.2% year-over-year
- Gross profit of $14.8 million
increased 68.5% year-over-year
- Backlog1 of $200
million; backlog including confirmed
orders2 of $341
million for the Engineered Steel Pressure Pipe segment
("SPP"), a new quarterly record
- Record order book3 of $66 million for the Precast Infrastructure and
Engineered Systems segment ("Precast")
- Net income of $0.36 per
diluted share; adjusted net income of $0.42 per diluted share
VANCOUVER, Wash., May 4, 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 first quarter ended
March 31, 2022. The Company will broadcast its first quarter
2022 earnings conference call on Thursday, May 5, 2022 at
7:00 a.m. PT.
Management Commentary
"The integration of ParkUSA, which was acquired on
October 5, 2021, is on schedule and we continue to be very
excited about the future growth prospects of this business. Our
Precast business remained strong in the first quarter generating
$34.6 million in revenue and a
gross profit margin nearing 22%. We ended the first quarter with a
record Precast order book of $66 million. We expect the order
book to continue to grow for the near term which should facilitate
further margin expansion as we progress through what appears to be
a very strong precast market in 2022," said Scott Montross, President and Chief Executive
Officer of Northwest Pipe Company.
Mr. Montross continued, "We experienced very strong steel
pressure pipe bidding during the first quarter of 2022 which
elevated our backlog including confirmed orders to an all-time
record of $341 million. Despite the first quarter being
projected to be the largest bidding period of the year, we expect
bidding to be fairly solid throughout 2022 and backlog to remain
elevated compared to recent historical levels. The improving
quality of the backlog is expected to lead to SPP margin expansion
into the mid-teens beginning in the second quarter. As we have
discussed earlier, SPP gross profit margins remained muted in the
first quarter due to the extremely small bidding market and
associated bidding pressures we experienced in 2021. In addition,
we recorded a discrete charge for a settlement of a product
liability claim on a dispute that originated in 2015, which reduced
our gross profit for the quarter. Without the settlement charge,
our first quarter SPP margins would have been similar to those
realized in both the first and fourth quarters of 2021."
First Quarter 2022 Financial Results
Consolidated
- Net sales increased 51.2% to $109.3
million from $72.3 million in
the first quarter of 2021.
- Gross profit increased 68.5% to $14.8
million, or 13.5% of net sales, from $8.8 million, or 12.1% of net sales, in the first
quarter of 2021.
- Net income was $3.6 million, or
$0.36 per diluted share, compared to
$2.2 million, or $0.22 per diluted share, in the first quarter of
2021.
- Adjusted net income was $4.2
million, or $0.42 per diluted
share, compared to $2.3 million, or
$0.23 per diluted share, in the first
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 24.4% to $74.7
million from $60.0 million in
the first quarter of 2021 driven by an 85% increase in selling
price per ton due to increased materials costs and changes in
product mix, partially offset by a 33% decrease in tons produced
resulting from changes in project timing.
- SPP gross profit remained relatively flat at $7.2 million, or 9.6% of SPP net sales, compared
to 11.9% of SPP net sales in the first quarter of 2021 due to the
combination of changes in product mix and pressure on project
pricing. SPP gross profit in the first quarter of 2022 was reduced
for a product liability settlement reserve recorded in the
quarter.
- SPP backlog was approximately $200
million as of March 31, 2022
compared to $183 million as of
December 31, 2021 and $178 million as of March
31, 2021. Backlog including confirmed orders was
$341 million as of March 31, 2022 compared to $290 million as of December 31, 2021 and $210
million as of March 31,
2021.
Precast Infrastructure and Engineered Systems Segment
(Precast)
- Precast net sales increased 182.5% to $34.6 million from $12.3
million in the first quarter of 2021 primarily due to the
Park Environmental Equipment, LLC ("ParkUSA") operations acquired
in October 2021, which contributed
$19.7 million in net sales during the
first quarter of 2022, as well as a 22% increase in net sales at
the Geneva Pipe and Precast Company ("Geneva") operations due to a 35% increase in
selling prices due to the high demand for the Company's concrete
products coupled with increased material costs, partially offset by
a 10% decrease in volume shipped due to changes in product
mix.
- Precast gross profit increased 368.7% to $7.6 million, or 21.9% of Precast net sales, from
$1.6 million, or 13.2% of Precast net
sales, in the first quarter of 2021 due to contributions from the
ParkUSA operations, as well as improved pricing at the Geneva operations.
- Precast order book was approximately $66
million as of March 31, 2022
compared to $51 million as of
December 31, 2021 and $16 million as of March
31, 2021. December 31, 2021
was the first period that included the order book for ParkUSA.
Liquidity Details
As of March 31, 2022, the Company had $90.3 million of outstanding revolving loan
borrowings, $1.1 million of
outstanding letters of credit, and additional borrowing capacity of
approximately $34 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 first quarter 2022 financial results will be held on
Thursday, May 5, 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 Thursday, May 19, 2022 by dialing
1‑844-512-2921 in the U.S. or 1‑412-317-6671 internationally and
entering the replay access code: 13728597.
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 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 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, 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. Cancelations against outstanding orders
are measured in the period they are received.
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Engineered Steel Pressure Pipe
|
|
$
|
74,715
|
|
|
$
|
60,057
|
|
Precast Infrastructure and Engineered Systems
|
|
|
34,616
|
|
|
|
12,254
|
|
Total net sales
|
|
|
109,331
|
|
|
|
72,311
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
Engineered Steel Pressure Pipe
|
|
|
67,526
|
|
|
|
52,903
|
|
Precast Infrastructure and Engineered Systems
|
|
|
27,019
|
|
|
|
10,633
|
|
Total cost of sales
|
|
|
94,545
|
|
|
|
63,536
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
Engineered Steel Pressure Pipe
|
|
|
7,189
|
|
|
|
7,154
|
|
Precast Infrastructure and Engineered Systems
|
|
|
7,597
|
|
|
|
1,621
|
|
Total gross profit
|
|
|
14,786
|
|
|
|
8,775
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
|
|
9,368
|
|
|
|
5,830
|
|
Operating income
|
|
|
5,418
|
|
|
|
2,945
|
|
Other income
|
|
|
44
|
|
|
|
59
|
|
Interest
expense
|
|
|
(560)
|
|
|
|
(227)
|
|
Income before income taxes
|
|
|
4,902
|
|
|
|
2,777
|
|
Income tax
expense
|
|
|
1,343
|
|
|
|
602
|
|
Net income
|
|
$
|
3,559
|
|
|
$
|
2,175
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
|
$
|
0.22
|
|
Diluted
|
|
$
|
0.36
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
9,881
|
|
|
|
9,814
|
|
Diluted
|
|
|
9,973
|
|
|
|
9,921
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
March 31,
2022
|
|
|
December 31,
2021
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,301
|
|
|
$
|
2,997
|
|
Trade and other receivables,
net
|
|
|
59,227
|
|
|
|
52,664
|
|
Contract assets
|
|
|
111,067
|
|
|
|
107,170
|
|
Inventories
|
|
|
62,708
|
|
|
|
59,651
|
|
Prepaid expenses and
other
|
|
|
4,939
|
|
|
|
5,744
|
|
Total current
assets
|
|
|
241,242
|
|
|
|
228,226
|
|
Property and equipment, net
|
|
|
123,047
|
|
|
|
121,266
|
|
Operating lease right-of-use assets
|
|
|
97,085
|
|
|
|
98,507
|
|
Goodwill
|
|
|
53,684
|
|
|
|
53,684
|
|
Intangible assets, net
|
|
|
38,182
|
|
|
|
39,376
|
|
Other assets
|
|
|
6,281
|
|
|
|
6,620
|
|
Total assets
|
|
$
|
559,521
|
|
|
$
|
547,679
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
36,953
|
|
|
$
|
32,267
|
|
Accrued liabilities
|
|
|
23,912
|
|
|
|
24,498
|
|
Contract liabilities
|
|
|
4,090
|
|
|
|
2,623
|
|
Current portion of operating
lease liabilities
|
|
|
4,769
|
|
|
|
4,704
|
|
Total current
liabilities
|
|
|
69,724
|
|
|
|
64,092
|
|
Borrowings in line of credit
|
|
|
90,252
|
|
|
|
86,761
|
|
Operating lease liabilities
|
|
|
92,539
|
|
|
|
93,725
|
|
Deferred income taxes
|
|
|
11,370
|
|
|
|
10,984
|
|
Other long-term liabilities
|
|
|
8,638
|
|
|
|
8,734
|
|
Total
liabilities
|
|
|
272,523
|
|
|
|
264,296
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
286,998
|
|
|
|
283,383
|
|
Total liabilities and
stockholders' equity
|
|
$
|
559,521
|
|
|
$
|
547,679
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
RECONCILIATION
OF NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
Net income, as
reported
|
|
$
|
3,559
|
|
|
$
|
2,175
|
|
Adjustments for non-recurring items:
|
|
|
|
|
|
|
|
|
Acquisition-related transaction
costs
|
|
|
23
|
|
|
|
146
|
|
Amortization of acquired
intangibles (1)
|
|
|
879
|
|
|
|
-
|
|
Estimated tax impact of
non-recurring items
|
|
|
(223)
|
|
|
|
(36)
|
|
Adjusted net
income
|
|
$
|
4,238
|
|
|
$
|
2,285
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share, as reported
|
|
$
|
0.36
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted net
income per share
|
|
$
|
0.42
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
(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