- Net sales of $116.4 million
decreased 1.8% year-over-year
- Gross profit of $22.5 million
decreased 6.6% year-over-year
- Net income of $0.74 per
diluted share
- Backlog1 of $292
million; backlog including confirmed
orders2 of $343
million for the Engineered Steel Pressure Pipe segment
("SPP")
- Order book3 of $58 million for the Precast Infrastructure and
Engineered Systems segment ("Precast")
VANCOUVER, Wash., Aug. 2, 2023
/PRNewswire/ --Northwest Pipe Company (NASDAQ: NWPX) (the
"Company"), a leading manufacturer of water-related infrastructure
products 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 second
quarter ended June 30, 2023. The Company will broadcast its
second quarter 2023 earnings conference call on Thursday,
August 3, 2023 at 7:00 a.m. PT.
Management Commentary
"The Precast business delivered $39.1 million in revenue, gross margins of
25.3%, and an order book of $58 million, which was flat to the
previous quarter. While the elevated interest rates and the
associated impact on both commercial and residential construction
has moderately affected the segment from the record highs of 2022,
we are still projecting a good year by historical standards," said
Scott Montross, President and Chief
Executive Officer of Northwest Pipe Company. "Following a slow
first quarter, the SPP business rebounded producing $77.3 million of revenue and gross margins
of 16.3%, 190 basis points higher than the second quarter of 2022.
The SPP backlog including confirmed orders declined from the near
record high at the end of the first quarter to $343 million;
however, we are currently awaiting the potential award of multiple
projects that have recently bid that could stabilize the near-term
backlog. Starting in the second quarter, we expect SSP revenue to
remain at a higher level similar to 2022, but with improved gross
margins."
________________________________
|
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.
|
|
|
Second Quarter 2023 Financial Results
Consolidated
- Net sales decreased 1.8% to $116.4
million from $118.5 million in
the second quarter of 2022.
- Gross profit decreased 6.6% to $22.5
million, or 19.3% of net sales, from $24.1 million, or 20.3% of net sales, in the
second quarter of 2022.
- Net income was $7.4 million, or
$0.74 per diluted share, compared to
$9.7 million, or $0.97 per diluted share, in the second quarter of
2022.
Engineered Steel Pressure Pipe Segment (SPP)
- SPP net sales increased 0.2% to $77.3
million from $77.1 million in
the second quarter of 2022 driven by a 7% increase in selling price
per ton due to product mix, partially offset by a 6% decrease in
tons produced resulting primarily from changes in project
timing.
- SPP gross profit increased 13.2% to $12.6 million, or 16.3% of SPP net sales, from
$11.1 million, or 14.4% of SPP net
sales, in the second quarter of 2022 primarily due to changes in
product mix.
- SPP backlog was $292 million as
of June 30, 2023 compared to
$297 million as of March 31, 2023 and $303
million as of June 30, 2022.
Backlog including confirmed orders was $343
million as of June 30, 2023
compared to $370 million as of
March 31, 2023 and $338 million as of June
30, 2022.
Precast Infrastructure and Engineered Systems Segment
(Precast)
- Precast net sales decreased 5.6% to $39.1 million from $41.5
million in the second quarter of 2022 driven by a 13%
decrease in volume shipped due to lower demand, partially offset by
an 8% increase in selling prices due to increased materials
costs.
- Precast gross profit decreased 23.6% to $9.9 million, or 25.3% of Precast net sales, from
$13.0 million, or 31.3% of Precast
net sales, in the second quarter of 2022 primarily due to increased
production costs.
- Precast order book was $58
million as of June 30, 2023
compared to $58 million as of
March 31, 2023 and $75 million as of June 30,
2022.
Balance Sheet and Cash Flow
- As of June 30, 2023, the Company
had $70.1 million of outstanding
revolving loan borrowings and additional borrowing capacity of
approximately $54 million under the
revolving credit facility.
- Net cash provided by operating activities was $1.2 million compared to $8.5 million in the second quarter of 2022
primarily due to a $6.2 million
decrease in cash provided by working capital.
- Capital expenditures of $4.0
million were relatively consistent with the second quarter
of 2022.
Conference Call Details
A conference call and simultaneous webcast to discuss the
Company's second quarter 2023 financial results will be held on
Thursday, August 3, 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, August 17, 2023, by dialing 1‑844‑512‑2921 in the
U.S. or 1‑412‑317‑6671 internationally and entering the replay
access code: 10180262.
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 contain "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 Park
Environmental Equipment, LLC 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 the Company's internal control over financial
reporting and its ability to remediate such weaknesses, impacts of
pandemics, epidemics, or other public health emergencies, and other
risks discussed in the Company's Annual Report on Form 10‑K
for the year ended December 31, 2022 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.
This non-GAAP financial measure is 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
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,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
$
|
77,255
|
|
|
$
|
77,068
|
|
|
$
|
140,801
|
|
|
$
|
151,783
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
39,117
|
|
|
|
41,454
|
|
|
|
74,668
|
|
|
|
76,070
|
|
Total net
sales
|
|
|
116,372
|
|
|
|
118,522
|
|
|
|
215,469
|
|
|
|
227,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
64,684
|
|
|
|
65,963
|
|
|
|
120,448
|
|
|
|
133,489
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
29,207
|
|
|
|
28,479
|
|
|
|
55,963
|
|
|
|
55,498
|
|
Total cost of
sales
|
|
|
93,891
|
|
|
|
94,442
|
|
|
|
176,411
|
|
|
|
188,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
12,571
|
|
|
|
11,105
|
|
|
|
20,353
|
|
|
|
18,294
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
9,910
|
|
|
|
12,975
|
|
|
|
18,705
|
|
|
|
20,572
|
|
Total gross
profit
|
|
|
22,481
|
|
|
|
24,080
|
|
|
|
39,058
|
|
|
|
38,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
|
|
11,016
|
|
|
|
10,127
|
|
|
|
22,882
|
|
|
|
19,495
|
|
Operating
income
|
|
|
11,465
|
|
|
|
13,953
|
|
|
|
16,176
|
|
|
|
19,371
|
|
Other income
(expense)
|
|
|
(134)
|
|
|
|
1
|
|
|
|
(163)
|
|
|
|
45
|
|
Interest
expense
|
|
|
(1,191)
|
|
|
|
(869)
|
|
|
|
(2,560)
|
|
|
|
(1,429)
|
|
Income before income
taxes
|
|
|
10,140
|
|
|
|
13,085
|
|
|
|
13,453
|
|
|
|
17,987
|
|
Income tax
expense
|
|
|
2,692
|
|
|
|
3,412
|
|
|
|
3,643
|
|
|
|
4,755
|
|
Net income
|
|
$
|
7,448
|
|
|
$
|
9,673
|
|
|
$
|
9,810
|
|
|
$
|
13,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.74
|
|
|
$
|
0.98
|
|
|
$
|
0.98
|
|
|
$
|
1.34
|
|
Diluted
|
|
$
|
0.74
|
|
|
$
|
0.97
|
|
|
$
|
0.97
|
|
|
$
|
1.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
10,000
|
|
|
|
9,918
|
|
|
|
9,970
|
|
|
|
9,900
|
|
Diluted
|
|
|
10,066
|
|
|
|
9,968
|
|
|
|
10,081
|
|
|
|
9,971
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited)
(In thousands)
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,152
|
|
|
$
|
3,681
|
|
Trade and other
receivables, net
|
|
|
63,419
|
|
|
|
71,563
|
|
Contract
assets
|
|
|
122,359
|
|
|
|
121,778
|
|
Inventories
|
|
|
84,579
|
|
|
|
71,029
|
|
Prepaid expenses and
other
|
|
|
4,919
|
|
|
|
10,689
|
|
Total current
assets
|
|
|
279,428
|
|
|
|
278,740
|
|
Property and
equipment, net
|
|
|
137,506
|
|
|
|
133,166
|
|
Operating lease
right-of-use assets
|
|
|
91,106
|
|
|
|
93,124
|
|
Goodwill
|
|
|
55,504
|
|
|
|
55,504
|
|
Intangible assets,
net
|
|
|
33,160
|
|
|
|
35,264
|
|
Other
assets
|
|
|
6,034
|
|
|
|
5,542
|
|
Total
assets
|
|
$
|
602,738
|
|
|
$
|
601,340
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current
debt
|
|
$
|
10,756
|
|
|
$
|
10,756
|
|
Accounts
payable
|
|
|
26,721
|
|
|
|
26,968
|
|
Accrued
liabilities
|
|
|
25,770
|
|
|
|
30,957
|
|
Contract
liabilities
|
|
|
26,990
|
|
|
|
17,456
|
|
Current portion of
operating lease liabilities
|
|
|
4,887
|
|
|
|
4,702
|
|
Total current
liabilities
|
|
|
95,124
|
|
|
|
90,839
|
|
Borrowings on line of
credit
|
|
|
70,069
|
|
|
|
83,696
|
|
Operating lease
liabilities
|
|
|
87,789
|
|
|
|
89,472
|
|
Deferred income
taxes
|
|
|
11,834
|
|
|
|
11,402
|
|
Other long-term
liabilities
|
|
|
9,321
|
|
|
|
7,657
|
|
Total
liabilities
|
|
|
274,137
|
|
|
|
283,066
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
328,601
|
|
|
|
318,274
|
|
Total liabilities and
stockholders' equity
|
|
$
|
602,738
|
|
|
$
|
601,340
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
9,810
|
|
|
$
|
13,232
|
|
Depreciation and
finance lease amortization
|
|
|
5,642
|
|
|
|
6,065
|
|
Amortization of
intangible assets
|
|
|
2,104
|
|
|
|
2,303
|
|
Deferred income
taxes
|
|
|
417
|
|
|
|
299
|
|
Share-based
compensation expense
|
|
|
2,304
|
|
|
|
1,308
|
|
Other, net
|
|
|
1,325
|
|
|
|
(14)
|
|
Changes in operating
assets and liabilities, net
|
|
|
5,877
|
|
|
|
(13,024)
|
|
Net cash provided by
operating activities
|
|
|
27,479
|
|
|
|
10,169
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(8,414)
|
|
|
|
(8,456)
|
|
Payment of working
capital adjustment in acquisition of business
|
|
|
(2,731)
|
|
|
|
-
|
|
Other investing
activities
|
|
|
9
|
|
|
|
30
|
|
Net cash used in
investing activities
|
|
|
(11,136)
|
|
|
|
(8,426)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Borrowings on line of
credit
|
|
|
72,912
|
|
|
|
80,908
|
|
Repayments on line of
credit
|
|
|
(86,539)
|
|
|
|
(80,956)
|
|
Payments on finance
lease obligations
|
|
|
(311)
|
|
|
|
(265)
|
|
Tax withholdings
related to net share settlements of equity awards
|
|
|
(1,652)
|
|
|
|
(853)
|
|
Other financing
activities
|
|
|
(282)
|
|
|
|
(31)
|
|
Net cash used in
financing activities
|
|
|
(15,872)
|
|
|
|
(1,197)
|
|
Change in cash and cash
equivalents
|
|
|
471
|
|
|
|
546
|
|
Cash and cash
equivalents, beginning of period
|
|
|
3,681
|
|
|
|
2,997
|
|
Cash and cash
equivalents, end of period
|
|
$
|
4,152
|
|
|
$
|
3,543
|
|
View original content to download
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SOURCE Northwest Pipe Company