VANCOUVER, WA -- (Marketwired) -- 11/03/14 -- Northwest Pipe Company (NASDAQ: NWPX) today announced its financial results for the quarter ended September 30, 2014. The Company will broadcast its third quarter 2014 earnings conference call on Tuesday, November 4, 2014, at 8:00 am PST.
Third Quarter 2014 Results
Net sales from continuing operations for the quarter ended September 30, 2014 increased 48.4% to $116.5 million compared to $78.5 million for the quarter ended September 30, 2013. Gross profit was $15.8 million (13.6% of net sales from continuing operations) in the third quarter of 2014, an increase from $11.3 million (14.3% of net sales from continuing operations) in the third quarter of 2013. Income from continuing operations for the third quarter of 2014 was $5.9 million or $0.61 per diluted share compared to income from continuing operations of $2.7 million or $0.29 per diluted share for the third quarter of 2013.
Water Transmission sales increased 64.1% to $76.9 million in the third quarter of 2014 from $46.8 million in the third quarter of 2013. The increase in net sales was due to higher volumes primarily attributed to the IPL project, which started production in mid-May. Water Transmission gross profit increased to $16.6 million (21.5% of segment net sales) in the third quarter of 2014 from $7.9 million (16.9% of segment net sales) in the same quarter of 2013. Water Transmission gross profit increased in total and as a percent of net sales due to increased volume and the mix of projects as compared to the same period a year ago.
Tubular Products sales from continuing operations increased 25.1% to $39.6 million in the third quarter of 2014 from $31.7 million in the third quarter of 2013, driven by a 23% increase in tons sold coupled with a 2% increase in sales prices. Sales volumes increased from 32,400 tons in the third quarter of 2013 to 39,700 tons in the third quarter of 2014. Tubular Products had a gross loss from continuing operations of $0.7 million (negative 1.9% of segment net sales from continuing operations) in the third quarter of 2014 compared to a $3.3 million gross profit (10.5% of segment net sales from continuing operations) in the third quarter of 2013. Gross profit was negatively impacted by higher steel costs in relation to sales prices.
As of September 30, 2014, the backlog of orders in the Water Transmission segment was approximately $138 million compared to a backlog of orders of $108 million as of September 30, 2013. The backlog includes confirmed orders, including the balance of projects in process, and projects for which the Company has been notified that it was the successful bidder even though a binding agreement has not been executed.
Outlook
"The company's financial performance is expected to come under increasing pressure in the fourth quarter compared to the third quarter. The extremely aggressive bidding posture in the Water Transmission market is expected to drive margins into the low teens," said Scott Montross, President and Chief Executive Officer of the company. "Even with the gains in efficiency and volume driven by our Atchison modernization project, we expect near term margins to be around break-even for the Tubular Products segment due to continued pressure from imports in the line pipe market."
Conference Call
The Company will hold its third quarter 2014 earnings conference call on Tuesday, November 4, 2014 at 8:00 am PST. The live call can be accessed by dialing 1-888-810-4934 passcode NWPIPE. For those unable to attend the live call, a replay will be available approximately one hour after the event and will remain available until Friday, December 5, 2014 by dialing 1-800-839-2338 passcode 6301.
About Northwest Pipe Company
Northwest Pipe Company is a leading manufacturer of welded steel pipe and tube products. The Water Transmission Group is the largest manufacturer of engineered steel pipe water systems in North America. With eight Water Transmission manufacturing facilities, the Group is positioned to meet North America's growing needs for water and wastewater infrastructure. The Water Transmission Group serves a wide-range of markets and their solution-based products are a perfect fit for applications including: water transmission, plant piping, energy, tunnels, river crossings, structural, industrial and construction. The Tubular Products Group operates a state of the art electric resistance weld mill facility. The Tubular Products portfolio serves a wide-range of markets and its quality certified pipe and tube products are good for applications including: oil and gas, structural industrial, fire protection, low pressure and agricultural. The Company is headquartered in Vancouver, Washington and has manufacturing facilities in the United States and Mexico.
Forward-Looking Statements
Statements in this press release by Scott Montross are "forward-looking" statements within the meaning of the Securities Litigation Reform Act of 1995 and Section 21E of the Exchange Act that are based on current expectations, estimates and projections about our 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 us include changes in demand and market prices for our products, product mix, bidding activity, the timing of customer orders and deliveries, production schedules, the price and availability of raw materials, excess or shortage of production capacity, international trade policy and regulations and other risks discussed in our Annual Report on Form 10-K for the year ended December 31, 2013 and from time to time in our other Securities and Exchange Commission filings and reports. Such forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. If we do update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements.
NORTHWEST PIPE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar and share amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2014 2013 2014 2013
----------- ----------- ----------- -----------
Net sales:
Water Transmission $ 76,857 $ 46,835 $ 182,061 $ 183,596
Tubular Products 39,648 31,692 119,079 90,208
----------- ----------- ----------- -----------
Net sales 116,505 78,527 301,140 273,804
Cost of sales:
Water Transmission 60,298 38,903 152,343 143,669
Tubular Products 40,387 28,370 117,346 80,752
----------- ----------- ----------- -----------
Total cost of sales 100,685 67,273 269,689 224,421
Gross profit (loss):
Water Transmission 16,559 7,932 29,718 39,927
Tubular Products (739) 3,322 1,733 9,456
----------- ----------- ----------- -----------
Total gross profit 15,820 11,254 31,451 49,383
Selling, general and
administrative expense 6,489 5,556 17,847 17,527
----------- ----------- ----------- -----------
Operating income (loss)
Water Transmission 14,429 6,306 23,673 34,838
Tubular Products (1,155) 2,951 550 8,460
Corporate (3,943) (3,559) (10,619) (11,442)
----------- ----------- ----------- -----------
Operating income 9,331 5,698 13,604 31,856
Other income (expense) 39 (242) 2 (279)
Interest income 220 94 383 337
Interest expense (457) (893) (1,796) (2,717)
----------- ----------- ----------- -----------
Income before income taxes
from continuing
operations 9,133 4,657 12,193 29,197
Income tax expense 3,275 1,923 4,364 9,940
----------- ----------- ----------- -----------
Income from continuing
operations 5,858 2,734 7,829 19,257
Income (loss) from
discontinued operations (837) (1,718) (11,720) (3,174)
----------- ----------- ----------- -----------
Net income (loss) $ 5,021 $ 1,016 $ (3,891) $ 16,083
=========== =========== =========== ===========
Basic earnings (loss) per
share
Continuing operations $ 0.62 $ 0.29 $ 0.82 $ 2.04
Discontinued operations (0.09) (0.18) (1.23) (0.34)
----------- ----------- ----------- -----------
Total $ 0.53 $ 0.11 $ (0.41) $ 1.70
=========== =========== =========== ===========
Diluted earnings (loss)
per share
Continuing operations $ 0.61 $ 0.29 $ 0.82 $ 2.03
Discontinued operations (0.09) (0.18) (1.23) (0.34)
----------- ----------- ----------- -----------
Total $ 0.52 $ 0.11 $ (0.41) $ 1.69
=========== =========== =========== ===========
Shares used in per share
calculations:
Basic 9,519 9,449 9,513 9,443
=========== =========== =========== ===========
Diluted 9,616 9,517 9,595 9,498
=========== =========== =========== ===========
NORTHWEST PIPE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands)
September 30, December 31,
2014 2013
---------------- ----------------
Assets:
Cash and cash equivalents $ 72 $ 588
Trade and other receivables, net 47,544 72,470
Costs and estimated earnings in excess
of billings on uncompleted contracts 55,774 50,468
Inventories 77,272 110,392
Other current assets 15,191 9,662
---------------- ----------------
Total current assets 195,853 243,580
Property and equipment, net 132,097 143,061
Other assets 41,046 46,818
---------------- ----------------
Total assets $ 368,996 $ 433,459
================ ================
Liabilities:
Current maturities of long-term debt $ 998 $ 7,930
Accounts payable 21,978 21,731
Accrued liabilities 10,301 15,194
Billings in excess of cost and estimated
earnings on uncompleted contracts 1,312 3,368
---------------- ----------------
Total current liabilities 34,589 48,223
Note payable to financial institution 46,649 87,919
Other long-term debt, less current
maturities 846 6,322
Other long-term liabilities 27,950 29,145
---------------- ----------------
Total liabilities 110,034 171,609
Stockholders' equity 258,962 261,850
---------------- ----------------
Total liabilities and stockholders'
equity $ 368,996 $ 433,459
================ ================
CONTACT:
Robin Gantt
Chief Financial Officer
360-397-6250
