Northwest Pipe Company Reports Improved Second Quarter Results, Significantly Higher Backlog and Announces Conference Call
03 August 2017 - 6:15AM
Quarterly Highlights:
Northwest Pipe Company (Nasdaq:NWPX) today announced its financial
results for the quarter ended June 30, 2017. The Company will
broadcast its second quarter 2017 earnings conference call on
Thursday, August 3, 2017 at 7:00 am PDT.
Second Quarter 2017 ResultsWater Transmission
sales decreased 27.9% to $28.7 million in the second quarter
of 2017 from $39.8 million in the second quarter of 2016. The
decrease in net sales was the result of a 73% decrease in tons
produced, partially offset by a 163% increase in selling price per
ton. The decrease in tons produced was due to project timing. The
increase in selling prices per ton was due to improved market
conditions and a change in product mix, combined with higher steel
costs. Higher material costs generally lead to higher contract
values and, therefore, higher net sales as contractors and
municipalities are aware of the input costs and market
conditions.
Water Transmission gross profit was $0.7 million (2.3% of
segment net sales) in the second quarter of 2017 compared to a
gross loss of $1.3 million (negative 3.2% of segment net
sales) in the second quarter of 2016. Water Transmission gross
profit increased due to improved pricing as well as our focus on
margin over volume and cost reductions.
Net loss for the second quarter of 2017 was $2.1 million or
$0.22 per diluted share compared to a net loss of $6.2 million
or $0.65 per diluted share for the second quarter of 2016.
As of June 30, 2017, the backlog of orders in the Water
Transmission segment was $101 million. This compared to a
backlog of $77 million as of March 31, 2017. Backlog was
$98 million as of June 30, 2016, which included $7
million for the subsequently closed and sold water transmission
plant in Denver, Colorado. The Company’s definition of backlog
includes confirmed orders, including the balance of projects in
process, and projects for which we have been notified as being the
successful bidder even though a binding agreement has not been
executed.
Outlook“Second quarter revenue and gross profit
were lower than anticipated due to unexpected job delays as
customers pushed work into the second half of the year. However,
due to our ongoing cost reduction focus, the Company was still able
to maintain a positive gross profit in its Water business,” said
Scott Montross, President and Chief Executive Officer of the
Company. “The bidding environment continues to improve and our
backlog has grown 53% since December 31, 2016. As a result of our
growing backlog and focus on margin over volume we expect
improvement in both revenue and profitability in the third
quarter.”
Conference CallThe Company will hold its second
quarter 2017 earnings conference call on Thursday, August 3,
2017 at 7:00 am PDT. To listen to the live call, visit the
Northwest Pipe Company website, www.nwpipe.com, under Investor
Relations. For those unable to listen to the live call, the replay
will be available approximately one hour after the event and will
remain available until Thursday, August 31, 2017 by dialing
1-866-385-0192 passcode 6301.
About Northwest Pipe CompanyNorthwest Pipe
Company is the largest manufacturer of engineered steel pipe water
systems in North America. The Company’s Water Transmission
manufacturing facilities are strategically positioned to
meet North America's growing needs for water and
wastewater infrastructure. The Company serves a wide range of
markets and its solution-based products are a good fit for
applications including: water transmission, plant piping, tunnels
and river crossings. The Company is headquartered in Vancouver,
Washington and has manufacturing facilities across the United
States and one manufacturing facility in Mexico.
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 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, price and volume of imported
product, excess or shortage of production capacity, international
trade policy and regulations, the results of our exploration of the
sale of our remaining energy tubular products business, including
our ability to identify and complete any transactions or other
actions as a result of such efforts, our ability to identify and
complete internal initiatives and/or acquisitions in order to grow
our Water Transmission business and other risks discussed in our
Annual Report on Form 10‑K for the year ended
December 31, 2016 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.
Non-GAAP Financial Measures The Company is
presenting backlog. This non-GAAP measure is provided to better
enable investors and others to assess our results and compare them
with our competitors. This should be considered as a supplement to,
and not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP.
For more information, visit www.nwpipe.com.
|
NORTHWEST PIPE COMPANY |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
(In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
|
June 30, |
|
June 30, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales: |
|
|
|
|
|
|
|
|
|
|
Water Transmission |
|
$ |
28,692 |
|
|
$ |
39,775 |
|
|
$ |
58,349 |
|
|
$ |
69,133 |
|
Tubular Products |
|
|
|
- |
|
|
|
2,286 |
|
|
|
9 |
|
|
|
6,856 |
|
Total net sales |
|
|
|
28,692 |
|
|
|
42,061 |
|
|
|
58,358 |
|
|
|
75,989 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
Water Transmission |
|
|
28,025 |
|
|
|
41,047 |
|
|
|
56,517 |
|
|
|
76,155 |
|
Tubular Products |
|
|
|
618 |
|
|
|
3,176 |
|
|
|
1,012 |
|
|
|
7,433 |
|
Total cost of sales |
|
|
28,643 |
|
|
|
44,223 |
|
|
|
57,529 |
|
|
|
83,588 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss): |
|
|
|
|
|
|
|
|
|
Water Transmission |
|
|
667 |
|
|
|
(1,272 |
) |
|
|
1,832 |
|
|
|
(7,022 |
) |
Tubular Products |
|
|
|
(618 |
) |
|
|
(890 |
) |
|
|
(1,003 |
) |
|
|
(577 |
) |
Total gross profit (loss) |
|
|
49 |
|
|
|
(2,162 |
) |
|
|
829 |
|
|
|
(7,599 |
) |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
3,571 |
|
|
|
4,091 |
|
|
|
7,412 |
|
|
|
8,690 |
|
Restructuring expense |
|
|
- |
|
|
|
- |
|
|
|
881 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss: |
|
|
|
|
|
|
|
|
|
Water Transmission |
|
|
(438 |
) |
|
|
(2,648 |
) |
|
|
(1,352 |
) |
|
|
(9,904 |
) |
Tubular Products |
|
|
|
(903 |
) |
|
|
(1,002 |
) |
|
|
(1,333 |
) |
|
|
(898 |
) |
Corporate |
|
|
|
(2,181 |
) |
|
|
(2,603 |
) |
|
|
(4,779 |
) |
|
|
(5,487 |
) |
Total operating loss |
|
|
(3,522 |
) |
|
|
(6,253 |
) |
|
|
(7,464 |
) |
|
|
(16,289 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
194 |
|
|
|
(1 |
) |
|
|
184 |
|
|
|
38 |
|
Interest expense |
|
|
|
(115 |
) |
|
|
(119 |
) |
|
|
(252 |
) |
|
|
(237 |
) |
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(3,443 |
) |
|
|
(6,373 |
) |
|
|
(7,532 |
) |
|
|
(16,488 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
|
|
(1,375 |
) |
|
|
(131 |
) |
|
|
(1,596 |
) |
|
|
(663 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
|
|
$ |
(2,068 |
) |
|
$ |
(6,242 |
) |
|
$ |
(5,936 |
) |
|
$ |
(15,825 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share |
|
$ |
(0.22 |
) |
|
$ |
(0.65 |
) |
|
$ |
(0.62 |
) |
|
$ |
(1.65 |
) |
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculations |
|
|
9,610 |
|
|
|
9,580 |
|
|
|
9,607 |
|
|
|
9,576 |
|
|
|
|
|
|
|
|
|
|
|
|
NORTHWEST PIPE COMPANY |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December
31, |
|
2017 |
|
2016 |
Assets: |
|
|
|
Cash and
cash equivalents |
$ |
17,528 |
|
$ |
21,829 |
Trade and
other receivables, net |
|
20,975 |
|
|
25,555 |
Costs and
estimated earnings in excess |
|
|
|
of
billings on uncompleted contracts |
|
43,178 |
|
|
43,663 |
Inventories |
|
22,415 |
|
|
19,037 |
Other
current assets |
|
1,214 |
|
|
2,096 |
Total
current assets |
|
105,310 |
|
|
112,180 |
Property
and equipment, net |
|
116,213 |
|
|
118,101 |
Other
assets |
|
10,992 |
|
|
11,274 |
Total
assets |
$ |
232,515 |
|
$ |
241,555 |
|
|
|
|
Liabilities: |
|
|
|
Current
portion of capital lease obligations |
$ |
258 |
|
$ |
325 |
Accounts
payable |
|
7,620 |
|
|
5,267 |
Accrued
liabilities |
|
7,682 |
|
|
10,925 |
Billings
in excess of costs and estimated earnings |
|
|
|
on
uncompleted contracts |
|
1,012 |
|
|
2,038 |
Total
current liabilities |
|
16,572 |
|
|
18,555 |
Capital
lease obligations, less current portion |
|
481 |
|
|
602 |
Other
long-term liabilities |
|
11,293 |
|
|
13,185 |
Total
liabilities |
|
28,346 |
|
|
32,342 |
|
|
|
|
Stockholders' equity |
|
204,169 |
|
|
209,213 |
Total
liabilities and stockholders' equity |
$ |
232,515 |
|
$ |
241,555 |
|
|
|
|
Contact:
Robin Gantt
Senior Vice President, Chief Financial Officer and Corporate Secretary
(360) 397-6325
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