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VANCOUVER, Wash., Nov. 8, 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 third quarter ended September 30, 2022. The Company will broadcast its third quarter 2022 earnings conference call on Wednesday, November 9, 2022 at 7:00 a.m. PT.
Management Commentary
"Our third quarter Precast Infrastructure and Engineered Systems business remained strong, producing $39.3 million in revenue and a 28% gross margin despite both revenue and gross margins being a little subdued by increased downtime associated with the planned system integration at our ParkUSA facilities. The order book of $74 million, while slightly off the record level from the second quarter, is very high by historical standards as we enter the seasonally slow time of the year. Regardless of some of the current economic headwinds, we expect the Precast business to remain fairly strong for the near term," said Scott Montross, President and Chief Executive Officer of Northwest Pipe Company.
Mr. Montross continued, "In the third quarter our Engineered Steel Pressure Pipe business generated $83.7 million in revenue and gross margin of 17%. We have continued to experience strong bidding levels and ended the third quarter with a record backlog including confirmed orders of $347 million. Due to the two major holidays and potential seasonal weather risks, we expect our fourth quarter SPP revenue to be modestly lower and gross margins that are in-line with the third quarter of 2022."
Third Quarter 2022 Financial Results
Consolidated
Engineered Steel Pressure Pipe Segment (SPP)
Precast Infrastructure and Engineered Systems Segment (Precast)
Liquidity Details
As of September 30, 2022, the Company had $71.8 million of outstanding revolving loan borrowings and additional borrowing capacity of $52 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 third quarter 2022 financial results will be held on Wednesday, November 9, 2022 at 7:00 a.m. PT. 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 Wednesday, November 23, 2022 by dialing 1‑844-512-2921 in the U.S. or 1‑412-317-6671 internationally and entering the replay access code: 13733442.
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, and Permalok® 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, 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 ParkUSA 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, 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. |
NORTHWEST PIPE COMPANY AND SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net sales: | ||||||||||||||||
Engineered Steel Pressure Pipe | $ | 83,663 | $ | 69,439 | $ | 235,446 | $ | 188,244 | ||||||||
Precast Infrastructure and | 39,321 | 15,204 | 115,391 | 42,522 | ||||||||||||
Total net sales | 122,984 | 84,643 | 350,837 | 230,766 | ||||||||||||
Cost of sales: | ||||||||||||||||
Engineered Steel Pressure Pipe | 69,467 | 60,595 | 202,956 | 165,631 | ||||||||||||
Precast Infrastructure and | 28,399 | 11,685 | 83,897 | 34,459 | ||||||||||||
Total cost of sales | 97,866 | 72,280 | 286,853 | 200,090 | ||||||||||||
Gross profit: | ||||||||||||||||
Engineered Steel Pressure Pipe | 14,196 | 8,844 | 32,490 | 22,613 | ||||||||||||
Precast Infrastructure and | 10,922 | 3,519 | 31,494 | 8,063 | ||||||||||||
Total gross profit | 25,118 | 12,363 | 63,984 | 30,676 | ||||||||||||
Selling, general, and administrative | 10,654 | 5,562 | 30,149 | 17,729 | ||||||||||||
Operating income | 14,464 | 6,801 | 33,835 | 12,947 | ||||||||||||
Other income | 11 | 171 | 56 | 260 | ||||||||||||
Interest expense | (964) | (112) | (2,393) | (687) | ||||||||||||
Income before income taxes | 13,511 | 6,860 | 31,498 | 12,520 | ||||||||||||
Income tax expense | 3,555 | 1,914 | 8,310 | 3,268 | ||||||||||||
Net income | $ | 9,956 | $ | 4,946 | $ | 23,188 | $ | 9,252 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 1.00 | $ | 0.50 | $ | 2.34 | $ | 0.94 | ||||||||
Diluted | $ | 0.99 | $ | 0.50 | $ | 2.32 | $ | 0.93 | ||||||||
Shares used in per share | ||||||||||||||||
Basic | 9,927 | 9,871 | 9,909 | 9,849 | ||||||||||||
Diluted | 10,010 | 9,921 | 9,988 | 9,918 | ||||||||||||
NORTHWEST PIPE COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
September 30, 2022 | December 31, 2021 | |||||||||||||||||||||
Assets | ||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||
Cash and cash equivalents | $ | 3,706 | $ | 2,997 | ||||||||||||||||||
Trade and other receivables, net | 73,975 | 52,664 | ||||||||||||||||||||
Contract assets | 117,260 | 107,170 | ||||||||||||||||||||
Inventories | 71,578 | 59,651 | ||||||||||||||||||||
Prepaid expenses and other | 4,326 | 5,744 | ||||||||||||||||||||
Total current assets | 270,845 | 228,226 | ||||||||||||||||||||
Property and equipment, net | 124,228 | 121,266 | ||||||||||||||||||||
Operating lease right-of-use assets | 94,166 | 98,507 | ||||||||||||||||||||
Goodwill | 55,504 | 53,684 | ||||||||||||||||||||
Intangible assets, net | 36,334 | 39,376 | ||||||||||||||||||||
Other assets | 5,400 | 6,620 | ||||||||||||||||||||
Total assets | $ | 586,477 | $ | 547,679 | ||||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||
Current debt | $ | 3,525 | $ | - | ||||||||||||||||||
Accounts payable | 40,444 | 32,267 | ||||||||||||||||||||
Accrued liabilities | 32,561 | 24,498 | ||||||||||||||||||||
Contract liabilities | 16,243 | 2,623 | ||||||||||||||||||||
Current portion of operating lease liabilities | 4,725 | 4,704 | ||||||||||||||||||||
Total current liabilities | 97,498 | 64,092 | ||||||||||||||||||||
Borrowings on line of credit | 71,817 | 86,761 | ||||||||||||||||||||
Operating lease liabilities | 90,231 | 93,725 | ||||||||||||||||||||
Deferred income taxes | 10,982 | 10,984 | ||||||||||||||||||||
Other long-term liabilities | 7,272 | 8,734 | ||||||||||||||||||||
Total liabilities | 277,800 | 264,296 | ||||||||||||||||||||
Stockholders' equity | 308,677 | 283,383 | ||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 586,477 | $ | 547,679 | ||||||||||||||||||
NORTHWEST PIPE COMPANY AND SUBSIDIARIES | ||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net income, as reported | $ | 9,956 | $ | 4,946 | $ | 23,188 | $ | 9,252 | ||||||||
Adjustments for non-recurring | ||||||||||||||||
Acquisition-related transaction | - | 565 | 59 | 801 | ||||||||||||
Amortization of acquired | 751 | - | 2,423 | - | ||||||||||||
Estimated tax impact of non- | (186) | (140) | (614) | (198) | ||||||||||||
Adjusted net income | $ | 10,521 | $ | 5,371 | $ | 25,056 | $ | 9,855 | ||||||||
Diluted net income per share, as | $ | 0.99 | $ | 0.50 | $ | 2.32 | $ | 0.93 | ||||||||
Adjusted diluted net income per | $ | 1.05 | $ | 0.54 | $ | 2.51 | $ | 0.99 |
(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