- Net sales of $129.5 million
increased 11.3% year-over-year
- Record net sales of $89.5
million for the Engineered Steel Pressure Pipe segment
("SPP")
- Record gross profit of $25.8
million increased 14.8% year-over-year
- Net income of $0.86 per
diluted share
- Generated strong net cash provided by operating activities
of $22.3 million
- Backlog1 of $282
million; backlog including confirmed orders2 of
$348 million for SPP
- Order book3 of $62
million for the Precast Infrastructure and Engineered
Systems segment ("Precast")
VANCOUVER, Wash., July 31,
2024 /PRNewswire/ -- Northwest Pipe Company
(NASDAQ: NWPX) (the "Company"), a leading manufacturer of
water-related infrastructure products, today announced its
financial results for the second quarter ended June 30, 2024.
The Company will broadcast its second quarter 2024 earnings
conference call on Thursday, August 1,
2024 at 7:00 a.m. PT.
Management Commentary
"Our second quarter results were very strong despite the
weather-related challenges we encountered in Texas which disrupted production, shipping,
and order intake," said Scott
Montross, President and Chief Executive Officer of Northwest
Pipe Company. "We delivered record quarterly revenue of
$89.5 million in our Steel
Pressure Pipe business and enjoyed continued strength in the
residential side of our Precast business despite persistent
interest rate headwinds. In addition, record quarterly
profitability levels, coupled with effective working capital
management, led to strong free cash
flow4 generation of $16.2 million in the second quarter, up
significantly versus last year. The SPP segment benefitted from the
strong pipeline of bidding opportunities in the first half of this
year. We expect our SPP business to remain strong for the rest of
2024. In Precast, reduced production and shipments on the
non-residential construction portion of our business at Park offset
much of the strength we saw on the residential side at Geneva,
primarily due to multiple severe weather events in Texas. Following a slow first half of the year
in Precast, we are expecting a stronger third quarter with
improving revenue and gross margins."
Second Quarter 2024 Financial Results
Consolidated
- Net sales increased 11.3% to $129.5
million from $116.4 million in
the second quarter of 2023.
- Gross profit increased 14.8% to a record of $25.8 million, or 19.9% of net sales, from
$22.5 million, or 19.3% of net sales,
in the second quarter of 2023.
- Net income was $8.6 million, or
$0.86 per diluted share, compared to
$7.4 million, or $0.74 per diluted share, in the second quarter of
2023.
Engineered Steel Pressure Pipe Segment (SPP)
- SPP net sales increased 15.9% to a quarterly record of
$89.5 million from $77.3 million in the second quarter of 2023
driven by a 56% increase in tons produced resulting from an
improved bidding environment coupled with changes in project
timing, partially offset by a 26% decrease in selling price per ton
due to a combination of lower raw materials costs and product
mix.
- SPP gross profit increased 35.1% to $17.0 million, or 19.0% of SPP net sales, from
$12.6 million, or 16.3% of SPP net
sales, in the second quarter of 2023 primarily due to increased
volume and changes in product mix.
- SPP backlog was $282 million as
of June 30, 2024 compared to
$255 million as of March 31, 2024 and $292
million as of June 30, 2023.
Backlog including confirmed orders was $348
million as of June 30, 2024
compared to $337 million as of
March 31, 2024 and $343 million as of June
30, 2023.
Precast Infrastructure and Engineered Systems Segment
(Precast)
- Precast net sales increased 2.2% to $40.0 million from $39.1
million in the second quarter of 2023 driven by a 30%
increase in volume shipped, partially offset by a 22% decrease in
selling prices due to changes in product mix.
- Precast gross profit decreased 10.9% to $8.8 million, or 22.1% of Precast net sales, from
$9.9 million, or 25.3% of Precast net
sales, in the second quarter of 2023 primarily due to changes in
product mix.
- Precast order book was $62
million as of June 30, 2024
compared to $52 million as of
March 31, 2024 and $58 million as of June 30,
2023.
Balance Sheet and Cash Flow
- As of June 30, 2024, the Company
had $75.9 million of outstanding
revolving loan borrowings and additional borrowing capacity of
approximately $47 million under the
revolving credit facility.
- Net cash provided by operating activities was $22.3 million in the second quarter of 2024
compared to $1.2 million in the
second quarter of 2023 primarily due to an $18.9 million increase in cash provided by
changes in working capital and a $2.2
million increase in cash provided by net income adjusted for
non-cash items.
- Capital expenditures were $6.1
million in the second quarter of 2024 compared to
$4.0 million in the second quarter of
2023.
- The Company repurchased approximately 18,000 shares of its
common stock at an average price of $31.81, for a total of $0.6 million during the second quarter of
2024.
|
____________
|
|
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.
|
|
4 Northwest Pipe Company defines
"free cash flow" as cash flows from operating activities less
purchases of property and equipment. For purposes of the second
quarter of 2024, $22.3 million of net cash provided by
operating activities, less $6.1 million in purchases of
property and equipment, resulted in $16.2 million of free cash
flow.
|
Conference Call Details
A conference call and simultaneous webcast to discuss the
Company's second quarter 2024 financial results will be
held on Thursday, August 1, 2024, 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 15, 2024, by
dialing 1‑844‑512‑2921 in the U.S. or 1‑412‑317‑6671
internationally and entering the replay access code: 10190352.
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 modifications or 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 future 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, timing and amount of share repurchases, 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 areas
such as Ukraine and Israel, 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, uncertainty around the outcome of political elections,
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, 2023
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 and
free cash flow. 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. These
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,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
$
|
89,523
|
|
|
$
|
77,255
|
|
|
$
|
169,530
|
|
|
$
|
140,801
|
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
39,982
|
|
|
|
39,117
|
|
|
|
73,190
|
|
|
|
74,668
|
|
|
Total net
sales
|
|
|
129,505
|
|
|
|
116,372
|
|
|
|
242,720
|
|
|
|
215,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
72,542
|
|
|
|
64,684
|
|
|
|
138,307
|
|
|
|
120,448
|
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
31,149
|
|
|
|
29,207
|
|
|
|
58,465
|
|
|
|
55,963
|
|
|
Total cost of
sales
|
|
|
103,691
|
|
|
|
93,891
|
|
|
|
196,772
|
|
|
|
176,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
16,981
|
|
|
|
12,571
|
|
|
|
31,223
|
|
|
|
20,353
|
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
8,833
|
|
|
|
9,910
|
|
|
|
14,725
|
|
|
|
18,705
|
|
|
Total gross
profit
|
|
|
25,814
|
|
|
|
22,481
|
|
|
|
45,948
|
|
|
|
39,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
|
|
12,195
|
|
|
|
11,016
|
|
|
|
23,639
|
|
|
|
22,882
|
|
|
Operating
income
|
|
|
13,619
|
|
|
|
11,465
|
|
|
|
22,309
|
|
|
|
16,176
|
|
|
Other
expense
|
|
|
(228)
|
|
|
|
(134)
|
|
|
|
(221)
|
|
|
|
(163)
|
|
|
Interest
expense
|
|
|
(1,823)
|
|
|
|
(1,191)
|
|
|
|
(3,297)
|
|
|
|
(2,560)
|
|
|
Income before income
taxes
|
|
|
11,568
|
|
|
|
10,140
|
|
|
|
18,791
|
|
|
|
13,453
|
|
|
Income tax
expense
|
|
|
2,949
|
|
|
|
2,692
|
|
|
|
4,934
|
|
|
|
3,643
|
|
|
Net income
|
|
$
|
8,619
|
|
|
$
|
7,448
|
|
|
$
|
13,857
|
|
|
$
|
9,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.87
|
|
|
$
|
0.74
|
|
|
$
|
1.40
|
|
|
$
|
0.98
|
|
|
Diluted
|
|
$
|
0.86
|
|
|
$
|
0.74
|
|
|
$
|
1.38
|
|
|
$
|
0.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
9,912
|
|
|
|
10,000
|
|
|
|
9,914
|
|
|
|
9,970
|
|
|
Diluted
|
|
|
9,995
|
|
|
|
10,066
|
|
|
|
10,025
|
|
|
|
10,081
|
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
|
|
|
|
|
|
June 30,
2024
|
|
|
December 31,
2023
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,528
|
|
|
$
|
4,068
|
|
|
Trade and other
receivables, net
|
|
|
70,933
|
|
|
|
47,645
|
|
|
Contract
assets
|
|
|
139,481
|
|
|
|
120,516
|
|
|
Inventories
|
|
|
87,732
|
|
|
|
91,229
|
|
|
Prepaid expenses and
other
|
|
|
5,274
|
|
|
|
9,026
|
|
|
Total current
assets
|
|
|
307,948
|
|
|
|
272,484
|
|
|
Property and
equipment, net
|
|
|
147,351
|
|
|
|
143,955
|
|
|
Operating lease
right-of-use assets
|
|
|
85,491
|
|
|
|
88,155
|
|
|
Goodwill
|
|
|
55,504
|
|
|
|
55,504
|
|
|
Intangible assets,
net
|
|
|
29,058
|
|
|
|
31,074
|
|
|
Other
assets
|
|
|
6,393
|
|
|
|
6,709
|
|
|
Total
assets
|
|
$
|
631,745
|
|
|
$
|
597,881
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Current
debt
|
|
$
|
10,756
|
|
|
$
|
10,756
|
|
|
Accounts
payable
|
|
|
24,508
|
|
|
|
31,142
|
|
|
Accrued
liabilities
|
|
|
23,234
|
|
|
|
27,913
|
|
|
Contract
liabilities
|
|
|
37,105
|
|
|
|
21,450
|
|
|
Current portion of
operating lease liabilities
|
|
|
5,108
|
|
|
|
4,933
|
|
|
Total current
liabilities
|
|
|
100,711
|
|
|
|
96,194
|
|
|
Borrowings on line of
credit
|
|
|
75,923
|
|
|
|
54,485
|
|
|
Operating lease
liabilities
|
|
|
82,919
|
|
|
|
85,283
|
|
|
Deferred income
taxes
|
|
|
11,159
|
|
|
|
10,942
|
|
|
Other long-term
liabilities
|
|
|
9,850
|
|
|
|
10,617
|
|
|
Total
liabilities
|
|
|
280,562
|
|
|
|
257,521
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
351,183
|
|
|
|
340,360
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
631,745
|
|
|
$
|
597,881
|
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
13,857
|
|
|
$
|
9,810
|
|
|
Depreciation and
finance lease amortization
|
|
|
7,106
|
|
|
|
5,642
|
|
|
Amortization of
intangible assets
|
|
|
2,016
|
|
|
|
2,104
|
|
|
Deferred income
taxes
|
|
|
227
|
|
|
|
417
|
|
|
Share-based
compensation expense
|
|
|
2,674
|
|
|
|
2,304
|
|
|
Other, net
|
|
|
360
|
|
|
|
1,325
|
|
|
Changes in working
capital
|
|
|
(30,055)
|
|
|
|
5,877
|
|
|
Net cash provided by
(used in) operating activities
|
|
|
(3,815)
|
|
|
|
27,479
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(10,634)
|
|
|
|
(8,414)
|
|
|
Payment of working
capital adjustment in acquisition of business
|
|
|
-
|
|
|
|
(2,731)
|
|
|
Other investing
activities
|
|
|
61
|
|
|
|
9
|
|
|
Net cash used in
investing activities
|
|
|
(10,573)
|
|
|
|
(11,136)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Borrowings on line of
credit
|
|
|
105,324
|
|
|
|
72,912
|
|
|
Repayments on line of
credit
|
|
|
(83,886)
|
|
|
|
(86,539)
|
|
|
Payments on finance
lease obligations
|
|
|
(712)
|
|
|
|
(311)
|
|
|
Tax withholdings
related to net share settlements of equity awards
|
|
|
(1,449)
|
|
|
|
(1,652)
|
|
|
Repurchase of common
stock
|
|
|
(4,429)
|
|
|
|
-
|
|
|
Other financing
activities
|
|
|
-
|
|
|
|
(282)
|
|
|
Net cash provided by
(used in) financing activities
|
|
|
14,848
|
|
|
|
(15,872)
|
|
|
|
|
|
|
|
|
|
|
|
Change in cash and
cash equivalents
|
|
|
460
|
|
|
|
471
|
|
|
Cash and cash
equivalents, beginning of period
|
|
|
4,068
|
|
|
|
3,681
|
|
|
Cash and cash
equivalents, end of period
|
|
$
|
4,528
|
|
|
$
|
4,152
|
|
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SOURCE Northwest Pipe Company