Quarterly Highlights:
- Backlog was $109 million as of September 30, 2017, an increase of 8% from June 30, 2017 and 65% from December 31, 2016
- Net sales for the quarter were $38.8 million, an increase of 35.2% from the previous quarter and a decrease of 5.5% from the third quarter of 2016
- Gross profit was $1.9 million, or 4.9% of net sales. This compares to a gross profit of $0.7 million, or 2.3% of net sales in the previous quarter and $2.9 million, or 7.2% of net sales in the third quarter of 2016.
- Net loss before income taxes was $1.6 million compared to losses of $2.8 million for the previous quarter and $1.4 million in the third quarter of 2016
VANCOUVER, Wash., Oct. 31, 2017 (GLOBE NEWSWIRE) -- Northwest Pipe Company (Nasdaq:NWPX) today announced its financial results for the quarter ended September 30, 2017. The Company will broadcast its third quarter 2017 earnings conference call on Wednesday, November 1, 2017 at 7:00 am PDT.
Third Quarter 2017 Results
Sales decreased 5.5% to $38.8 million in the third quarter of 2017 from $41.1 million in the third quarter of 2016. The decrease in net sales was the result of a 12% decrease in tons produced, partially offset by a 7% 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 material costs per ton. 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.
Gross profit was $1.9 million (4.9% of net sales) in the third quarter of 2017 compared to a gross profit of $2.9 million (7.2% of net sales) in the third quarter of 2016. Gross profit decreased due to a change in product mix and project timing.
Net loss from continuing operations for the third quarter of 2017 was $1.6 million or $0.16 per diluted share compared to a net income from continuing operations of $1.4 million or $0.15 per diluted share for the third quarter of 2016. The change in net results between quarters was due to the unusual tax benefit rate in the third quarter of 2016. The 2016 tax benefit rate was primarily due to the expected taxable gain on the sale of Denver real property resulting in a reduction in the expected increase in the valuation allowance.
As of September 30, 2017, the Company’s backlog including confirmed orders was $109 million. This compared to $101 million as of June 30, 2017. Backlog including confirmed orders was $96 million as of September 30, 2016, which included $3 million for the subsequently closed and sold water transmission plant in Denver, Colorado. The Company’s definition of backlog including confirmed orders consists of the balance of projects in process and project bookings for which we have been notified as being the successful bidder even though a binding agreement has not been executed.
The Company continues to explore the sale of its line pipe plant in Atchison, Kansas. The Tubular Products segment results are reported as discontinued operations and the associated assets are classified as held for sale. The Company’s operating results include only the Water Transmission segment.
Outlook
“This year has developed into a relatively small demand year as we have seen large jobs pushed into 2018 and work that has been delayed due to severe weather events. As a result, we expect fourth quarter revenues to be flat but margins will continue to show slow but steady improvement,” said Scott Montross, President and Chief Executive Officer of the Company. “Despite the small market, we continue to see improvement in our bidding environment resulting in larger and higher quality backlog. As we approach 2018, we are expecting to see market demand that is higher than we have seen over the last several years.”
Conference Call
The Company will hold its third quarter 2017 earnings conference call on Wednesday, November 1, 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 Friday, December 1, 2017 by dialing 1-866-402-3743 passcode 6301.
About Northwest Pipe Company
Northwest 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 including confirmed orders. 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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net sales | $ | 38,804 | $ | 41,075 | $ | 97,153 | $ | 110,208 | ||||||||
| Cost of sales | 36,889 | 38,136 | 93,406 | 114,291 | ||||||||||||
| Gross profit (loss) | 1,915 | 2,939 | 3,747 | (4,083 | ) | |||||||||||
| Selling, general and administrative expense | 3,423 | 3,910 | 10,835 | 12,337 | ||||||||||||
| Restructuring expense | - | 282 | 881 | 282 | ||||||||||||
| Operating loss | (1,508 | ) | (1,253 | ) | (7,969 | ) | (16,702 | ) | ||||||||
| Other income (expense) | (3 | ) | 16 | 181 | 51 | |||||||||||
| Interest income | - | 10 | - | 14 | ||||||||||||
| Interest expense | (117 | ) | (134 | ) | (369 | ) | (368 | ) | ||||||||
| Loss before income taxes | (1,628 | ) | (1,361 | ) | (8,157 | ) | (17,005 | ) | ||||||||
| Income tax benefit | (41 | ) | (2,781 | ) | (1,607 | ) | (3,437 | ) | ||||||||
| Income (loss) from continuing operations | (1,587 | ) | 1,420 | (6,550 | ) | (13,568 | ) | |||||||||
| Loss on discontinued operations | (482 | ) | (693 | ) | (1,455 | ) | (1,529 | ) | ||||||||
| Net income (loss) | $ | (2,069 | ) | $ | 727 | $ | (8,005 | ) | $ | (15,097 | ) | |||||
| Basic and diluted income (loss) per share: | ||||||||||||||||
| Continuing operations | $ | (0.16 | ) | $ | 0.15 | $ | (0.68 | ) | $ | (1.42 | ) | |||||
| Discontinued operations | (0.05 | ) | (0.07 | ) | (0.15 | ) | (0.16 | ) | ||||||||
| Total | $ | (0.21 | ) | $ | 0.08 | $ | (0.83 | ) | $ | (1.58 | ) | |||||
| Shares used in per share calculations: | ||||||||||||||||
| Basic | 9,620 | 9,597 | 9,611 | 9,583 | ||||||||||||
| Diluted | 9,620 | 9,620 | 9,611 | 9,583 | ||||||||||||
| NORTHWEST PIPE COMPANY | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (Unaudited) | |||||
| (In thousands) | |||||
| September 30, | December 31, | ||||
| 2017 | 2016 | ||||
| Assets: | |||||
| Cash and cash equivalents | $ | 5,303 | $ | 21,829 | |
| Trade and other receivables, net | 24,245 | 25,555 | |||
| Costs and estimated earnings in excess | |||||
| of billings on uncompleted contracts | 50,293 | 43,663 | |||
| Inventories | 18,998 | 18,645 | |||
| Other current assets | 1,013 | 2,096 | |||
| Assets held for sale | 36,439 | 36,822 | |||
| Total current assets | 136,291 | 148,610 | |||
| Property and equipment, net | 79,043 | 81,671 | |||
| Other assets | 10,591 | 11,274 | |||
| Total assets | $ | 225,925 | $ | 241,555 | |
| Liabilities: | |||||
| Current portion of capital lease obligations | $ | 244 | $ | 325 | |
| Accounts payable | 3,699 | 5,267 | |||
| Accrued liabilities | 7,787 | 10,925 | |||
| Billings in excess of costs and estimated earnings | |||||
| on uncompleted contracts | 291 | 2,038 | |||
| Total current liabilities | 12,021 | 18,555 | |||
| Capital lease obligations, less current portion | 424 | 602 | |||
| Other long-term liabilities | 11,038 | 13,185 | |||
| Total liabilities | 23,483 | 32,342 | |||
| Stockholders' equity | 202,442 | 209,213 | |||
| Total liabilities and stockholders' equity | $ | 225,925 | $ | 241,555 | |