PORTLAND, OR -- (MARKET WIRE) -- October 19, 2006 -- Northwest Pipe Company (
Water Transmission
Sales in the Water Transmission Group were $65.5 million in the third quarter of 2006, compared to $61.8 million for the third quarter last year. The gross profit for this Group was $12.7 million, or 19.4% of sales, consistent with our results over the same period last year. "While our margin percentage was slightly below last year's, it did trend up from the second quarter as expected. We anticipate a small improvement in margin again in the fourth quarter," said Dunham.
Tubular Products
The Tubular Products Group's sales were $22.3 million in the third quarter of 2006, compared to $20.5 million reported for the third quarter last year. Gross profit was $2.2 million for the quarter compared to $1.1 million in the third quarter of 2005. Gross profit as a percent of sales was 10.1% in the third quarter of 2006, compared to 5.3% for the same period in 2005.
Fabricated Products
The Fabricated Products Group generated sales of $4.7 million during the quarter compared to $4.5 million in the third quarter of 2005. Gross profit was $243,000 compared to $454,000 for the same quarter last year. "Gross profit decreased as pricing became more aggressive in our propane tank markets. We have completed the expansion of our Monterrey, Mexico facility and expect to start showing increasing sales and improving margins as we add new products to this Group later this year," said Dunham.
Backlog and Outlook
The backlog at September 30, 2006 was $195 million. "Bidding activity in the third quarter for the Water Transmission Group was strong as expected and led to our record backlog. We expect fourth quarter bidding activity to continue to be very positive and production to continue at, or slightly higher than, current levels into the fourth quarter and next year. Revenues in the fourth quarter, however, may decrease slightly from current results due to holidays and possible weather issues. If bidding activity continues as forecasted," Dunham continued, "we should end the year with a new record backlog."
Tubular products demand should continue to be steady through the end of the year. In spite of a normal shift in our product mix due to seasonality, we expect margins in the fourth quarter to be consistent with the third quarter. "The upgrade at our Atchison division is on track to be completed by the end of the year," said Dunham. "We expect to start producing a broader range of energy products when this is completed, which will help drive our growth in 2007."
About Northwest Pipe
Northwest Pipe Company manufactures welded steel pipe and other products in three business groups. Its Water Transmission Group is a leading supplier of large diameter, high-pressure steel pipe products that are used primarily for water infrastructure in North America. Its Tubular Products Group manufactures smaller diameter steel pipe for a wide range of construction, agricultural, energy, industrial and mechanical applications. Its Fabricated Products Group manufactures propane tanks and other fabricated products. The Company is headquartered in Portland, Oregon and has nine manufacturing facilities across the United States and Mexico.
Forward-Looking Statements
Statements in this press release by Brian Dunham and statements in the "Backlog and Outlook" section of this press release are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements reflect management's current views and estimates of future economic and market circumstances, industry conditions, Company performance and financial results. Actual results could vary materially from the description contained herein due to many factors, including project delays, changes in bidding activity, market demand, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, competitive environment, and other risks described from time to time in the Company's reports to the Securities and Exchange Commission. The forward-looking statements we make today speak only as of today and we do not undertake any obligation to update any such statements to reflect events or circumstances occurring after today.
NORTHWEST PIPE COMPANY
STATEMENTS OF OPERATIONS
(Dollar and share amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
--------------------- --------------------
2006 2005 2006 2005
---------- ---------- --------- ----------
Net Sales:
Water Transmission $ 65,481 $ 61,747 $ 172,771 $ 177,743
Tubular Products 22,272 20,486 63,765 62,932
Fabricated Products 4,665 4,521 12,556 11,263
---------- ---------- --------- ----------
Net Sales 92,418 86,754 249,092 251,938
Cost of Sales:
Water Transmission 52,756 49,038 140,057 142,242
Tubular Products 20,030 19,410 56,961 58,972
Fabricated Products 4,422 4,067 11,596 10,563
---------- ---------- --------- ----------
Total Cost of Sales 77,208 72,515 208,614 211,777
Gross Profit:
Water Transmission 12,725 12,709 32,714 35,501
Tubular Products 2,242 1,076 6,804 3,960
Fabricated Products 243 454 960 700
---------- ---------- --------- ----------
Gross Profit 15,210 14,239 40,478 40,161
Selling, General and
Administrative 6,989 6,633 20,298 19,166
Gain on Sale of Asset - - (7,674) -
---------- ---------- --------- ----------
Operating Income 8,221 7,606 27,854 20,995
Interest Expense 1,832 1,897 5,320 5,499
---------- ---------- --------- ----------
Income Before Income Taxes 6,389 5,709 22,534 15,496
Provision for Income Taxes 2,310 1,733 8,494 5,501
---------- ---------- --------- ----------
Net Income $ 4,079 $ 3,976 $ 14,040 $ 9,995
========== ========== ========= ==========
Basic Earnings per Share $ 0.59 $ 0.58 $ 2.05 $ 1.48
========== ========== ========= ==========
Diluted Earnings per Share $ 0.57 $ 0.56 $ 1.97 $ 1.42
========== ========== ========= ==========
Shares Used in Per Share
Calculation:
Basic 6,866 6,822 6,854 6,762
========== ========== ========= ==========
Diluted 7,162 7,112 7,139 7,050
========== ========== ========= ==========
NORTHWEST PIPE COMPANY
SELECTED BALANCE SHEET AND OTHER DATA
(Dollar amounts in thousands)
September 30, December 31,
2006 2005
------------- -------------
Assets:
Cash and Cash Equivalents $ 99 $ 133
Trade and Other Receivables, Net 67,056 64,538
Cost and Estimated Earnings in Excess
of Billings on Uncompleted Contracts 67,701 73,161
Inventories 66,273 51,070
Other Current Assets 3,716 7,435
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Total Current Assets 204,845 196,337
Property and Equipment, Net 133,574 117,369
Other Assets 25,532 24,779
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Total Assets $ 363,951 $ 338,485
============= =============
Liabilities:
Current Maturities of Long-Term Debt $ 9,571 $ 9,361
Accounts Payable 48,092 28,914
Accrued Liabilities 9,491 7,634
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Total Current Liabilities 67,154 45,909
Long-Term Note Payable to Financial
Institution 34,589 41,353
Other Long-Term Debt, Less Current
Maturities 53,018 53,578
Other Liabilities 34,893 38,180
------------- -------------
Total Liabilities 189,654 179,020
Stockholders’ Equity 174,297 159,465
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Total Liabilities and Stockholders’
Equity $ 363,951 $ 338,485
============= =============
Other Data:
Working Capital $ 137,691 $ 150,428
Capital Expenditures 20,600 18,502
Depreciation and Amortization 2,751 5,451
Debt as a Percent of Capitalization 35.8% 39.5%
Contact Information: CONTACT: Brian Dunham Chief Executive Officer 503-946-1200