PORTLAND, OR -- (MARKET WIRE) -- April 25, 2007 -- Northwest Pipe Company (
Water Transmission
Sales in the Water Transmission Group increased 15.4% to $64.6 million for the first quarter compared to $55.9 million for the same period last year. Gross profit for this Group also improved to $13.7 million, or 21.3% of sales, compared to $10.2 million, or 18.2% of sales, for the first quarter of last year. While sales volume was generally as expected in the first quarter of 2007, gross profit was approximately $800,000 higher than expected due to some non-recurring items that were recorded during the quarter.
Tubular Products
The Tubular Products Group's sales increased 21.6% to $23.0 million for the first quarter of 2007, compared to $18.9 million for the same period last year. This is the highest quarterly sales for this Group since the third quarter of 2004. Gross profit was $2.3 million compared to $1.9 million in the first quarter of 2006. Gross profit as a percent of sales was consistent at approximately 10% for both periods.
Fabricated Products
Sales in the Fabricated Products Group were $3.2 million in the first quarter of 2007, compared to $4.0 million for the first quarter last year. The gross profit for this Group was $58,000 or 1.8% of sales, compared to $383,000, or 9.6% of sales, last year.
Outlook
The first quarter ended with a strong backlog of $192 million as bookings were somewhat higher than projected. This should lead to continued high production levels in the next few quarters. Margins on water transmission orders booked during the quarter were not quite as strong as expected, but we believe margins will improve as the year progresses. At this point, due to the lead times on water transmission projects, any future improvement in market pricing will not likely have an impact on our financial results until the fourth quarter.
The Tubular Products Group should continue to see sales increase in the next two quarters as this business continues its historic seasonal pattern. We are increasing our prices to match steel cost increases, and we expect margins to remain steady through the next quarter. We currently project margins to improve slightly in the third quarter based on increased pricing, higher plant utilization rates and product mix.
The Fabricated Products Group is not anticipating much growth at this time. During the next several months, in addition to producing our core products, we will shift certain manufacturing capabilities in this facility to support water transmission projects with specialty fabrication work. We fully expect this facility to be a steady, contributing factor in the success of our Water Transmission Group.
About Northwest Pipe
Northwest Pipe Company manufactures welded steel pipe and other products in three business segments. 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 "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)
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Three Months Ended
March 31
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2007 2006
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Net Sales:
Water Transmission $ 64,581 $ 55,947
Tubular Products 22,982 18,900
Fabricated Products 3,173 3,971
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Net Sales 90,736 78,818
Cost of Sales:
Water Transmission 50,845 45,774
Tubular Products 20,672 16,992
Fabricated Products 3,115 3,588
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Total Cost of Sales 74,632 66,354
Gross Profit:
Water Transmission 13,736 10,173
Tubular Products 2,310 1,908
Fabricated Products 58 383
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Net Gross Profit 16,104 12,464
Selling, General and Administrative 7,302 6,416
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Operating Income 8,802 6,048
Interest Expense 1,604 1,758
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Income Before Income Taxes 7,198 4,290
Income Tax Expense 2,664 1,652
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Net Income $ 4,534 $ 2,638
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Basic Earnings per Share $ 0.51 $ 0.39
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Diluted Earnings per Share $ 0.49 $ 0.37
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Shares used in Per Share Calculation:
Basic 8,924 6,841
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Diluted 9,213 7,125
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NORTHWEST PIPE COMPANY
SELECTED BALANCE SHEET
(Dollar amounts in thousands)
March 31, December 31,
2007 2006
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Assets:
Cash and Cash Equivalents $ 180 $ 4,259
Trade and Other Receivables, Net 69,714 68,425
Cost and Estimated Earnings in Excess of
Billings on Uncompleted Contracts 63,966 74,353
Inventories 74,986 79,300
Other Current Assets 9,287 11,177
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Total Current Assets 218,133 237,514
Property and Equipment, Net 165,328 160,776
Other Assets 26,345 26,161
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Total Assets $ 409,806 $ 424,451
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Liabilities:
Current Maturities of Long-Term Debt $ 12,178 $ 9,663
Accounts Payable 28,939 50,865
Accrued Liabilities 11,768 10,243
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Total Current Liabilities 52,885 70,771
Long-Term Note Payable to Financial
Institution 40,600 43,000
Other Long-Term Debt, Less Current
Maturities 46,725 47,915
Other Liabilities 32,997 31,939
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Total Liabilities 173,207 193,625
Stockholders’ Equity 236,599 230,826
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Total Liabilities and Stockholders’
Equity $ 409,806 $ 424,451
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Contact Information: CONTACT: Brian Dunham Chief Executive Officer 503-382-2332