PORTLAND, OR--(Marketwire - March 5, 2008) - Northwest Pipe Company (
NASDAQ:
NWPX) today
reported the highest annual sales and earnings in its history. Sales for
the year ended December 31, 2007 were $382.8 million compared to $346.6
million in 2006. Net income was $20.8 million, compared to $20.0 million
in 2006. The 2006 results included a non-recurring gain on sale of
approximately $7.7 million.
For the fourth quarter, the Company reported sales of $98.2 million
compared to $97.5 million for the fourth quarter of 2006. Fourth quarter
net income was $5.6 million, or $0.60 per diluted share, slightly lower
than the $6.0 million recorded for the same quarter last year.
Water Transmission
Sales in the Water Transmission Group for 2007 were $274.8 million compared
to $244.8 million for 2006. Gross profit for 2007 was $60.6 million, or
22.0% of sales, compared to $46.6 million, or 19.0% of sales in 2006.
For the fourth quarter, sales were $76.8 million, and gross profit was
$17.4 million, or 22.7% of sales. This is the highest volume ever for this
group and the highest gross profit margin reported for a quarter since
2003. "The Water Transmission Group's performance was outstanding during
the quarter," said Brian W. Dunham, president and chief executive officer
of the Company. "The higher margin reflects that performance, some
incremental improvements in the market, and a positive product mix. While
this margin performance won't necessarily repeat every quarter, we do
believe it is indicative of real improvements in our markets and our
facilities."
Tubular Products
The Tubular Products Group's 2007 sales were $95.0 million, compared to
$84.8 million in 2006. Gross profit was $10.0 million, or 10.5% of sales,
compared to $8.9 million, or 10.5% of sales for 2006.
Sales were $17.9 million and gross profit was $1.0 million in the fourth
quarter of 2007. "Although we met our objectives for the year, the fourth
quarter for this Group was disappointing," said Dunham. "Volume was down
as we changed our direction in the energy market and we were significantly
impacted by adverse weather in the Midwest. We do expect to see rapid
improvement and margin should be back in the low double digit range in the
first quarter of 2008."
Fabricated Products
Sales in the Fabricated Products Group were $13.0 million for the year and
$3.5 million in the fourth quarter. The Group lost $400,000 in the fourth
quarter and ended the year with a loss of $350,000. The Company plans to
include this business in the Water Transmission Group beginning in the
first quarter of 2008. This reflects the internal management structure and
strategic direction for this Group.
Outlook
The Company's backlog is at an all time high at $212 million and the market
continues to look very active in 2008. Consequently, the Company expects
to improve upon 2007's results in both sales and earnings over the course
of the year. At this time, given the timing of projected market activity,
the second half of the year should be significantly better than the first
half and the second quarter should be stronger than the first quarter.
"While we expect solid performance in the first quarter, we do not expect
to match the earnings we are reporting today in the Water Transmission
Group, which were based on historically high volume and a strong product
mix," said Dunham.
"We expect a quick return to better margins and volume in the Tubular
Products Group in the first quarter," continued Dunham. "In spite of
concerns about a slower overall economy, we see growth opportunities in
non-residential construction products, energy products, and traffic
signpost products in 2008."
Over the past few months there has been a rapid increase in the cost of
steel, the Company's primary raw material. "Steel price increases cause
different challenges in our two main groups," said Dunham. "In Tubular
Products, the challenge is to pass on these increases to customers. At
this time, prices for our products are going up and we believe the market
dynamics are strong enough to absorb expected increases. In the Water
Transmission Group, the risk is that we might underestimate the cost of
steel in fixed price contracts. While this is possible, we do not see
significant exposure at this time."
"Steel availability is an issue for both groups. In the first quarter of
2008, our overall revenues in Water Transmission will be somewhat lower
because delivery lead times have increased. We believe this is only a near
term timing problem. In general, for both groups, we believe we have
adequate supply of steel to meet our needs, but we are watching this
situation carefully," concluded Dunham.
About Northwest Pipe Company
Northwest Pipe Company manufactures welded steel pipe and other products in
three business groups. Its Water Transmission Group is the 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,
water transmission fittings, 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.
Conference Call
The Company's fourth quarter 2007 earnings conference call will be held on
Wednesday, March 5, 2008, at 8:00 a.m. PST via live Internet webcast. The
conference broadcast can be accessed at the "Investor Relations" section of
the Company's website located at
http://www.nwpipe.com. For those unable
to listen to the live broadcast, a replay will be available at the Investor
Relations section of the Company's website (
www.nwpipe.com) or by dialing
800-925-5456 approximately one hour after the event.
NORTHWEST PIPE COMPANY
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar and share amounts in thousands, except per share amounts)
Three Months Ended For the Year Ended
December 31 December 31
-------------------- --------------------
2007 2006 2007 2006
--------- ---------- --------- ---------
Net Sales:
Water Transmission $ 76,840 $ 72,039 $ 274,760 $ 244,810
Tubular Products 17,910 20,991 95,019 84,756
Fabricated Products 3,459 4,469 13,045 17,025
--------- ---------- --------- ---------
Net Sales 98,209 97,499 382,824 346,591
Cost of Sales:
Water Transmission 59,402 58,152 214,196 198,209
Tubular Products 16,921 18,863 85,011 75,824
Fabricated Products 3,863 4,249 13,402 15,845
--------- ---------- --------- ---------
Total Cost of Sales 80,186 81,264 312,609 289,878
Gross Profit:
Water Transmission 17,438 13,887 60,564 46,601
Tubular Products 989 2,128 10,008 8,932
Fabricated Products (404) 220 (357) 1,180
--------- ---------- --------- ---------
Gross Profit 18,023 16,235 70,215 56,713
Selling, General and
Administrative 7,832 7,087 30,703 27,385
Gain on Sale of Asset - - - (7,674)
--------- ---------- --------- ---------
Operating Income 10,191 9,148 39,512 37,002
Interest Expense, net 1,701 1,380 6,792 6,700
--------- ---------- --------- ---------
Income Before Income Taxes 8,490 7,768 32,720 30,302
Provision for Income Taxes 2,922 1,789 11,888 10,283
--------- ---------- --------- ---------
Net Income $ 5,568 $ 5,979 $ 20,832 $ 20,019
========= ========== ========= =========
Basic Earnings per Share $ 0.62 $ 0.74 $ 2.32 $ 2.80
========= ========== ========= =========
Diluted Earnings per Share $ 0.60 $ 0.72 $ 2.26 $ 2.69
========= ========== ========= =========
Shares Used in Per Share
Calculation:
Basic 9,014 8,035 8,962 7,152
========= ========== ========= =========
Diluted 9,264 8,349 9,235 7,446
========= ========== ========= =========
CONDENSED SELECTED BALANCE SHEET AND OTHER DATA (Unaudited)
(Dollar amounts in thousands)
December December
31, 31,
2007 2006
--------- ---------
Assets:
Cash and Cash Equivalents $ 234 $ 4,259
Trade and Other Receivables, Net 49,300 68,425
Cost and Estimated Earnings in Excess
of Billings on Uncompleted Contracts 121,058 74,353
Inventories 62,805 79,300
Other Current Assets 10,487 11,177
--------- ---------
Total Current Assets 243,884 237,514
Property and Equipment, Net 179,977 160,776
Other Assets 29,702 26,161
--------- ---------
Total Assets $ 453,563 $ 424,451
========= =========
Liabilities:
Current Maturities of Long-Term Debt $ 5,851 $ 9,663
Accounts Payable 41,684 50,865
Accrued Liabilities 12,311 10,243
Billings in Excess of Cost and Estimated Earnings
on Uncompleted Contracts 2,514 -
--------- ---------
Total Current Liabilities 62,360 70,771
Long-Term Note Payable to Financial Institution 54,415 43,000
Other Long-Term Debt, Less Current Maturities 34,929 47,915
Other Liabilities 45,577 31,939
--------- ---------
Total Liabilities 197,281 193,625
Stockholders Equity 256,282 230,826
--------- ---------
Total Liabilities and Stockholders Equity $ 453,563 $ 424,451
========= =========
Other Data:
Working Capital $ 181,524 $ 166,743
Capital Expenditures 22,971 58,428
Depreciation and Amortization 4,864 3,782
Debt as a Percent of Capitalization 27.1% 29.5%
Contact Information: CONTACT:
Brian Dunham
Chief Executive Officer
503-382-2332