VANCOUVER, WA--(Marketwire - February 25, 2009) - Northwest Pipe Company (
NASDAQ:
NWPX) today
reported record revenue and earnings for the year ended December 31, 2008.
Revenue in the year was $439.7 million compared to $382.8 million in 2007.
Net income for 2008 was $32.3 million, compared to $20.8 million in 2007.
Diluted earnings per share were $3.46 for 2008 compared to $2.26 per share
in 2007.
For the fourth quarter of 2008, the Company reported $110.2 million in
revenue, up from $98.2 million in the same period of the prior year. Net
income in the fourth quarter of 2008 was $8.6 million, or $0.92 per diluted
share, compared to net income of $5.6 million or $0.60 per diluted share in
the same quarter of 2007. The Company reported backlog entering 2009 of
approximately $190 million.
Water Transmission Results
Revenue for the Water Transmission Group was $271.9 million in 2008
compared to $287.8 million in 2007. Gross profit in 2008 was $54.5 million,
or 20.0% of sales, compared to $60.2 million, or 20.9% of sales in 2007.
Water Transmission revenue was $55.7 million in the fourth quarter of 2008
compared to $80.3 million in the fourth quarter of 2007. Gross profit was
$11.0 million, or 19.7% of sales, in 2008 compared to $17.0 million, or
21.2% of sales, in the same quarter of 2007.
"Water Transmission revenue was down in the fourth quarter of 2008 for
three reasons which were all previously disclosed," said Brian W. Dunham,
president and chief executive officer of the Company. "First, and most
importantly, a major project was postponed so late that we had no
opportunity to replace this volume. Secondly, we shut down our highest
volume production line during the quarter to install a new spiral weld
mill; and finally, weather issues impacted production in all but two of our
facilities."
Tubular Products Results
The Tubular Products Group revenue was a record $167.8 million in 2008,
compared to $95.0 million in 2007. Gross profit in 2008 was $39.2 million,
or 23.4% of sales, compared to $10.0 million, or 10.5% of sales for 2007.
Fourth quarter revenue was also at a record high for the Tubular Products
Group at $54.5 million, compared to $17.9 million in the fourth quarter of
last year. Gross profit in the fourth quarter of 2008 was $13.5 million, or
24.7% of sales, up from $1.0 million, or 5.5% of sales, in the fourth
quarter of 2007.
"The record results in the Tubular Products Group for the year were driven
primarily by strong energy pipe sales with solid performance in our other
products as well," said Dunham. "Late in the fourth quarter, bookings
declined dramatically as the recession deepened. However, through the end
of the year, we continued to ship orders that had been placed earlier in
the year. Shipping out of backlog kept our revenue at a high level
throughout the fourth quarter."
Outlook
"As we look ahead, we are focused on the impact of the recession and
financial issues on our markets," stated Dunham. "Clearly, there is a
strong correlation between our tubular products business outlook and
general economic factors, including natural gas exploration,
non-residential construction, agricultural spending, and highway spending.
At this time, we are expecting decreases in all these areas. Our selling
prices will also come down as our markets adjust to lower raw material
costs. These issues will result in a pronounced impact in the first two
quarters of 2009. We expect to see improving market conditions and results
in the second half of the year."
"Our water transmission business doesn't necessarily move in patterns
consistent with the economic cycle. This market is driven by large
municipal projects that are planned and developed over the course of
several years and are primarily motivated by long term population growth
and migration projections," said Dunham. "Funding is typically provided by
the sale of revenue bonds that are backed by connection fees or usage fees.
While there have been short-term delays in project timing, we have not seen
significant delays or cancellations due to funding issues on projects in
our backlog or projects we expect to bid in the near future."
"We are anticipating a stronger water transmission market in 2009," stated
Dunham. "Due to the timing on specific projects, weather delays and the
installation of our new mill, the first quarter is expected to be the
slowest of the year."
The Company recently announced the formation of Northwest Pipe Asia and the
acquisition of Byard Ltd., an equipment manufacturer. "While this will not
provide much near term impact, it may ultimately lead to additional
international sales of products made in the United States and, possibly,
some further investment overseas as well," said Dunham.
Northwest Pipe is continuing the process of reopening its Bossier City,
Louisiana facility. "The Louisiana facility will produce pipe primarily for
the natural gas exploration market, and we expect it to be in production in
July. However, given the significant downturn in drilling activity and the
glut of imported product that has recently arrived, we will postpone
completion of the downstream manufacturing processes. We will be able to
participate in the market by shipping product to processors for completion
in the near term and will be able to quickly complete the project when
market conditions warrant the additional investment," said Dunham.
Northwest Pipe also announced a temporary shut down of one facility. "We
have seven water transmission plants," said Dunham. "At this time, we are
temporarily closing our Pleasant Grove, Utah facility. This facility and
its people have performed well and have been very successful for us, but we
do not currently see sufficient upcoming work located nearby to justify its
operation. We are going to maintain the equipment at this location and
closely monitor the project opportunities in and around Utah. We hope to be
able to start this up again."
"This is a challenging time," concluded Dunham. "We are adjusting our
strategies and managing our costs in order to work through this period as
effectively as possible while, at the same time, staying poised to take
advantage of improving conditions when they come."
About Northwest Pipe Company
Northwest Pipe Company manufactures welded steel pipe and other products in
two 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
applications including construction, agricultural, energy, traffic and
other commercial and industrial uses. The Company is headquartered in
Vancouver, Washington and has ten 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 expectations
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, domestic and international
economic conditions and financial markets 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 2008 earnings conference call will be held on
Wednesday, February 25, 2009, 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 Twelve Months Ended
December 31 December 31
------------------- -------------------
2008 2007 2008 2007
--------- --------- --------- ---------
Net Sales:
Water Transmission $ 55,688 $ 80,299 $ 271,930 $ 287,805
Tubular Products 54,513 17,910 167,805 95,019
--------- --------- --------- ---------
Net Sales 110,201 98,209 439,735 382,824
Cost of Sales:
Water Transmission 44,707 63,265 217,457 227,598
Tubular Products 41,050 16,921 128,620 85,011
--------- --------- --------- ---------
Total Cost of Sales 85,757 80,186 346,077 312,609
Gross Profit:
Water Transmission 10,981 17,034 54,473 60,207
Tubular Products 13,463 989 39,185 10,008
--------- --------- --------- ---------
Gross Profit 24,444 18,023 93,658 70,215
Selling, General, and
Administrative 8,924 7,832 35,166 30,703
--------- --------- --------- ---------
Operating Income 15,520 10,191 58,492 39,512
Interest Expense, Net 1,942 1,701 6,409 6,792
--------- --------- --------- ---------
Income Before Income Taxes 13,578 8,490 52,083 32,720
Provision for Income Taxes 4,950 2,922 19,782 11,888
--------- --------- --------- ---------
Net Income $ 8,628 $ 5,568 $ 32,301 $ 20,832
========= ========= ========= =========
Basic Earnings per Share $ 0.94 $ 0.62 $ 3.53 $ 2.32
========= ========= ========= =========
Diluted Earnings per Share $ 0.92 $ 0.60 $ 3.46 $ 2.26
========= ========= ========= =========
Shares Used in Per Share
Calculation:
Basic 9,185 9,014 9,148 8,962
========= ========= ========= =========
Diluted 9,330 9,264 9,344 9,235
========= ========= ========= =========
NORTHWEST PIPE COMPANY
CONDENSED SELECTED BALANCE SHEET AND OTHER DATA (Unaudited)
(Dollar amounts in thousands)
December 31, December 31,
2008 2007
-------------- --------------
Assets:
Cash and Cash Equivalents $ 90 $ 234
Trade and Other Receivables, Net 75,923 49,300
Costs and Estimated Earnings in Excess
of Billings on Uncompleted Contracts 106,234 121,058
Inventories 87,348 62,805
Other Current Assets 12,436 10,487
-------------- --------------
Total Current Assets 282,031 243,884
Property and Equipment, Net 194,035 179,977
Other Assets 33,368 29,702
-------------- --------------
Total Assets $ 509,434 $ 453,563
============== ==============
Liabilities:
Current Maturities of Long-Term Debt $ 6,543 $ 5,851
Accounts Payable 34,109 41,684
Accrued Liabilities 10,111 12,311
Billings in Excess of Cost and Estimated
Earnings on Uncompleted Contracts 8,020 2,514
-------------- --------------
Total Current Liabilities 58,783 62,360
Long-Term Note Payable to Financial
Institution 82,065 54,415
Other Long-Term Debt, Less Current
Maturities 32,379 38,921
Other Liabilities 44,646 41,585
-------------- --------------
Total Liabilities 217,873 197,281
Stockholders' Equity 291,561 256,282
-------------- --------------
Total Liabilities and Stockholders'
Equity $ 509,434 $ 453,563
============== ==============
Contact Information: CONTACT:
Brian Dunham
Chief Executive Officer
Or
Stephanie Welty
Chief Financial Officer
360-397-6250