- Net sales of $118.7 million
decreased 3.5% year-over-year
- Gross profit of $19.3 million
decreased 23.2% year-over-year
- Net income of $0.58 per
diluted share
- Backlog1 of $253
million; backlog including confirmed orders2
of $335 million for the Engineered
Steel Pressure Pipe segment ("SPP")
- Order book3 of $52 million for the Precast Infrastructure and
Engineered Systems segment ("Precast")
- Authorization for $30 million
share repurchase program announced
VANCOUVER, Wash., Nov. 2, 2023
/PRNewswire/ -- Northwest Pipe Company (NASDAQ: NWPX) (the
"Company"), a leading manufacturer of water-related infrastructure
products, today announced its financial results for the third
quarter ended September 30, 2023 and
the authorization of a share repurchase program for up to
$30 million of its outstanding common
stock. The Company will broadcast its third quarter 2023 earnings
conference call on Friday, November 3,
2023 at 7:00 a.m. PT.
Management Commentary
"Our SPP revenue of $80.5 million was strong even when taking
into account multiple one-time anomalies that reduced both the
revenue and gross margins we had expected in the third quarter.
These anomalies included customer-driven contract changes as well
as changes in project scope and delays that affected project
delivery timing. Despite reduced bidding activity in 2023 and the
associated pressure that has had on project bidding especially over
the last few months, our backlog including confirmed orders has
remained elevated at $335 million, setting the stage for a
strong fourth quarter," said Scott
Montross, President and Chief Executive Officer of Northwest
Pipe Company.
Mr. Montross continued, "Revenue in our Precast business
modestly declined both sequentially and year-over-year to
$38.2 million, though we
maintained a fairly strong order book of $52 million. Elevated
interest rates continued to affect both the residential and
commercial construction markets, which moderately reduced Precast
product demand, negatively impacted overhead absorption, and
altered our product mix, all of which led to our margins
normalizing compared to the record year we experienced in 2022. We
expect Precast revenue in the fourth quarter to be down modestly
from the prior year period with margins that are down from 2022
record highs but similar to what we have seen in the second and
third quarters of 2023."
Mr. Montross concluded, "We are pleased to announce that we
have authorized a $30 million share repurchase program,
underscoring our confidence in our strategic plan to drive
long-term profitable growth and enhance stockholder value. We view
stock repurchases as another component to our growth strategy as a
means to reward our stockholders while we continue to pay down debt
and seek accretive acquisition candidates that align with our
Precast strategy. While finalizing the integration of ParkUSA
remains paramount, we will continue to evaluate potential M&A
opportunities to grow our Precast-related business to reduce the
cyclicality of our SPP operations as well as to improve our margins
and cash flow profile."
Third Quarter 2023 Financial Results
Consolidated
- Net sales decreased 3.5% to $118.7
million from $123.0 million in
the third quarter of 2022.
- Gross profit decreased 23.2% to $19.3
million, or 16.3% of net sales, from $25.1 million, or 20.4% of net sales, in the
third quarter of 2022.
- Net income was $5.8 million, or
$0.58 per diluted share, compared to
$10.0 million, or $0.99 per diluted share, in the third quarter of
2022.
Engineered Steel Pressure Pipe Segment (SPP)
- SPP net sales decreased 3.8% to $80.5
million from $83.7 million in
the third quarter of 2022 driven by a 13% decrease in tons produced
resulting primarily from changes in project timing, partially
offset by an 11% increase in selling price per ton primarily due to
product mix.
- SPP gross profit decreased 23.1% to $10.9 million, or 13.6% of SPP net sales, from
$14.2 million, or 17.0% of SPP net
sales, in the third quarter of 2022 primarily due to
customer-driven contract changes and project scope and timing
changes.
- SPP backlog was $253 million as
of September 30, 2023 compared to
$292 million as of June 30, 2023 and $295
million as of September 30,
2022. Backlog including confirmed orders was $335 million as of September 30, 2023 compared to $343 million as of June
30, 2023 and $347 million as
of September 30, 2022.
Precast Infrastructure and Engineered Systems Segment
(Precast)
- Precast net sales decreased 2.8% to $38.2 million from $39.3
million in the third quarter of 2022 driven by an 8%
decrease in selling prices due to lower demand, partially offset by
a 6% increase in volume shipped due to changes in product mix.
- Precast gross profit decreased 23.2% to $8.4 million, or 21.9% of Precast net sales, from
$10.9 million, or 27.8% of Precast
net sales, in the third quarter of 2022 primarily due to changes in
product mix.
- Precast order book was $52
million as of September 30,
2023 compared to $58 million
as of June 30, 2023 and $74 million as of September 30, 2022.
Balance Sheet and Cash Flow
- As of September 30, 2023, the
Company had $58.1 million of
outstanding revolving loan borrowings and additional borrowing
capacity of approximately $66 million
under the revolving credit facility.
- Net cash provided by operating activities was $16.9 million in the third quarter of 2023
compared to $15.3 million in the
third quarter of 2022 primarily due to a $6.0 million increase in cash provided by changes
in working capital partially offset by a $4.5 million decrease in cash provided by net
income adjusted for non-cash items.
- Capital expenditures were $4.8
million in the third quarter of 2023 compared to
$3.3 million in the third quarter of
2022.
Share Repurchase Authorization
The Company has authorized a share repurchase program of up to
$30 million of its outstanding common stock. The program does
not commit to any particular timing or quantity of purchases, and
the program may be suspended or discontinued at any time. Under the
program, shares may be purchased in open market, including through
Rule 10b5‑1 trading plans, or in privately negotiated
transactions. Any repurchases will be subject to the Company's
liquidity, including availability of borrowings and covenant
compliance under its revolving credit facility, and other capital
allocation priorities of the business.
|
|
|
|
|
1 Northwest Pipe Company defines
"backlog" as the balance of remaining performance obligations under
signed contracts for Engineered Steel Pressure Pipe products for
which revenue is recognized over time.
|
|
2 Northwest Pipe Company defines
"confirmed orders" as Engineered Steel Pressure Pipe projects for
which the Company has been notified that it is the successful
bidder, but a binding agreement has not been executed.
|
|
3 Northwest
Pipe Company defines "order book" as unfulfilled orders outstanding
at the measurement date for its Precast Infrastructure and
Engineered Systems segment.
|
Conference Call Details
A conference call and simultaneous webcast to discuss the
Company's third quarter 2023 financial results will be held on
Friday, November 3, 2023, at
7:00 a.m. Pacific Time. The call will
be broadcast live on the Investor Relations section of the
Company's website at investor.nwpipe.com and will be archived
online upon completion of the conference call. For those unable to
listen to the live call, a replay will be available approximately
three hours after the event and will remain available until Friday,
November 17, 2023, by dialing 1‑844‑512‑2921 in the U.S. or
1‑412‑317‑6671 internationally and entering the replay access code:
13741503.
About Northwest Pipe Company
Founded in 1966, Northwest Pipe Company is a leading
manufacturer of water-related infrastructure products. In addition
to being the largest manufacturer of engineered steel water
pipeline systems in North America,
the Company manufactures stormwater and wastewater technology
products; high-quality precast and reinforced concrete products;
pump lift stations; steel casing pipe, bar-wrapped concrete
cylinder pipe, and one of the largest offerings of pipeline system
joints, fittings, and specialized components. Strategically
positioned to meet growing water and wastewater infrastructure
needs, Northwest Pipe Company provides solution-based products for
a wide range of markets under the ParkUSA, Geneva Pipe and Precast, Permalok®, and
Northwest Pipe Company lines. The Company's diverse team is
committed to quality and innovation while demonstrating the
Company's core values of accountability, commitment, and teamwork.
The Company is headquartered in Vancouver, Washington, and has 13
manufacturing facilities across North
America. Please visit www.nwpipe.com for more
information.
Forward-Looking Statements
Statements in this press release by Scott Montross contain "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 the Company's 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 the Company include
changes in demand and market prices for its products, product mix,
bidding activity and order modifications or cancelations, timing of
customer orders and deliveries, production schedules, price and
availability of raw materials, excess or shortage of production
capacity, international trade policy and regulations, changes in
tariffs and duties imposed on imports and exports and related
impacts on the Company, economic uncertainty and associated trends
in macroeconomic conditions, including potential recession,
inflation, and the state of the housing market, interest rate risk
and changes in market interest rates, including the impact on the
Company's customers and related demand for its products, the
Company's ability to identify and complete internal initiatives
and/or acquisitions in order to grow its business, the Company's
ability to effectively integrate Park Environmental Equipment, LLC
and other acquisitions into its business and operations and achieve
significant administrative and operational cost synergies and
accretion to financial results, effects of security breaches,
computer viruses, and cybersecurity incidents, impacts of U.S. tax
reform legislation on the Company's results of operations, adequacy
of the Company's insurance coverage, supply chain challenges, labor
shortages, ongoing military conflicts in areas such as Ukraine and Israel, and related consequences, operating
problems at the Company's manufacturing operations including fires,
explosions, inclement weather, and floods and other natural
disasters, material weaknesses in the Company's internal control
over financial reporting and its ability to remediate such
weaknesses, impacts of pandemics, epidemics, or other public health
emergencies, and other risks discussed in the Company's Annual
Report on Form 10‑K for the year ended December 31, 2022
and from time to time in its other Securities and Exchange
Commission filings and reports. Such forward-looking statements
speak only as of the date on which they are made, and the Company
does not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date of this
release. If the Company does update or correct one or more
forward-looking statements, investors and others should not
conclude that it 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 financial measure is provided to better enable
investors and others to assess the Company's ongoing operating
results and compare them with its competitors. This should be
considered a supplement to, and not a substitute for, or superior
to, financial measures calculated in accordance with GAAP.
For more information, visit www.nwpipe.com.
Contact:
Aaron
Wilkins
Chief Financial Officer
Northwest Pipe Company
investors@nwpipe.com
Or
Addo Investor Relations
nwpx@addo.com
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
$
|
80,493
|
|
|
$
|
83,663
|
|
|
$
|
221,294
|
|
|
$
|
235,446
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
38,229
|
|
|
|
39,321
|
|
|
|
112,897
|
|
|
|
115,391
|
|
Total net
sales
|
|
|
118,722
|
|
|
|
122,984
|
|
|
|
334,191
|
|
|
|
350,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
69,582
|
|
|
|
69,467
|
|
|
|
190,030
|
|
|
|
202,956
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
29,846
|
|
|
|
28,399
|
|
|
|
85,809
|
|
|
|
83,897
|
|
Total cost of
sales
|
|
|
99,428
|
|
|
|
97,866
|
|
|
|
275,839
|
|
|
|
286,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
10,911
|
|
|
|
14,196
|
|
|
|
31,264
|
|
|
|
32,490
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
8,383
|
|
|
|
10,922
|
|
|
|
27,088
|
|
|
|
31,494
|
|
Total gross
profit
|
|
|
19,294
|
|
|
|
25,118
|
|
|
|
58,352
|
|
|
|
63,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
|
|
10,237
|
|
|
|
10,654
|
|
|
|
33,119
|
|
|
|
30,149
|
|
Operating
income
|
|
|
9,057
|
|
|
|
14,464
|
|
|
|
25,233
|
|
|
|
33,835
|
|
Other income
(expense)
|
|
|
(61)
|
|
|
|
11
|
|
|
|
(224)
|
|
|
|
56
|
|
Interest
expense
|
|
|
(1,162)
|
|
|
|
(964)
|
|
|
|
(3,722)
|
|
|
|
(2,393)
|
|
Income before income
taxes
|
|
|
7,834
|
|
|
|
13,511
|
|
|
|
21,287
|
|
|
|
31,498
|
|
Income tax
expense
|
|
|
2,016
|
|
|
|
3,555
|
|
|
|
5,659
|
|
|
|
8,310
|
|
Net income
|
|
$
|
5,818
|
|
|
$
|
9,956
|
|
|
$
|
15,628
|
|
|
$
|
23,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.58
|
|
|
$
|
1.00
|
|
|
$
|
1.57
|
|
|
$
|
2.34
|
|
Diluted
|
|
$
|
0.58
|
|
|
$
|
0.99
|
|
|
$
|
1.55
|
|
|
$
|
2.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
10,014
|
|
|
|
9,927
|
|
|
|
9,985
|
|
|
|
9,909
|
|
Diluted
|
|
|
10,107
|
|
|
|
10,010
|
|
|
|
10,088
|
|
|
|
9,988
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
September 30, 2023
|
|
|
December 31, 2022
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,058
|
|
|
$
|
3,681
|
|
Trade and other
receivables, net
|
|
|
66,997
|
|
|
|
71,563
|
|
Contract
assets
|
|
|
105,420
|
|
|
|
121,778
|
|
Inventories
|
|
|
83,093
|
|
|
|
71,029
|
|
Prepaid expenses and
other
|
|
|
6,638
|
|
|
|
10,689
|
|
Total current
assets
|
|
|
266,206
|
|
|
|
278,740
|
|
Property and
equipment, net
|
|
|
139,812
|
|
|
|
133,166
|
|
Operating lease
right-of-use assets
|
|
|
89,605
|
|
|
|
93,124
|
|
Goodwill
|
|
|
55,504
|
|
|
|
55,504
|
|
Intangible assets,
net
|
|
|
32,117
|
|
|
|
35,264
|
|
Other
assets
|
|
|
5,844
|
|
|
|
5,542
|
|
Total
assets
|
|
$
|
589,088
|
|
|
$
|
601,340
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current
debt
|
|
$
|
10,756
|
|
|
$
|
10,756
|
|
Accounts
payable
|
|
|
31,156
|
|
|
|
26,968
|
|
Accrued
liabilities
|
|
|
23,786
|
|
|
|
30,957
|
|
Contract
liabilities
|
|
|
17,264
|
|
|
|
17,456
|
|
Current portion of
operating lease liabilities
|
|
|
4,899
|
|
|
|
4,702
|
|
Total current
liabilities
|
|
|
87,861
|
|
|
|
90,839
|
|
Borrowings on line of
credit
|
|
|
58,076
|
|
|
|
83,696
|
|
Operating lease
liabilities
|
|
|
86,529
|
|
|
|
89,472
|
|
Deferred income
taxes
|
|
|
11,639
|
|
|
|
11,402
|
|
Other long-term
liabilities
|
|
|
9,845
|
|
|
|
7,657
|
|
Total
liabilities
|
|
|
253,950
|
|
|
|
283,066
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
335,138
|
|
|
|
318,274
|
|
Total liabilities and
stockholders' equity
|
|
$
|
589,088
|
|
|
$
|
601,340
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
15,628
|
|
|
$
|
23,188
|
|
Depreciation and
finance lease amortization
|
|
|
8,644
|
|
|
|
9,321
|
|
Amortization of
intangible assets
|
|
|
3,147
|
|
|
|
3,369
|
|
Deferred income
taxes
|
|
|
226
|
|
|
|
(3)
|
|
Share-based
compensation expense
|
|
|
3,050
|
|
|
|
2,477
|
|
Other, net
|
|
|
1,298
|
|
|
|
(305)
|
|
Changes in working
capital
|
|
|
12,416
|
|
|
|
(12,530)
|
|
Net cash provided by
operating activities
|
|
|
44,409
|
|
|
|
25,517
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(13,244)
|
|
|
|
(11,792)
|
|
Payment of working
capital adjustment in acquisition of business
|
|
|
(2,731)
|
|
|
|
-
|
|
Other investing
activities
|
|
|
63
|
|
|
|
(288)
|
|
Net cash used in
investing activities
|
|
|
(15,912)
|
|
|
|
(12,080)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Borrowings on line of
credit
|
|
|
113,047
|
|
|
|
121,103
|
|
Repayments on line of
credit
|
|
|
(138,667)
|
|
|
|
(136,047)
|
|
Borrowings on other
debt
|
|
|
-
|
|
|
|
3,525
|
|
Payments on finance
lease obligations
|
|
|
(548)
|
|
|
|
(409)
|
|
Tax withholdings
related to net share settlements of equity awards
|
|
|
(1,652)
|
|
|
|
(853)
|
|
Other financing
activities
|
|
|
(300)
|
|
|
|
(47)
|
|
Net cash used in
financing activities
|
|
|
(28,120)
|
|
|
|
(12,728)
|
|
Change in cash and cash
equivalents
|
|
|
377
|
|
|
|
709
|
|
Cash and cash
equivalents, beginning of period
|
|
|
3,681
|
|
|
|
2,997
|
|
Cash and cash
equivalents, end of period
|
|
$
|
4,058
|
|
|
$
|
3,706
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/northwest-pipe-company-announces-third-quarter-2023-financial-results-and-share-repurchase-authorization-301976436.html
SOURCE Northwest Pipe Company