Exhibit 99.1
| EARNINGS RELEASE | July 25, 2007 |
NORTHWEST PIPE REPORTS RECORD QUARTERLY SALES
Portland, Oregon, July 25, 2007. Northwest Pipe Company (NASDAQ: NWPX) today reported the highest quarterly sales in its history. Sales for the second quarter of 2007 were $101.9 million compared to $77.9 million in the second quarter of 2006. Net income for the second quarter of 2007 was $5.7 million, or $0.61 per diluted share, compared to $7.3 million, or $1.03 per diluted share, in the second quarter of 2006, which included a $7.7 million pretax, non-recurring gain on the sale of the Riverside property. Excluding the sale of the Riverside property, results were stronger in the second quarter of 2007 than in the second quarter of 2006.
Water Transmission
Sales in the Water Transmission Group for the second quarter of 2007 were $69.5 million compared to $51.3 million for the second quarter of 2006. Gross profit for the second quarter of 2007 was $15.1 million, or 21.7% of sales, compared to $9.8 million, or 19.1% of sales in the second quarter of 2006.
“The Water Transmission Group sales in the second quarter of this year were consistent with our expectations. Margins also improved, showing the benefits of higher plant utilization for the quarter,” said Dunham.
Tubular Products
The Tubular Products Group’s sales were $28.9 million in the second quarter of 2007 compared to $22.6 million for the second quarter of 2006. Gross profit was $3.6 million, or 12.5% of sales for the second quarter of 2007, compared to $2.7 million, or 11.7% of sales for the second quarter of 2006. This is the highest quarterly sales and gross profit for this Group since 2004.
Fabricated Products
Sales in the Fabricated Products Group were $3.5 million in the second quarter of 2007 compared to $3.9 million for the same period in 2006. Gross profit was $113,000, or 3.2% of sales in the second quarter of 2007, compared to $334,000, or 8.5% of sales for the second quarter of 2006.
Acquisition of Continental Pipe Manufacturing
The Company completed the purchase of Continental Pipe Manufacturing Company’s Pleasant Grove, Utah manufacturing plant at the beginning of July 2007. “This facility’s additional capacity will help support the Water Transmission Group’s growth in the
coming years,” said Dunham. “This facility did not have much backlog when we acquired it, so we expect a slow start. However, by the beginning of 2008, we should start seeing the benefits of this acquisition.”
Outlook
The Company reported a strong backlog of $192.2 million as of June 30, 2007. “We continue to expect the total 2007 market to exceed the 2006 market with strong bookings and sales in the second half of 2007. Due to timing issues, we expect third quarter revenues to be down somewhat from this quarter, with a stronger fourth quarter. We continue to project record results for this Group,” said Dunham.
“The Tubular Products Group should continue at approximately its current level in the third quarter and decrease in the fourth quarter, as a result of normal seasonality. We are on track to reach our near-term sales goal of $100 million in 2007,” stated Dunham. “In addition, with the improvement in gross profit as a percent of sales, we have the opportunity to record our strongest year in this Group since 2004.”
The Fabricated Products Group is expected to continue at its current level in sales and profitability through the rest of this year. “As we have stated before, the long-term opportunity in this Group is in supporting our water transmission business,” noted Dunham. “We will continue to increase production of pipe fittings at this facility in the months ahead and we have transitioned management responsibility for this Group to John Peterson, who heads up our Saginaw, Texas Division of the Water Transmission Group.”
About Northwest Pipe Company
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 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 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.
| CONTACT: | Brian Dunham | |
| Chief Executive Officer | ||
| 503-946-1200 |
NORTHWEST PIPE COMPANY
STATEMENTS OF OPERATIONS
(Dollar and share amounts in thousands, except per share amounts)
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||
Net Sales: | ||||||||||||||
Water Transmission | $ | 69,477 | $ | 51,343 | $ | 134,057 | $ | 107,290 | ||||||
Tubular Products | 28,918 | 22,593 | 51,901 | 41,493 | ||||||||||
Fabricated Products | 3,502 | 3,920 | 6,675 | 7,891 | ||||||||||
Net Sales | 101,897 | 77,856 | 192,633 | 156,674 | ||||||||||
Cost of Sales: | ||||||||||||||
Water Transmission | 54,426 | 41,527 | 105,270 | 87,301 | ||||||||||
Tubular Products | 25,290 | 19,939 | 45,963 | 36,931 | ||||||||||
Fabricated Products | 3,389 | 3,586 | 6,504 | 7,174 | ||||||||||
Total Cost of Sales | 83,105 | 65,052 | 157,737 | 131,406 | ||||||||||
Gross Profit: | ||||||||||||||
Water Transmission | 15,051 | 9,816 | 28,787 | 19,989 | ||||||||||
Tubular Products | 3,628 | 2,654 | 5,938 | 4,562 | ||||||||||
Fabricated Products | 113 | 334 | 171 | 717 | ||||||||||
Gross Profit | 18,792 | 12,804 | 34,896 | 25,268 | ||||||||||
Selling, General and Administrative | 7,973 | 6,894 | 15,275 | 13,310 | ||||||||||
Gain on Sale of Asset | — | (7,674 | ) | — | (7,674 | ) | ||||||||
Operating Income | 10,819 | 13,584 | 19,621 | 19,632 | ||||||||||
Interest Expense | 1,833 | 1,729 | 3,437 | 3,487 | ||||||||||
Income Before Income Taxes | 8,986 | 11,855 | 16,184 | 16,145 | ||||||||||
Provision for Income Taxes | 3,324 | 4,532 | 5,988 | 6,184 | ||||||||||
Net Income | $ | 5,662 | $ | 7,323 | $ | 10,196 | $ | 9,961 | ||||||
Basic Earnings per Share | $ | 0.63 | $ | 1.07 | $ | 1.14 | $ | 1.45 | ||||||
Diluted Earnings per Share | $ | 0.61 | $ | 1.03 | $ | 1.11 | $ | 1.40 | ||||||
Shares Used in Per Share Calculation: | ||||||||||||||
Basic | 8,940 | 6,854 | 8,932 | 6,848 | ||||||||||
Diluted | 9,221 | 7,131 | 9,217 | 7,128 | ||||||||||
NORTHWEST PIPE COMPANY
SELECTED BALANCE SHEET AND OTHER DATA
(Dollar amounts in thousands)
| June 30, 2007 | December 31, 2006 | |||||||
Assets: | ||||||||
Cash and Cash Equivalents | $ | 250 | $ | 4,259 | ||||
Trade and Other Receivables, Net | 65,657 | 68,425 | ||||||
Cost and Estimated Earnings in Excess of Billings on Uncompleted Contracts | 79,821 | 74,353 | ||||||
Inventories | 63,638 | 79,300 | ||||||
Other Current Assets | 9,876 | 11,177 | ||||||
Total Current Assets | 219,242 | 237,514 | ||||||
Property and Equipment, Net | 168,456 | 160,776 | ||||||
Other Assets | 26,755 | 26,161 | ||||||
Total Assets | $ | 414,453 | $ | 424,451 | ||||
Liabilities: | ||||||||
Current Maturities of Long-Term Debt | $ | 4,402 | $ | 9,663 | ||||
Accounts Payable | 29,717 | 50,865 | ||||||
Accrued Liabilities | 13,740 | 10,243 | ||||||
Total Current Liabilities | 47,859 | 70,771 | ||||||
Long-Term Note Payable to Financial Institution | 49,001 | 43,000 | ||||||
Other Long-Term Debt, Less Current Maturities | 40,710 | 47,915 | ||||||
Other Liabilities | 33,879 | 31,939 | ||||||
Total Liabilities | 171,449 | 193,625 | ||||||
Stockholders’ Equity | 243,004 | 230,826 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 414,453 | $ | 424,451 | ||||
Other Data: | ||||||||
Working Capital | $ | 171,383 | $ | 166,743 | ||||
Capital Expenditures | 8,832 | 58,428 | ||||||
Depreciation and Amortization | 2,518 | 3,782 | ||||||
Debt as a Percent of Capitalization | 26.9 | % | 29.5 | % | ||||