Exhibit 99.1
| EARNINGS RELEASE | July 29, 2009 |
NORTHWEST PIPE REPORTS SECOND QUARTER 2009 RESULTS
Vancouver, WA, July 29, 2009…Northwest Pipe Company (NASDAQ: NWPX) today reported sales of $74.9 million and per share earnings of $0.26 for the second quarter ended June 30, 2009. Net income for the quarter was $2.4 million. In the same quarter of 2008, sales were $112.1 million and net income was $8.4 million, with earnings per share of $0.90.
Water Transmission Results
Revenues for the Water Transmission Group were $59.3 million in the second quarter of 2009 compared to $74.9 million in 2008. Second quarter gross profit in 2009 was $12.8 million, or 21.6% of sales, compared to $14.8 million, or 19.7% of sales in 2008.
“Water Transmission revenues and gross margins met our expectations this quarter,” said Brian W. Dunham, President and Chief Executive Officer of the Company. “Volume was not as strong as we would like, but this was anticipated due to the timing and unbalanced locations of projects.”
Tubular Products Results
The Tubular Products Group sales were $15.6 million in the second quarter of 2009, compared to $37.2 million in 2008. Gross margin for the quarter was a negative $2.6 million, compared to gross profit of $9.8 million in the same quarter of 2008.
“Selling prices across all product lines in the Tubular Products Group continued to fall throughout the quarter. Even though our costs also declined during this quarter, our margins turned negative as selling prices dropped precipitously,” said Dunham. “At the same time, demand continued to be slow. Demand for our largest product line, energy pipe, has been severely depressed in recent months As of today, it appears unlikely there will be a recovery in the natural gas market this year.”
Outlook
“The second quarter was challenging due to the price declines in the Tubular Products Group. Additionally, our backlog went down to $190 million due to a significant order in the Water Transmission Group that did not materialize. However, as we look ahead, this is still a strong backlog and we do project an increase in bidding activity and a corresponding increase in backlog in the third quarter,” noted Dunham. “While the Tubular Products Group will have another difficult quarter, we expect to see margins improve as steel prices have begun to increase in recent weeks. We have seen some corresponding price increases in our end markets as well. At this time, we expect modest growth in both groups in both the 3rd and 4th quarters.”
“Difficult market conditions, particularly in Tubular Products, are affecting our business in 2009 and will continue to do so as we look ahead to the rest of the year. We will maintain our efforts to control our costs and yet maintain our competitive strengths so we are positioned to react as conditions improve. Our financial position is sound and we continue to see strong long-term prospects in both of our business segments,” Dunham concluded.
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 and a subsidiary in Singapore.
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 second quarter 2009 earnings conference call will be held on Wednesday, July 29, 2009, at 8:00 a.m. PDT via live internet webcast. The conference broadcast can be accessed at the “Investor Relations” section of the Company’s website located athttp://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 866-380-8128 with the password 6301 approximately one hour after the event.
| CONTACT: | Brian Dunham, Chief Executive Officer | |
| Stephanie Welty, Chief Financial Officer | ||
| 360-397-6250 |
NORTHWEST PIPE COMPANY
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar and share amounts in thousands, except per share amounts)
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||
Net Sales: | ||||||||||||||
Water Transmission | $ | 59,303 | $ | 74,861 | $ | 118,158 | $ | 138,730 | ||||||
Tubular Products | 15,592 | 37,245 | 38,140 | 67,379 | ||||||||||
Net Sales | 74,895 | 112,106 | 156,298 | 206,109 | ||||||||||
Cost of Sales: | ||||||||||||||
Water Transmission | 46,468 | 60,083 | 94,031 | 109,499 | ||||||||||
Tubular Products | 18,149 | 27,405 | 39,252 | 54,207 | ||||||||||
Total Cost of Sales | 64,617 | 87,488 | 133,283 | 163,706 | ||||||||||
Gross Profit: | ||||||||||||||
Water Transmission | 12,835 | 14,778 | 24,127 | 29,231 | ||||||||||
Tubular Products | (2,557 | ) | 9,840 | (1,112 | ) | 13,172 | ||||||||
Gross Profit | 10,278 | 24,618 | 23,015 | 42,403 | ||||||||||
Selling, General, and Administrative | 5,761 | 9,285 | 13,006 | 17,246 | ||||||||||
Operating Income | 4,517 | 15,333 | 10,009 | 25,157 | ||||||||||
Interest Expense, Net | 1,028 | 1,329 | 2,254 | 3,135 | ||||||||||
Income Before Income Taxes | 3,489 | 14,004 | 7,755 | 22,022 | ||||||||||
Provision for Income Taxes | 1,066 | 5,605 | 2,702 | 8,576 | ||||||||||
Net Income | $ | 2,423 | $ | 8,399 | $ | 5,053 | $ | 13,446 | ||||||
Basic Earnings per Share | $ | 0.26 | $ | 0.92 | $ | 0.55 | $ | 1.47 | ||||||
Diluted Earnings per Share | $ | 0.26 | $ | 0.90 | $ | 0.54 | $ | 1.44 | ||||||
Shares Used in Per Share Calculation: | ||||||||||||||
Basic | 9,237 | 9,151 | 9,228 | 9,119 | ||||||||||
Diluted | 9,368 | 9,348 | 9,362 | 9,330 | ||||||||||
NORTHWEST PIPE COMPANY
CONDENSED SELECTED BALANCE SHEET AND OTHER DATA (Unaudited)
(Dollar amounts in thousands)
| June 30 2009 | December 31 2008 | |||||
Assets: | ||||||
Cash and Cash Equivalents | $ | 121 | $ | 90 | ||
Trade and Other Receivables, Net | 52,515 | 75,923 | ||||
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts | 95,364 | 106,234 | ||||
Inventories | 63,494 | 87,348 | ||||
Other Current Assets | 11,058 | 12,436 | ||||
Total Current Assets | 222,552 | 282,031 | ||||
Property and Equipment, Net | 204,780 | 194,035 | ||||
Other Assets | 34,179 | 33,368 | ||||
Total Assets | $ | 461,511 | $ | 509,434 | ||
Liabilities: | ||||||
Current Maturities of Long-Term Debt | $ | 7,286 | $ | 6,543 | ||
Accounts Payable | 24,429 | 34,109 | ||||
Accrued Liabilities | 8,854 | 10,111 | ||||
Billings in Excess of Cost and Estimated Earnings on Uncompleted Contracts | 1,613 | 8,020 | ||||
Total Current Liabilities | 42,182 | 58,783 | ||||
Long-Term Note Payable to Financial Institution | 41,660 | 82,065 | ||||
Other Long-Term Debt, Less Current Maturities | 32,980 | 32,379 | ||||
Other Liabilities | 47,546 | 44,646 | ||||
Total Liabilities | 164,368 | 217,873 | ||||
Stockholders’ Equity | 297,143 | 291,561 | ||||
Total Liabilities and Stockholders’ Equity | $ | 461,511 | $ | 509,434 | ||