Exhibit 99.2
NORTHWEST PIPE COMPANY
CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS (Unaudited)
The following unaudited condensed consolidated pro forma financial statements should be read in conjunction with the consolidated financial statements of Northwest Pipe Company (the “Company”) included in its Annual Report on Form 10-K for the year ended December 31, 2016. The unaudited condensed consolidated pro forma financial statements have been prepared to give effect to the sale of substantially all of the assets associated with the Company’s manufacturing facility in Atchison, Kansas as if the transaction had occurred on September 30, 2017 for purposes of the unaudited condensed consolidated pro forma balance sheet, and as of January 1, 2014 for purposes of the unaudited condensed consolidated pro forma statements of operations. Such information has been prepared based upon currently available information and assumptions that management believes are reasonable. This pro forma information is not necessarily indicative of future results.
NORTHWEST PIPE COMPANY
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS (Unaudited)
Nine months ended September 30, 2017
(Dollar and share amounts in thousands, except per share amounts)
| | | Historical | | | Pro Forma
Adjustments | | | | Pro Forma | |
| | | | | | | | | | | | | | |
Net sales | | $ | 97,153 | | | $ | - | | | | $ | 97,153 | |
Cost of sales | | | 93,406 | | | | - | | | | | 93,406 | |
Gross profit | | | 3,747 | | | | - | | | | | 3,747 | |
Selling, general and administrative expense | | | 10,835 | | | | - | | | | | 10,835 | |
Restructuring expense | | | 881 | | | | - | | | | | 881 | |
Operating loss | | | (7,969 | ) | | | - | | | | | (7,969 | ) |
Other income | | | 181 | | | | - | | | | | 181 | |
Interest expense | | | (369 | ) | | | - | | | | | (369 | ) |
Loss before income taxes | | | (8,157 | ) | | | - | | | | | (8,157 | ) |
Income tax benefit | | | (1,607 | ) | | | - | | | | | (1,607 | ) |
Loss from continuing operations | | | (6,550 | ) | | | - | | | | | (6,550 | ) |
Discontinued operations: | | | | | | | | | | | | | |
Loss from operations of discontinued operations | | | (1,459 | ) | | | 1,459 | | (a) | | | - | |
Income tax benefit | | | (4 | ) | | | 4 | | (a) | | | - | |
Loss on discontinued operations | | | (1,455 | ) | | | 1,455 | | | | | - | |
Net loss | | $ | (8,005 | ) | | $ | 1,455 | | | | $ | (6,550 | ) |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basic and diluted loss per share: | | | | | | | | | | | | | |
Continuing operations | | $ | (0.68 | ) | | | | | | | $ | (0.68 | ) |
Discontinued operations | | | (0.15 | ) | | | | | | | | - | |
Net loss per share | | $ | (0.83 | ) | | | | | | | $ | (0.68 | ) |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basic and diluted shares used in per share calculation: | | | 9,611 | | | | | | | | | 9,611 | |
Pro Forma Adjustments
(a) | Adjustment to eliminate results associated with the Atchison assets, previously presented as Discontinued Operations. |
NORTHWEST PIPE COMPANY
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS (Unaudited)
Year ended December 31, 2016
(Dollar and share amounts in thousands, except per share amounts)
| | | Historical | | | Pro Forma
Adjustments | | | | Pro Forma | |
| | | | | | | | | | | | | | |
Net sales | | $ | 156,256 | | | $ | (6,869 | ) | (a) | | $ | 149,387 | |
Cost of sales | | | 159,481 | | | | (9,777 | ) | (a) | | | 149,704 | |
Gross loss | | | (3,225 | ) | | | 2,908 | | | | | (317 | ) |
Selling, general and administrative expense | | | 17,178 | | | | (257 | ) | (b) | | | 16,921 | |
Gain on sale of facility | | | (7,860 | ) | | | - | | | | | (7,860 | ) |
Restructuring expense | | | 990 | | | | - | | | | | 990 | |
Operating loss | | | (13,533 | ) | | | 3,165 | | | | | (10,368 | ) |
Other income | | | 23 | | | | 1 | | (a) | | | 24 | |
Interest income | | | 14 | | | | - | | (c) | | | 14 | |
Interest expense | | | (523 | ) | | | 21 | | (c) | | | (502 | ) |
Loss before income taxes | | | (14,019 | ) | | | 3,187 | | | | | (10,832 | ) |
Income tax benefit | | | (4,756 | ) | | | 1,190 | | (d) | | | (3,566 | ) |
Net loss | | $ | (9,263 | ) | | $ | 1,997 | | | | $ | (7,266 | ) |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basic and diluted loss per share: | | $ | (0.97 | ) | | | | | | | $ | (0.76 | ) |
| | | | | | | | | | | | | | |
Basic and diluted shares used in per share calculation: | | | 9,588 | | | | | | | | | 9,588 | |
Pro Forma Adjustments
(a) | Adjustment to eliminate historical revenues and expenses associated with the Atchison assets. |
(b) | Adjustment to eliminate allocated historical Atchison selling, general and administrative expense associated with the Atchison assets. |
(c) | Adjustment to eliminate allocated historical Atchison interest income and interest expense associated with the Atchison assets. |
(d) | The income tax effect resulting from elimination of historical revenues, expenses, and allocated costs associated with the Atchison assets, based on the Company’s blended statutory rate of 37.3%. |
NORTHWEST PIPE COMPANY
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS (Unaudited)
Year ended December 31, 2015
(Dollar and share amounts in thousands, except per share amounts)
| | | Historical | | | Pro Forma
Adjustments | | | | Pro Forma | |
| | | | | | | | | | | | | | |
Net sales | | $ | 236,608 | | | $ | (63,448 | ) | (a) | | $ | 173,160 | |
Cost of sales | | | 249,233 | | | | (76,679 | ) | (a) | | | 172,554 | |
Gross profit (loss) | | | (12,625 | ) | | | 13,231 | | | | | 606 | |
Selling, general and administrative expense | | | 22,303 | | | | (1,925 | ) | (b) | | | 20,378 | |
Impairment of goodwill | | | 5,282 | | | | - | | | | | 5,282 | |
Operating loss | | | (40,210 | ) | | | 15,156 | | | | | (25,054 | ) |
Other income | | | 88 | | | | (30 | ) | (a) | | | 58 | |
Interest income | | | 173 | | | | (172 | ) | (c) | | | 1 | |
Interest expense | | | (1,390 | ) | | | 373 | | (c) | | | (1,017 | ) |
Loss before income taxes | | | (41,339 | ) | | | 15,327 | | | | | (26,012 | ) |
Income tax benefit | | | (11,951 | ) | | | 5,781 | | (d) | | | (6,170 | ) |
Net loss | | $ | (29,388 | ) | | $ | 9,546 | | | | $ | (19,842 | ) |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basic and diluted loss per share: | | $ | (3.07 | ) | | | | | | | $ | (2.08 | ) |
| | | | | | | | | | | | | | |
Basic and diluted shares used in per share calculation: | | | 9,560 | | | | | | | | | 9,560 | |
Pro Forma Adjustments
(a) | Adjustment to eliminate historical revenues and expenses associated with the Atchison assets. |
(b) | Adjustment to eliminate allocated historical Atchison selling, general and administrative expense associated with the Atchison assets. |
(c) | Adjustment to eliminate allocated historical Atchison interest income and interest expense associated with the Atchison assets. |
(d) | The income tax effect resulting from elimination of historical revenues, expenses, and allocated costs associated with the Atchison assets, based on the Company’s blended statutory rate of 37.7%. |
NORTHWEST PIPE COMPANY
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS (Unaudited)
Year ended December 31, 2014
(Dollar and share amounts in thousands, except per share amounts)
| | | Historical | | | Pro Forma
Adjustments | | | | Pro Forma | |
| | | | | | | | | | | | | | |
Net sales | | $ | 403,298 | | | $ | (164,753 | ) | (a) | | $ | 238,545 | |
Cost of sales | | | 362,722 | | | | (163,650 | ) | (a) | | | 199,072 | |
Gross profit | | | 40,576 | | | | (1,103 | ) | | | | 39,473 | |
Selling, general and administrative expense | | | 24,316 | | | | (1,861 | ) | (b) | | | 22,455 | |
Impairment of goodwill | | | 16,066 | | | | - | | | | | 16,066 | |
Operating income | | | 194 | | | | 758 | | | | | 952 | |
Other income | | | 108 | | | | 2 | | (a) | | | 110 | |
Interest income | | | 466 | | | | (35 | ) | (c) | | | 431 | |
Interest expense | | | (2,290 | ) | | | 655 | | (c) | | | (1,635 | ) |
Income (loss) before income taxes | | | (1,522 | ) | | | 1,380 | | | | | (142 | ) |
Income tax expense | | | 4,651 | | | | 515 | | (d) | | | 5,166 | |
Loss from continuing operations | | | (6,173 | ) | | | 865 | | | | | (5,308 | ) |
Discontinued operations: | | | | | | | | | | | | | |
Loss from operations of discontinued business | | | (2,151 | ) | | | - | | | | | (2,151 | ) |
Loss on sale of business | | | (13,497 | ) | | | - | | | | | (13,497 | ) |
Income tax benefit | | | (3,934 | ) | | | - | | | | | (3,934 | ) |
Loss on discontinued operations | | | (11,714 | ) | | | - | | | | | (11,714 | ) |
Net loss | | $ | (17,887 | ) | | $ | 865 | | | | $ | (17,022 | ) |
| | | | | | | | | | | | | | |
Basic and diluted loss per share: | | | | | | | | | | | | | |
Continuing operations | | $ | (0.65 | ) | | | | | | | $ | (0.56 | ) |
Discontinued operations | | | (1.23 | ) | | | | | | | | (1.23 | ) |
Net loss per share | | $ | (1.88 | ) | | | | | | | $ | (1.79 | ) |
| | | | | | | | | | | | | | |
Basic and diluted shares used in per share calculation: | | | 9,515 | | | | | | | | | 9,515 | |
Pro Forma Adjustments
(a) | Adjustment to eliminate historical revenues and expenses associated with the Atchison assets. |
(b) | Adjustment to eliminate allocated historical Atchison selling, general and administrative expense associated with the Atchison assets. |
(c) | Adjustment to eliminate allocated historical Atchison interest income and interest expense associated with the Atchison assets. |
(d) | The income tax effect resulting from elimination of historical revenues, expenses, and allocated costs associated with the Atchison assets, based on the Company’s blended statutory rate of 37.3%. |
NORTHWEST PIPE COMPANY
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET (Unaudited)
September 30, 2017
(Dollar amounts in thousands)
| | | Historical | | | Pro Forma
Adjustments | | | | Pro Forma | |
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 5,303 | | | $ | 32,418 | | (a) | | $ | 37,721 | |
Trade and other receivables, less allowance for doubtful accounts | | | 24,245 | | | | — | | | | | 24,245 | |
Costs and estimated earnings in excess of billings on uncompleted contracts | | | 50,293 | | | | — | | | | | 50,293 | |
Inventories | | | 18,998 | | | | — | | | | | 18,998 | |
Prepaid expenses and other | | | 1,013 | | | | 4,465 | | (b) | | | 5,478 | |
Assets held for sale | | | 36,439 | | | | (36,439 | ) | (c) | | | — | |
Total current assets | | | 136,291 | | | | 444 | | | | | 136,735 | |
Property and equipment, net | | | 79,043 | | | | (261 | ) | (c) | | | 78,782 | |
Other assets | | | 10,591 | | | | — | | | | | 10,591 | |
Total assets | | $ | 225,925 | | | $ | 183 | | | | $ | 226,108 | |
| | | | | | | | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable | | | 3,699 | | | | — | | | | | 3,699 | |
Accrued liabilities | | | 7,787 | | | | 183 | | (d) | | | 7,970 | |
Billings in excess of costs and estimated earnings on uncompleted contracts | | | 291 | | | | — | | | | | 291 | |
Current portion of capital lease obligations | | | 244 | | | | — | | | | | 244 | |
Total current liabilities | | | 12,021 | | | | 183 | | | | | 12,204 | |
Capital lease obligations, less current portion | | | 424 | | | | — | | | | | 424 | |
Deferred income taxes | | | 82 | | | | — | | | | | 82 | |
Other long-term liabilities | | | 10,956 | | | | — | | | | | 10,956 | |
Total liabilities | | | 23,483 | | | | 183 | | | | | 23,666 | |
Total stockholders’ equity | | | 202,442 | | | | — | | (e) | | | 202,442 | |
Total liabilities and stockholders’ equity | | $ | 225,925 | | | $ | 183 | | | | $ | 226,108 | |
Pro Forma Adjustments
(a) | Adjustment to reflect cash received. |
(b) | Adjustment to reflect proceeds held in escrow. |
(c) | Adjustment to eliminate basis of assets included in the sale from the Company’s Consolidated Balance Sheet. |
(d) | Adjustment to reflect transaction liabilities from the sale of the Atchison assets. |
(e) | The Company estimates no gain or loss from the sale of the Atchison assets. |
