Northwest Pipe Predicts Third Quarter Will Be Its Weakeast This Year
08/09/2013 - Northwest Pipe Company announced its second quarter 2013 financial results, noting that it expects the third quarter to be its weakest in 2013.
Second Quarter 2013 Results
Net sales for the quarter ended 30 June 2013 decreased 10.9% to US$116.7 million compared to US$131.0 million in the quarter ended June 30, 2012. Gross profit was US$15.7 million (13.4% of net sales) in the second quarter of 2013, an increase from US$13.6 million (10.4% of net sales) in the second quarter of 2012. Operating income was US$9.4 million in the second quarter of 2013, an increase from US$7.0 million in the second quarter of 2012. Net income for the second quarter of 2013 was US$5.6 million or US$0.59 per diluted share compared to US$3.6 million or US$0.38 per diluted share for the second quarter of 2012.
Water Transmission net sales decreased by 1.5% to US$58.1 million in the second quarter of 2013 from US$59.1 million in the second quarter of 2012. The decrease in net sales was due to a 34% decrease in tons produced, offset by a 49% increase in average selling price per ton. Water Transmission gross profit increased to US$12.1 million (20.9% of segment net sales) in the second quarter of 2013 from US$8.1 million (13.8% of segment net sales) in the same period of 2012.
Tubular Products net sales decreased 18.6% to US$58.6 million in the second quarter of 2013 from US$72.0 million in the second quarter of 2012, driven by a 13% decrease in average selling price per ton and a 6% decrease in tons sold from 56,500 tons in the second quarter of 2012 to 52,900 tons in the second quarter of 2013. Tubular Products gross profit decreased by 34.7% to US$3.5 million (6.0% of segment net sales) in the second quarter of 2013 from US$5.4 million (7.5% of segment net sales) in the second quarter of 2012.
As of 30 June 2013, the backlog of orders in the Water Transmission segment was approximately US$115 million compared to a backlog of orders of US$245 million as of June 30, 2012. The backlog contains confirmed orders, including the balance of projects in process, and projects for which the company has been notified that it is the successful bidder even though a binding agreement has not been executed.
Outlook
"Based on current market conditions, we believe the third quarter will be our weakest quarter in 2013. The Water Transmission segment will have significantly lower net sales and gross profit as indicated by the relatively low backlog at the end of the second quarter," said Scott Montross, president and chief executive officer of the company. "While a trade case has been filed against nine nations importing oil country tubular goods into the United States, we have not yet seen a significant improvement in sales prices or volumes. In Tubular Products we expect to see gross margin in the low positive single-digits."
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 products including energy, construction, agriculture and industrial systems. The company is headquartered in Vancouver, Wash., and has nine manufacturing facilities across the United States and Mexico.
