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Northwest Pipe Reports 1st Quarter Results

04/28/2008 - Northwest Pipe reports net income of $5.0 million on sales of $94.0 million for the first quarter of 2008.

Northwest Pipe Co. reported net income of $5.0 million on sales of $94.0 million for the first quarter of 2008.
 
Net income of $5.0 million ($0.54 per diluted share) compares to net income of $4.5 million ($0.49 per diluted share) in the year-ago first quarter. Sales of $94.0 million compare to sales of $90.7 million in the first quarter of 2007.
 
Water Transmission Group Results—Sales were $63.9 million for the Water Transmission Group, compared to sales of $67.8 million in the first quarter of 2007. Gross profit was $14.5 million for this Group (22.6% of sales), which compares to gross profit of $13.8 million (20.4% of sales) in the first quarter of 2007.
 
“Overall volume was a little lower than we expected, while margins were a little stronger, resulting in a solid performance,” said Brian W. Dunham, the company’s President and CEO. Results for Water Transmission include the results of operations for the Monterrey, Mexico, plant which were previously reported separately.
 
Tubular Products Group Results—The Tubular Products Group recorded sales of $30.1 million and gross profit of $3.3 million (11.1% of sales), which compares to sales of $23.0 million and gross profit of $2.3 million (10.1% of sales) in the first quarter of 2007.
 
“We are seeing significant increases in our sales of energy products and continuing growth in pipe for fire protection and agricultural applications,” said Dunham. “We saw steady improvement in gross margins throughout the quarter and expect that trend to continue for the next few months.”
 
Outlook—The company reported a strong backlog of $195 million as of March 31, 2008. “We expect Water Transmission volume to strengthen throughout the year beginning with a small improvement in the second quarter,” said Dunham. “We expect strong Water Transmission bookings in the second quarter which should increase the backlog and help drive significant revenue growth in the second half of 2008.”
 
The company expects the Tubular Products Group is expected to generate somewhat higher volumes in the next two quarters, with strong demand coming from energy, fire protection, and agricultural markets. The company also believes that margins may also increase if current trends continue.
 
"Steel prices and lead times continue to increase," said Dunham. "In Tubular Products, we have been generally successful in reflecting cost increases in our prices. We stay close to the trends in steel costs and lead times in both Groups and we continue to manage our purchases to ensure adequate supply at the best possible prices."
 
Northwest Pipe Co. 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, Wash., and has ten manufacturing facilities across the United States and Mexico.