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Northwest Pipe Reports 2nd Quarter 2009 Results
07/30/2009 - Northwest Pipe reports net income of $2.4 million on sales of $74.9 million for the second quarter ended June 30, 2009.
Northwest Pipe Co. reported net income of $2.4 million on sales of $74.9 million for the second quarter ended June 30, 2009.
The $2.4 million net income ($0.26 per share) compares to net income of $8.4 million ($0.90 earnings per share) for the comparable year-ago quarter. Sales of $74.9 million compare to sales of $112.1 million for the year-ago second quarter.
The company’s Water Transmission Group reported gross profit of $12.8 million (21.6% of sales), compared to gross profit of $14.8 million (19.7% of sales) in the second quarter of 2008. The Group’s revenues were $59.3 million in the second quarter, compared to revenues of $74.9 million in the year-ago second quarter.
"Water Transmission revenues and gross margins met our expectations this quarter," said Brian W. Dunham, President and CEO. "Volume was not as strong as we would like, but this was anticipated due to the timing of projects."
The company’s Tubular Products Group reported sales of $15.6 million, as compared to sales of $37.2 million in the year-ago quarter. Gross margin 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,” said Dunham. “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."
"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,” continued Dunham. “At this time, we expect modest sequential growth in both groups in the third and fourth 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.
Northwest Pipe manufactures welded steel pipe and other products in two 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 applications including construction, agricultural, energy, traffic and other commercial and industrial uses. Headquartered in Vancouver, Wash., the company has ten manufacturing facilities across the United States and Mexico and a subsidiary in Singapore.
