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Northwest Pipe Reports Q1 2012 Financial Results
05/15/2012 - Northwest Pipe reported that net sales for the quarter ended March 31, 2012, increased 27.6% to $142.2 million compared to $111.5 million in the same quarter in 2011. Gross profit was $16.5 million (11.6% of net sales), an increase from $14.8 million (13.2% of net sales) a year ago.
Northwest Pipe reported that net sales for the quarter ended March 31, 2012, increased 27.6% to $142.2 million compared to $111.5 million in the same quarter in 2011. Gross profit was $16.5 million (11.6% of net sales) in the first quarter of 2012, an increase from $14.8 million (13.2% of net sales) from a year ago. Net income for the first quarter of 2012 was $4.7 million or $0.50 per diluted share compared to $2.9 million or $0.31 per diluted share for the same period in 2011.
Water Transmission sales decreased by 0.4% to $58.4 million in the first quarter of 2012 from $58.6 million in the first quarter of 2011. The decrease in sales was due to an 11% decrease in volume, partially offset by a 12% increase in selling price per ton, according to Northwest Pipe. Water Transmission gross profit decreased to $9.7 million (16.6% of segment net sales) from $9.9 million (16.9% of segment net sales) a year ago. Northwest Pipe says the decrease in gross profit was due to a 19% increase in steel cost during the first quarter of 2012 over the same period in 2011.
Tubular Products sales increased 58.6% to $83.7 million in the first quarter of 2012 from $52.8 million in the first quarter of 2011, driven by a 40% increase in tons sold, from 47,500 to 66,600 tons, and a 17% increase in the average selling price per ton. The most significant increase in volume was for energy pipe, resulting from increases in sales related to natural gas and oil drilling operations, the company noted. Tubular Products gross profit increased by 39.5% to $6.8 million (8.1% of segment net sales) from $4.9 million (9.2% of segment net sales) in the same quarter of 2011. Though gross profit increased with the increase in sales, higher steel costs tempered those gains as selling prices did not increase as rapidly as steel costs in the first quarter of 2012.
As of March 31, 2012, the company’s backlog of orders was approximately $198 million, with the Water Transmission segment representing approximately $161 million and the Tubular Products segment about $37 million. This compared to a total backlog of orders of $258 million as of March 31, 2011, with the Water Transmission segment representing approximately $194 million and the Tubular Products segment approximately $64 million. The backlog includes confirmed orders, including the balance of projects in process, and projects for which the company has been notified that they have been the successful bidder even though a binding agreement has not been executed.
Outlook – "We have seen increases in sales and net income in the first quarter of 2012 as compared to the first quarter of 2011," said Richard Roman, President and Chief Executive Officer of the company. "As previously discussed and reflected in our backlog numbers, we experienced a decline in bidding activity for our Water Transmission segment, which we expect will result in lower sales and gross profit for that segment as we look forward in 2012. However, we anticipate strong energy markets for our Tubular Products Group will continue through 2012, resulting in increased sales and gross profit for that segment. We expect we will start seeing improved margins in our Tubular Products Group in the second half of 2012 as compared to 2011 as we complete the expansion project in our Atchison, Kan., facility in May and continue our cost improvement program in place throughout our Tubular Products facilities."
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 products including energy, construction, agriculture and industrial systems. The company is headquartered in Vancouver, Wash., and has 10 manufacturing facilities across the United States and Mexico.
