Northwest Pipe Reports Q2 2011 Results
08/08/2011 - Northwest Pipe Co. announced net income of $5.4 million on net sales of $143.8 million for the second quarter, and net income of $8.9 million on net sales of $255.3 million for the first six months of 2011.
Northwest Pipe Co. announced net income of $5.4 million on net sales of $143.8 million for the second quarter, and net income of $8.9 million on net sales of $255.3 million for the first six months of 2011.
Second Quarter Results — Net sales of $143.8 million reflect a 49.6% increase compared to net sales of $96.1 million in the year-ago second quarter. Gross profit was $17.9 million (12.5% of net sales), an increase of $12.1 million from $5.8 million (6.0% of net sales) in the same quarter of 2010. Net income of $5.4 million ($0.57 per diluted share) compares to a loss of $1.4 million (($0.15) per diluted share) for the year-ago second quarter.
Segment Results — The Water Transmission segment reported sales of $74.5 million, a 32.8% increase from $56.1 million in the year-ago second quarter. The increase in sales was due to a 16% increase in average selling price and a 14% increase in volume. Water Transmission gross profit increased to $12.0 million (16.1% of segment net sales) from $5.0 million (8.9% of segment net sales) in the year-ago second quarter. Water Transmission sales and gross profit were favorably impacted by the mix of contracts produced during the quarter.
The Tubular Products segment reported sales of $69.3 million, a 73.1% increase from $40.1 million in the year-ago second quarter, driven by a 48% increase in tons sold (from 37,635 to 55,697 tons) and a 17% increase in the average selling price per ton. The most significant increase in demand was for energy pipe, resulting from increases in natural gas and oil drilling operations, which enabled the company to utilize the additional capacity brought into production in Bossier City, La., over the course of 2010. Tubular Products gross profit increased to $5.9 million (8.5% of segment net sales) from $0.8 million (1.9% of segment net sales) in the year-ago second quarter. While gross profit increased with the increase in sales, it was tempered by higher steel costs as selling prices did not increase as rapidly as steel costs in the second quarter of 2011.
As of June 30, 2011, the company’s backlog of orders was approximately $256 million, with the Water Transmission segment representing approximately $208 million and the Tubular Products segment representing approximately $48 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 expect Water Transmission and Tubular Products sales and profit to continue to grow in 2011 compared to 2010," said Richard Roman, President and CEO. "However, we currently project a decline in bidding activity during the remainder of 2011 for our Water Transmission segment, which may result in a lower backlog for that segment as we enter 2012."
Northwest Pipe Co. 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 products including energy, construction, agriculture and industrial systems. The company is headquartered in Vancouver, Wash., and has ten manufacturing facilities across the United States and Mexico.
