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Northwest Pipe Reports Record 3rd Quarter Results
10/23/2008 - Northwest Pipe reports record net income of $10.2 million on record sales of $123.4 million for the third quarter of 2008.
Northwest Pipe Co. reported record net income of $10.2 million on record sales of $123.4 million for the third quarter of 2008.
The $10.2 million net income ($1.09 per share) compares to net income of $5.1 million ($0.55 per share) in the third quarter of 2007. Sales of $123.4 million compare to sales of $92.0 million year-ago quarter.
Third Quarter Water Transmission Results—Gross profit for the Water Transmission Group was $14.3 million (18.4% of sales), which compares to gross profit of $14.2 million (21.3% of sales) in 2007. Revenues were $77.5 million, which compares to revenues of $66.8 million in 2007.
"We are pleased once again to report strong revenue in our Water Transmission Group," said Brian W. Dunham, Northwest Pipe’s President and CEO. "While revenues were a little higher than expected, the gross margin was slightly lower. The decrease was primarily due to higher raw material costs embedded in the cost of our products."
Third Quarter Tubular Products Results—Gross profit for the Tubular Products Group was $12.6 million (27.3% of sales), which compares to gross profit of $3.1 million (12.2% of sales) for 2007. Sales were $45.9 million, which compares to sales of $25.2 million in 2007.
"This was obviously another very strong quarter for the Tubular Products Group, with a 23% sequential increase in sales over the second quarter of this year, and record margins," said Dunham. “While some of our markets slowed due to economic conditions, we continued to see strong demand from the energy market throughout the period.”
Outlook—The company reported backlog of $235 million as of September 30th. "The backlog, although down from last quarter, is still very strong," said Dunham. Bidding activity for the Water Transmission Group over the past three months was lower than expected, but several projects were delayed into the fourth quarter.
"At this time, we expect growth in the backlog through the end of the year, which should leave us in a very strong position entering into 2009," noted Dunham. "Conversely, we are expecting lower water transmission sales in the fourth quarter due to a major project postponement, as well as normal seasonality."
“In the Tubular Products Group, we are expecting another strong quarter due to energy sales, which we hope will offset weakness in some of our other markets,” added Dunham. “Slowing demand in parts of our business, along with falling steel costs which may lead to lower pricing, could combine to make it difficult to maintain our current high margin, but our overall results should be solid.”
“As we look beyond 2008," continued Dunham, "the long-term trends for most of our products look strong. Infrastructure spending, energy development and agriculture all look positive, especially as financial markets stabilize. However, concerns over current economic conditions and the credit markets certainly must be addressed.
“Looking into next year, we see mixed signals but we continue to be optimistic about our 2009 prospects given that the outlook for our two largest product lines, water transmission and energy, continues to be positive," Dunham stated. "As financial markets stabilize and the economy recovers, we believe we will be well positioned to continue our growth and capitalize on strong positions within our core markets."
“Looking into next year, we see mixed signals but we continue to be optimistic about our 2009 prospects given that the outlook for our two largest product lines, water transmission and energy, continues to be positive," Dunham stated. "As financial markets stabilize and the economy recovers, we believe we will be well positioned to continue our growth and capitalize on strong positions within our core markets."
Northwest Pipe 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 energy, construction, agricultural, 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.
