Northwest Pipe Reports Record Results
07/24/2008 - Northwest Pipe reports record net income of $8.4 million on record sales of $112.1 million for the second quarter ended June 30, 2008.
Northwest Pipe Co. reported record net income of $8.4 million on record sales of $112.1 million for the second quarter ended June 30, 2008.
Net income of $8.4 million ($0.90 per share) compares to net income of $5.7 million ($0.61 per share) in the second quarter of 2007. Sales of $112.1 million compare to sales of $101.9 million in the same quarter of 2007.
Previous Project Announcements—Over the past three months, the company announced the following major projects:
· $22.0-million Prairie Waters Project for the City of Aurora, Colo.
· $19.0-million project for the Lewis and Clark Regional Water System in South Dakota
· $10.6-million energy products order for domestic gas gathering pipe and pipe for a storage tank farm in Ghana
· $8.0-million project for the Alternative Intake Project Pipeline for the Contra Costa Water District in California
Water Transmission Results—The Water Transmission Group reported revenues of $74.9 million, which compares to revenues of $73.0 million in the second quarter of 2007. Gross profit was $14.8 million (19.7% of sales), which compares to gross profit of $15.2 million (20.8% of sales) in the second quarter of 2007.
"The Water Transmission Group's performance was solid throughout the quarter. Margins declined slightly compared to recent quarters, mainly due to increased raw material costs, but sales increased sequentially," said Brian W. Dunham, President and CEO of the company.
Tubular Products Results—The Tubular Products Group's sales were $37.2 million, which compares to sales of $28.9 million in the second quarter of 2007. Gross profit was $9.8 million (26.4% of sales), compared to gross profit of $3.6 million (12.5% of sales) for the second quarter of 2007.
"The Tubular Products results are clearly outstanding," said Dunham. "In spite of continuing concerns of a slowing economy, we have seen strong demand from the energy, agriculture and construction markets. Our costs are obviously higher due to increasing raw material costs, but the market has been strong enough so far to support prices that offset these cost increases."
Outlook—The company said its backlog is at an all-time high at $264 million, adding that the market continues to look very active over the balance of 2008. The company said it continues to expect the second half of the year to be very strong. "Based on our backlog, and our current manufacturing schedules, we expect the Water Transmission Group's production and revenues to be somewhat better in the second half of the year than those reported so far. Additionally, we expect the gross margin percentage in this group to stay at approximately the same level as we recorded in this quarter," stated Dunham.
"While the Tubular Products Group's performance may not match this outstanding quarter, we do anticipate strong sales and margins in this Group for the second half of the year," continued Dunham. "Demand is still good throughout our product lines and is particularly strong in energy products."
"The condition of the economy, rising steel costs, and rising fuel costs are all risk factors to our expectations," continued Dunham. "At this time, we believe steel and fuel costs are likely to remain at elevated levels, but unlikely to increase significantly over the next several months. The economy needs to sustain its current levels in order to pass through these higher costs and, at this time, we do not expect any significant downturns in the segments we serve. Changes in these assumptions would, of course, impact our results."
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 markets including construction, agriculture, energy, traffic and a variety of other commercial and industrial applications. The company is headquartered in Vancouver, Wash., and has ten manufacturing facilities across the United States and Mexico.
