Northwest Pipe Reports Record Sales in 2012
03/22/2013 - Northwest Pipe Company announced its 2012 financial results including record net sales in 2012, but notes that competition from imports of energy tubular products will continue to negatively impact profitability in the near term.
Northwest Pipe Company announced its 2012 financial results including record net sales in 2012.
Full Year 2012 Results
Net sales for the year ended 31 December 2012 increased 2.5% to US$524.5 million compared to $511.7 million in the year ended 31 December 2011. Gross profit was $56.2 million (10.7% of net sales) in 2012, a decrease from $59.1 million (11.6% of net sales) in 2011. Net income for 2012 was $16.2 million or $1.72 per diluted share compared to $12.7 million or $1.35 per diluted share for 2011.
Water Transmission sales decreased by 1.0% to $269.2 million in 2012 from $271.9 million in 2011. The minor decrease in net sales was due to an 8.9% decrease in the average selling price per ton which was offset by an 8.7% increase in tons produced. Water Transmission gross profit increased to $45.1 million (16.7% of segment net sales) in 2012 from $43.2 million (15.9% of segment net sales) in the prior year.
Tubular Products sales increased 6.5% to $255.3 million in 2012 from $239.8 million in 2011, driven by a 4% increase in average selling price per ton and a 2% increase in tons sold from 202,400 tons in 2011 to 206,200 tons in 2012. Tubular Products gross profit decreased by 30.1% to $11.1 million (4.4% of segment net sales) in 2012 from $16.0 million (6.7% of segment net sales) in 2011.
As of 31 December 2012, the backlog of orders in the Water Transmission segment was approximately $173 million. This compared to a backlog of orders of $138 million as of 31 December 2011. The backlog includes confirmed orders, including the balance of projects in process, and projects for which the Company has been notified that we are the successful bidder even though a binding agreement has not been executed.
Outlook
"The Water Transmission segment had higher margins in 2012 compared to 2011, although net sales stayed relatively the same. The fourth quarter was the strongest quarter of 2012 in Water Transmission, and was the highest quarter ever in Water Transmission in both net sales and gross profit. This was due, in part, to production on the Lake Texoma project, the largest project in our history," said Scott Montross, president and chief executive officer of the Company. "As expected, we saw lower margins in the Tubular Products segment in 2012 as compared to 2011 with the competition from increased quantities of imported energy pipe, particularly in the third and fourth quarters. The Tubular Products segment was also negatively impacted by lower drilling activity, as seen in the decrease in rig counts, and lower natural gas prices. In Water Transmission, we anticipate that the first quarter of 2013 will have similar profitability as the fourth quarter of 2012, although with lower net sales. In Tubular Products, we expect to be near breakeven as competition from imports of energy products will continue to negatively impact profitability for the Tubular Products segment in the near term."
Northwest Pipe Company 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 nine manufacturing facilities across the United States and Mexico.
