- Fourth quarter 2023 net sales of $110.2 million increased 3.1%
year-over-year
- Annual net sales of $444.4
million decreased 2.9% year-over-year
- Annual gross profit of $77.6
million decreased 9.6% year-over-year from 2022
record
- Annual net income of $2.09 per
diluted share
- Strong annual cash generation with net cash provided by
operating activities of $53.5
million
- Backlog1 of $273
million; backlog including confirmed orders2 of
$319 million for the Engineered Steel
Pressure Pipe segment ("SPP")
- Order book3 of $46
million for the Precast Infrastructure and Engineered
Systems segment ("Precast")
- Repurchased $4.4 million of
common stock through February 29,
2024
- Record safety performance; annual total recordable incident
rate of 1.51
VANCOUVER, Wash., March 4,
2024 /PRNewswire/ -- Northwest Pipe Company (NASDAQ:
NWPX) (the "Company"), a leading manufacturer of water-related
infrastructure products, today announced its financial results for
the fourth quarter and full year ended December 31, 2023. The
Company will broadcast its fourth quarter and full year 2023
earnings conference call on Tuesday, March 5, 2024 at
7:00 a.m. PT.
Management Commentary
"Despite the challenging circumstances of 2023, we generated
annual net sales of $444.4 million, down only moderately from
2022, demonstrating what we believe is a new level of through cycle
resilience created by the growth strategy deployed over the last
several years. In 2023 we faced significant challenges in both our
Steel Pressure Pipe and Precast businesses. The SPP business had
one of the smallest bidding volume periods we have seen in many
years and the Precast business continued to be suppressed by the
interest rate environment throughout 2023," said Scott Montross, President and Chief Executive
Officer of Northwest Pipe Company. "In addition, we achieved record
safety performance in 2023 and collectively our facilities are well
below the national average for total recordable incident rate."
Mr. Montross continued, "Our SPP revenue of $296.4 million was strong and our backlog
including confirmed orders remained elevated at $319 million
despite significantly reduced bidding activity and steel price
volatility throughout 2023. While we anticipate a significantly
stronger bidding year in 2024, due to typical seasonality and
severe weather conditions that have led to unscheduled downtime
time at several facilities, first quarter SPP net sales are
expected to decline compared to the fourth quarter of 2023, but
expected to remain well above first quarter 2023 levels. We also
expect year-over-year SPP margins in the first quarter to improve
moderately compared to 2023. Precast net sales declined slightly by
1.4% year-over-year to $148.0 million in 2023 as higher interest
rates continued to impact demand for both the residential and
commercial construction markets. Precast margins were compressed
due to reduced overhead absorption on lower demand. Further, the
aforementioned early 2024 weather events have also caused
unscheduled downtime in our Precast facilities, further suppressing
the already seasonally slow first quarter. We expect Precast net
sales in the first quarter to be similar to the same quarter last
year with near-term margins remaining compressed."
Mr. Montross concluded, "We were pleased to have improved
our liquidity position in the fourth quarter by continuing to pay
down debt and generating strong cash flow from operations given our
effective management of working capital despite reduced levels of
profitability. Our growth strategy remains focused on growing our
Precast business to reduce the cyclicality of our SPP operations
and improving our overall margins and cash flow
generation."
Fourth Quarter 2023 Financial Results
Consolidated
- Net sales increased 3.1% to $110.2
million from $106.8 million in
the fourth quarter of 2022.
- Gross profit decreased 11.8% to $19.3
million, or 17.5% of net sales, from $21.9 million, or 20.5% of net sales, in the
fourth quarter of 2022.
- Net income was $5.4 million, or
$0.54 per diluted share, compared to
$8.0 million, or $0.79 per diluted share, in the fourth quarter of
2022.
Engineered Steel Pressure Pipe Segment (SPP)
- SPP net sales increased 4.1% to $75.1
million from $72.1 million in
the fourth quarter of 2022 driven by a 2% increase in tons produced
resulting primarily from changes in project timing and a 2%
increase in selling price per ton primarily due to product
mix.
- SPP gross profit decreased 6.8% to $11.2
million, or 14.9% of SPP net sales, from $12.0 million, or 16.6% of SPP net sales, in the
fourth quarter of 2022 primarily due to changes in product
mix.
- SPP backlog was $273 million as
of December 31, 2023 compared to
$253 million as of September 30, 2023 and $274 million as of December 31, 2022. Backlog including confirmed
orders was $319 million as of
December 31, 2023 compared to
$335 million as of September 30, 2023 and $372 million as of December 31, 2022.
Precast Infrastructure and Engineered Systems Segment
(Precast)
- Precast net sales increased 1.1% to $35.1 million from $34.7
million in the fourth quarter of 2022 driven by a 25%
increase in volume shipped due to product mix, partially offset by
a 19% decrease in selling prices due to both product mix and
decreased demand.
- Precast gross profit decreased 17.8% to $8.1 million, or 23.2% of Precast net sales, from
$9.9 million, or 28.5% of Precast net
sales, in the fourth quarter of 2022 primarily due to decreased
demand and related decreased cost absorption.
- Precast order book was $46
million as of December 31,
2023 compared to $52 million
as of September 30, 2023 and
$64 million as of December 31, 2022.
Full Year 2023 Financial Results
Consolidated
- Net sales decreased 2.9% to $444.4
million in 2023 from $457.7
million in 2022.
- Gross profit decreased 9.6% to $77.6
million, or 17.5% of net sales, in 2023 from $85.9 million, or 18.8% of net sales, in
2022.
- Net income was $21.1 million, or
$2.09 per diluted share, in 2023
compared to $31.1 million, or
$3.11 per diluted share, in
2022.
Engineered Steel Pressure Pipe Segment (SPP)
- SPP net sales decreased 3.6% to $296.4
million in 2023 from $307.6
million in 2022 driven by a 6% decrease in tons produced
resulting primarily from changes in project timing, partially
offset by a 2% increase in selling price per ton primarily due to
product mix.
- SPP gross profit decreased 4.6% to $42.4
million, or 14.3% of SPP net sales, in 2023 from
$44.5 million, or 14.5% of SPP net
sales, in 2022 primarily due to changes in production volume.
Precast Infrastructure and Engineered Systems Segment
(Precast)
- Precast net sales decreased 1.4% to $148.0 million in 2023 from $150.1 million in 2022 driven by a 3% decrease in
selling prices due to decreased demand, partially offset by a 2%
increase in volume shipped primarily due to product mix.
- Precast gross profit decreased 14.9% to $35.2 million, or 23.8% of Precast net sales, in
2023 from $41.4 million, or 27.6% of
Precast net sales, in 2022 primarily due to decreased demand.
Balance Sheet and Cash Flow Details
- As of December 31, 2023, the
Company had $54.5 million of
outstanding revolving loan borrowings and additional borrowing
capacity of approximately $69 million
under the revolving credit facility.
- Net cash provided by (used in) operating activities was
$9.0 million in the fourth quarter of
2023 compared to ($8.0) million in
the fourth quarter of 2022 primarily due to a $21.7 million increase in cash provided by
changes in working capital partially offset by a $4.7 million decrease in cash provided by net
income adjusted for non-cash items. Net cash provided by operating
activities was $53.5 million in 2023
compared to $17.5 million in 2022
primarily due to a $46.6 million
increase in cash provided by changes in working capital partially
offset by a $10.7 million decrease in
cash provided by net income adjusted for non-cash items.
- Capital expenditures were $5.0
million in the fourth quarter of 2023 compared to
$11.0 million in the fourth quarter
of 2022, which included a $6.9
million investment in the fourth quarter of 2022 for the
reinforced concrete pipe mill. Capital expenditures were
$18.3 million in 2023 compared to
$22.8 million in 2022.
- The Company repurchased approximately 29,000 shares of its
common stock at an average price of $29.20, for a total of $0.8 million during the fourth quarter of 2023.
Since the authorization of the share repurchase program in
November 2023, the Company
repurchased approximately 149,000 shares of its common stock at an
average price of $29.32, for a total
of $4.4 million as of February 29, 2024.
|
|
|
|
|
|
|
1 Northwest
Pipe Company defines "backlog" as the balance of remaining
performance obligations under signed contracts for Engineered Steel
Pressure Pipe products for which revenue is recognized over
time.
|
2 Northwest Pipe Company defines
"confirmed orders" as Engineered Steel Pressure Pipe projects for
which the Company has been notified that it is the successful
bidder, but a binding agreement has not been executed.
|
3 Northwest Pipe Company defines
"order book" as unfulfilled orders outstanding at the measurement
date for its Precast Infrastructure and Engineered Systems
segment.
|
Conference Call Details
A conference call and simultaneous webcast to discuss the
Company's fourth quarter and full year 2023 financial results will
be held on Tuesday, March 5, 2024, at
7:00 a.m. Pacific Time. The call will be broadcast live on the
Investor Relations section of the Company's website at
investor.nwpipe.com and will be archived online upon completion of
the conference call. For those unable to listen to the live call, a
replay will be available approximately three hours after the event
and will remain available until Tuesday, March 19, 2024, by
dialing 1-844-512-2921 in the U.S. or 1-412-317-6671
internationally and entering the replay access code: 13743773.
About Northwest Pipe Company
Founded in 1966, Northwest Pipe Company is a leading
manufacturer of water-related infrastructure products. In addition
to being the largest manufacturer of engineered steel water
pipeline systems in North America,
the Company manufactures stormwater and wastewater technology
products; high-quality precast and reinforced concrete products;
pump lift stations; steel casing pipe, bar-wrapped concrete
cylinder pipe, and one of the largest offerings of pipeline system
joints, fittings, and specialized components. Strategically
positioned to meet growing water and wastewater infrastructure
needs, Northwest Pipe Company provides solution-based products for
a wide range of markets under the ParkUSA, Geneva Pipe and Precast, Permalok®, and
Northwest Pipe Company lines. The Company's diverse team is
committed to quality and innovation while demonstrating the
Company's core values of accountability, commitment, and teamwork.
The Company is headquartered in Vancouver, Washington, and has
13 manufacturing facilities across North America. Please visit www.nwpipe.com for
more information.
Forward-Looking Statements
Statements in this press release by Scott Montross contain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 and Section 21E of the Securities Exchange Act
of 1934, as amended, that are based on current expectations,
estimates, and projections about the Company's business,
management's beliefs, and assumptions made by management. These
statements are not guarantees of future performance and involve
risks and uncertainties that are difficult to predict. Therefore,
actual outcomes and results may differ materially from what is
expressed or forecasted in such forward-looking statements as a
result of a variety of important factors. While it is impossible to
identify all such factors, those that could cause actual results to
differ materially from those estimated by the Company include
changes in demand and market prices for its products, product mix,
bidding activity and order modifications or cancelations, timing of
customer orders and deliveries, production schedules, price and
availability of raw materials, excess or shortage of production
capacity, international trade policy and regulations, changes in
tariffs and duties imposed on imports and exports and related
impacts on the Company, economic uncertainty and associated trends
in macroeconomic conditions, including potential recession,
inflation, and the state of the housing market, interest rate risk
and changes in market interest rates, including the impact on the
Company's customers and related demand for its products, the
Company's ability to identify and complete internal initiatives
and/or acquisitions in order to grow its business, the Company's
ability to effectively integrate Park Environmental Equipment, LLC
and other acquisitions into its business and operations and achieve
significant administrative and operational cost synergies and
accretion to financial results, effects of security breaches,
computer viruses, and cybersecurity incidents, timing and amount of
share repurchases, impacts of U.S. tax reform legislation on the
Company's results of operations, adequacy of the Company's
insurance coverage, supply chain challenges, labor shortages,
ongoing military conflicts in areas such as Ukraine and Israel, and related consequences, operating
problems at the Company's manufacturing operations including fires,
explosions, inclement weather, and floods and other natural
disasters, material weaknesses in the Company's internal control
over financial reporting and its ability to remediate such
weaknesses, impacts of pandemics, epidemics, or other public health
emergencies, and other risks discussed in the Company's Annual
Report on Form 10‑K for the year ended December 31, 2022 and from time to time in its
other Securities and Exchange Commission filings and reports. Such
forward-looking statements speak only as of the date on which they
are made, and the Company does not undertake any obligation to
update any forward-looking statement to reflect events or
circumstances after the date of this release. If the Company does
update or correct one or more forward-looking statements, investors
and others should not conclude that it will make additional updates
or corrections with respect thereto or with respect to other
forward-looking statements.
Non-GAAP Financial Measures
The Company is presenting backlog including confirmed orders.
This non-GAAP financial measure is provided to better enable
investors and others to assess the Company's ongoing operating
results and compare them with its competitors. This should be
considered a supplement to, and not a substitute for, or superior
to, financial measures calculated in accordance with GAAP.
For more information, visit www.nwpipe.com.
Contact:
Aaron
Wilkins
Chief Financial Officer
Northwest Pipe Company
investors@nwpipe.com
Or
Addo Investor Relations
nwpx@addo.com
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except
per share amounts)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended December
31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
$
|
75,087
|
|
|
$
|
72,126
|
|
|
$
|
296,381
|
|
|
$
|
307,572
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
35,077
|
|
|
|
34,702
|
|
|
|
147,974
|
|
|
|
150,093
|
|
Total net
sales
|
|
|
110,164
|
|
|
|
106,828
|
|
|
|
444,355
|
|
|
|
457,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
63,924
|
|
|
|
60,143
|
|
|
|
253,954
|
|
|
|
263,099
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
26,950
|
|
|
|
24,814
|
|
|
|
112,759
|
|
|
|
108,711
|
|
Total cost of
sales
|
|
|
90,874
|
|
|
|
84,957
|
|
|
|
366,713
|
|
|
|
371,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Steel
Pressure Pipe
|
|
|
11,163
|
|
|
|
11,983
|
|
|
|
42,427
|
|
|
|
44,473
|
|
Precast Infrastructure
and Engineered Systems
|
|
|
8,127
|
|
|
|
9,888
|
|
|
|
35,215
|
|
|
|
41,382
|
|
Total gross
profit
|
|
|
19,290
|
|
|
|
21,871
|
|
|
|
77,642
|
|
|
|
85,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
|
|
10,665
|
|
|
|
10,885
|
|
|
|
43,784
|
|
|
|
41,034
|
|
Operating
income
|
|
|
8,625
|
|
|
|
10,986
|
|
|
|
33,858
|
|
|
|
44,821
|
|
Other income
|
|
|
500
|
|
|
|
41
|
|
|
|
276
|
|
|
|
97
|
|
Interest
expense
|
|
|
(1,133)
|
|
|
|
(1,175)
|
|
|
|
(4,855)
|
|
|
|
(3,568)
|
|
Income before income
taxes
|
|
|
7,992
|
|
|
|
9,852
|
|
|
|
29,279
|
|
|
|
41,350
|
|
Income tax
expense
|
|
|
2,548
|
|
|
|
1,891
|
|
|
|
8,207
|
|
|
|
10,201
|
|
Net income
|
|
$
|
5,444
|
|
|
$
|
7,961
|
|
|
$
|
21,072
|
|
|
$
|
31,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.54
|
|
|
$
|
0.80
|
|
|
$
|
2.11
|
|
|
$
|
3.14
|
|
Diluted
|
|
$
|
0.54
|
|
|
$
|
0.79
|
|
|
$
|
2.09
|
|
|
$
|
3.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
10,010
|
|
|
|
9,927
|
|
|
|
9,991
|
|
|
|
9,914
|
|
Diluted
|
|
|
10,105
|
|
|
|
10,061
|
|
|
|
10,081
|
|
|
|
10,012
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In
thousands)
|
|
|
|
|
|
December
31,
|
|
|
|
2023
|
|
|
2022
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,068
|
|
|
$
|
3,681
|
|
Trade and other
receivables, net
|
|
|
47,645
|
|
|
|
71,563
|
|
Contract
assets
|
|
|
120,516
|
|
|
|
121,778
|
|
Inventories
|
|
|
91,229
|
|
|
|
71,029
|
|
Prepaid expenses and
other
|
|
|
9,026
|
|
|
|
10,689
|
|
Total current
assets
|
|
|
272,484
|
|
|
|
278,740
|
|
Property and
equipment, net
|
|
|
143,955
|
|
|
|
133,166
|
|
Operating lease
right-of-use assets
|
|
|
88,155
|
|
|
|
93,124
|
|
Goodwill
|
|
|
55,504
|
|
|
|
55,504
|
|
Intangible assets,
net
|
|
|
31,074
|
|
|
|
35,264
|
|
Other
assets
|
|
|
6,709
|
|
|
|
5,542
|
|
Total
assets
|
|
$
|
597,881
|
|
|
$
|
601,340
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current
debt
|
|
$
|
10,756
|
|
|
$
|
10,756
|
|
Accounts
payable
|
|
|
31,142
|
|
|
|
26,968
|
|
Accrued
liabilities
|
|
|
27,913
|
|
|
|
30,957
|
|
Contract
liabilities
|
|
|
21,450
|
|
|
|
17,456
|
|
Current portion of
operating lease liabilities
|
|
|
4,933
|
|
|
|
4,702
|
|
Total current
liabilities
|
|
|
96,194
|
|
|
|
90,839
|
|
Borrowings on line of
credit
|
|
|
54,485
|
|
|
|
83,696
|
|
Operating lease
liabilities
|
|
|
85,283
|
|
|
|
89,472
|
|
Deferred income
taxes
|
|
|
10,942
|
|
|
|
11,402
|
|
Other long-term
liabilities
|
|
|
10,617
|
|
|
|
7,657
|
|
Total
liabilities
|
|
|
257,521
|
|
|
|
283,066
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
340,360
|
|
|
|
318,274
|
|
Total liabilities and
stockholders' equity
|
|
$
|
597,881
|
|
|
$
|
601,340
|
|
NORTHWEST PIPE
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In
thousands)
|
|
|
|
|
|
For the Year Ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
21,072
|
|
|
$
|
31,149
|
|
Depreciation and
finance lease amortization
|
|
|
11,616
|
|
|
|
12,664
|
|
Amortization of
intangible assets
|
|
|
4,190
|
|
|
|
4,439
|
|
Deferred income
taxes
|
|
|
(172)
|
|
|
|
514
|
|
Gain on insurance
proceeds
|
|
|
(466)
|
|
|
|
-
|
|
Share-based
compensation expense
|
|
|
3,672
|
|
|
|
3,702
|
|
Other, net
|
|
|
1,547
|
|
|
|
(286)
|
|
Changes in working
capital
|
|
|
11,996
|
|
|
|
(34,642)
|
|
Net cash provided by
operating activities
|
|
|
53,455
|
|
|
|
17,540
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(18,291)
|
|
|
|
(22,829)
|
|
Purchases of
intangible assets
|
|
|
-
|
|
|
|
(327)
|
|
Payment of working
capital adjustment in acquisition of business
|
|
|
(2,731)
|
|
|
|
-
|
|
Proceeds from
insurance
|
|
|
431
|
|
|
|
-
|
|
Other investing
activities
|
|
|
219
|
|
|
|
106
|
|
Net cash used in
investing activities
|
|
|
(20,372)
|
|
|
|
(23,050)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Borrowings on line of
credit
|
|
|
155,398
|
|
|
|
177,634
|
|
Repayments on line of
credit
|
|
|
(184,609)
|
|
|
|
(180,699)
|
|
Borrowings on other
debt
|
|
|
-
|
|
|
|
10,756
|
|
Payments on finance
lease obligations
|
|
|
(826)
|
|
|
|
(597)
|
|
Tax withholdings
related to net share settlements of equity awards
|
|
|
(1,652)
|
|
|
|
(853)
|
|
Repurchase of common
stock
|
|
|
(707)
|
|
|
|
-
|
|
Other financing
activities
|
|
|
(300)
|
|
|
|
(47)
|
|
Net cash provided by
(used in) financing activities
|
|
|
(32,696)
|
|
|
|
6,194
|
|
|
|
|
|
|
|
|
|
|
Change in cash and
cash equivalents
|
|
|
387
|
|
|
|
684
|
|
Cash and cash
equivalents, beginning of period
|
|
|
3,681
|
|
|
|
2,997
|
|
Cash and cash
equivalents, end of period
|
|
$
|
4,068
|
|
|
$
|
3,681
|
|
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SOURCE Northwest Pipe Company