Northwest Pipe Reports Record Resultsadmin
Northwest Pipe Company reported record sales, earnings and backlog for the second quarter of 2008. Sales in the second quarter ended June 30, 2008 were $112.1 million compared to $101.9 million in the same quarter of 2007. Net income in the quarter was $8.4 million, compared to $5.7 million in the second quarter of 2007. Per share earnings were $0.90 in the second quarter of 2008 compared to $0.61 per share in 2007.
Summary of 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, Colorado – $19.0 million 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 for the Alternative Intake Project Pipeline for the Contra Costa Water District in California
Water Transmission Results
Revenues for the Water Transmission Group were $74.9 million in the second quarter of 2008 compared to $73.0 million in 2007. Gross profit in 2008 was $14.8 million, or 19.7% of sales, compared to $15.2 million, or 20.8% of sales in 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 chief executive officer of the Company.
Tubular Products Results
The Tubular Products Group’s sales were $37.2 million in the second quarter of 2008, compared to $28.9 million in the second quarter of 2007. Gross profit for the quarter was $9.8 million, or 26.4% of sales, compared to $3.6 million, or 12.5% of sales for 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.”
The Company’s backlog is at an all-time high at $264 million, and the market continues to look very active over the balance of 2008. The Company 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.”
About Northwest Pipe Company
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 markets including construction, agriculture, energy, traffic and a variety of other commercial and industrial applications. The Company is headquartered in Vancouver, Washington and has ten manufacturing facilities across the United States and Mexico.
The Company’s second quarter 2008 earnings conference call will be held on Wednesday, July 23, 2008, at 8:00 a.m. PDT via live internet webcast. The conference broadcast can be accessed at the “Investor Relations” section of the Company’s website located at http://www.nwpipe.com. For those unable to listen to the live broadcast, a replay will be available at the Investor Relations section of the Company’s website (www.nwpipe.com) or by dialing 888-566-0620 approximately one hour after the event.
CONTACT: Brian Dunham Chief Executive Officer
Source: Northwest Pipe Company