Northwest Pipe Company Announces Fourth Quarter and Full Year 2022 Financial Results

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15 Mar, 2023, 16:01 ET

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VANCOUVER, Wash., March 15, 2023 /PRNewswire/ -- Northwest Pipe Company (NASDAQ: NWPX) (the "Company"), a leading manufacturer of water-related infrastructure including engineered steel water pipeline systems; 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, today announced its financial results for the fourth quarter and full year ended December 31, 2022. The Company will broadcast its fourth quarter and full year 2022 earnings conference call on Thursday, March 16, 2023 at 7:00 a.m. PT.

Management Commentary

"After a slow first quarter, our Engineered Steel Pressure Pipe business gained strength throughout 2022 resulting in a record annual revenue of $307.6 million. We ended the year with a record backlog including confirmed orders of $372 million due to the strong bidding that we experienced in the second half of the year which allowed our backlog to continue to improve in terms of both size and margin quality," said Scott Montross, President and Chief Executive Officer of Northwest Pipe Company. "Precast Infrastructure and Engineered Systems generated a record annual revenue of $150.1 million and a strong gross margin of 27.6%, despite challenges related to the implementation of a new business system at our ParkUSA facilities. Our Precast order book ended 2022 at $64 million in this segment of the business, down 14% from the third quarter of 2022 due to the current uncertainty in the residential housing market and the resulting impact primarily on our Geneva business."

Mr. Montross continued, "We expect that the first quarter of 2023 will be challenging, similar to what we saw in the first quarter of 2022. Even with the record backlog including confirmed orders in SPP, there are customer driven delays affecting the production timing of near-term projects as well as severe weather events that have led to unscheduled downtime time at various SPP facilities. These weather events have also caused unscheduled downtime in our Precast business, further suppressing the first quarter which is already the seasonally slow time of year. After the anticipated slow first quarter, the SPP business levels are expected to normalize similar to what we experienced in 2022. The Precast segment is likely to be moderately affected by the uncertainty in the residential housing market near term but is still expected to have a solid year."

Fourth Quarter 2022 Financial Results

Consolidated

Engineered Steel Pressure Pipe Segment (SPP)

Precast Infrastructure and Engineered Systems Segment (Precast)

Full Year 2022 Financial Results

Consolidated

Engineered Steel Pressure Pipe Segment (SPP)

Precast Infrastructure and Engineered Systems Segment (Precast)

Liquidity Details

As of December 31, 2022, the Company had $83.7 million of outstanding revolving loan borrowings and additional borrowing capacity of approximately $40 million. The Company expects to have sufficient credit available to support its operations for at least the next twelve months with near-term repayment of outstanding debt remaining a high priority.

Conference Call Details

A conference call and simultaneous webcast to discuss the Company's fourth quarter 2022 financial results will be held on Thursday, March 16, 2023, 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 Thursday, March 30, 2023, by dialing 1-844-512-2921 in the U.S. or 1-412-317-6671 internationally and entering the replay access code: 13736353.

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 are "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 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 ParkUSA 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, 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 Ukraine 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 our internal control over financial reporting and our ability to remediate such weaknesses, impacts of pandemics, epidemics, or other public health emergencies, such as coronavirus disease 2019, and other risks discussed in the Company's Annual Report on Form 10–K for the year ended December 31, 2021 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, adjusted net income, and adjusted diluted net income per share. These non-GAAP financial measures are 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 WilkinsChief Financial OfficerNorthwest Pipe Company[email protected]

Or Addo Investor Relations[email protected]

________________

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.

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.

Northwest Pipe Company defines "order book" as unfulfilled orders outstanding at the measurement date for its Precast Infrastructure and Engineered Systems segment.

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

Three Months EndedDecember 31,

Year Ended December 31,

2022

2021

2022

2021

Net sales:

Engineered Steel Pressure Pipe

72,126

71,579

307,572

259,823

Precast Infrastructure and Engineered Systems

34,702

30,968

150,093

73,490

Total net sales

106,828

102,547

457,665

333,313

Cost of sales:

Engineered Steel Pressure Pipe

60,143

62,911

263,099

228,542

Precast Infrastructure and Engineered Systems

24,814

26,058

108,711

60,517

Total cost of sales

84,957

88,969

371,810

289,059

Gross profit:

Engineered Steel Pressure Pipe

11,983

8,668

44,473

31,281

Precast Infrastructure and Engineered Systems

9,888

4,910

41,382

12,973

Total gross profit

21,871

13,578

85,855

44,254

Selling, general, and administrative expense

10,885

10,493

41,034

28,222

Operating income

10,986

3,085

44,821

16,032

Other income

328

Interest expense

(1,175)

(515)

(3,568)

(1,202)

Income before income taxes

9,852

2,638

41,350

15,158

Income tax expense

1,891

367

10,201

3,635

Net income

7,961

2,271

31,149

11,523

Net income per share:

Basic

0.80

0.23

3.14

1.17

Diluted

0.79

0.23

3.11

1.16

Shares used in per share calculations:

Basic

9,927

9,871

9,914

9,854

Diluted

10,061

9,954

10,012

9,928

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

December 31,

2022

2021

Assets

Current assets:

Cash and cash equivalents

3,681

2,997

Trade and other receivables, net

71,563

52,664

Contract assets

121,778

107,170

Inventories

71,029

59,651

Prepaid expenses and other

10,689

5,744

Total current assets

278,740

228,226

Property and equipment, net

133,166

121,266

Operating lease right-of-use assets

93,124

98,507

Goodwill

55,504

53,684

Intangible assets, net

35,264

39,376

Other assets

5,542

6,620

Total assets

601,340

547,679

Liabilities and Stockholders' Equity

Current liabilities:

Current debt

10,756

Accounts payable

26,968

32,267

Accrued liabilities

30,957

24,498

Contract liabilities

17,456

2,623

Current portion of operating lease liabilities

4,702

4,704

Total current liabilities

90,839

64,092

Borrowings on line of credit

83,696

86,761

Operating lease liabilities

89,472

93,725

Deferred income taxes

11,402

10,984

Other long-term liabilities

7,657

8,734

Total liabilities

283,066

264,296

Stockholders' equity

318,274

283,383

Total liabilities and stockholders' equity

601,340

547,679

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited)

(In thousands, except per share amounts)

Three Months EndedDecember 31,

Year Ended December 31,

2022

2021

2022

2021

Net income, as reported

7,961

2,271

31,149

11,523

Adjustments for non-recurring items:

Acquisition-related transaction costs

2,587

3,387

Amortization of acquired intangibles (1)

750

879

3,173

879

Acquisition-related fair value inventory charges

2,319

Estimated tax impact of non-recurring items

(179)

(1,432)

(793)

(1,630)

Adjusted net income

8,532

6,624

33,588

16,478

Diluted net income per share, as reported

0.79

0.23

3.11

1.16

Adjusted diluted net income per share

0.85

0.67

3.35

1.66

(1)

Amortization of acquired intangibles represents amortization of ParkUSA intangible assets only and is included for comparability purposes between 2022 and 2021.

SOURCE Northwest Pipe Company

Northwest Pipe Company