Northwest Pipe Company Announces Second Quarter 2024 Financial Results
Rhea-AI Summary
Northwest Pipe Company (NWPX) reported strong Q2 2024 financial results, with net sales increasing 11.3% year-over-year to $129.5 million. The company achieved record net sales of $89.5 million in its Engineered Steel Pressure Pipe (SPP) segment and record gross profit of $25.8 million, up 14.8% from the previous year. Net income was $0.86 per diluted share, and the company generated $22.3 million in net cash from operating activities.
The SPP segment's backlog stood at $282 million, with confirmed orders bringing it to $348 million. The Precast Infrastructure and Engineered Systems segment's order book was $62 million. Despite weather-related challenges in Texas, the company expects a stronger third quarter with improving revenue and gross margins in the Precast segment.
Positive
- Record quarterly revenue of $89.5 million in Steel Pressure Pipe segment
- Record gross profit of $25.8 million, up 14.8% year-over-year
- Net income increased to $0.86 per diluted share from $0.74 in Q2 2023
- Strong free cash flow generation of $16.2 million in Q2 2024
- SPP backlog including confirmed orders increased to $348 million
Negative
- Weather-related challenges in Texas disrupted production, shipping, and order intake
- Precast segment experienced reduced production and shipments in non-residential construction
- 26% decrease in selling price per ton in SPP segment due to lower raw materials costs and product mix
- Precast gross profit decreased 10.9% year-over-year due to changes in product mix
Insights
Northwest Pipe Company's Q2 2024 results demonstrate robust performance across key financial metrics. The 11.3% year-over-year increase in net sales to
The Engineered Steel Pressure Pipe (SPP) segment's performance is particularly noteworthy, with record net sales of
The company's ability to generate strong net cash from operating activities of
The backlog of
Overall, Northwest Pipe Company's Q2 results reflect a strong market position and operational execution, particularly in its core SPP business. The company's ability to navigate challenges such as weather disruptions while delivering record results bodes well for its resilience and future performance.
Northwest Pipe Company's Q2 2024 results offer valuable insights into the water infrastructure market dynamics. The strong performance in the Engineered Steel Pressure Pipe (SPP) segment, with a
The company's ability to maintain profitability despite a
The Precast Infrastructure and Engineered Systems segment presents a mixed picture. While volume shipped increased by
The growing backlog and order book across both segments indicate sustained market demand. However, the mention of weather-related challenges in Texas highlights the potential impact of climate events on the company's operations and the broader infrastructure sector.
Investors should note the company's optimism for a stronger third quarter in the Precast segment, which could signal a potential upturn in non-residential construction activities. This aligns with broader economic indicators suggesting a gradual recovery in commercial construction projects.
Overall, Northwest Pipe's results reflect the ongoing need for water infrastructure upgrades and expansion in the U.S., positioning the company well within its niche market.
- Net sales of
$129.5 million 11.3% year-over-year - Record net sales of
$89.5 million - Record gross profit of
$25.8 million 14.8% year-over-year - Net income of
$0.86 - Generated strong net cash provided by operating activities of
$22.3 million - Backlog1 of
$282 million $348 million - Order book3 of
$62 million
Management Commentary
"Our second quarter results were very strong despite the weather-related challenges we encountered in
Second Quarter 2024 Financial Results
Consolidated
- Net sales increased
11.3% to$129.5 million $116.4 million - Gross profit increased
14.8% to a record of$25.8 million 19.9% of net sales, from$22.5 million 19.3% of net sales, in the second quarter of 2023. - Net income was
$8.6 million $0.86 $7.4 million $0.74
Engineered Steel Pressure Pipe Segment (SPP)
- SPP net sales increased
15.9% to a quarterly record of$89.5 million $77.3 million 56% increase in tons produced resulting from an improved bidding environment coupled with changes in project timing, partially offset by a26% decrease in selling price per ton due to a combination of lower raw materials costs and product mix. - SPP gross profit increased
35.1% to$17.0 million 19.0% of SPP net sales, from$12.6 million 16.3% of SPP net sales, in the second quarter of 2023 primarily due to increased volume and changes in product mix. - SPP backlog was
$282 million $255 million $292 million $348 million $337 million $343 million
Precast Infrastructure and Engineered Systems Segment (Precast)
- Precast net sales increased
2.2% to$40.0 million $39.1 million 30% increase in volume shipped, partially offset by a22% decrease in selling prices due to changes in product mix. - Precast gross profit decreased
10.9% to$8.8 million 22.1% of Precast net sales, from$9.9 million 25.3% of Precast net sales, in the second quarter of 2023 primarily due to changes in product mix. - Precast order book was
$62 million $52 million $58 million
Balance Sheet and Cash Flow
- As of June 30, 2024, the Company had
$75.9 million $47 million - Net cash provided by operating activities was
$22.3 million $1.2 million $18.9 million $2.2 million - Capital expenditures were
$6.1 million $4.0 million - The Company repurchased approximately 18,000 shares of its common stock at an average price of
$31.81 $0.6 million
____________ |
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. |
4 Northwest Pipe Company defines "free cash flow" as cash flows from operating activities less purchases of property and equipment. For purposes of the second quarter of 2024, |
Conference Call Details
A conference call and simultaneous webcast to discuss the Company's second quarter 2024 financial results will be held on Thursday, August 1, 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 Thursday, August 15, 2024, by dialing 1‑844‑512‑2921 in the
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
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 future 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
Non-GAAP Financial Measures
The Company is presenting backlog including confirmed orders and free cash flow. 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. These 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 | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Net sales: | ||||||||||||||||
Engineered Steel Pressure Pipe | $ | 89,523 | $ | 77,255 | $ | 169,530 | $ | 140,801 | ||||||||
Precast Infrastructure and Engineered Systems | 39,982 | 39,117 | 73,190 | 74,668 | ||||||||||||
Total net sales | 129,505 | 116,372 | 242,720 | 215,469 | ||||||||||||
Cost of sales: | ||||||||||||||||
Engineered Steel Pressure Pipe | 72,542 | 64,684 | 138,307 | 120,448 | ||||||||||||
Precast Infrastructure and Engineered Systems | 31,149 | 29,207 | 58,465 | 55,963 | ||||||||||||
Total cost of sales | 103,691 | 93,891 | 196,772 | 176,411 | ||||||||||||
Gross profit: | ||||||||||||||||
Engineered Steel Pressure Pipe | 16,981 | 12,571 | 31,223 | 20,353 | ||||||||||||
Precast Infrastructure and Engineered Systems | 8,833 | 9,910 | 14,725 | 18,705 | ||||||||||||
Total gross profit | 25,814 | 22,481 | 45,948 | 39,058 | ||||||||||||
Selling, general, and administrative expense | 12,195 | 11,016 | 23,639 | 22,882 | ||||||||||||
Operating income | 13,619 | 11,465 | 22,309 | 16,176 | ||||||||||||
Other expense | (228) | (134) | (221) | (163) | ||||||||||||
Interest expense | (1,823) | (1,191) | (3,297) | (2,560) | ||||||||||||
Income before income taxes | 11,568 | 10,140 | 18,791 | 13,453 | ||||||||||||
Income tax expense | 2,949 | 2,692 | 4,934 | 3,643 | ||||||||||||
Net income | $ | 8,619 | $ | 7,448 | $ | 13,857 | $ | 9,810 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.87 | $ | 0.74 | $ | 1.40 | $ | 0.98 | ||||||||
Diluted | $ | 0.86 | $ | 0.74 | $ | 1.38 | $ | 0.97 | ||||||||
Shares used in per share calculations: | ||||||||||||||||
Basic | 9,912 | 10,000 | 9,914 | 9,970 | ||||||||||||
Diluted | 9,995 | 10,066 | 10,025 | 10,081 | ||||||||||||
NORTHWEST PIPE COMPANY AND SUBSIDIARIES | ||||||||
June 30, 2024 | December 31, 2023 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,528 | $ | 4,068 | ||||
Trade and other receivables, net | 70,933 | 47,645 | ||||||
Contract assets | 139,481 | 120,516 | ||||||
Inventories | 87,732 | 91,229 | ||||||
Prepaid expenses and other | 5,274 | 9,026 | ||||||
Total current assets | 307,948 | 272,484 | ||||||
Property and equipment, net | 147,351 | 143,955 | ||||||
Operating lease right-of-use assets | 85,491 | 88,155 | ||||||
Goodwill | 55,504 | 55,504 | ||||||
Intangible assets, net | 29,058 | 31,074 | ||||||
Other assets | 6,393 | 6,709 | ||||||
Total assets | $ | 631,745 | $ | 597,881 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Current debt | $ | 10,756 | $ | 10,756 | ||||
Accounts payable | 24,508 | 31,142 | ||||||
Accrued liabilities | 23,234 | 27,913 | ||||||
Contract liabilities | 37,105 | 21,450 | ||||||
Current portion of operating lease liabilities | 5,108 | 4,933 | ||||||
Total current liabilities | 100,711 | 96,194 | ||||||
Borrowings on line of credit | 75,923 | 54,485 | ||||||
Operating lease liabilities | 82,919 | 85,283 | ||||||
Deferred income taxes | 11,159 | 10,942 | ||||||
Other long-term liabilities | 9,850 | 10,617 | ||||||
Total liabilities | 280,562 | 257,521 | ||||||
Stockholders' equity | 351,183 | 340,360 | ||||||
Total liabilities and stockholders' equity | $ | 631,745 | $ | 597,881 | ||||
NORTHWEST PIPE COMPANY AND SUBSIDIARIES | ||||||||
Six Months Ended June 30, | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 13,857 | $ | 9,810 | ||||
Depreciation and finance lease amortization | 7,106 | 5,642 | ||||||
Amortization of intangible assets | 2,016 | 2,104 | ||||||
Deferred income taxes | 227 | 417 | ||||||
Share-based compensation expense | 2,674 | 2,304 | ||||||
Other, net | 360 | 1,325 | ||||||
Changes in working capital | (30,055) | 5,877 | ||||||
Net cash provided by (used in) operating activities | (3,815) | 27,479 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (10,634) | (8,414) | ||||||
Payment of working capital adjustment in acquisition of business | - | (2,731) | ||||||
Other investing activities | 61 | 9 | ||||||
Net cash used in investing activities | (10,573) | (11,136) | ||||||
Cash flows from financing activities: | ||||||||
Borrowings on line of credit | 105,324 | 72,912 | ||||||
Repayments on line of credit | (83,886) | (86,539) | ||||||
Payments on finance lease obligations | (712) | (311) | ||||||
Tax withholdings related to net share settlements of equity awards | (1,449) | (1,652) | ||||||
Repurchase of common stock | (4,429) | - | ||||||
Other financing activities | - | (282) | ||||||
Net cash provided by (used in) financing activities | 14,848 | (15,872) | ||||||
Change in cash and cash equivalents | 460 | 471 | ||||||
Cash and cash equivalents, beginning of period | 4,068 | 3,681 | ||||||
Cash and cash equivalents, end of period | $ | 4,528 | $ | 4,152 | ||||
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SOURCE Northwest Pipe Company
FAQ
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