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Exhibit 99.1

 

LOGO

November 8, 2012

 

 

NORTHWEST PIPE REPORTS Q3 2012 FINANCIAL RESULTS AND

ANNOUNCES CONFERENCE CALL

Vancouver, WA, November 8, 2012. Northwest Pipe Company (NASDAQ: NWPX) today announced its financial results for the third quarter of 2012. The Company will broadcast its third quarter 2012 earnings conference call on Friday, November 9, 2012, at 9:00 am PST.

Third Quarter 2012 Results

Net sales for the quarter ended September 30, 2012 decreased 17.4% to $115.1 million compared to $139.3 million in the quarter ended September 30, 2011. Gross profit was $11.6 million (10.1% of net sales) in the third quarter of 2012, a decrease from $16.5 million (11.9% of net sales) in the same quarter of 2011. Net income for the third quarter of 2012 was $3.4 million or $0.36 per diluted share compared to $3.3 million or $0.35 per diluted share for the same period in 2011.

Water Transmission sales decreased by 17.5% to $63.5 million in the third quarter of 2012 from $77.0 million in the third quarter of 2011. The decrease in sales was due to a 2% decrease in volume and a 16% decrease in selling price per ton. Water Transmission gross profit decreased to $9.7 million (15.2% of segment net sales) in the third quarter of 2012 from $13.3 million (17.3% of segment net sales) in the same quarter of the prior year.

Tubular Products sales decreased 17.2% to $51.6 million in the third quarter of 2012 from $62.3 million in the third quarter of 2011, driven by an 18% decrease in tons sold from 52,100 tons in the third quarter of 2011 to 42,900 tons in the third quarter of 2012, partially offset by a 2% increase in the average selling price per ton. Tubular Products gross profit decreased by 39.4% to $1.9 million (3.7% of segment net sales) in the third quarter of 2012 from $3.2 million (5.1% of segment net sales) in the same quarter of 2011.

As of September 30, 2012, the backlog of orders in the Water Transmission segment was approximately $241 million. This compared to a backlog of orders of $187 million as of September 30, 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.

Net income in the third quarter of 2012 was positively impacted by a net benefit from income taxes of $686,000. During the third quarter of 2012, a research and development tax credit study was performed for fiscal years 2010 through 2011. This study resulted in a tax benefit of $1.8 million.

The Company entered into a $165 million Second Amended and Restated Credit Agreement on October 24, 2012 which expires on October 24, 2017. It provides for a revolving loan, swingline loan and letters of credit, and reflects reductions in the interest rates charged on outstanding balances and a reduction in the number of financial covenants as compared to the previous credit agreement.

Outlook

“As expected, we saw lower net sales and margins in the Tubular Products segment in the third quarter of 2012 as compared to the third quarter of 2011 with the competition from increased quantities of imported energy pipe. The Tubular Products segment was also negatively impacted by lower drilling activity, as seen in the decrease in rig

 

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counts, and lower natural gas prices,” said Richard Roman, President and Chief Executive Officer of the Company. “In July of 2012, we announced the Water Transmission segment was awarded the Lake Texoma project which is the largest project in our history. We started production on the Lake Texoma project in August, and will be producing for this project through the second quarter of 2013. We anticipate that the fourth quarter of 2012 will be the strongest quarter in 2012 in the Water Transmission segment. Consistent with other domestic tubular producers, we expect continued competition from imports of energy products to reduce profitability for the Tubular Products segment in the near term.”

Conference Call

The Company will hold its third quarter 2012 earnings conference call on Friday, November 9, 2012 at 9 am PST. The live call can be accessed by dialing 1-800-369-3340 passcode NWPIPE. For those unable to attend the live call, a replay will be available approximately one hour after the event and will remain available for 30 days by dialing 1-888-567-0484 passcode 6301.

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 products including energy, construction, agriculture and industrial systems. The Company is headquartered in Vancouver, Washington and has nine manufacturing facilities across the United States and Mexico.

Forward-Looking Statements

Statements in this press release by Richard A. Roman are “forward-looking” statements within the meaning of the Securities Litigation Reform Act of 1995 and Section 21E of the Exchange Act that are based on current expectations, estimates and projections about our 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 us include changes in demand and market prices for our products, product mix, bidding activity, the timing of customer orders and deliveries, production schedules, the price and availability of raw materials, excess or shortage of production capacity, international trade policy and regulations and other risks discussed in our Annual Report on Form 10-K for the year ended December 31, 2011 and from time to time in our other Securities and Exchange Commission filings and reports. Such forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. If we do update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements.

 

CONTACT:   Robin Gantt, Chief Financial Officer
  360-397-6250

 

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NORTHWEST PIPE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Dollar and share amounts in thousands, except per share amounts)

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2012     2011     2012     2011  

Net sales:

        

Water Transmission

   $ 63,487      $ 76,953      $ 180,968      $ 210,057   

Tubular Products

     51,612        62,312        207,347        184,467   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

     115,099        139,265        388,315        394,524   

Cost of sales:

        

Water Transmission

     53,806        63,608        153,439        175,287   

Tubular Products

     49,693        59,143        193,199        171,284   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of sales

     103,499        122,751        346,638        346,571   

Gross profit:

        

Water Transmission

     9,681        13,345        27,529        34,770   

Tubular Products

     1,919        3,169        14,148        13,183   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total gross profit

     11,600        16,514        41,677        47,953   

Selling, general, and administrative expense

     7,571        6,467        21,499        19,359   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss):

        

Water Transmission

     6,969        10,747        21,123        28,150   

Tubular Products

     1,134        2,349        11,981        10,502   

Corporate

     (4,074     (3,049     (12,926     (10,058
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     4,029        10,047        20,178        28,594   

Other expense

     49        950        51        1,347   

Interest income

     (35     (4     (122     (27

Interest expense

     1,305        2,247        4,471        7,440   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     2,710        6,854        15,778        19,834   

(Benefit from) provision for income taxes

     (686     3,570        4,044        8,641   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 3,396      $ 3,284      $ 11,734      $ 11,193   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 0.36      $ 0.35      $ 1.25      $ 1.20   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 0.36      $ 0.35      $ 1.24      $ 1.20   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in per share calculations:

        

Basic

     9,383        9,346        9,375        9,326   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     9,499        9,373        9,458        9,359   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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NORTHWEST PIPE COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollar amounts in thousands)

 

     September 30,      December 31,  
     2012      2011  

Assets:

     

Cash and cash equivalents

   $ 28       $ 182   

Trade and other receivables, net

     70,980         69,894   

Costs and estimated earnings in excess of billings on uncompleted contracts

     57,323         38,029   

Inventories

     131,679         107,169   

Other current assets

     11,170         11,649   
  

 

 

    

 

 

 

Total current assets

     271,180         226,923   

Property and equipment, net

     150,702         152,846   

Other assets

     33,158         33,604   
  

 

 

    

 

 

 

Total assets

   $ 455,040       $ 413,373   
  

 

 

    

 

 

 

Liabilities:

     

Current maturities of long-term debt

   $ 8,980       $ 9,072   

Accounts payable

     24,421         20,248   

Accrued liabilities

     51,734         19,175   

Billings in excess of cost and estimated earnings on uncompleted contracts

     8,757         7,814   
  

 

 

    

 

 

 

Total current liabilities

     93,892         56,309   

Note payable to financial institution

     58,289         62,000   

Other long-term debt, less current maturities

     17,810         24,418   

Other long-term liabilities

     30,955         30,379   
  

 

 

    

 

 

 

Total liabilities

     200,946         173,106   

Stockholders' equity

     254,094         240,267   
  

 

 

    

 

 

 

Total liabilities and stockholders' equity

   $ 455,040       $ 413,373   
  

 

 

    

 

 

 

 

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