Northwest Pipe Company announced its financial results for the quarter ended June 30th 2014. The Company will broadcast its Q2 2014 earnings conference call on August 5th 2014.
Result for Q2 2014;
Net sales from continuing operations for the quarter ended June 30th 2014 increased 16.0% to USD 102.0 million compared to USD 87.9 million for the quarter ended June 30th 2013. Gross profit was USD 11.3 million (11.1% of net sales from continuing operations) in the Q2 of 2014, a decrease from USD 15.2 million (17.3% of net sales from continuing operations) in the Q2 of 2013. Income from continuing operations for the Q2 of 2014 was USD 3.2 million or USD 0.33 per diluted share compared to income from continuing operations of USD 5.5 million or USD 0.59 per diluted share for the Q2 of 2013.
Water Transmission sales increased 7.0% to USD 62.2 million in the Q2 of 2014 from USD 58.1 million in the Q2 of 2013. The increase in net sales was due to higher volumes primarily attributed to the Integrated Pipeline Project, which started production in mid May. Water Transmission gross profit decreased to USD 11.5 million (18.5% of segment net sales) in the Q2 of 2014 from USD 12.1 million (20.9% of segment net sales) in the same quarter of 2013. Water Transmission gross profit decreased in total and as a percent of net sales due to the mix of projects as compared to the same period a year ago. In addition, increased competition has compressed margins on projects that were produced in the Q2 and bid during the recent Water Transmission market slowdown.
Tubular Products sales from continuing operations increased 33.5% to USD 39.8 million in the Q2 of 2014 from USD 29.8 million in the Q2 of 2013, driven by a 37% increase in tonnes sold partially offset by a 3% decrease in sales prices. Sales volumes increased from 29,800 tonnes in the Q2 of 2013 to 40,900 tonnes in the Q2 of 2014. Tubular Products gross profit from continuing operations decreased by 105.6% to a USD 0.2 million gross loss (negative 0.4% of segment net sales from continuing operations) in the second quarter of 2014 from USD 3.1 million gross profit (10.4% of segment net sales from continuing operations) in the Q2 of 2013. Gross profit was negatively impacted by higher steel costs in relation to the lower sales prices coupled with USD 1.6 million lower of cost or market adjustment in the Q2.
As of June 30th 2014, the backlog of orders in the Water Transmission segment was approximately USD 143 million compared to a backlog of orders of USD 115 million as of June 30th 2013. The backlog includes confirmed orders, including the balance of projects in process and projects for which the Company has been notified that it was the successful bidder even though a binding agreement has not been executed.
The Company’s financial performance is expected to improve in the third quarter with the higher levels of production in the Water Transmission segment.
Mr Scott Montross president and CEO of Northwest Pipe Company said that “The IPL and other projects are expected to push third quarter Water Transmission margins into the high teens. We have recently completed the modernization project at our Atchison facility and are seeing improving volumes and enhanced product mix, but high levels of imports continue to have a negative impact on the line pipe market. In the near term we expect margins in the low single digits for the Tubular Products segment.”
Source – Strategic Research Institute