8-K
NWPX Infrastructure, Inc. (NWPX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2024
NORTHWEST PIPE COMPANY
(Exact name of registrant as specified in its charter)
| O regon | 0-27140 | 93-0557988 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
201 NE Park Plaza Drive , Suite 100
Vancouver , WA 98684
(Address of principal executive offices and Zip Code)
Registrant’s telephone number, including area code: 360 -397-6250
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | NWPX | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
|---|---|
| On July 31, 2024, Northwest Pipe Company (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2024 and its current outlook. The press release contains forward-looking statements regarding the Company, and includes cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated. The press release issued July 31, 2024 is furnished herewith as Exhibit No. 99.1 to this Report, and shall not be deemed filed for purposes of Section 18 of the Exchange Act. | |
| Item 9.01. | FINANCIAL STATEMENTS AND EXHIBITS |
| (d) | Exhibits |
| 99.1 Press Release issued by Northwest Pipe Company dated July 31, 2024 | |
| 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on July 31, 2024.
| NORTHWEST PIPE COMPANY | |
|---|---|
| (Registrant) | |
| By | /s/ Aaron Wilkins |
| Aaron Wilkins, | |
| Senior Vice President, Chief Financial Officer, and Corporate Secretary |
ex_666602.htm
Exhibit 99.1
Northwest Pipe Company Announces Second Quarter 2024 Financial Results
| • | Net sales of $129.5 million increased 11.3% year-over-year |
|---|---|
| • | Record net sales of $89.5 million for the Engineered Steel Pressure Pipe segment (“SPP”) |
| • | Record gross profit of $25.8 million increased 14.8% year-over-year |
| • | Net income of $0.86 per diluted share |
| • | Generated strong net cash provided by operating activities of $22.3 million |
| • | Backlog^1^ of $282 million; backlog including confirmed orders^2^ of $348 million for SPP |
| • | Order book^3^ of $62 million for the Precast Infrastructure and Engineered Systems segment (“Precast”) |
VANCOUVER, Washington—July 31, 2024—Northwest Pipe Company (NASDAQ: NWPX) (the “Company”), a leading manufacturer of water-related infrastructure products, today announced its financial results for the second quarter ended June 30, 2024. The Company will broadcast its second quarter 2024 earnings conference call on Thursday, August 1, 2024 at 7:00 a.m. PT.
Management Commentary
“Our second quarter results were very strong despite the weather-related challenges we encountered in Texas which disrupted production, shipping, and order intake,” said Scott Montross, President and Chief Executive Officer of Northwest Pipe Company. “We delivered record quarterly revenue of $89.5 million in our Steel Pressure Pipe business and enjoyed continued strength in the residential side of our Precast business despite persistent interest rate headwinds. In addition, record quarterly profitability levels, coupled with effective working capital management, led to strong free cash flow*^4^* generation of $16.2 million in the second quarter, up significantly versus last year. The SPP segment benefitted from the strong pipeline of bidding opportunities in the first half of this year. We expect our SPP business to remain strong for the rest of 2024. In Precast, reduced production and shipments on the non-residential construction portion of our business at Park offset much of the strength we saw on the residential side at Geneva, primarily due to multiple severe weather events in Texas. Following a slow first half of the year in Precast, we are expecting a stronger third quarter with improving revenue and gross margins.”
Second Quarter 2024 Financial Results
Consolidated
| • | Net sales increased 11.3% to $129.5 million from $116.4 million in the second quarter of 2023. |
|---|---|
| • | Gross profit increased 14.8% to a record of $25.8 million, or 19.9% of net sales, from $22.5 million, or 19.3% of net sales, in the second quarter of 2023. |
| • | Net income was $8.6 million, or $0.86 per diluted share, compared to $7.4 million, or $0.74 per diluted share, in the second quarter of 2023. |
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Engineered Steel Pressure Pipe Segment (SPP)
| • | SPP net sales increased 15.9% to a quarterly record of $89.5 million from $77.3 million in the second quarter of 2023 driven by a 56% increase in tons produced resulting from an improved bidding environment coupled with changes in project timing, partially offset by a 26% 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, or 19.0% of SPP net sales, from $12.6 million, or 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 as of June 30, 2024 compared to $255 million as of March 31, 2024 and $292 million as of June 30, 2023. Backlog including confirmed orders was $348 million as of June 30, 2024 compared to $337 million as of March 31, 2024 and $343 million as of June 30, 2023. |
Precast Infrastructure and Engineered Systems Segment (Precast)
| • | Precast net sales increased 2.2% to $40.0 million from $39.1 million in the second quarter of 2023 driven by a 30% increase in volume shipped, partially offset by a 22% decrease in selling prices due to changes in product mix. |
|---|---|
| • | Precast gross profit decreased 10.9% to $8.8 million, or 22.1% of Precast net sales, from $9.9 million, or 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 as of June 30, 2024 compared to $52 million as of March 31, 2024 and $58 million as of June 30, 2023. |
Balance Sheet and Cash Flow
| • | As of June 30, 2024, the Company had $75.9 million of outstanding revolving loan borrowings and additional borrowing capacity of approximately $47 million under the revolving credit facility. |
|---|---|
| • | Net cash provided by operating activities was $22.3 million in the second quarter of 2024 compared to $1.2 million in the second quarter of 2023 primarily due to an $18.9 million increase in cash provided by changes in working capital and a $2.2 million increase in cash provided by net income adjusted for non-cash items. |
| • | Capital expenditures were $6.1 million in the second quarter of 2024 compared to $4.0 million in the second quarter of 2023. |
| • | The Company repurchased approximately 18,000 shares of its common stock at an average price of $31.81, for a total of $0.6 million during the second quarter of 2024. |
^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, $22.3 million of net cash provided by operating activities, less $6.1 million in purchases of property and equipment, resulted in $16.2 million of free cash flow.
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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 U.S. or 1‑412‑317‑6671 internationally and entering the replay access code: 10190352.
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 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 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 areas such as Ukraine and Israel, 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 the Company’s internal control over financial reporting and its ability to remediate such weaknesses, uncertainty around the outcome of political elections, impacts of pandemics, epidemics, or other public health emergencies, and other risks discussed in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2023 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.
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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
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| NORTHWEST PIPE COMPANY AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (Unaudited) | ||||||||||||
| (In thousands, except per share amounts) | ||||||||||||
| 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 |
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| NORTHWEST PIPE COMPANY AND SUBSIDIARIES | ||||
|---|---|---|---|---|
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
| (Unaudited) | ||||
| (In thousands) | ||||
| 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 |
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| NORTHWEST PIPE COMPANY AND SUBSIDIARIES | ||||||
|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| (Unaudited) | ||||||
| (In thousands) | ||||||
| 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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