VANCOUVER, WA – 11/04/15 – Northwest Pipe Company (NASDAQ: NWPX) today announced its financial results for the quarter ended September 30, 2015. The Company will broadcast its third quarter 2015 earnings conference call on Thursday, November 5, 2015, at 8:00 AM PST.
Third Quarter 2015 Results
Net sales from continuing operations for the quarter ended September 30, 2015 decreased 55.1% to $52.3 million compared to $116.5 million for the quarter ended September 30, 2014. Gross loss was $2.5 million (negative 4.8% of net sales from continuing operations) in the third quarter of 2015, a decrease in profitability from a gross profit of $15.8 million (13.6% of net sales from continuing operations) in the third quarter of 2014. The loss from continuing operations for the third quarter of 2015 was $1.5 million or $0.16 per diluted share compared to income from continuing operations of $5.9 million or $0.61 per diluted share for the third quarter of 2014.
Water Transmission sales decreased by 48.2% to $39.8 million in the third quarter of 2015 from $76.9 million in the third quarter of 2014. The decrease in net sales was the result of a 35% decrease in production due to reduced demand and project timing and a 21% decrease in selling prices, which was primarily due to lower steel costs. Water Transmission had a segment gross loss of $0.7 million (negative 1.8% of segment net sales) in the third quarter of 2015 compared to a gross profit of $16.6 million (21.5% of segment net sales) in the same quarter of 2014. Water Transmission gross profit decreased in total and as a percent of net sales due to the mix of products produced coupled with significant competition on recent project bids. In addition, gross profit was negatively impacted by a third quarter lower of cost or market charge of $1.1 million and $0.4 million in claims with steel suppliers.
Tubular Products sales from continuing operations decreased 68.4% to $12.5 million in the third quarter of 2015 from $39.6 million in the third quarter of 2014, driven by a 57% decrease in tons sold and a 27% decrease in selling prices per ton. Tubular Products segment gross loss increased to $1.8 million (negative 14.2% of segment net sales from continuing operations) in the third quarter of 2015 compared to $0.7 million (negative 1.9% of segment net sales from continuing operations) in the third quarter of 2014. Gross profit was negatively affected by reduced sales volumes due to lower demand and high levels of imported pipe.
For the nine months ended September 30, 2015, free cash flow, defined as net cash generated from operating activities after capital expenditures for property, plant and equipment, was $30.1 million, compared to $19.5 million during the nine months ended September 30, 2014.
As of September 30, 2015, the backlog of orders in the Water Transmission segment decreased to approximately $101 million compared to a backlog of orders of $109 million as of June 30, 2015 on virtually the same level of backlog tons. 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.
“We expect fourth quarter revenue and backlog in Water Transmission to improve due to increased second half bidding levels. However, the extremely competitive market conditions and continued collapse of steel prices are expected to restrict revenues and keep margins under pressure for the near term,” said Scott Montross, President and Chief Executive Officer of the Company. “In Tubular Products, import pressures, depressed energy prices and the collapsing steel market have created a very challenging environment. We continue to operate Atchison at reduced levels while we explore the sale of the facility.”
The Company will hold its third quarter 2015 earnings conference call on Thursday, November 5, 2015 at 8:00 AM PST. The live call can be accessed by dialing 1-888-566-6175 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 until Friday, December 4, 2015 by dialing 1-866-441-1048 passcode 6301.