PORTLAND, Ore., July 17, 2002 -- Northwest Pipe Co. recently reported its results for the second quarter of 2002.
Sales were $64.4 million compared to $75.1 million in the second quarter of 2001. Net income was $2.1 million, or $0.31 per diluted share for the second quarter of 2002, compared to $3.1 million, or $0.47 per diluted share for the same quarter last year.
Sales in the Water Transmission Group were $39.9 million in the second quarter of 2002 compared to $47.9 million for the second quarter last year. The gross profit for this Group was $8.4 million, or 21.1% of sales for the second quarter of 2002, compared to $11.3 million, or 23.5% of sales last year.
The Water Transmission Group's volume for the second quarter of 2002 was down significantly compared to last year as the impact of slower project bidding activity in prior periods affected the results. A slowdown in bidding activity began in the second half of 2001 and continued through the first part of the second quarter.
"The much awaited improvement in bidding activity began during the quarter. As a result, our backlog increased from $75 million at the beginning of the second quarter to $95 million at the end of the quarter," noted Brian Dunham, Chief Executive Officer. "However, the improvement in bidding activity occurred too late to favorably impact our current financial results."
"There is often a lag of 90-120 days between the bid date and production," Dunham continued. "Accordingly, our recent bookings will start to impact our production schedule in the latter part of the third quarter and result in improved revenues from then through the end of the year."
The Tubular Products Group's sales were $24.4 million in the second quarter of 2002 compared to $27.2 million reported for the second quarter last year. On a sequential basis, however, sales were up 16.6% from the first quarter of 2002 as this Group continued its improving trend.
Gross profit was $2.1 million in the second quarter of 2002 compared to $2.9 million in the second quarter of 2001 and was up significantly from the $1.4 million recorded in the first quarter of this year. Gross profit as a percent of sales was 8.6% compared to 10.6% in the second quarter last year and 6.8% in the first quarter of 2002.
While the Tubular Products Group continued to show improvements in volume and prices in the second quarter of 2002, overall market conditions did not meet expectations. "We continued to be impacted by the lingering effects of the economic slowdown, as well as rapidly escalating steel costs during the quarter," Dunham reported.
"While we expect to at least maintain current margins throughout the balance of the year, the spread between our selling prices and steel costs is subject to compression if we cannot continue to pass on our increased steel costs to our customers."
Northwest Pipe Company manufactures welded steel pipe in two business segments. Its Water Transmission Group is a leading supplier of large diameter, high-pressure steel pipe products that are used primarily for transmission of drinking water in the United States and Canada.
Its Tubular Products Group manufactures smaller diameter steel pipe for a wide range of construction, agricultural, energy, industrial and mechanical applications. The Company is headquartered in Portland, Oregon and operates eleven manufacturing facilities across the United States and Mexico.
