PORTLAND, Ore., Feb. 19, 2003 -- Northwest Pipe Co. reported its results for the fourth quarter and for the year ended December 31, 2002.
The company reported sales of $266.1 million for the year, a 3.8% decline from 2001. Net income was $9.3 million compared to $11.1 million in 2001. Sales in the fourth quarter were $67.8 million compared to $66.9 million in the fourth quarter of 2001. Net income was $2.3 million, or $0.35 per diluted share, for the fourth quarter of 2002, approximately the same as the fourth quarter of 2001.
The Water Transmission Group - Sales in the Water Transmission Group were $174.5 million for 2002 compared to $180.3 million for 2001. For the fourth quarter of 2002, sales in this Group were $44.7 million compared to $47.9 million for the fourth quarter of 2001. Water Transmission's gross profit was $10.6 million, or 23.6% of sales for the fourth quarter of 2002, compared to $11.0 million, or 23.0% of sales in the fourth quarter of 2001.
"Water Transmission sales were slightly down due to slow bidding activity which resulted in lower production levels at some of our facilities," said Brian Dunham, chief executive officer. Many projects scheduled to bid in the fourth quarter of 2002 were delayed into 2003. This lower bidding activity resulted in the backlog decreasing to $55 million at year end. Bidding activity through January of 2003 continued to be slow. Recently, activity has improved and is expected to continue to improve through the remainder of the year. "We expect softness in our production schedules in the first quarter and into the second quarter due to the delays in the market," noted Dunham. "The project we are announcing today, other current bidding activity, and the anticipated release of previously delayed projects, should result in higher production levels and better financial results later in the year."
The Tubular Products Group - The Tubular Products Group recorded sales of $91.6 million in 2002 compared to $96.2 million last year. This Group's sales were $23.1 million in the fourth quarter of 2002 compared to $19.1 million reported for the fourth quarter last year. Gross profit was $484,000 in the fourth quarter of 2002 compared to $467,000 in the fourth quarter of 2001. Gross profit, as a percent of sales was 2.1% in the fourth quarter of 2002, compared to 2.4% in the fourth quarter last year.
"The Tubular Products Group's volume improved significantly over the fourth quarter of last year," said Dunham. "Based on current booking levels and our forecasts, we expect Tubular Products to consistently generate higher sales in 2003 than were recorded in 2002. Steel costs, however, will continue to be an issue for the next several months. While current steel costs have declined, we still have high cost steel in inventory. After we work through this inventory, we expect improved margins as long as demand continues to improve."
Major New Order - Northwest Pipe received a letter of intent from RCI Construction Group to install the company's products in the Tacoma Department of Public Utilities Second Supply Line. This project includes approximately eight miles of large diameter pipe that will supply drinking water to the city of Tacoma, Washington. Northwest Pipe expects to begin producing this $12 million order in the second quarter at its Portland, Oregon Division and complete delivery in the first quarter of 2004. "This project certainly helps solidify the production schedule at our Portland division," said Dunham. "This is the first major project of the year. We expect to see more large projects across the country in the next few months."
Addition to Board of Directors - Northwest Pipe also announced the appointment of Richard A. Roman to its Board of Directors. Roman is the chief operating officer of Columbia Ventures Company, a privately owned company with interests in basic materials, metals processing and finishing, and telecommunications with operations in the United States, Iceland and Mexico. Roman was formerly a partner in the CPA firm of Coopers & Lybrand and brings significant financial, operational and international experience to the company's board.
About Northwest Pipe - 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.
