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Jun 30, 2021
Northwest Pipe Q2 2021 Earnings Report
Net sales increased, but gross profit and net income decreased due to product mix and project pricing pressure.
Key Takeaways
Northwest Pipe Company reported a 5.5% increase in net sales to $73.8 million, driven by higher shipments from Geneva Pipe and Precast. However, gross profit decreased by 26.4% to $9.5 million, and net income decreased to $2.1 million, or $0.21 per diluted share, compared to $6.0 million, or $0.61 per diluted share, in the second quarter of 2020.
Net sales increased 5.5% year-over-year to $73.8 million.
Backlog reached $195 million, with $234 million including confirmed orders.
Net income was $2.1 million, or $0.21 per diluted share.
Refinancing completed, increasing borrowing capacity to $100 million.
Northwest Pipe
Northwest Pipe
Forward Guidance
The company expects steel pressure pipe bidding strength and stability to continue to improve in the second half of the year. The precast concrete business is expected to remain strong during the second half of 2021.
Positive Outlook
- Steel pressure pipe bidding strength and stability are expected to improve in the second half of the year.
- Growing backlog should support improved revenue and margins as we move into the latter part of 2021 and into 2022.
- The precast concrete business is expected to remain strong during the second half of 2021.
- Project bidding began to stabilize and improve during the second quarter.
- Order book remains at a historically high level.
Challenges Ahead
- Steel delivery issues negatively affected production levels.
- Customer-driven delays on existing orders negatively affected production levels.
- Associated bidding pressure negatively affected margins.
- Steel pressure pipe revenue and margin recovery will be slow in the beginning of the second half of 2021 due to steel delivery delays.
- Lingering effect of market panic bidding and the resulting margin pressure.