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Sep 30, 2021
Northwest Pipe Q3 2021 Earnings Report
Net sales increased, but gross profit decreased due to product mix changes, while net income decreased compared to the same quarter last year.
Key Takeaways
Northwest Pipe Company reported a 9.0% increase in net sales to $84.6 million for the third quarter of 2021, driven by higher pricing and shipments of precast concrete products and increased selling prices in steel pipe facilities. However, gross profit decreased by 20.8% to $12.4 million due to changes in product mix and project pricing pressure. Net income was $4.9 million, or $0.50 per diluted share, compared to $7.3 million, or $0.73 per diluted share, in the third quarter of 2020.
Net sales increased 9.0% year-over-year to $84.6 million.
Backlog reached $191 million, with $273 million including confirmed orders.
Net income was $4.9 million, or $0.50 per diluted share.
Acquisition of Park Environmental Equipment, LLC (“ParkUSA”) was completed on October 5, 2021.
Northwest Pipe
Northwest Pipe
Forward Guidance
The company expects upward movement of backlog and margins to continue through year end and lead to a stronger start to 2022. The existing precast business is expected to have slightly higher revenue and margins than in the fourth quarter of 2020. Water transmission revenue is expected to be a little lower than third quarter.
Positive Outlook
- ParkUSA acquisition expected to be immediately accretive and provide organic growth opportunities.
- Existing precast and ParkUSA’s order books are both at historically high levels.
- Existing precast business is expected to have slightly higher revenue and margins than in the fourth quarter of 2020.
- Upward movement of backlog and margins is expected to continue through year end.
- A stronger start to 2022 is anticipated.
Challenges Ahead
- COVID‑19 related delays continue to push bidding into 2022.
- Water transmission revenue is expected to be a little lower than third quarter.
- Time of the year affected by major holidays and weather events.
- Slower improvement in bidding volume.
- Unknown impacts of external factors.