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Northwest Pipe Reports Q3 2012 Financial Results and Announces


Northwest Pipe Reports Q3 2012 Financial Results and Announces Conference Call

VANCOUVER, WA -- (Marketwire) -- 11/08/12 -- Northwest Pipe Company (NASDAQ: NWPX) today announced its financial results for the third quarter of 2012. The Company will broadcast its third quarter 2012 earnings conference call on Friday, November 9, 2012, at 9:00 am PST.

Third Quarter 2012 Results

Net sales for the quarter ended September 30, 2012 decreased 17.4% to $115.1 million compared to $139.3 million in the quarter ended September 30, 2011. Gross profit was $11.6 million (10.1% of net sales) in the third quarter of 2012, a decrease from $16.5 million (11.9% of net sales) in the same quarter of 2011. Net income for the third quarter of 2012 was $3.4 million or $0.36 per diluted share compared to $3.3 million or $0.35 per diluted share for the same period in 2011.

Water Transmission sales decreased by 17.5% to $63.5 million in the third quarter of 2012 from $77.0 million in the third quarter of 2011. The decrease in sales was due to a 2% decrease in volume and a 16% decrease in selling price per ton. Water Transmission gross profit decreased to $9.7 million (15.2% of segment net sales) in the third quarter of 2012 from $13.3 million (17.3% of segment net sales) in the same quarter of the prior year.

Tubular Products sales decreased 17.2% to $51.6 million in the third quarter of 2012 from $62.3 million in the third quarter of 2011, driven by an 18% decrease in tons sold from 52,100 tons in the third quarter of 2011 to 42,900 tons in the third quarter of 2012, partially offset by a 2% increase in the average selling price per ton. Tubular Products gross profit decreased by 39.4% to $1.9 million (3.7% of segment net sales) in the third quarter of 2012 from $3.2 million (5.1% of segment net sales) in the same quarter of 2011.

As of September 30, 2012, the backlog of orders in the Water Transmission segment was approximately $241 million. This compared to a backlog of orders of $187 million as of September 30, 2011. 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.

Net i ncome in the third quarter of 2012 was positively impacted by a net benefit from income taxes of $686,000. During the third quarter of 2012, a research and development tax credit study was performed for fiscal years 2010 through 2011. This study resulted in a tax benefit of $1.8 million.

The Company entered into a $165 million Second Amended and Restated Credit Agreement on October 24, 2012 which expires on October 24, 2017. It provides for a revolving loan, swingline loan and letters of credit, and reflects reductions in the interest rates charged on outstanding balances and a reduction in the number of financial covenants as compared to the previous credit agreement.

Outlook

"As expected, we saw lower net sales and margins in the Tubular Products segment in the third quarter of 2012 as compared to the third quarter of 2011 with the competition from increased quantities of imported energy pipe. The Tubular Products segment was also negatively impacted by lower drilling activity, as seen in the decrease in rig counts, and lower natural gas prices," said Richard Roman, President and Chief Executive Officer of the Company. "In July of 2012, we announced the Water Transmission segment was awarded the Lake Texoma project which is the largest project in our history. We started production on the Lake Texoma project in August, and will be producing for this project through the second quarter of 2013. We anticipate that the fourth quarter of 2012 will be the strongest quarter in 2012 in the Water Transmission segment. Consistent with other domestic tubular producers, we expect continued competition from imports of energy products to reduce profitability for the Tubular Products segment in the near term."

Conference Call

The Company will hold its third quarter 2012 earnings conference call on Friday, November 9, 2012 at 9 am PST. The live call can be accessed by dialing 1-800-369-3340 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 for 30 days by dialing 1-888-567-0484 passcode 6301.

About Northwest Pipe Company

Northwest Pipe Company manufactures welded steel pipe and other products in two business groups. Its Water Transmission Group is the leading supplier of large diameter, high-pressure steel pipe products that are used primarily for water infrastructure in North America. Its Tubular Products Group manufactures smaller diameter steel pipe for a wide range of products including energy, construction, agriculture and industrial systems. The Company is headquartered in Vancouver, Washington and has nine manufacturing facilities across the United States and Mexico.

Forward-Looking Statements

Statements in this press release by Richard A. Roman are "forward-looking" statements within the meaning of the Securities Litigation Reform Act of 1995 and Section 21E of the Exchange Act that are based on current expectations, estimates and projections about our business, management's beliefs, and assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements as a result of a variety of important factors. While it is impossible to identify all such factors, those that could cause actual results to differ materially from those estimated by us include changes in demand and market prices for our products, product mix, bidding activity, the timing of customer orders and deliveries, production schedules, the price and availability of raw materials, excess or shortage of production capacity, international trade policy and regulations and other risks discussed in our Annual Report on Form 10-K for the year ended December 31, 2011 and from time to time in our other Securities and Exchange Commission filings and reports. Such forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. If we do update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements.


 
                                                                            
                           NORTHWEST PIPE COMPANY                           
        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)         
     (Dollar and share amounts in thousands, except per share amounts)      
                                                                            
                                                                            
                                  Three Months Ended     Nine Months Ended  
                                     September 30,         September 30,    
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ------
---  ---------  ---------  --------- 
                                                                            
Net sales:                                                                  
  Water Transmission             $  63,487  $  76,953  $ 180,968  $ 210,057 
  Tubular Products                  51,612     62,312    207,347    184,467 
                                 ---------  ---------  ---------  --------- 
    Net sales                      115,099    139,265    388,315    394,524 
                                                                            
Cost of sales:                                                              
  Water Transmission                53,806     63,608    153,439    175,287 
  Tubular Products                  49,693     59,143    193,199    171,284 
                                 ---------  ---------  ---------  --------- 
    Total cost of sales            103,499    122,751    346,638    346,571 
                                                                            
Gross profit:                                                               
  Water Transmission                 9,681     13,345     27,529     34,770 
  Tubular Products                   1,919      3,169     14,148     13,183 
                                 ---------  ---------  ---------  --------- 
    Total gross profit              11,600     16,514     41,677     47,953 
                                                                            
Selling, general, and                                                       
 administrative expense              7,571      6,467     21,499     19,359 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating income (loss):                                                    
  Water Transmission                 6,969     10,747     21,123     28,150 
  Tubular Products                   1,134      2,349     11,981     10,502 
  Corporate                         (4,074)    (3,049)   (12,926)   (10,058)
                                 ---------  ---------  ---------  --------- 
    Operating income                 4,029     10,047     20,178     28,594 
                                                                            
Other expense                           49        950         51      1,347 
Interest income                        (35)        (4)      (122)       (27)
Interest expense                     1,305      2,247      4,471      7,440 
                                 ---------  ---------  ---------  --------- 
                                                                            
Income before income taxes           2,710      6,854     15,778     19,834 
                                                                            
(Benefit from) provision for                                                
 income taxes                         (686)     3,570      4,044      8,641 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net income                       $   3,396  $   3,284  $  11,734  $  11,193 
                                 =========  =========  =========  ========= 
                                                                            
Basic earnings per share         $    0.36  $    0.35  $    1.25  $    1.20 
                                 =========  =========  =========  ========= 
                                                                            
Diluted earnings per share       $    0.36  $    0.35  $    1.24  $    1.20 
                                 =========  =========  =========  ========= 
                                                                            
Shares used in per share                                                    
 calculations:                                                              
  Basic                              9,383      9,346      9,375      9,326 
                                 =========  =========  =========  ========= 
  Diluted                            9,499      9,373      9,458      9,359 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
                           NORTHWEST PIPE COMPANY                           
              CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)             
                        (Dollar amounts in thousands)                       
                                                                            
                                                                            
                                                                            
                                                September 30,   December 31,
                                                     2012           2011    
                                                -------------  -------------
Assets:                                                                     
  Cash and cash equivalents                     $          28  $         182
  Trade and other receivables, net                     70,980         69,894
  Costs and estimated earnings in excess of                                 
   billings on uncompleted contracts                   57,323         38,029
  Inventories                                         131,679        107,169
  Other current assets                                 11,170         11,649
                                                -------------  -------------
    Total current assets                              271,180        226,923
  Property and equipment, net                         150,702        152,846
  Other assets                                         33,158         33,604
                                                -------------  -------------
    Total assets                                $     455,040  $     413,373
                                                =============  =============
                                                                            
Liabilities:                                                                
  Current maturities of long-term debt          $       8,980  $       9,072
  Accounts payable                                     24,421         20,248
  Accrued liabilities                                  51,734         19,175
  Billings in excess of cost and estimated                                  
   earnings on uncompleted contracts                    8,757          7,814
                                                -------------  -------------
    Total current liabilities                          93,892         56,309
  Note payable to financial institution                58,289         62,000
  Other long-term debt, less current maturities        17,810         24,418
  Other long-term liabilities                          30,955         30,379
                                                -------------  -------------
    Total liabilities                                 200,946        173,106
                                                                            
Stockholders' equity                                  254,094        240,267
                                                -------------  -------------
    Total liabilities and stockholders' equity  $     455,040  $     413,373
                                                =============  =============

CONTACT:

Robin Gantt Chief Financial Officer 360-397-6250

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