Vancouver-based Northwest Pipe Company released its first quarter earnings report Thursday, detailing a strong quarter with minimal impact from the COVID-19 pandemic.
“We believe our business is very well-positioned to withstand these challenging circumstances,” CEO Scott Montross said during a Friday conference call with investors and analysts.
Northwest Pipe had to shut down its San Luis Rio plant in Mexico in April due to a local stay-at-home order, but the company’s work has been deemed essential in the United States, exempting its other nine plants — all of which are domestic — from stay-at-home orders.
Northwest Pipe primarily manufactures spiral-welded steel pressure pipe for water transmission systems, typically for large-scale municipal projects. The company has also branched out into other products such as reinforced concrete pipe, which is typically used in stormwater systems.
The closure order in Mexico has been extended through May, Montross said. The plant represented about one-sixth of the Northwest Pipe’s total steel pressure pipe manufacturing capacity, he added, but he stressed that the company has enough capacity at its remaining plants to absorb those operations.
The company’s net sales were $68.9 million, a 10 percent increase over the first quarter of 2019. That increase was primarily due to an $8 million contribution from the operations of Utah-based Geneva Pipe Company, Inc., which Northwest Pipe acquired earlier this year in a $49.4 million transaction.
The legacy company’s revenues saw a slight year-over-year decrease, with a 12 percent decrease in tons produced partially offset by a 10 percent increase in selling price per ton.
Gross profit grew to $9.6 million, compared with $6.6 million in the first quarter of 2019, a 45.8 percent jump that the company attributed to improved pricing in the steel pressure pipe business, as well as the addition of Geneva.
Net income was reported at $600,000, or $0.06 per diluted share, in the first quarter of 2020 compared with $2.2 million in the first quarter of 2019. Adjusted net income – excluding acquisition-related transaction costs and charges, as well as costs stemming from a fire at one of the company’s plants last year – was $3.2 million, or $0.33 per diluted share.
Northwest Pipe’s backlog of orders stood at $224 million as of March 31, the company reported, including orders that have been executed via a binding agreement as well as those that have been confirmed but not yet executed.
The figure marks a small decrease from the record-breaking backlog that the company has had in recent months. The backlog, including confirmed orders, was $242 million on March 31, 2019, and $258 million at the end of December.
Montross said the pandemic caused a reduction in the company’s short-term bidding volume, but the backlog remains at a historically high level. Orders for other products including concrete and precast pipe are also strong, he said.