nwpx20230930

nwpx20230930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______to _______

Commission File Number: 0-27140

NORTHWEST PIPE COMPANY

(Exact name of registrant as specified in its charter)

Oregon	93-0557988
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

201 NE Park Plaza Drive, Suite 100

Vancouver, Washington 98684

(Address of principal executive offices and Zip Code)

360‑397‑6250

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	NWPX	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock as of October 25, 2023 was 10,014,196 shares.

Table of Contents

NORTHWEST PIPE COMPANY

FORM 10‑Q

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited):

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	2

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022	3

Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	4

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022	5

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	7

Notes to Condensed Consolidated Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3. Quantitative and Qualitative Disclosures About Market Risk	27

Item 4. Controls and Procedures	28

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	29

Item 1A. Risk Factors	29

Item 5. Other Information	29

Item 6. Exhibits	30

Signatures	31

Table of Contents

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

Net sales	$	118,722		$	122,984		$	334,191		$	350,837
Cost of sales		99,428			97,866			275,839			286,853
Gross profit		19,294			25,118			58,352			63,984
Selling, general, and administrative expense		10,237			10,654			33,119			30,149
Operating income		9,057			14,464			25,233			33,835
Other income (expense)		(61	)		11			(224	)		56
Interest expense		(1,162	)		(964	)		(3,722	)		(2,393	)
Income before income taxes		7,834			13,511			21,287			31,498
Income tax expense		2,016			3,555			5,659			8,310
Net income	$	5,818		$	9,956		$	15,628		$	23,188

Net income per share:
Basic	$	0.58		$	1.00		$	1.57		$	2.34
Diluted	$	0.58		$	0.99		$	1.55		$	2.32

Shares used in per share calculations:
Basic		10,014			9,927			9,985			9,909
Diluted		10,107			10,010			10,088			9,988

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2023			2022		2023			2022

Net income	$	5,818		$	9,956	$	15,628		$	23,188

Other comprehensive income (loss), net of tax:
Pension liability adjustment		29			22		88			66
Unrealized gain (loss) on foreign currency forward contracts designated as cash flow hedges		3			158		(98	)		(245	)
Unrealized gain (loss) on interest rate swaps designated as cash flow hedges		(59	)		428		(152	)		661
Other comprehensive income (loss), net of tax		(27	)		608		(162	)		482
Comprehensive income	$	5,791		$	10,564	$	15,466		$	23,670

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollar amounts in thousands, except per share amounts)

	September 30, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	4,058		$	3,681
Trade and other receivables, less allowance for doubtful accounts of $284 and $369		66,997			71,563
Contract assets		105,420			121,778
Inventories		83,093			71,029
Prepaid expenses and other		6,638			10,689
Total current assets		266,206			278,740
Property and equipment, less accumulated depreciation and amortization of $124,175 and $117,856		139,812			133,166
Operating lease right-of-use assets		89,605			93,124
Goodwill		55,504			55,504
Intangible assets, net		32,117			35,264
Other assets		5,844			5,542
Total assets	$	589,088		$	601,340

Liabilities and Stockholders’ Equity
Current liabilities:
Current debt	$	10,756		$	10,756
Accounts payable		31,156			26,968
Accrued liabilities		23,786			30,957
Contract liabilities		17,264			17,456
Current portion of operating lease liabilities		4,899			4,702
Total current liabilities		87,861			90,839
Borrowings on line of credit		58,076			83,696
Operating lease liabilities		86,529			89,472
Deferred income taxes		11,639			11,402
Other long-term liabilities		9,845			7,657
Total liabilities		253,950			283,066

Commitments and contingencies (Note 8)

Stockholders’ equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued or outstanding		-			-
Common stock, $.01 par value, 15,000,000 shares authorized, 10,014,196 and 9,927,360 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		100			99
Additional paid-in-capital		129,308			127,911
Retained earnings		206,681			191,053
Accumulated other comprehensive loss		(951	)		(789	)
Total stockholders’ equity		335,138			318,274
Total liabilities and stockholders’ equity	$	589,088		$	601,340

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollar amounts in thousands)

									Accumulated
					*Additional*				*Other*			*Total*
	*Common Stock*				*Paid-In-*		*Retained*		*Comprehensive*			*Stockholders*’
	*Shares*		*Amount*		*Capital*		*Earnings*		*Loss*			*Equity*

Balances, June 30, 2023		10,014,196	$	100	$	128,562	$	200,863	$	(924	)	$	328,601
Net income		-		-		-		5,818		-			5,818
Other comprehensive income (loss):
Pension liability adjustment, net of tax expense of $0		-		-		-		-		29			29
Unrealized gain on foreign currency forward contracts designated as cash flow hedges, net of tax expense of $1		-		-		-		-		3			3
Unrealized loss on interest rate swaps designated as cash flow hedges, net of tax benefit of $19		-		-		-		-		(59	)		(59	)
Share-based compensation expense		-		-		746		-		-			746
Balances, September 30, 2023		10,014,196	$	100	$	129,308	$	206,681	$	(951	)	$	335,138

									Accumulated
					*Additional*				*Other*			*Total*
	*Common Stock*				*Paid-In-*		*Retained*		*Comprehensive*			*Stockholders*’
	*Shares*		*Amount*		*Capital*		*Earnings*		*Loss*			*Equity*

Balances, June 30, 2022		9,927,360	$	99	$	125,517	$	173,136	$	(1,808	)	$	296,944
Net income		-		-		-		9,956		-			9,956

SEC Form 10-Q filed by Northwest Pipe Company