nwpx20220930

nwpx20220930_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, 2022

☐	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 November 1, 2022 was 9,927,360 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, 2022 and 2021	2

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 and 2021	3

Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	4

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021	5

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	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	28

Item 4. Controls and Procedures	28

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	29

Item 1A. Risk Factors	29

Item 6. Exhibits	29

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,
	2022			2021			2022			2021

Net sales	$	122,984		$	84,643		$	350,837		$	230,766
Cost of sales		97,866			72,280			286,853			200,090
Gross profit		25,118			12,363			63,984			30,676
Selling, general, and administrative expense		10,654			5,562			30,149			17,729
Operating income		14,464			6,801			33,835			12,947
Other income		11			171			56			260
Interest expense		(964	)		(112	)		(2,393	)		(687	)
Income before income taxes		13,511			6,860			31,498			12,520
Income tax expense		3,555			1,914			8,310			3,268
Net income	$	9,956		$	4,946		$	23,188		$	9,252

Net income per share:
Basic	$	1.00		$	0.50		$	2.34		$	0.94
Diluted	$	0.99		$	0.50		$	2.32		$	0.93

Shares used in per share calculations:
Basic		9,927			9,871			9,909			9,849
Diluted		10,010			9,921			9,988			9,918

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,
	2022		2021		2022			2021

Net income	$	9,956	$	4,946	$	23,188		$	9,252

Other comprehensive income (loss), net of tax:
Pension liability adjustment		22		29		66			87
Unrealized gain (loss) on foreign currency forward contracts designated as cash flow hedges		158		25		(245	)		73
Unrealized gain on interest rate swap designated as cash flow hedge		428		-		661			-
Other comprehensive income, net of tax		608		54		482			160
Comprehensive income	$	10,564	$	5,000	$	23,670		$	9,412

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, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	3,706		$	2,997
Trade and other receivables, less allowance for doubtful accounts of $498 and $503		73,975			52,664
Contract assets		117,260			107,170
Inventories		71,578			59,651
Prepaid expenses and other		4,326			5,744
Total current assets		270,845			228,226
Property and equipment, less accumulated depreciation and amortization of $115,377 and $106,957		124,228			121,266
Operating lease right-of-use assets		94,166			98,507
Goodwill		55,504			53,684
Intangible assets, net		36,334			39,376
Other assets		5,400			6,620
Total assets	$	586,477		$	547,679

Liabilities and Stockholders’ Equity
Current liabilities:
Current debt	$	3,525		$	-
Accounts payable		40,444			32,267
Accrued liabilities		32,561			24,498
Contract liabilities		16,243			2,623
Current portion of operating lease liabilities		4,725			4,704
Total current liabilities		97,498			64,092
Borrowings on line of credit		71,817			86,761
Operating lease liabilities		90,231			93,725
Deferred income taxes		10,982			10,984
Other long-term liabilities		7,272			8,734
Total liabilities		277,800			264,296

Commitments and contingencies (Note 10)

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, 9,927,360 and 9,870,567 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		99			99
Additional paid-in-capital		126,686			125,062
Retained earnings		183,092			159,904
Accumulated other comprehensive loss		(1,200	)		(1,682	)
Total stockholders’ equity		308,677			283,383
Total liabilities and stockholders’ equity	$	586,477		$	547,679

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, 2022		9,927,360	$	99	$	125,517	$	173,136	$	(1,808	)	$	296,944
Net income		-		-		-		9,956		-			9,956
Other comprehensive income:
Pension liability adjustment, net of tax expense of $0		-		-		-		-		22			22
Unrealized gain on foreign currency forward contracts designated as cash flow hedges, net of tax benefit of $142		-		-		-		-		158			158
Unrealized gain on interest rate swap designated as cash flow hedge, net of tax expense of $141		-		-		-		-		428			428
Share-based compensation expense		-		-		1,169		-		-			1,169
Balances, September 30, 2022		9,927,360	$	99	$	126,686	$	183,092	$	(1,200	)	$	308,677

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

Balances, June 30, 2021		9,870,567	$	99	$	123,686	$	152,687	$	(1,760	)	$	274,712
Net income		-		-		-		4,946		-			4,946
Other comprehensive income:
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 $8		-		-		-		-		25			25
Share-based compensation expense		-		-		597		-		-			597
Balances, September 30, 2021		9,870,567	$	99	$	124,283	$	157,633	$	(1,706	)	$	280,309

Table of Contents

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY, Continued

(Unaudited)

(Dollar amounts in thousands)

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

Balances, December 31, 2021		9,870,567	$	99	$	125,062	$	159,904	$	(1,682	)	$	283,383
Net income		-		-		-		23,188		-			23,188
Other comprehensive income (loss):
Pension liability adjustment, net of tax expense of $0		-		-		-

SEC Form 10-Q filed by Northwest Pipe Company