Northwest Pipe CEO expects strong 2008
Northwest Pipe Co. (Nasdaq: NWPX) CEO Brian Dunham said he expects strong results for the company, which makes welded steel pipes, fittings and tanks, during 2008.
“Our backlog was at a record-high level of $212 million as of the beginning of the year,” Dunham said. “We expect the total market for 2008 to be a new record high for the company.”
Because of manufacturing delays, the chief executive said the company projects lower sales during the first quarter than the $98.2 million posted in the fourth quarter. Based on bidding activity, Dunham said Northwest expects the second quarter to be stronger than the first quarter and likewise, the second half to be stronger than the first half in 2008.
Before Wednesday’s opening, Northwest Pipe posted fourth-quarter sales of $98.2 million, up from $97.5 million a year earlier. Analysts predicted $94.4 million in revenue. Water transmission sales during the three month period helped offset lower fabricated and tubular product sales.
Quarterly profit declined 7% to $5.6 million, or $0.60 per share, compared with $6 million, or $0.72 per share, during the year-ago period. Wall Street analysts, on average, projected earnings of $0.60 per share.
During the three month period ended Dec. 31, cost of sales edged down to $80.2 million, from $81.3 million a year earlier. The firm ended the quarter with $453.6 million in total assets, from $424.5 million a year earlier.
Selling, general and administrative expenses during the quarter rose to $7.8 million, from $7 million during the prior year’s fourth quarter. CFO Stephanie Welty said she expects selling, general and administrative expenses to be flat to slightly higher during the first quarter of 2008.
Rising steel costs will hurt Northwest’s expenses during 2008. Welty said steel expenses account for about one-third of the firm’s costs for water transmission products and 75% to 80% of the cost for tubular products.
“Steel prices are rising rapidly and our average steel cost has gone from $550 per ton in December to more than $700 per ton for the steel orders we are placing today,” Welty said.
In midday trading, NWPX shares are up 1.5%, or $0.58, at $39.25. Over the last 52 weeks, shares have ranged from $29.54 to $44.37.
