Vancouver-based Northwest Pipe Co. released its first quarter earnings results Tuesday, outlining a modest increase in net sales during a period that CEO Scott Montross described as challenging due to bidding delays, extreme weather events and steel market supply and delivery disruptions.
Northwest Pipe primarily manufactures steel pipes for water transmission systems, although it has also been branching out into other categories such as precast concrete pipe of the type used in sewer and storm water systems.
Net sales were $72.3 million, a 4.9 percent year-over-year increase, although the company noted in its announcement that the increase primarily came from sales growth through Geneva Pipe and Precast Co., which Northwest Pipe acquired at the start of 2020.
“Ongoing strong performance in pre-cast concrete contributed to our revenue during the first quarter as this business is beginning to serve as a stabilizer to offset periods of choppiness in the steel pressure pipe business,” Montross said in a Tuesday morning conference call with investors and analysts.
Net sales at Northwest Pipe’s legacy facilities declined by 1 percent, which the company attributed to a change in the product mix at facilities resulting in a 1 percent increase in tons produced but a 2 percent decrease in selling price per ton. Gross profit was reported at $8.8 million, an 8.4 percent decrease from the first quarter of 2020, which the company also attributed to the product mix.
The company’s backlog of future projects under contract was approximately $178 million at the end of the quarter, compared with $167 million at the end of 2020. The backlog was $210 million including projects for which the company has been notified that it was the successful bidder, but a formal agreement is not yet in place.
“Despite the delays in bidding that we’ve seen over the last several months related to the COVID pandemic, we’ve been able to continue to maintain a steel pressure pipe backlog over $200 million for the eleventh consecutive quarter,” Montross said, “which we believe remains strong by historical standards.”
He also stressed that the pandemic-related project impacts tended to be delays rather than cancellations, and said the upcoming bidding environment still appears strong — although he said steel market challenges and production delays could continue in the second quarter.
