Despite steel prices rising last year, Vancouver-based Northwest Pipe Company saw its net sales increase by nearly 50 percent in the final quarter of 2021.
At the beginning 2022, steel prices had begun to fall significantly, said Scott Montross, president and chief executive, in a March investor call. During 2021, steel prices had nearly doubled with there not being nearly enough supply to meet demand across the country, Montross said.
Issues also arose from delivery disruptions, a small market and customer-driven production delays of orders that were already in Northwest Pipe’s backlog.
But the company, which specializes in making steel and precast pipes for water transmission systems, was still able to increase sales by double digits at year’s end.
“Based on the current precast-related market strength, we are entering 2022 with solid momentum and expect the precast business to remain strong for the near term,” said Montross in the year-end financial statement.
Northwest Pipe’s net sales rose by 16.6 percent at the end of 2021 to $333.3 million, up from $285.9 million in 2020.
Gross profit fell 12.4 percent in the company’s full-year financial results to $44.3 million, which equated to 13.3 percent of net sales in 2021, down from $50.5 million, or 17.7 percent of net sales, in 2020.
Net income came in at $11.5 million at the end of the year, compared with $19.1 million in 2020.
“This first quarter is one of the larger first quarters we’ve seen in a long time,” Montross said in the March call. “And a lot of this stuff is relatively near term.”
Montross said the company expects to see strong revenue numbers if everything goes as the company expects it will.
“We’ve got a good bit of momentum behind us as we stand right now,” Montross added.
It saw huge sale increases in the fourth quarter, a 47.8 percent increase to $102.5 million in the fourth quarter of 2021 compared with $69.4 million in 2020. Part of that included sales from Northwest Pipe’s October 2021 acquisition of ParkUSA, a precast concrete and steel fabrication-based company.
Montross noted that the company has seen steel prices creep back up because of world events.
“We’ve actually seen steel prices move back up again,” Montross said. Effects could be coming from the conflict in Ukraine, as well as from transportation and transportation costs.
“Those are things we’re going to have to pay close attention to and make sure we’re passing that up through the system,” he said.
Lead times for steel delivery seem stable, Montross said.
“We’re not opposed to high steel prices, we’re just opposed to the volatility in prices that cause us problems with deliveries and things like that,” said Montross.
The company’s shares, which trade on the Nasdaq exchange, closed at $25.29 Tuesday.
