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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
----------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1996
OR
[ ] 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 (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
12005 N. BURGARD
PORTLAND, OREGON 97203
(Address of principal executive offices and zip code)
503-285-1400
(Registrant's telephone number including area code)
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 [ X ] No [ ]
COMMON STOCK, PAR VALUE $.01 PER SHARE 5,293,624
(Class) (Shares outstanding at July 31, 1996)
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NORTHWEST PIPE COMPANY
FORM 10-Q
INDEX
PART I - FINANCIAL INFORMATION Page
- ------------------------------ ----
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets - June 30, 1996
and December 31, 1995...................................................2
Consolidated Statements of Income - Three Months and Six Months
Ended June 30, 1996 and 1995............................................3
Consolidated Statements of Cash Flows - Three Months and Six Months
Ended June 30, 1996 and 1995............................................4
Notes to Consolidated Financial Statements..............................5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..........................................7
PART II - OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security Holders................11
Item 6. Exhibits and Reports on Form 8-K...................................11
1
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NORTHWEST PIPE COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share amounts)
JUNE 30, DECEMBER 31,
1996 1995
-------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 2,603 $ 857
Accounts receivable, less allowance for doubtful
accounts of $1,312 and $867 34,832 15,984
Costs and estimated earnings in excess of billings
on uncompleted contracts 9,877 9,891
Inventories 15,878 11,409
Prepaid expenses and other 441 835
Deferred income taxes 1,694 694
------- -------
Total current assets 65,325 39,670
Property and equipment, net 29,139 21,198
Property under capital leases, less accumulated
amortization of $545 and $513 2,906 2,939
Deferred income taxes -- --
Other assets, net 1,529 647
------- -------
$98,899 $64,454
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to financial institution $22,131 $ 2,191
Current portion of long-term debt 2,050 2,100
Current portion of capital lease obligations 867 106
Current portion of capital lease obligations due to
related party 120 115
Accounts payable 10,373 9,733
Accrued liabilities 7,249 2,987
------- -------
Total current liabilities 42,790 17,232
Long-term debt, less current portion 10,485 9,110
Capital lease obligations, less current portion 1,808 259
Capital lease obligations due to related party 2,610 2,671
Other long-term debt 630 --
Deferred income taxes 1,453 1,453
------- -------
Total liabilities 59,776 30,725
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, 5,293,624 and 5,258,299 shares issued
and outstanding 53 53
Additional paid-in-capital 22,929 22,903
Retained earnings 16,141 10,773
------- -------
Total stockholders' equity 39,123 33,729
------- -------
$98,899 $64,454
------- -------
------- -------
The accompanying notes are an integral part of these financial statements.
2
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NORTHWEST PIPE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -----------------
1996 1995 1996 1995
-------- ------- --------- -------
Net sales $33,118 $23,741 $ 64,088 $46,525
Cost of sales 25,634 18,932 49,224 36,911
------- ------- --------- -------
Gross profit 7,484 4,809 14,864 9,614
Selling, general and administrative 2,699 1,756 5,065 4,009
------- ------- --------- -------
Income from operations 4,785 3,053 9,799 5,605
Interest expense 394 601 736 1,457
Interest expense to related parties 58 269 116 329
------- ------- --------- -------
Income before income taxes 4,333 2,183 8,947 3,819
Provision for income taxes 1,733 816 3,579 1,426
------- ------- --------- -------
Net income $ 2,600 $ 1,367 $ 5,368 $ 2,393
------- ------- --------- -------
------- ------- --------- -------
Earnings per share $ .47 $ .40 $ .97 $ .71
------- ------- --------- -------
------- ------- --------- -------
Shares used in per share calculations 5,527 3,484 5,527 3,484
------- ------- --------- -------
------- ------- --------- -------
The accompanying notes are an integral part of these financial statements.
3
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NORTHWEST PIPE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
SIX MONTHS ENDED JUNE 30,
-------------------------
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,368 $ 2,393
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 832 654
Provision for doubtful accounts 167 320
Deferred income tax provision -- 443
Changes in current assets and liabilities:
Accounts receivable (7,862) (893)
Costs and estimated earnings in excess of billings on
uncompleted contracts 1,403 (5,203)
Inventories (2,629) 1,209
Prepaid expenses and other 412 256
Accounts payable (2,417) (49)
Accrued liabilities (248) 1,715
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Net cash (provided by) used in operating activities (4,974) 845
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (1,398) (779)
Acquisition, net of cash acquired (2,072) --
Other assets (574) 27
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Net cash used in investing activities (4,044) (752)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in common stock and additional paid in capital 26 --
Payments on long-term debt (1,704) (1,852)
Proceeds under note payable to financial institution 12,555 1,658
Payments on capital lease obligations (56) (41)
Payments on capital lease obligations to related parties (57) (53)
------- -------
Net cash provided by (used in) financing activities 10,764 (288)
------- -------
Net increase (decrease) in cash and cash equivalents 1,746 (195)
Cash and cash equivalents, beginning of period 857 395
------- -------
Cash and cash equivalents, end of period $ 2,603 $ 200
------- -------
------- -------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 789 $ 1,513
Income taxes 3,563 63
SUPPLEMENTAL DISCLOSURE OF NONCASH INFORMATION:
Accrued interest converted to long term debt -- 28
Capital lease obligations incurred -- 41
Acquisition:
Fair value of assets acquired $18,931 $ --
Fair value of liabilities assumed 16,859 --
Cash paid, net 2,072 --
The accompanying notes are an integral part of these financial statements.
4
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NORTHWEST PIPE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements as of and for
the three month and six month periods ended June 30, 1996 and 1995 have been
prepared in conformity with generally accepted accounting principles. The
financial information as of December 31, 1995 is derived from the Northwest
Pipe Company's (the "Company") consolidated financial statements included in
the Annual Report to Shareholders which is incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
Certain information or footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted, pursuant to the rules
and regulations of the Securities and Exchange Commission. In the opinion of
management, the accompanying consolidated financial statements include all
adjustments necessary (which are of a normal and recurring nature) for the
fair presentation of the results of the interim periods presented. The
accompanying consolidated financial statements should be read in conjunction
with the Company's audited financial statements for the year ended December
31, 1995, as incorporated by reference in the Company's Annual Report on Form
10-K for the year ended December 31, 1995.
Operating results for the three month and six month periods ended June 30,
1996 are not necessarily indicative of the results that may be expected for
the entire fiscal year ending December 31, 1996, or any portion thereof.
2. INVENTORIES
Inventories are stated at the lower of cost or market. Finished goods are
costed using standard costs which approximate the first-in, first-out method
of accounting. Inventories of steel coil are costed on an identified cost
basis. Inventories of coating and lining materials, as well as material and
supplies, are costed on an average cost basis.
JUNE 30, DECEMBER 31,
1996 1995
-------- ------------
Finished goods $ 10,174 $ 3,423
Raw materials 4,883 6,665
Materials and supplies 821 1,321
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$ 15,878 $ 11,409
-------- --------
-------- --------
3. PROPERTY AND EQUIPMENT
JUNE 30, DECEMBER 31,
1996 1995
-------- ------------
Land and improvements $ 4,449 $ 2,736
Buildings 11,823 5,915
Equipment 30,079 20,835
Construction in progress 3,041 1,639
-------- --------
49,392 31,125
Less accumulated depreciation (20,253) (9,927)
-------- --------
$ 29,139 $21,198
-------- --------
-------- --------
5
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NORTHWEST PIPE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. ACQUISITION
On May 31, 1996 the Company acquired Thompson Pipe and Steel Company
("Thompson"), a manufacturer of water transmission pipe headquartered in
Denver, Colorado. The acquisition ("the Acquisition") was accomplished
through the Company's purchase of all of the issued and outstanding capital
stock of Thompson from Inter-City Products Corporation, a Canadian
corporation based in Toronto, Canada, and its affiliates ("ICP").
The principal assets acquired by the Company in the Acquisition were steel
pipe manufacturing facilities located in Denver, Colorado and Princeton,
Kentucky. The Kentucky manufacturing facility was closed by Thompson in 1995.
The Company intends to continue operating the manufacturing facility in
Denver, Colorado, and intends to dispose of the manufacturing facility
located in Princeton, Kentucky.
The purchase price paid by the Company for the capital stock of Thompson
was approximately $3.0 million. In addition, the Company purchased from ICP
certain indebtedness of Thompson to ICP in the amount of approximately $4.8
million. The purchase price was determined through arms-length negotiations
between the Company and ICP. The total purchase price amount is subject to
adjustment based on a yet to be agreed upon post closing balance sheet. The
post closing adjustment is expected to result in a reduction of the total
purchase price amount. The funds used to pay the purchase price were
obtained pursuant to the terms of the Company's Amended and Restated
Financing Agreement with the CIT Group/Business Credit, Inc. dated as of May
31, 1996.
The accompanying consolidated financial statements include the results of
operations of Thompson from the date of acquisition. The acquisition was
accounted for using the purchase method of accounting.
The following unaudited pro forma information represents the results of
operation of the Company as if the acquisition had occurred at the beginning
of each period presented:
(UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 30,
-------------------------
1996 1995
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Net revenues $ 74,941 $ 64,467
Net earnings (loss) 1,414 (990)
Earnings (loss) per share .25 (.26)
The unaudited pro forma information does not purport to be indicative of
the results which would actually have been obtained had the acquisition
occurred as of the date of the periods indicated or which may be obtained in
the future.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table compares for the periods indicated, certain financial
information regarding costs and expenses expressed as a percentage of total
net sales and net sales of the Company's segments.
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------- ----------------
1996 1995 1996 1995
---- ---- ---- ----
Net sales
Water transmission 63.0% 58.8% 65.0% 58.1%
Tubular products 37.0 41.2 35.0 41.9
----- ----- ----- -----
Total net sales 100.0 100.0 100.0 100.0
Cost of sales 77.4 79.7 76.8 79.3
----- ----- ----- -----
Gross profit 22.6 20.3 23.2 20.7
Selling, general and administrative expenses 8.1 7.4 7.9 8.6
----- ----- ----- -----
Income from operations 14.5 12.9 15.3 12.1
Interest expense 1.4 3.7 1.3 3.8
----- ----- ----- -----
Income before income taxes 13.1 9.2 14.0 8.3
Provision for income taxes 5.2 3.4 5.6 3.1
----- ----- ----- -----
Net income 7.9% 5.8% 8.4% 5.2%
----- ----- ----- -----
----- ----- ----- -----
Gross profit as a percentage
of segment net sales:
Water transmission 25.6% 21.7% 25.7% 22.3%
Tubular products 17.5 18.3 18.5 18.4
SECOND QUARTER ENDED JUNE 30, 1996 COMPARED TO SECOND QUARTER ENDED
JUNE 30, 1995
SALES. Net sales increased 39.5% to $33.1 million in the second quarter of
1996, from $23.7 million in the second quarter of 1995. Sales increased in
both business segments. Water transmission sales increased 49.6% to $20.9
million in the second quarter of 1996 from $13.9 million in the second
quarter of 1995, primarily as a result of an increase in the number of
projects bid in the Company's geographical market areas and the number of
successful bids in prior periods which resulted in increased production
during the second quarter of 1996. Tubular products sales increased 25.0% to
$12.2 million in the second quarter of 1996 from $9.8 million in the second
quarter of 1995. The increase was primarily the result of increased sales of
well casing products. In the second quarter of 1996, no single customer
accounted for 10% or more of total net sales. In the second quarter of 1995,
sales to Martin K. Eby Construction Co., Inc. represented 15.9% of total net
sales.
GROSS PROFIT. Gross profit increased 55.6% to $7.5 million (22.6% of total
net sales) in the second quarter of 1996 from $4.8 million (20.3% of total
net sales) in the second quarter of 1995. Water transmission gross profit
increased 76.7% to $5.3 million (25.6% of segment net sales) in the second
quarter of 1996 from $3.0 million (21.7% of segment net sales) in the second
quarter of 1995. This increase was primarily attributable to improved margins
resulting from increased plant utilization. Gross profit from tubular
products increased 20.0% to $2.2 million (17.5% of segment net sales) in the
second quarter of 1996 from $1.8 million (18.3% of segment net sales) in the
second quarter of 1995. This increase was primarily attributable to labor
efficiency improvements and increased plant utilization.
7
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 53.7% to $2.7 million (8.1% of total net
sales) in the second quarter of 1996 from $1.8 million (7.4% of total net
sales) in the second quarter of 1995, primarily due to one-time costs
associated with the acquisition of Thompson in May 1996 and the costs of
operating Thompson since that time.
INTEREST EXPENSE. Interest expense decreased 48.1% to $452,000 in the
second quarter of 1996 from $870,000 in the second quarter of 1995. This
resulted from a decrease in average borrowings for much of the second quarter
of 1996, as compared to the second quarter of 1995; a direct result of the
application of the proceeds of the initial public offering in November 1995.
The Company expects interest expense to increase as a result of additional
debt related to the acquisition of Thompson.
INCOME TAXES. The provision for income taxes increased to $1.7 million in
the second quarter of 1996 from $816,000 in the second quarter of 1995. The
provision for income taxes in 1995 reflected the use of net operating loss
carryforwards and tax credits which reduced the Company's tax provision. In
connection with the acquisition of Thompson, the Company acquired net
operating loss carry forwards of approximately $3.0 million which, due to an
"ownership change" as defined under section 382 of the Internal Revenue Code
of 1986, as amended, is subject to an annual limitation of approximately
$200,000.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
SALES. Net sales increased 37.8% to $64.1 million in the first six months
of 1996, from $46.5 million in the first six months of 1995. Sales increased
in both business segments. Water transmission sales increased 54.3% to $41.7
million in the first six months of 1996 from $27.0 million in the first six
months of 1995, primarily as a result of an increase in the number of
projects bid in the Company's geographical market areas and the number of
successful bids in prior periods which resulted in increased production
during the six months ended June 30, 1996. Tubular products sales increased
14.9% to $22.4 million in the first six months of 1996 from $19.5 million in
the first six months of 1995. The increase was primarily the result of
increased sales of well casing products. In the first six months of 1996,
sales to Homer J. Olsen, Inc. represented 12.7% of total net sales. In the
first six months of 1995, sales to Martin K. Eby Construction Co.,
represented 18.1% of total net sales.
GROSS PROFIT. Gross profit increased 54.6% to $14.9 million (23.2% of
total net sales) in the first six months of 1996 from $9.6 million (20.7% of
total net sales) in the first six months of 1995. Water transmission gross
profit increased 77.5% to $10.7 million (25.7% of segment net sales) in the
first six months of 1996 from $6.0 million (22.3% of segment net sales) in
the first six months of 1995. This increase was primarily attributable to
improved margins resulting from increased plant utilization. Gross profit
from tubular products increased 16.0% to $4.2 million (18.5% of segment net
sales) in the first six months of 1996 from $3.6 million (18.4% of segment
net sales) in the first six months of 1995, primarily the result of the of
increased sales volume.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 26.3% to $5.1 million (7.9% of total net
sales) in the first six months of 1996 from $4.0 million (8.6% of total net
sales) in the first six months of 1995. The increase is largely attributable
to the one-time costs associated with the acquisition of Thompson in May,
1996 and to the costs of operating Thompson since that time.
INTEREST EXPENSE. Interest expense decreased 52.3% to $852,000 in the
first six months of 1996 from $1.8 in the first six months of 1995. This
resulted from a decrease in average borrowings outstanding during the first
six months of 1996, as compared to the first six months of 1995; a direct
result of the application of the proceeds of the initial public offering in
November 1995. The Company expects interest expense to increase as a result
of the additional debt related to the acquisition of Thompson.
INCOME TAXES. The provision for income taxes increased to $3.6 million in
the first six months of 1996 from $1.4 in the first six months of 1995. The
provision for income taxes in 1995 reflected the use of net
8
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operating loss carryforwards and tax credits which reduced the Company's tax
provision. In connection with the acquisition of Thompson, the Company
acquired net operating loss carryforwards of approximately $3.0 million
which, due to an "ownership change" as defined under section 382 of the
Internal Revenue Code of 1986, as amended, is subject to an annual limitation
of approximately $200,000.
BACKLOG
The Company had $59.3 million in backlog as of June 30, 1996 compared to
$41.6 million as of June 30, 1995. The Company includes confirmed orders in
backlog, including the balance of projects in process. The Company also
includes projects for which the Company has been notified it is the
successful bidder even though a binding agreement has not been executed.
Projects for which a binding contract has not been executed could be
canceled. Binding orders received by the Company may also be subject to
cancellation, but such cancellations would generally obligate the customer to
pay the costs incurred by the Company if the order is canceled. Backlog
orders as of any particular date may not be indicative of actual operating
results for any fiscal period.
LIQUIDITY AND CAPITAL RESOURCES
The Company finances operations with internally generated funds and
available borrowings under its revolving credit facility. The Company's
working capital increased to $22.5 million at June 30, 1996, from $22.4
million at December 31, 1995.
Net cash used in operating activities in the first six months of 1996 was
$5.0 million. This was primarily a net result of $5.4 million of net income,
an increase in accounts receivable and inventories of $7.9 million and $2.6
million, respectively and a decrease in accounts payable of $2.4 million.
These changes were primarily attributable to the 37.8% sales increase in the
first six months of 1996.
Net cash used in investing activities in the first six months of 1996 was
$4.0 million. The primary uses of funds were the acquisition, net of cash
acquired, of Thompson for $2.1 million and additions to property and
equipment of $1.4 million. (SEE NOTE 4 OF NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS.) The following amounts, which are included in the accompanying
consolidated statement of cash flows as a net amount of $2.1 million, are the
primary effects of the Thompson acquisition on the Company's June 30, 1996
consolidated balance sheet; accounts receivable increased $11.4 million;
property, plant and equipment increased $6.9 million; accounts payable
increased $3.1 million; accrued liabilities increased $4.5 million; long-term
debt increased $3.7 million; note payable to a financial institution
increased $3.3 million; and capital lease obligations increased $2.4 million.
The principal additions to property and equipment in the first six months of
1996 were for a new pipe coating system for the tubular products business
segment and a manufacturing office building. The remaining additions were
projects related to existing operations.
Net cash provided by financing activities was $10.8 million in the first
six months of 1996. The funds were primarily used to support the growth in
sales in the first six months of 1996, to fund the acquisition of Thompson
and to acquire fixed assets.
As a result of the foregoing, the Company's net cash increased $1.7
million to $2.6 million as of June 30, 1996.
At June 30, 1996, the Company had in effect an Amended and Restated Financing
Agreement ("Agreement") with the CIT Group/Business Credit, Inc. dated May
31, 1996. Advances under the Agreement are limited to 85% of eligible
accounts receivable plus 60% of eligible inventory plus 50% of eligible
estimated earnings in excess of billings on uncompleted contracts.
Advances under the Agreement bear interest at prime (8.25 % at June
30, 1996) and also include a LIBOR option. The Agreement includes a line of
credit of $44.0 million, which includes a capital expenditure line of $12.0
million. As of June 30, 1996 the Company had unused capacity of $7.9 million
under the Agreement.
The Company anticipates that its cash flow from operations, and amounts
available under its line of credit facilities will be adequate to fund its
working capital requirements for the next twelve months.
9
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To the extent necessary, the Company may also satisfy capital expenditure
requirements through additional bank borrowings and capital leases if such
resources are available on satisfactory terms. The Company currently has no
significant capital expenditure commitments. The Company is actively seeking
strategic acquisition candidates which will enable the Company to expand in
existing markets, add complementary product lines or participate in new
geographic areas.
On February 7, 1996 the Company's production at its Oregon facility was
interrupted by a flood. Approximately $450,000 in direct costs were incurred.
The company expects to meet with its insurer to negotiate its claim to
recover direct flood costs and the costs associated with business
interruption in the third quarter of this year. The Company does not
anticipate any further negative impact on its operations as a result of the
flood.
As described in the Company's 1995 Annual Report on Form 10-K for the year
ended December 31, 1995, the Company has been identified as a Potentially
Responsible Party ("PRP") for a Superfund Site (the "Site"). PRP's may be
ordered to perform response actions which may include, but are not limited
to, conducting a Remedial Investigation/Feasibility Study, conducting a
Remedial Design/Remedial Action, and other investigation, planning and
remediation activities (collectively, the "Response Activities"). Although
the Company believes that any claims with respect to liability for the costs
of the Response Activities were discharged by the United States Bankruptcy
Court's confirmation of the Company's Plan of Reorganization in December
1986, no assurance can be given that the Company will be successful in
obtaining a judgment from the United States Bankruptcy Court that the
confirmation of the Plan of Reorganization discharged its liability for
environmental claims with respect to the Site or that it will not ultimately
be found to have liability with respect to the Site. In the event the
bankruptcy defense is unsuccessful, the ultimate liability will depend on the
total costs of the Response Activities and the related costs and fees of the
allocation process, the Company's relative contribution of contaminants at
the Site and the financial capability of other PRP's to bear their share of
the liability. Based upon a preliminary estimate of the types of contaminants
found and the number of years each PRP operated on the Site, the Company
believes that, if its bankruptcy defense is unsuccessful, its liability for
Response Activities and the costs and fees of the allocation process would
range from $4.0 million to $6.0 million on an undiscounted basis. This range
is primarily based on the length of time the Company operated at the Site.
The most contaminated portion of the Site was operated as a coating facility
for approximately 30 years. Another of the PRP's operated at the coating
facility for approximately 23 years from 1955 to 1978. The Company operated
the coating facility from 1978 to 1985, or approximately 23% of the time the
coating facility was in operation. Accordingly, the Company has estimated its
allocable share to be 20-25%. However there is no assurance that, if found
responsible, the other PRP's will be able to bear their share of the
liability. If the Company is ultimately found to have liability with respect
to the Site, no assurance can be given that such liability would not have a
material adverse effect on the Company's business, financial condition and
results of operations. The Company, after consultation with its legal
counsel, does not believe that liability with respect to Response Activities
at the Site is "probable" within the meaning of Statement of Financial
Accounting Standards No. 5. Accordingly, no accrual for such liability has
been made in the Company's financial statements. The Company, the U.S.
Environmental Protection Agency and the Department of Environmental Quality
have substantially completed discovery in this matter. On August 8, 1996,
the United States Bankruptcy Court ordered a temporary suspension of the
litigation to provide the parties the opportunity to pursue settlement
options.
10
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PART II - OTHER INFORMATION
---------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -----------------------------------------------------------
The Company's annual meeting of shareholders was held on May 14, 1996. The
following matters were submitted to shareholders for their consideration:
1. The two nominees for director identified in the Company's Proxy
Statement, William R. Tagmyer and Neil R. Thornton, each received 4,857,389
votes and 250 votes were withheld for each of the two nominees.
2. The appointment of Coopers & Lybrand LLP as the Company's independent
auditors for the year ending December 31, 1996 was ratified as follows:
4,821,728 shares were voted in favor, 1,600 shares were voted in
opposition, 27,311 votes abstained and there were no broker non-votes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ----------------------------------------
(a) The exhibits filed as part of this report are listed below:
EXHIBIT NO.
-----------
11 Statement regarding computation of per share earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
A report on Form 8-K was filed with the Commission on June 14, 1996
disclosing the acquisition of Thompson Pipe and Steel Company. No financial
statements were filed as part of this report.
No other reports on Form 8-K were filed during the quarter ended June 30,
1996.
11
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 8, 1996
NORTHWEST PIPE COMPANY
By: /s/ WILLIAM R. TAGMYER
-----------------------
William R. Tagmyer
Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)
By: /s/ BRIAN W. DUNHAM
-----------------------
Brian W. Dunham
Executive Vice President, Chief Financial Officer,
Treasurer and Secretary
(Principal Financial Officer)
12
<PAGE>
EXHIBIT 11.0
NORTHWEST PIPE COMPANY
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------- ----------------
1996 1995 1996 1995
---- ---- ---- ----
Net income as reported $2,600 $1,367 $5,368 $2,393
Reduction in interest as a result of conver-
sion of the Series B and Series C Convert-
ible Subordinated Debentures, net of tax -- 46 -- 90
------ ------ ------ ------
Net income $2,600 $1,413 $5,368 $2,483
------ ------ ------ ------
------ ------ ------ ------
Earnings per share $.47 $.40 $.97 $.71
------ ------ ------ ------
------ ------ ------ ------
Weighted average shares outstanding:
Common stock 5,263 698 5,263 698
Common stock issuable upon exercise of
stock options 264 157 264 157
Conversion of Series B and Series C
Convertible Subordinated Debentures -- 2,629 -- 2,629
------ ------ ------ ------
Shares used in per share calculations 5,527 3,484 5,527 3,484
------ ------ ------ ------
------ ------ ------ ------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements found in the Company's Form 10Q for the three
and six month periods ended June 30, 1996, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,603
<SECURITIES> 0
<RECEIVABLES> 36,144
<ALLOWANCES> 1,312
<INVENTORY> 15,878
<CURRENT-ASSETS> 65,325
<PP&E> 49,392
<DEPRECIATION> 20,253
<TOTAL-ASSETS> 98,899
<CURRENT-LIABILITIES> 42,790
<BONDS> 0
0
0
<COMMON> 53
<OTHER-SE> 39,070
<TOTAL-LIABILITY-AND-EQUITY> 98,899
<SALES> 64,088
<TOTAL-REVENUES> 64,088
<CGS> 49,224
<TOTAL-COSTS> 49,224
<OTHER-EXPENSES> 5,065
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 852
<INCOME-PRETAX> 8,947
<INCOME-TAX> 3,579
<INCOME-CONTINUING> 5,368
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,368
<EPS-PRIMARY> .97
<EPS-DILUTED> .97
</TABLE>
