<PAGE>
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, 1997
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 OF (I.R.S. EMPLOYER
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 6,409,052
(Class) (Shares outstanding at July 31,1997)
<PAGE>
NORTHWEST PIPE COMPANY
FORM 10-Q
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets - June 30, 1997
and December 31, 1996 ................................................. 2
Consolidated Statements of Income - Three Months and Six Months
Ended June 30, 1997 and 1996 .......................................... 3
Consolidated Statements of Cash Flows - Six Months Ended
June 30, 1997 and 1996 .......................................... 4
Notes to Consolidated Financial Statements ............................ 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ............................................ 6
PART II - OTHER INFORMATION
Item 1. Legal Proceedings .............................................. 10
Item 2. Changes in Securities .......................................... 10
Item 4. Submission of Matters to a Vote of Security Holders ............ 10
Item 5. Other Information .............................................. 10
Item 6. Exhibits and Reports on Form 8-K ............................... 10
1
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NORTHWEST PIPE COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share amounts)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,730 $ 4,302
Trade receivables, less allowance for doubtful accounts
of $1,872 and $1,680 19,383 23,222
Costs and estimated earnings in excess of billings on
uncompleted contracts 14,955 10,750
Inventories 24,501 20,484
Prepaid expenses and other 910 1,289
Deferred income taxes 3,051 3,051
-------- --------
Total current assets 67,530 63,098
Property and equipment, less accumulated depreciation
of $21,932 and $20,860 39,211 34,594
Property under capital leases, less accumulated amortization
of $549 and $577 2,850 2,875
Other assets 1,367 857
-------- --------
$ 110,958 $ 101,424
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to financial institution $ 10,295 $ 7,302
Current portion of long-term debt 2,079 2,100
Current portion of capital lease obligations 301 299
Current portion of capital lease obligations due to
related party 130 125
Accounts payable 12,971 9,930
Accrued liabilities 7,000 7,605
-------- --------
Total current liabilities 32,776 27,361
Long-term debt, less current portion 8,896 10,050
Capital lease obligations, less current portion 1,507 1,760
Capital lease obligations due to related party, less
current portion 2,480 2,546
Deferred income taxes 13 13
Other liabilities 240 --
-------- --------
Total liabilities 45,912 41,730
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,
6,404,441 and 6,388,986 shares issued and outstanding 64 64
Additional paid-in-capital 38,429 38,453
Retained earnings 26,553 21,177
-------- --------
Total stockholders' equity 65,046 59,694
-------- --------
$ 110,958 $ 101,424
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
NORTHWEST PIPE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------ -----------------
1997 1996 1997 1996
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Net sales ................................... $ 37,441 $ 33,118 $ 75,198 $ 64,088
Cost of sales ............................... 29,304 25,634 59,551 49,224
-------- -------- -------- --------
Gross profit .............................. 8,137 7,484 15,647 14,864
Selling, general and administrative
expenses .................................. 2,726 2,699 5,866 5,065
-------- -------- -------- --------
Operating income .......................... 5,411 4,785 9,781 9,799
Interest expense ............................ 419 394 708 736
Interest expense to related parties ......... 56 58 112 116
-------- -------- -------- --------
Income before income taxes ................ 4,936 4,333 8,961 8,947
Provision for income taxes .................. 1,974 1,733 3,584 3,579
-------- -------- -------- --------
Net income ................................ $ 2,962 $ 2,600 $ 5,377 $ 5,368
-------- -------- -------- --------
-------- -------- -------- --------
Earnings per share ........................ $ 0.45 $ 0.47 $ 0.81 $ 0.97
-------- -------- -------- --------
-------- -------- -------- --------
Shares used in per share
calculations ............................... 6,607 5,527 6,609 5,527
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE>
NORTHWEST PIPE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1997 1996
--------- --------
<C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................... $ 5,377 $ 5,368
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization .......................... 1,043 832
Decrease in accrued pension obligation ................. (212) --
Provision for doubtful accounts ........................ 192 167
Changes in current assets and liabilities:
Trade receivables ...................................... 3,646 (7,862)
Costs and estimated earnings in excess of billings on
uncompleted contracts ................................... (4,204) 1,403
Inventories ............................................ (4,018) (2,629)
Prepaid expenses and other ............................. 379 412
Accounts payable ....................................... 3,041 (2,417)
Accrued and other liabilities .......................... (198) (248)
-------- --------
Net cash provided by (used in) operating activities ... 5,046 (4,974)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment .................... (5,635) (1,398)
Acquisition, net of cash acquired ...................... -- (2,072)
Other assets ........................................... (506) (574)
-------- --------
Net cash used in investing activities ................ (6,141) (4,044)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock ...................... 16 26
Payments on long-term debt .............................. (1,175) (1,704)
Proceeds under note payable to financial institution .... 2,993 12,555
Payments on capital lease obligations ................... (250) (56)
Payments on capital lease obligations to related party .. (61) (57)
-------- --------
Net cash provided by financing activities ................ 1,523 10,764
-------- --------
Net increase in cash and cash equivalents ................ 428 1,746
Cash and cash equivalents, beginning of period .......... 4,302 857
-------- --------
Cash and cash equivalents, end of period ................ $ 4,730 $ 2,603
-------- --------
-------- --------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest ............................................... $ 790 $ 789
Income taxes ........................................... 2,676 3,563
SUPPLEMENTAL DISCLOSURE OF NONCASH INFORMATION:
Tax benefit of nonqualified stock options exercised ...... $ 102 $ --
Acquisition:
Fair value of assets acquired .......................... $ -- $ 18,931
Fair value of liabilities assumed ...................... -- 16,859
-------- --------
Cash paid, net ........................................ $ -- $ 2,072
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
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NORTHWEST PIPE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements as of and for the three month
and six months periods ended June 30, 1997 and 1996 have been prepared in
conformity with generally accepted accounting principles. The financial
information as of December 31, 1996 is derived from the audited financial
statements presented in the Northwest Pipe Company (the "Company") Annual Report
on Form 10-K for the year ended December 31, 1996. Certain information or
footnote disclosures normally included in 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 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 financial statements should be read in conjunction with the
Company's audited financial statements for the year ended December 31, 1996, as
presented in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
Operating results for the three months and six months ended June 30, 1997 are
not necessarily indicative of the results that may be expected for the entire
fiscal year ending December 31, 1997, or any portion thereof.
2. INVENTORIES
Inventories are stated at the lower of cost or market. Finished goods are stated
at standard cost which approximates the first-in, first-out method of
accounting. Inventories of steel coil are stated at cost on a specific
identification basis. Inventories of coating and lining materials, as well as
materials and supplies, are stated on an average cost basis.
June 30, December 31,
1997 1996
---------- ------------
Finished goods ....................... $ 6,489 $ 6,564
Raw materials ........................ 16,391 12,449
Materials and supplies ............... 1,621 1,471
-------- --------
$ 24,501 $ 20,484
-------- --------
-------- --------
5
<PAGE>
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.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
-------- ------- ------- ------
<S> <C> <C> <C> <C>
Net sales
Water transmission ..................... 60.0 % 63.0 % 64.1 % 65.0 %
Tubular products ....................... 40.0 37.0 35.9 35.0
-------- -------- -------- --------
Total net sales ......................... 100.0 100.0 100.0 100.0
Cost of sales ........................... 78.3 77.4 79.2 76.8
-------- -------- -------- --------
Gross profit .......................... 21.7 22.6 20.8 23.2
Selling, general and administrative
expenses .............................. 7.3 8.1 7.8 7.9
-------- -------- -------- --------
Operating income ........................ 14.4 14.5 13.0 15.3
Interest expense ........................ 1.2 1.4 1.1 1.3
-------- -------- -------- --------
Income before income taxes .............. 13.2 13.1 11.9 14.0
Provision for income taxes .............. 5.3 5.2 4.8 5.6
-------- -------- -------- --------
Net income .............................. 7.9 % 7.9 % 7.1 % 8.4 %
-------- -------- -------- --------
-------- -------- -------- --------
Gross profit as a percentage
of segment net sales:
Water transmission .................... 25.1 % 25.6 % 23.0 % 25.7 %
Tubular products ...................... 16.7 17.5 17.0 18.5
</TABLE>
SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SECOND QUARTER AND
SIX MONTHS ENDED JUNE 30, 1996
SALES. Net sales increased 13.1% to $37.4 million in the second quarter of
1997, from $33.1 million in the second quarter of 1996, and increased 17.3%
to $75.2 million in the first six months of 1997, from $64.1 million in the
first six months of 1996. Sales increased in both business segments.
Water transmission sales increased 7.7% to $22.4 million in the second
quarter of 1997 from $20.9 million in the second quarter of 1996, and
increased 15.7% to $48.2 million in the first six months of 1997 from $41.7
million in the first six months of 1996. The sales increases are primarily
due to acquisitions made in 1996.
Tubular products sales increased 22.2% to $15.0 million in the second quarter
of 1997 from $12.2 million in the second quarter of 1996 and increased 20.4%
to $27.0 million in the first six months of 1997 from $22.4 million in the
first six months of 1996. The increase was primarily a result of higher
sales in certain product lines.
In the first six months of 1997, no single customer accounted for 10% or more
of total net sales. In the first six months of 1996, sales to a single
customer represented 12.7% of total net sales.
GROSS PROFIT. Gross profit increased 8.7% to $8.1 million (21.7% of total net
sales) in the second quarter of 1997 from $7.5 million (22.6% of total net
sales) in the second quarter of 1996 and increased 5.3% to $15.6 million
(20.8% of total net sales) in the first six months of 1997 from $14.9 million
(23.2% of total net sales) in the first six months of 1996.
6
<PAGE>
Water transmission gross profit increased 5.6% to $5.6 million (25.1% of
segment net sales) in the second quarter of 1997 from $5.3 million (25.6% of
segment net sales) in the second quarter of 1996 and increased 3.4% to $11.1
million (23.0% of segment net sales) in the first six months of 1997 from
$10.7 million (25.7% of segment net sales) in the first six months of 1996.
Water transmission gross profit was impacted by lower bidding activity in the
latter part of 1996 and early 1997, as well as competitive pricing.
Gross profit from tubular products increased 16.5% to $2.5 million (16.7% of
segment net sales) in the second quarter of 1997 from $2.2 million (17.5% of
segment net sales) in the second quarter of 1996 and increased 10.2% to $4.6
million (17.0% of segment net sales) in the first six months of 1997 from
$4.2 million (18.5% of segment net sales) in the first six months of 1996.
Tubular products gross profit was impacted by higher sales volume in lower
margin product lines.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 1.0% to $2.7 million (7.3% of total net
sales) in the second quarter of 1997 from $2.7 million (8.1% of total net
sales) in the second quarter of 1996 and increased 15.8% to $5.9 million
(7.8% of total net sales) in the first six months of 1997 from $5.1 million
(7.9% of total net sales) in the first six months of 1996. The increases are
a result of the acquisitions that occurred in 1996.
INTEREST EXPENSE. Interest expense increased 5.1% to $475,000 in the second
quarter of 1997 from $452,000 in the second quarter of 1996 and decreased
3.8% to $820,000 in the first six months of 1997 from $852,000 in the first
six months of 1996.
INCOME TAXES. The company's effective tax rate was approximately 40% for the
first half of 1997 and 1996.
LIQUIDITY AND CAPITAL RESOURCES
The company finances operations with internally generated funds and available
borrowings under its credit agreement. In November 1995, the Company
completed an initial public offering, which resulted in net proceeds to the
Company of approximately $14.6 million. In November 1996, the Company
completed a public offering, which resulted in net proceeds to the Company of
approximately $15.3 million. At June 30, 1997, the Company had cash and cash
equivalents of $4.7 million.
Net cash provided by operating activities in the first half of 1997 was $5.0
million. This was primarily a net result of $5.4 million of net income,
non-cash adjustments for depreciation and amortization of $1.0 million,
increases in costs and estimated earnings in excess of billings on
uncompleted contracts of $4.2 million, inventories of $4.0 million, and
accounts payable of $3.0 million and a decrease in trade receivables of $3.6
million. These changes were principally the result of increased production
and sales levels as a result of acquisitions made in 1996, and the timing of
collections of trade receivables.
Net cash used in investing activities in the first half of 1997 was $6.1
million, which primarily resulted from expenditures related to the new
tubular products mill being installed in the Portland, Oregon plant. The new
mill is scheduled to be operational in the fourth quarter of 1997. The
remaining expenditures were for projects related to existing operations.
Net cash provided by financing activities was $1.5 million in the first half
of 1997, which included the net effect of additional borrowings of $3.0
million under a note payable to a financial institution and the repayment of
$1.5 million of long-term debt and capital lease obligations.
The Company has three significant components of debt: a credit agreement
which includes a line of credit bearing interest at prime (8.50% at June 30,
1997), which expires in 2001, and notes payable to its Senior Lender, bearing
interest at prime plus 0.25%; Industrial Development Bonds in the aggregate
amount of $3.7 million with variable interest rates ranging from 4.10% to
4.50% at June 30, 1997; and capital leases aggregating $4.4 million bearing
interest at rates ranging from 4.50% to 11.25% at June 30, 1997.
7
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At June 30, 1997 the Company had an aggregate of $17.9 million outstanding
under a $44.0 million credit agreement, which expires on April 30, 2001.
Amounts outstanding under the credit agreement at June 30, 1997 include $10.7
million outstanding under a line of credit and $7.2 million outstanding under
two notes payable. Advances under the credit agreement are limited to the
lesser of $44.0 million or the sum of (i) 85% of eligible accounts
receivable, plus (ii) 60% of eligible inventory, plus (iii) 50% of eligible
costs and estimated earnings in excess of billings on uncompleted contracts.
The notes payable are due in aggregate quarterly principal payments of
$450,000 and mature on September 30, 2001. As of June 30, 1997 the current
borrowing base yielded unused capacity of $9.5 million under the credit
agreement. Advances under the credit agreement are collateralized by
substantially all of the Company's assets.
In July 1997 the Company signed a proposal to replace its existing credit
agreement. This proposal is currently under review by the proposed lending
institution. The new agreement, if approved, should be in place in the third
quarter of 1997. The new financing agreement would be unsecured and would bear
interest at lower rates than in the existing credit agreement.
The Company's working capital requirements have increased due to the increase
in the Company's Water Transmission business which is characterized by lengthy
production periods and extended payment cycles. The Company anticipates that
its existing cash and cash equivalents, cash flows expected to be generated by
operations and amounts available under its credit agreement will be adequate to
fund its working capital and capital requirements for at least the next twelve
months.
To the extent necessary, the Company may also satisfy capital requirements
through additional bank borrowings, senior notes, and capital leases if such
resources are available on satisfactory terms. The Company has from time to time
evaluated and continues to evaluate opportunities for acquisitions and expansion
and, consistent with this practice, is currently engaged in discussions with
other parties regarding possible acquisitions. Any such transactions, if
consummated, may use a portion of the Company's working capital or necessitate
additional bank borrowings.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY ("EPA") LITIGATION. As described
in the Company's Annual Report on Form 10-K for the year ended December 31,
1996, the Company has been identified as one of four potentially responsible
parties with potential liability for a Superfund site in Clackamas, Oregon (the
"Site"). In October 1995, the Company filed a complaint seeking a declaratory
judgment from the Bankruptcy Court that any claims with respect to liability for
the costs of the Response Activities at the Site were discharged by the
Bankruptcy Court's confirmation of the Company's Plan of Reorganization (the
"Plan"). In September 1996, the Company entered into mediation with the EPA and
the Oregon Department of Environmental Quality (the "ODEQ") (collectively, the
"Agencies") in an attempt to resolve the matter without incurring the
substantial additional expense of continuing the litigation. As a result of the
mediation process, the Company and the Agencies entered into an agreement in
principle with respect to a proposed settlement of the litigation (the
"Settlement Agreement"). Pursuant to the Settlement Agreement, the Company and
the Agencies prepared a consent decree which embodies the terms of the
Settlement Agreement (the "Consent Decree"). The Consent Decree was entered by
the Bankruptcy Court on July 22, 1997. The Consent Decree will become effective
upon the entry by the United States District Court of a consent decree relating
to the portion of the Site that is vacant (the "Hall Property") which provides
for the transfer of title to the Hall Property to the Agencies. The consent
decree relating to the Hall Property was lodged with the United States District
Court on July 16, 1997, and is presently expected to be entered by the District
Court before August 31, 1997.
Under the terms of the Consent Decree, the Company will promptly pay the
Agencies $1.0 million and deposit an additional $2.3 million in an escrow
account or cash escrow (the "Cash Escrow"), with the interest income on the Cash
Escrow to be distributed to the EPA. The Consent Decree provides that the EPA
will complete construction of the remedial action at the Site in accordance with
its standards and will have the right to sell the Hall Property at any time
during the clean-up process and for one year thereafter. If the Hall Property is
sold by the Agencies, the $2.3 million held in the Cash Escrow will be returned
to the Company. Once construction of the remedial action has been completed as
evidenced by issuance of Remedial Action Reports (or their equivalents) and a
Preliminary Close Out Report, and the Hall Property is usable for a "reasonable
commercial or industrial use,"
8
<PAGE>
the Agencies will have the option to continue to market the Hall Property for
one year. If the Hall Property is not sold during this period, the Company
can elect to have the Hall Property conveyed to it in exchange for the $2.3
million held in the Cash Escrow. If the Company takes ownership of the Hall
Property it will be required to market the Hall Property for another year. If
the Hall Property sells within one year thereafter, fifty percent of any net
proceeds in excess of $2.3 million would be paid to the EPA.
If the Company takes title to the Hall Property, the Agencies will provide a
"Prospective Purchaser Agreement" for use by the Company at its option and for
use by the Company's eligible successors in interest. The EPA would specify that
any eligible prospective purchaser of the Hall Property would not be liable for
any past environmental contamination or any ongoing remediation resulting from
past operations at the Site. If the Company elects not to take ownership of the
Hall Property, the Agencies would retain the $2.3 million held in Cash Escrow.
If the Agencies are unable to complete construction of the remedial action and
clean up soils so that the Hall Property can be used for a reasonable commercial
or industrial use within ten years, they would be required to return the $2.3
million held in the Cash Escrow to the Company. The Consent Decree also contains
covenants not to sue, reservations of rights, and protection for the Company
from third party claims for contribution for environmental clean-up costs at the
Site.
The Company believes that once the Hall Property is available for a "reasonable
commercial or industrial use," it would have a current value in excess of $2.3
million. Consequently, the Company does not believe that the $2.3 million to be
held in the Cash Escrow is "impaired" under generally accepted accounting
principles. Accordingly, the Company will segregate the $2.3 million as a
restricted asset on its consolidated balance sheet when the Cash Escrow is
established. The Company recorded the $1.0 million payment as an expense in the
third quarter of 1996.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
During February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
128") which changes the standards for computing and presenting earnings per
share and supersedes Accounting Principles Board Opinion No. 15, "Earnings per
Share," and Statement of Financial Accounting Standards No. 129, "Disclosure of
Information about Capital Structure" ("SFAS 129"); both of which are effective
for the Company's 1997 fiscal year. The Company's management has studied the
implications of SFAS 128 and SFAS 129, and based on the initial evaluation, does
not expect the adoption to have a material impact on the Company's financial
condition or results of operations.
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" (SFAS 130), which establishes requirements
for disclosure of comprehensive income. The objective of SFAS 130 is to report a
measure of all changes in equity that result from transactions and economic
events other than transactions with owners. Comprehensive income is the total of
net income and all other non-owner changes in equity. SFAS 130 is effective for
fiscal years beginning after December 15, 1997. Reclassification of earlier
financial statements for comparative purposes is required. The Company's
management has studied the implications of SFAS 130, and based on the initial
evaluation, does not expect the adoption to have a material impact on the
Company's financial condition or results of operations.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information set forth in Part I, Item 2 under the caption Liquidity and
Capital Resources -- United States Environmental Protection Agency ("EPA")
Litigation is incorporated herein by reference.
ITEM 2. CHANGES IN SECURITIES
(c) During the second quarter of 1997, the Company sold securities without
registration under the Securities Act of 1933, as amended (the
"Securities Act") upon the exercise of certain stock options granted
under the Company's stock option plans. An aggregate of 716 shares of
Common Stock were issued at an exercise price of $1.00. These
transactions were effected in reliance upon the exemption from
registration under the Securities Act provided by Rule 701 promulgated by
the Securities and Exchange Commission pursuant to authority granted
under Section 3(b) of the Securities Act.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's annual meeting of shareholders was held on May 22, 1997. The
following matters were submitted to shareholders for their consideration:
1. With respect to the two nominees for director identified in the
Company's Proxy Statement; Brian W. Dunham received 5,918,028 votes and
6,143 votes were withheld and Wayne B. Kingsley received 5,916,828 votes
and 7,343 votes were withheld.
2. The amendments to the 1995 Stock Incentive Plan were approved as
follows: 3,834,161 shares were voted in favor, 2,003,387 shares were voted
in opposition, 7,650 votes abstained and there were 78,973 broker
non-votes.
3. The appointment of Coopers & Lybrand LLP as the Company's independent
auditors for the year ending December 31, 1997 was ratified as follows:
5,913,285 shares were voted in favor, 4,956 shares were voted in
opposition, 5,930 votes abstained and there were no broker non-votes.
ITEM 5. OTHER INFORMATION
The information set forth in Part I, Item 2 under the caption Liquidity and
Capital Resources -- United States Environmental Protection Agency ("EPA")
Litigation is incorporated herein by reference.
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
No reports on Form 8-K were filed during the quarter ended June 30, 1997.
10
<PAGE>
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, 1997
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 Operating Officer,
Treasurer and Secretary
(Principal Financial Officer)
11
<PAGE>
EXHIBIT 11.0
NORTHWEST PIPE COMPANY
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------- ----------------
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net income as reported ................... $2,962 $2,600 $5,377 $5,368
------ ------ ------ ------
------ ------ ------ ------
Earnings per share ....................... $0.45 $0.47 $0.81 $0.97
------ ------ ------ ------
------ ------ ------ ------
Weighted average shares outstanding:
Common stock .......................... 6,404 5,263 6,401 5,263
Common stock issuable upon exercise
of stock options .................... 203 264 208 264
------ ------ ------ ------
Shares used in per share calculations .... 6,607 5,527 6,609 5,527
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
<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, 1997, 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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,730
<SECURITIES> 0
<RECEIVABLES> 21,255
<ALLOWANCES> 1,872
<INVENTORY> 24,501
<CURRENT-ASSETS> 67,530
<PP&E> 64,542
<DEPRECIATION> 22,481
<TOTAL-ASSETS> 110,958
<CURRENT-LIABILITIES> 32,776
<BONDS> 0
0
0
<COMMON> 64
<OTHER-SE> 64,982
<TOTAL-LIABILITY-AND-EQUITY> 110,958
<SALES> 75,198
<TOTAL-REVENUES> 75,198
<CGS> 59,551
<TOTAL-COSTS> 59,551
<OTHER-EXPENSES> 5,866
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 820
<INCOME-PRETAX> 8,961
<INCOME-TAX> 3,584
<INCOME-CONTINUING> 5,377
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,377
<EPS-PRIMARY> .81
<EPS-DILUTED> .81
</TABLE>
