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Northwest Pipe in red for quarter, year

Keywords: Tags  Northwest Pipe, oil country tubular goods, OCTG, Scott Montross, Robin Gantt, earnings results, water transmission, tubular products Thorsten Schier

NEW YORK — Northwest Pipe Co. sees challenges continuing after logging further losses as water transmission backlogs remain thin, in addition to pressure on tubular products from imports and additional domestic capacity.

"We expect that the first quarter of ‘14 will remain challenging for both sides of the business," president and chief executive officer Scott Montross said in a call on its earnings results.

In tubular products, comprising its oil country tubular goods (OCTG) and line pipe business, he said the ongoing OCTG anti-dumping case—in which Northwest Pipe is a petitioner—vs. nine countries "has not yet had a significant impact on sales price or volumes. The preliminary decision ... was not favorable."

The decision was announced last month (,Feb. 18).

Northwest Pipe’s tubular product sales totaled $72.3 million in the fourth quarter, up 50.9 percent from the same year-ago period, although prices were 8 percent lower, according to chief financial officer Robin Gantt. Tubular product margins are expected to be at a break-even point for the first quarter.

"Rising coil costs, stagnant pipe prices and still-depressed demand continues to put pressure on energy tubular products," Montross said.

The Vancouver, Wash.-based company in October said it was mulling strategic options for its OCTG business (,
Oct. 1), and Montross said in the call that "we are down the road on a process at this point." He didn’t provide further details.

Meanwhile, water transmission sales are seen remaining at "lower levels for at least the next quarter," with bidding for a couple of large state infrastructure projects yet to close, he said. The segment’s sales were $42.8 million for the quarter ended Dec. 31, off 51.5 percent from $88.2 million a year earlier.

The company recorded a noncash impairment charge of $27.5 million for property and equipment at its Bossier City, La., OCTG facility in the quarter as an "impairment trigger event ... occurred due to increased competition and pricing and volume pressures from imported pipe," Gantt said.

For the full year, water transmission sales fell 15.9 percent to $226.4 million due to continued weakness in municipal markets, while tubular product sales declined 2.4 percent to $249.1 million, driven by a 10-percent drop in average selling prices that was partially offset by a 9-percent gain in tons sold (to 224,300 tons from 206,200 tons).

The company’s water transmission backlog was $103 million at year-end, down 40.1 percent from $173 million for 2012.

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