Vancouver, Washington-based pipe manufacturer Northwest Pipe Company announced Friday that net sales for the year ended December 31, 2012 increased 2.5 percent to $524.5 million compared to $511.7 million in the prior year. Net income for 2012 was $16.2 million compared to $12.7 million in 2011.
Water Transmission segment sales decreased by 1 percent to $269.2 million in 2012 from $271.9 million in 2011. The minor decrease in net sales was due to an 8.9 percent decrease in the average selling price per ton which was offset by an 8.7 percent increase in tons produced.
Sales in the Tubular Products segment increased 6.5 percent to $255.3 million in 2012 from $239.8 million in 2011, driven by a 4 percent increase in average selling price per ton and a 2 percent increase in tons sold from 202,400 tons in 2011 to 206,200 tons in 2012.
"The Water Transmission segment had higher margins in 2012 compared to 2011, although net sales stayed relatively the same. The fourth quarter was the strongest quarter of 2012 in Water Transmission, and was the highest quarter ever in Water Transmission in both net sales and gross profit. This was due, in part, to production on the Lake Texoma project, the largest project in our history," said Scott Montross, President and Chief Executive Officer of the Company.
"As expected, we saw lower margins in the Tubular Products segment in 2012 as compared to 2011 with the competition from increased quantities of imported energy pipe, particularly in the third and fourth quarters. The Tubular Products segment was also negatively impacted by lower drilling activity, as seen in the decrease in rig counts, and lower natural gas prices. In Water Transmission, we anticipate that the first quarter of 2013 will have similar profitability as the fourth quarter of 2012, although with lower net sales. In Tubular Products, we expect to be near breakeven as competition from imports of energy products will continue to negatively impact profitability for the Tubular Products segment in the near term."