10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2022

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 incorporation or organization)	(I.R.S. Employer Identification No.)

201 NE Park Plaza Drive, Suite 100

Vancouver, Washington 98684

(Address of principal executive offices and Zip Code)

360‑397‑6250

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	NWPX	Nasdaq Global Select Market

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  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).  Yes  ☐    No  ☒

The number of shares outstanding of the registrant’s common stock as of November 1, 2022 was 9,927,360 shares.

NORTHWEST PIPE COMPANY

FORM 10‑Q

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021	2
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 and 2021	3
Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	4
Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021	5
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures About Market Risk	28
Item 4. Controls and Procedures	28
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	29
Item 1A. Risk Factors	29
Item 6. Exhibits	29
Signatures	31

1

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net sales	$	122,984		$	84,643		$	350,837		$	230,766
Cost of sales		97,866			72,280			286,853			200,090
Gross profit		25,118			12,363			63,984			30,676
Selling, general, and administrative expense		10,654			5,562			30,149			17,729
Operating income		14,464			6,801			33,835			12,947
Other income		11			171			56			260
Interest expense		(964	)		(112	)		(2,393	)		(687	)
Income before income taxes		13,511			6,860			31,498			12,520
Income tax expense		3,555			1,914			8,310			3,268
Net income	$	9,956		$	4,946		$	23,188		$	9,252
Net income per share:
Basic	$	1.00		$	0.50		$	2.34		$	0.94
Diluted	$	0.99		$	0.50		$	2.32		$	0.93
Shares used in per share calculations:
Basic		9,927			9,871			9,909			9,849
Diluted		10,010			9,921			9,988			9,918

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022			2021
Net income	$	9,956	$	4,946	$	23,188		$	9,252
Other comprehensive income (loss), net of tax:
Pension liability adjustment		22		29		66			87
Unrealized gain (loss) on foreign currency forward contracts designated as cash flow hedges		158		25		(245	)		73
Unrealized gain on interest rate swap designated as cash flow hedge		428		-		661			-
Other comprehensive income, net of tax		608		54		482			160
Comprehensive income	$	10,564	$	5,000	$	23,670		$	9,412

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollar amounts in thousands, except per share amounts)

	September 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	3,706		$	2,997
Trade and other receivables, less allowance for doubtful accounts of $498 and $503		73,975			52,664
Contract assets		117,260			107,170
Inventories		71,578			59,651
Prepaid expenses and other		4,326			5,744
Total current assets		270,845			228,226
Property and equipment, less accumulated depreciation and amortization of $115,377 and $106,957		124,228			121,266
Operating lease right-of-use assets		94,166			98,507
Goodwill		55,504			53,684
Intangible assets, net		36,334			39,376
Other assets		5,400			6,620
Total assets	$	586,477		$	547,679
Liabilities and Stockholders’ Equity
Current liabilities:
Current debt	$	3,525		$	-
Accounts payable		40,444			32,267
Accrued liabilities		32,561			24,498
Contract liabilities		16,243			2,623
Current portion of operating lease liabilities		4,725			4,704
Total current liabilities		97,498			64,092
Borrowings on line of credit		71,817			86,761
Operating lease liabilities		90,231			93,725
Deferred income taxes		10,982			10,984
Other long-term liabilities		7,272			8,734
Total liabilities		277,800			264,296
Commitments and contingencies (Note 10)
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, 9,927,360 and 9,870,567 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		99			99
Additional paid-in-capital		126,686			125,062
Retained earnings		183,092			159,904
Accumulated other comprehensive loss		(1,200	)		(1,682	)
Total stockholders’ equity		308,677			283,383
Total liabilities and stockholders’ equity	$	586,477		$	547,679

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollar amounts in thousands)

									Accumulated
					Additional				Other			Total
	Common Stock				Paid-In-		Retained		Comprehensive			Stockholders’
	Shares		Amount		Capital		Earnings		Loss			Equity
Balances, June 30, 2022		9,927,360	$	99	$	125,517	$	173,136	$	(1,808	)	$	296,944
Net income		-		-		-		9,956		-			9,956
Other comprehensive income:
Pension liability adjustment, net of tax expense of $0		-		-		-		-		22			22
Unrealized gain on foreign currency forward contracts designated as cash flow hedges, net of tax benefit of $142		-		-		-		-		158			158
Unrealized gain on interest rate swap designated as cash flow hedge, net of tax expense of $141		-		-		-		-		428			428
Share-based compensation expense		-		-		1,169		-		-			1,169
Balances, September 30, 2022		9,927,360	$	99	$	126,686	$	183,092	$	(1,200	)	$	308,677

									Accumulated
					Additional				Other			Total
	Common Stock				Paid-In-		Retained		Comprehensive			Stockholders’
	Shares		Amount		Capital		Earnings		Loss			Equity
Balances, June 30, 2021		9,870,567	$	99	$	123,686	$	152,687	$	(1,760	)	$	274,712
Net income		-		-		-		4,946		-			4,946
Other comprehensive income:
Pension liability adjustment, net of tax expense of $0		-		-		-		-		29			29
Unrealized gain on foreign currency forward contracts designated as cash flow hedges, net of tax expense of $8		-		-		-		-		25			25
Share-based compensation expense		-		-		597		-		-			597
Balances, September 30, 2021		9,870,567	$	99	$	124,283	$	157,633	$	(1,706	)	$	280,309

5

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY, Continued

(Unaudited)

(Dollar amounts in thousands)

										Accumulated
					Additional					Other			Total
	Common Stock				Paid-In-			Retained		Comprehensive			Stockholders’
	Shares		Amount		Capital			Earnings		Loss			Equity
Balances, December 31, 2021		9,870,567	$	99	$	125,062		$	159,904	$	(1,682	)	$	283,383
Net income		-		-		-			23,188		-			23,188
Other comprehensive income (loss):
Pension liability adjustment, net of tax expense of $0		-		-		-			-		66			66
Unrealized loss on foreign currency forward contracts designated as cash flow hedges, net of tax benefit of $83		-		-		-			-		(245	)		(245	)
Unrealized gain on interest rate swap designated as cash flow hedge, net of tax expense of $218		-		-		-			-		661			661
Issuance of common stock under stock compensation plans, net of tax withholdings		56,793		-		(853	)		-		-			(853	)
Share-based compensation expense		-		-		2,477			-		-			2,477
Balances, September 30, 2022		9,927,360	$	99	$	126,686		$	183,092	$	(1,200	)	$	308,677

										Accumulated
					Additional					Other			Total
	Common Stock				Paid-In-			Retained		Comprehensive			Stockholders’
	Shares		Amount		Capital			Earnings		Loss			Equity
Balances, December 31, 2020		9,805,437	$	98	$	123,013		$	148,381	$	(1,866	)	$	269,626
Net income		-		-		-			9,252		-			9,252
Other comprehensive income:
Pension liability adjustment, net of tax expense of $0		-		-		-			-		87			87
Unrealized gain on foreign currency forward contracts designated as cash flow hedges, net of tax expense of $21		-		-		-			-		73			73
Issuance of common stock under stock compensation plans, net of tax withholdings		65,130		1		(1,167	)		-		-			(1,166	)
Share-based compensation expense		-		-		2,437			-		-			2,437
Balances, September 30, 2021		9,870,567	$	99	$	124,283		$	157,633	$	(1,706	)	$	280,309

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Nine Months Ended September 30,
	2022			2021
Cash flows from operating activities:
Net income	$	23,188		$	9,252
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and finance lease amortization		9,321			8,358
Amortization of intangible assets		3,369			947
Deferred income taxes		(3	)		(89	)
Share-based compensation expense		2,477			2,437
Other, net		(305	)		106
Changes in operating assets and liabilities:
Trade and other receivables		(21,588	)		3,181
Contract assets, net		3,531			(35,055	)
Inventories		(11,927	)		(13,813	)
Prepaid expenses and other assets		8,789			6,383
Accounts payable		8,350			6,725
Accrued and other liabilities		315			(2,057	)
Net cash provided by (used in) operating activities		25,517			(13,625	)
Cash flows from investing activities:
Purchases of property and equipment		(11,792	)		(8,126	)
Other investing activities		(288	)		304
Net cash used in investing activities		(12,080	)		(7,822	)
Cash flows from financing activities:
Borrowings on line of credit		121,103			4,720
Repayments on line of credit		(136,047	)		(2,567	)
Borrowings on other debt		3,525			-
Payments on other debt		-			(13,762	)
Payments on finance lease obligations		(409	)		(297	)
Tax withholdings related to net share settlements of equity awards		(853	)		(1,166	)
Other financing activities		(47	)		(220	)
Net cash used in financing activities		(12,728	)		(13,292	)
Change in cash and cash equivalents		709			(34,739	)
Cash and cash equivalents, beginning of period		2,997			37,927
Cash and cash equivalents, end of period	$	3,706		$	3,188
Noncash investing and financing activities:
Accrued property and equipment purchases	$	614		$	756
Accrued consideration in acquisition of business	$	1,820		$	-
Right-of-use assets obtained in exchange for operating lease liabilities	$	26		$	4,669
Right-of-use assets obtained in exchange for finance lease liabilities	$	894		$	855

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

NORTHWEST PIPE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Basis of Presentation

Northwest Pipe Company (collectively with its subsidiaries, the “Company”) is a leading manufacturer of water related infrastructure products, and operates in two segments, Engineered Steel Pressure Pipe (“SPP”) and Precast Infrastructure and Engineered Systems (“Precast”). This segment presentation is consistent with how the Company’s chief operating decision maker, its Chief Executive Officer, evaluates performance of the Company and makes decisions regarding the allocation of resources.

In addition to being the largest manufacturer of engineered steel water pipeline systems in North America, the Company manufactures high-quality precast and reinforced concrete products; water, wastewater, and stormwater equipment; steel casing pipe, bar-wrapped concrete cylinder pipe, and one of the largest offerings of pipeline system joints, fittings, and specialized components. Strategically positioned to meet growing water and wastewater infrastructure needs, the Company provides solution-based products for a wide range of markets under the ParkUSA, Geneva Pipe and Precast, Permalok®, and Northwest Pipe Company lines. The Company is headquartered in Vancouver, Washington, and has 13 manufacturing facilities across North America.

The Condensed Consolidated Financial Statements are expressed in United States Dollars and include the accounts of the Company and its subsidiaries over which the Company exercises control as of the financial statement date. Intercompany accounts and transactions have been eliminated.

Effective in the fourth quarter of 2021, as a result of the acquisition of Park Environmental Equipment, LLC (“ParkUSA”), the Company revised its historical one segment position and identified the new operating segments, SPP and Precast, to align with changes made in its internal management structure and its reporting structure of financial information used to assess performance and allocate resources. See Note 15, “Segment Information” for detailed descriptions of these segments. As a result, certain amounts from the prior year financial statements have been reclassified in order to conform to the current year presentation.

The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. The financial information as of December 31, 2021 is derived from the audited Consolidated Financial Statements presented in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2021 (“2021 Form 10‑K”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission and the accounting standards for interim financial statements. In the opinion of management, the accompanying Condensed Consolidated Financial Statements include all adjustments necessary (which are of a normal and recurring nature) for the fair statement of the results of the interim periods presented. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto together with management’s discussion and analysis of financial condition and results of operations contained in the Company’s 2021 Form 10‑K.

Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2022.

2. Business Combination

On October 5, 2021, the Company completed the acquisition of 100% of Park Environmental Equipment, LLC (ParkUSA) for a purchase price of $90.2 million in cash which is included in the Precast segment for all periods following the acquisition date. ParkUSA is a precast concrete and steel fabrication-based company that develops and manufactures water, wastewater, and environmental solutions. Operations continue with ParkUSA’s previous management and workforce at its three Texas manufacturing facilities located in Houston, Dallas, and San Antonio.

8

 

The following table summarizes the purchase consideration and fair value of the assets acquired and liabilities assumed as of October 5, 2021 (in thousands):

Assets
Cash and cash equivalents	$	278
Trade and other receivables		11,034
Inventories		12,773
Prepaid expenses and other		293
Property and equipment		8,076
Operating lease right-of-use assets		58,301
Intangible assets		31,000
Deferred income taxes		347
Total assets acquired		122,102
Liabilities
Accounts payable		2,029
Accrued liabilities		4,067
Operating lease liabilities		58,301
Total liabilities assumed		64,397
Goodwill		32,519
Total purchase consideration	$	90,224

The tangible and intangible assets acquired and liabilities assumed were recognized based on their estimated fair values on the acquisition date, with the excess purchase consideration recorded as goodwill. As a result of additional information obtained during the measurement period about facts and circumstances that existed as of the acquisition date, the Company recorded measurement period adjustments during the three and nine months ended September 30, 2022 which resulted in a $1.8 million increase in goodwill and purchase consideration related to the settlement of working capital. The measurement period for the ParkUSA acquisition was complete as of September 30, 2022.

The following table summarizes the components of the intangible assets acquired and their estimated useful lives:

	Estimated Useful Life		Fair Value
	(In years)		(In thousands)
Customer relationships		10.0	$	19,800
Trade names and trademarks		10.0		9,600
Patents		21.0		1,300
Backlog		0.6		300
Total intangible assets		10.2	$	31,000

Goodwill arose from the acquisition of an assembled workforce, expansion of product offerings, and management’s industry know-how, and is deductible for tax purposes.

The Company incurred transaction costs associated with this acquisition of $0 and $0.1 million during the three and nine months ended September 30, 2022, respectively and $0.6 million and $0.8 million during the three and nine months ended September 30, 2021, respectively. These transaction costs are included in Selling, general, and administrative expense in the Condensed Consolidated Statements of Operations.

9

 

Unaudited Pro Forma Disclosures

The following unaudited pro forma summary presents the consolidated results of the Company as if the acquisition of ParkUSA had occurred on January 1 of the year prior to the acquisition (in thousands):

	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
Net sales	$	105,345	$	283,005
Net income		2,477		12,247

This unaudited pro forma consolidated financial data is included only for the purpose of illustration and does not necessarily indicate what the operating results would have been if the acquisition of ParkUSA had occurred on January 1 of the year prior to the acquisition. Moreover, this information is not indicative of what the Company’s future operating results will be. The information prior to the acquisition is included based on prior accounting records maintained by ParkUSA. The pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of ParkUSA to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied on January 1 of the year prior to the acquisition. Adjustments also include an increase of interest expense as if the Company’s debt obtained in connection with the acquisition of ParkUSA had been outstanding since January 1 of the year prior to the acquisition. The provision for income taxes has also been adjusted for all periods, based upon the foregoing adjustments to historical results.

3. Inventories

Inventories consist of the following (in thousands):

	September 30, 2022		December 31, 2021
Raw materials	$	52,915	$	44,697
Work-in-process		3,817		3,018
Finished goods		12,646		10,096
Supplies		2,200		1,840
Total inventories	$	71,578	$	59,651

4. Goodwill

The Company has recorded goodwill in connection with its business acquisitions within the Precast reportable segment. The changes in the carrying amount of goodwill for the nine months ended September 30, 2022 were as follows (in thousands):

Goodwill, December 31, 2021	$	53,684
Measurement period adjustment (Note 2)		1,820
Goodwill, September 30, 2022	$	55,504

5. Current Debt

In August 2022, the Company entered into an Interim Funding Agreement (“IFA”) with Wells Fargo Equipment Finance, Inc. (“WFEF”) allowing for aggregate interim funding advances up to $13.5 million of equipment purchased for a new reinforced concrete pipe mill, to be converted into a term loan upon final delivery and acceptance of the financed equipment. The IFA bears interest at the Term Secured Overnight Finance Rate plus 1.75%, requires monthly payments of accrued interest, and grants a security interest in the equipment to WFEF. As of September 30, 2022, the outstanding balance was $3.5 million, which is classified as a current liability since there is not a firm commitment for long-term debt financing.

10

 

6. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date.

The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. These levels are: Level 1 (inputs are quoted prices in active markets for identical assets or liabilities); Level 2 (inputs are other than quoted prices that are observable, either directly or indirectly through corroboration with observable market data); and Level 3 (inputs are unobservable, with little or no market data that exists, such as internal financial forecasts). The Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The following table summarizes information regarding the Company’s financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):

	Total			Level 1		Level 2			Level 3
As of September 30, 2022
Financial assets:
Deferred compensation plan	$	3,410		$	2,902	$	508		$	-
Interest rate swaps		879			-		879			-
Foreign currency forward contracts		1,123			-		1,123			-
Total financial assets	$	5,412		$	2,902	$	2,510		$	-
Financial liabilities:
Foreign currency forward contracts	$	(1,209	)	$	-	$	(1,209	)	$	-
As of December 31, 2021
Financial assets:
Deferred compensation plan	$	4,321		$	3,830	$	491		$	-
Foreign currency forward contracts		17			-		17			-
Total financial assets	$	4,338		$	3,830	$	508		$	-
Financial liabilities:
Foreign currency forward contracts	$	(661	)	$	-	$	(661	)	$	-

The deferred compensation plan assets consist of cash and several publicly traded stock and bond mutual funds, valued using quoted market prices in active markets, classified as Level 1 within the fair value hierarchy, as well as guaranteed investment contracts, valued at principal plus interest credited at contract rates, classified as Level 2 within the fair value hierarchy. Deferred compensation plan assets are included within Other assets in the Condensed Consolidated Balance Sheets.

The foreign currency forward contracts and interest rate swaps are derivatives valued using various pricing models or discounted cash flow analyses that incorporate observable market parameters, such as interest rate yield curves and currency rates, and are classified as Level 2 within the fair value hierarchy. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or the Company. The foreign currency forward contracts and interest rate swaps are presented at their gross fair values. Foreign currency forward contract and interest rate swap assets are included within Prepaid expenses and other and foreign currency forward contract liabilities are included within Accrued liabilities in the Condensed Consolidated Balance Sheets.

The net carrying amounts of cash and cash equivalents, trade and other receivables, accounts payable, accrued liabilities, and borrowings on the line of credit approximate fair value due to the short-term nature of these instruments.

7. Derivative Instruments and Hedging Activities

In the normal course of business, the Company is exposed to interest rate and foreign currency exchange rate fluctuations. Consistent with the Company’s strategy for financial risk management, the Company has established a program that utilizes foreign currency forward contracts and interest rate swaps to offset the risks associated with the effects of these exposures.

11

 

For each derivative entered into in which the Company seeks to obtain cash flow hedge accounting treatment, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking the hedge transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method of measuring ineffectiveness. This process includes linking all derivatives to specific firm commitments or forecasted transactions and designating the derivatives as cash flow hedges. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. The effective portion of these hedged items is reflected in Unrealized gain (loss) on cash flow hedges on the Condensed Consolidated Statements of Comprehensive Income. If it is determined that a derivative is not highly effective, or that it has ceased to be a highly effective hedge, the Company is required to discontinue hedge accounting with respect to that derivative prospectively.

As of September 30, 2022, the total notional amount of the foreign currency forward contracts was $17.8 million (CAD$24.6 million) and $7.3 million (EUR$7.4 million), which included $0.7 million (CAD$1.0 million) of foreign currency forward contracts not designated as cash flow hedges. As of December 31, 2021, the total notional amount of the foreign currency forward contracts was $19.0 million (CAD$24.1 million), and all foreign currency forward contracts were designated as cash flow hedges. As of September 30, 2022, the Company’s foreign currency forward contracts mature at various dates through October 2023 and are subject to an enforceable master netting arrangement.

As of September 30, 2022, the interest rate swap, which effectively converts a portion of the Company’s variable-rate debt to fixed-rate debt, was designated as cash flow hedge. The Company receives floating interest payments monthly based on the Secured Overnight Financing Rate (“SOFR”) and pays a fixed rate of 1.941% to the counterparty. As of September 30, 2022, the total notional amount was $31.7 million, which amortizes ratably on a monthly basis to zero by the April 2024 maturity date.

On August 9, 2022, the Company entered into an interest rate swap transaction which will begin April 3, 2023 at a notional amount of $15.0 million, which will amortize ratably on a monthly basis to zero by the April 2028 maturity date. The Company will receive floating interest payments monthly based on the 30‑day Average SOFR and will pay a fixed rate of 2.96% to the counterparty.

The following table summarizes the gains (losses) recognized on derivatives in the Condensed Consolidated Financial Statements (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022			2021
Foreign currency forward contracts:
Net sales	$	599	$	145	$	841		$	44
Property and equipment		32		-		(95	)		-
Interest rate swaps:
Interest expense		4		-		(78	)		-
Total	$	635	$	145	$	668		$	44

As of September 30, 2022, unrealized pretax gains (losses) on outstanding cash flow hedges in Accumulated other comprehensive loss was $0.3 million, of which $0.4 million, $(1.1) million, and $0.6 million are expected to be reclassified to Net sales, Property and equipment, and Interest expense, respectively, within the next twelve months as a result of underlying hedged transactions also being recorded in these line items. See Note 13, “Accumulated Other Comprehensive Loss” for additional information regarding foreign currency forward contract gains and losses.

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8. Stockholders’ Equity

At-the-Market Offering

On September 2, 2022, the Company entered into an Open Market Sale Agreement (the “At-the-Market Offering”) with Jefferies LLC (“Jefferies”), pursuant to which the Company may issue and sell shares of its common stock, par value $0.01 per share, having aggregate offering sales proceeds of up to $50,000,000 (the “Shares”) from time to time through Jefferies as its sales agent. The Company may sell the Shares in amounts and at times to be determined by the Company from time to time subject to the terms and conditions of the At-the-Market Offering, but it has no obligation to sell any of the Shares under the At-the-Market Offering. The Shares to be sold under the At-the-Market Offering, if any, will be offered and sold pursuant to the Company’s shelf registration statement on Form S‑3 (File No. 333‑249637) filed with the Securities and Exchange Commission, which became effective on November 3, 2020, and the prospectus supplement dated September 2, 2022 filed by the Company. The Company will pay Jefferies a cash commission of up to 3.0% of gross proceeds from the sale of the Shares pursuant to the At-the-Market Offering. The Company has also agreed to provide Jefferies with customary indemnification and contribution rights. No proceeds were raised under the At-the-Market Offering during the three and nine months ended September 30, 2022.

9. Share-based Compensation

The Company has one active stock incentive plan for employees and directors, the 2022 Stock Incentive Plan, which provides for awards of stock options to purchase shares of common stock, stock appreciation rights, restricted and unrestricted shares of common stock, restricted stock units (“RSUs”), and performance share awards (“PSAs”). In addition, the Company has one inactive stock incentive plan, the 2007 Stock Incentive Plan, under which previously granted awards remain outstanding.

The Company recognizes the compensation cost of employee and director services received in exchange for awards of equity instruments based on the grant date estimated fair value of the awards. The Company estimates the fair value of RSUs and PSAs using the value of the Company’s stock on the date of grant. Share-based compensation cost is recognized over the period during which the employee or director is required to provide service in exchange for the award and, as forfeitures occur, the associated compensation cost recognized to date is reversed. For awards with performance-based payout conditions, the Company recognizes compensation cost based on the probability of achieving the performance conditions, with changes in expectations recognized as an adjustment to earnings in the period of change. Any recognized compensation cost is reversed if the conditions are ultimately not met.

The following table summarizes share-based compensation expense recorded (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cost of sales	$	474	$	202	$	822	$	685
Selling, general, and administrative expense		695		395		1,655		1,752
Total	$	1,169	$	597	$	2,477	$	2,437

Restricted Stock Units and Performance Share Awards

The Company’s stock incentive plan provides for equity instruments, such as RSUs and PSAs, which grant the right to receive a specified number of shares over a specified period of time. RSUs and PSAs are service-based awards that vest according to the terms of the grant. PSAs have performance-based payout conditions.

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The following table summarizes the Company’s RSU and PSA activity:

	Number of RSUs and PSAs (1)			Weighted-Average Grant Date Fair Value
Unvested RSUs and PSAs as of December 31, 2021		161,131		$	30.26
RSUs and PSAs granted		116,622			30.68
Unvested RSUs and PSAs canceled		(8,248	)		31.18
RSUs and PSAs vested (2)		(68,581	)		29.29
Unvested RSUs and PSAs as of September 30, 2022		200,924			30.80

(1)	The number of PSAs disclosed in this table are at the target level of 100%.
(2)	For the PSAs vested on March 31, 2022, the actual number of common shares that were issued was determined by multiplying the PSAs at the target level of 100%, as disclosed in this table, by a payout percentage based on the performance-based conditions achieved. The payout percentage was 141% for the 2020-2021 performance period and 93% for the 2021 performance period.

The unvested balance of RSUs and PSAs as of September 30, 2022 includes approximately 149,000 PSAs at the target level of 100%. The vesting of these awards is subject to the achievement of specified performance-based conditions, and the actual number of common shares that will ultimately be issued will be determined by multiplying this number of PSAs by a payout percentage ranging from 0% to 200%.

Based on the estimated level of achievement of the performance targets associated with the PSAs as of September 30, 2022, unrecognized compensation expense related to the unvested portion of the Company’s RSUs and PSAs was $4.6 million, which is expected to be recognized over a weighted-average period of 1.6 years.

Stock Awards

For the nine months ended September 30, 2022 and 2021, stock awards of 11,380 shares and 12,606 shares, respectively, were granted to non-employee directors, which vested immediately upon issuance. The Company recorded compensation expense based on the weighted-average fair market value per share of the awards on the grant date of $30.75 in 2022 and $30.94 in 2021.

10. Commitments and Contingencies

Portland Harbor Superfund Site

In December 2000, a section of the lower Willamette River known as the Portland Harbor Superfund Site was included on the National Priorities List at the request of the United States Environmental Protection Agency (“EPA”). While the Company’s Portland, Oregon manufacturing facility does not border the Willamette River, an outfall from the facility’s stormwater system drains into a neighboring property’s privately owned stormwater system and slip. Also in December 2000, the Company was notified by the EPA and the Oregon Department of Environmental Quality (“ODEQ”) of potential liability under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). A remedial investigation and feasibility study of the Portland Harbor Superfund Site was directed by a group of 14 potentially responsible parties known as the Lower Willamette Group under agreement with the EPA. The EPA finalized the remedial investigation report in February 2016, and the feasibility study in June 2016, which identified multiple remedial alternatives. In January 2017, the EPA issued its Record of Decision selecting the remedy for cleanup at the Portland Harbor Superfund Site, which it believes will cost approximately $1 billion at net present value and 13 years to complete. The EPA has not yet determined who is responsible for the costs of cleanup or how the cleanup costs will be allocated among the more than 150 potentially responsible parties. Because of the large number of potentially responsible parties and the variability in the range of remediation alternatives, the Company is unable to estimate an amount or an amount within a range of costs for its obligation with respect to the Portland Harbor Superfund Site matters, and no further adjustment to the Condensed Consolidated Financial Statements has been recorded as of the date of this filing.

The ODEQ is separately providing oversight of voluntary investigations and source control activities by the Company involving the Company’s site, which are focused on controlling any current “uplands” releases of contaminants into the Willamette River. No liabilities have been established in connection with these investigations because the extent of contamination and the Company’s responsibility for the contamination have not yet been determined.

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Concurrent with the activities of the EPA and the ODEQ, the Portland Harbor Natural Resources Trustee Council (“Trustees”) sent some or all of the same parties, including the Company, a notice of intent to perform a Natural Resource Damage Assessment (“NRDA”) for the Portland Harbor Superfund Site to determine the nature and extent of natural resource damages under CERCLA Section 107. The Trustees for the Portland Harbor Superfund Site consist of representatives from several Northwest Indian Tribes, three federal agencies, and one state agency. The Trustees act independently of the EPA and the ODEQ. The Trustees have encouraged potentially responsible parties to voluntarily participate in the funding of their injury assessments and several of those parties have agreed to do so. In June 2014, the Company agreed to participate in the injury assessment process, which included funding $0.4 million of the assessment. The Company has not assumed any additional payment obligations or liabilities with the participation with the NRDA, nor does the Company expect to incur significant future costs in the resolution of the NRDA.

In January 2017, the Confederated Tribes and Bands of the Yakama Nation, a Trustee until they withdrew from the council in 2009, filed a complaint against the potentially responsible parties including the Company to recover costs related to their own injury assessment and compensation for natural resources damages. The Company does not have sufficient information to determine the likelihood of a loss in this matter or the amount of damages that could be allocated to the Company.

The Company has insurance policies for defense costs, as well as indemnification policies it believes will provide reimbursement for the remediation assessed. However, the Company can provide no assurance that those policies will cover all of the costs which the Company may incur.

All Sites

The Company operates its facilities under numerous governmental permits and licenses relating to air emissions, stormwater runoff, and other environmental matters. The Company’s operations are also governed by many other laws and regulations, including those relating to workplace safety and worker health, principally the Occupational Safety and Health Act and regulations there under which, among other requirements, establish noise and dust standards. The Company believes it is in material compliance with its permits and licenses and these laws and regulations, and the Company does not believe that future compliance with such laws and regulations will have a material adverse effect on its financial position, results of operations, or cash flows.

Other Contingencies and Legal Proceedings

From time to time, the Company is party to a variety of legal actions, including claims, suits, complaints, and investigations arising out of the ordinary course of its business. The Company maintains insurance coverage against potential claims in amounts that are believed to be adequate. To the extent that insurance does not cover legal, defense, and indemnification costs associated with a loss contingency, the Company records accruals when such losses are considered probable and reasonably estimable. The Company believes that it is not presently a party to legal actions, the outcomes of which would have a material adverse effect on its business, financial condition, results of operations, or cash flows.

Commitments

As of September 30, 2022, the Company’s commitments include approximately $7.3 million relating to its investment in a new reinforced concrete pipe mill for which the Company has not yet received the equipment.

Guarantees

The Company has entered into certain letters of credit that total $1.1 million as of September 30, 2022. The letters of credit relate to workers’ compensation insurance.

11. Revenue

The Company manufactures water infrastructure steel pipe products, which are generally made to custom specifications for installation contractors serving projects funded by public water agencies, as well as precast and reinforced concrete products. Generally, each of the Company’s contracts with its customers contains a single performance obligation, as the promise to transfer products is not separately identifiable from other promises in the contract and, therefore, is not distinct.

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SPP revenue for water infrastructure steel pipe products is recognized over time as the manufacturing process progresses because of the Company’s right to payment for work performed to date plus a reasonable profit on cancellations for unique products that have no alternative use to the Company. Revenue is measured by the costs incurred to date relative to the estimated total direct costs to fulfill each contract (cost-to-cost method). Contract costs include all material, labor, and other direct costs incurred in satisfying the performance obligations. The cost of steel material is recognized as a contract cost when the steel is introduced into the manufacturing process. Changes in job performance, job conditions, and estimated profitability, including those arising from contract change orders, contract penalty provisions, foreign currency exchange rate movements, changes in raw materials costs, and final contract settlements may result in revisions to estimates of revenue, costs, and income, and are recognized in the period in which the revisions are determined. Provisions for losses on uncompleted contracts, included in Accrued liabilities, are estimated by comparing total estimated contract revenue to the total estimated contract costs and a loss is recognized during the period in which it becomes probable and can be reasonably estimated.

Revisions in contract estimates resulted in an increase (decrease) in SPP net sales of $0.2 million and $(0.2) million for the three and nine months ended September 30, 2022, respectively, and approximately $0 and $2.1 million for the three and nine months ended September 30, 2021, respectively.

Precast revenue for water infrastructure concrete pipe and precast concrete products is recognized at the time control is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products. All variable consideration that may affect the total transaction price, including contractual discounts, returns, and credits, is included in net sales. Estimates for variable consideration are based on historical experience, anticipated performance, and management’s judgment. The Company’s contracts do not contain significant financing.

The Company does not recognize revenue on a contract until the contract has approval and commitment from both parties, the contract rights and payment terms can be identified, the contract has commercial substance, and its collectability is probable.

Disaggregation of Revenue

The following table disaggregates revenue by recognition over time or at a point in time, as the Company believes it best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Over time (Engineered Steel Pressure Pipe)	$	83,663	$	69,439	$	235,446	$	188,244
Point in time (Precast Infrastructure and Engineered Systems)		39,321		15,204		115,391		42,522
Net sales	$	122,984	$	84,643	$	350,837	$	230,766

Contract Assets and Liabilities

Contract assets primarily represent revenue earned over time but not yet billable based on the terms of the contracts. These amounts will be billed based on the terms of the contracts, which can include certain milestones, partial shipments, or completion of the contracts. Payment terms of amounts billed vary based on the customer, but are typically due within 30 days of invoicing.

Contract liabilities represent advance billings on contracts, typically for steel. The Company recognized revenue that was included in the contract liabilities balance at the beginning of each period of $2.8 million and $2.6 million during the three and nine months ended September 30, 2022, respectively and $1.5 million and $6.2 million during the three and nine months ended September 30, 2021, respectively.

Backlog

Backlog represents the balance of remaining performance obligations under signed contracts for SPP water infrastructure steel pipe products for which revenue is recognized over time. As of September 30, 2022, backlog was $295 million. The Company expects to recognize 25% of the remaining performance obligations in 2022, 52% in 2023, and the balance thereafter.

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12. Income Taxes

The Company files income tax returns in the United States Federal jurisdiction, in a limited number of foreign jurisdictions, and in many state jurisdictions. With few exceptions, the Company is no longer subject to United States Federal, state, or foreign income tax examinations for years before 2018.

The Company recorded income tax expense at an estimated effective income tax rate of 26.3% and 26.4% for the three and nine months ended September 30, 2022, respectively and 27.9% and 26.1% for the three and nine months ended September 30, 2021, respectively. The Company’s estimated effective income tax rates for the three and nine months ended September 30, 2022 and 2021 were primarily impacted by non-deductible permanent differences.

13. Accumulated Other Comprehensive Loss

The following table summarizes changes in the components of Accumulated other comprehensive loss (in thousands). All amounts are net of income tax:

	Pension Liability Adjustment			Unrealized Loss on Foreign Currency Forward Contracts Designated as Cash Flow Hedges			Unrealized Gain on Interest Rate Swap Designated as Cash Flow Hedge		Total
Balances, December 31, 2021	$	(1,487	)	$	(195	)	$	-	$	(1,682	)
Other comprehensive income (loss) before reclassifications		61			(383	)		602		280
Amounts reclassified from Accumulated other comprehensive loss		5			138			59		202
Net current period other comprehensive income (loss)		66			(245	)		661		482
Balances, September 30, 2022	$	(1,421	)	$	(440	)	$	661	$	(1,200	)

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The following table provides additional detail about Accumulated other comprehensive loss components that were reclassified to the Condensed Consolidated Statements of Operations (in thousands):

	Amount reclassified from												Affected line item
	Accumulated Other Comprehensive Loss												in the Condensed
	Three Months Ended						Nine Months Ended						Consolidated
Details about Accumulated Other	September 30,						September 30,						Statements of
Comprehensive Loss Components	2022			2021			2022			2021			Operations
Pension liability adjustment:
Net periodic pension cost:
Service cost	$	(2	)	$	(4	)	$	(5	)	$	(12	)	Cost of sales
		(2	)		(4	)		(5	)		(12	)	Net of tax
Unrealized gain (loss) on foreign currency forward contracts:
Gain (loss) on cash flow hedges		35			(15	)		(56	)		(71	)	Net sales
Loss on cash flow hedges		-			-			(127	)		-		Property and equipment
Associated income tax benefit		22			4			45			18		Income tax expense
		57			(11	)		(138	)		(53	)	Net of tax
Unrealized gain (loss) on interest rate swap:
Gain (loss) on cash flow hedge		4			-			(78	)		-		Interest expense
Associated income tax (expense) benefit		(1	)		-			19			-		Income tax expense
		3			-			(59	)		-		Net of tax
Total reclassifications for the period	$	58		$	(15	)	$	(202	)	$	(65	)

14. Net Income per Share

Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by giving effect to all potential shares of common stock, including stock options, RSUs, and PSAs, to the extent dilutive. Performance-based PSAs are considered dilutive when the related performance conditions have been met assuming the end of the reporting period represents the end of the performance period. In periods with a net loss, all potential shares of common stock are excluded from the computation of diluted net loss per share as the impact would be antidilutive.

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Net income per basic and diluted weighted-average common share outstanding was calculated as follows (in thousands, except per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	9,956	$	4,946	$	23,188	$	9,252
Basic weighted-average common shares outstanding		9,927		9,871		9,909		9,849
Effect of potentially dilutive common shares (1)		83		50		79		69
Diluted weighted-average common shares outstanding		10,010		9,921		9,988		9,918
Net income per common share:
Basic	$	1.00	$	0.50	$	2.34	$	0.94
Diluted	$	0.99	$	0.50	$	2.32	$	0.93

(1) The weighted-average number of antidilutive shares not included in the computation of diluted net income per share was approximately 77,000 for the three months ended September 30, 2021. There were no antidilutive shares for the three and nine months ended September 30, 2022 and the nine months ended September 30, 2021.

15. Segment Information

The operating segments reported below are based on the nature of the products sold and the manufacturing process used by the Company and are the segments of the Company for which separate financial information is available and for which operating results are regularly evaluated by the Company’s chief operating decision maker, its Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance. Management evaluates segment performance based on gross profit. The Company does not allocate selling, general, and administrative expenses, interest, other non-operating income or expense items, or taxes to segments.

The Company’s Engineered Steel Pressure Pipe segment (SPP) manufactures large-diameter, high-pressure steel pipeline systems for use in water infrastructure applications, which are primarily related to drinking water systems. These products are also used for hydroelectric power systems, wastewater systems, and other applications. In addition, SPP makes products for industrial plant piping systems and certain structural applications. SPP has manufacturing facilities located in Adelanto and Tracy, California; St. Louis, Missouri; Portland, Oregon; Saginaw, Texas; Parkersburg, West Virginia; and San Luis Río Colorado, Mexico.

The Company’s Precast Infrastructure and Engineered Systems segment (Precast) manufactures high-quality precast and reinforced concrete products, including manholes, box culverts, vaults, catch basins, oil water separators, pump lift stations, biofiltration, and other environmental and engineered solutions. Precast has manufacturing facilities located in Dallas, Houston, and San Antonio, Texas; and Orem, Salt Lake City, and St. George, Utah.

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The following table disaggregates revenue and gross profit based on the Company’s reportable segments (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales:
Engineered Steel Pressure Pipe	$	83,663	$	69,439	$	235,446	$	188,244
Precast Infrastructure and Engineered Systems		39,321		15,204		115,391		42,522
Total	$	122,984	$	84,643	$	350,837	$	230,766
Gross profit:
Engineered Steel Pressure Pipe	$	14,196	$	8,844	$	32,490	$	22,613
Precast Infrastructure and Engineered Systems		10,922		3,519		31,494		8,063
Total	$	25,118	$	12,363	$	63,984	$	30,676

16. Recent Accounting and Reporting Developments

There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s Condensed Consolidated Financial Statements and disclosures in Notes to Condensed Consolidated Financial Statements, from those disclosed in the Company’s 2021 Form 10‑K.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10‑Q for the quarter ended September 30, 2022 (“2022 Q3 Form 10‑Q”) contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on current expectations, estimates, and projections about our business, management’s beliefs, and assumptions made by management. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “forecasts,” “should,” “could,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements as a result of a variety of important factors. While it is impossible to identify all such factors, those that could cause actual results to differ materially from those estimated by us include:

• changes in demand and market prices for our products;

• product mix;

• bidding activity and order cancelations;

• timing of customer orders and deliveries;

• production schedules;

• price and availability of raw materials;

• excess or shortage of production capacity;

• international trade policy and regulations;

• changes in tariffs and duties imposed on imports and exports and related impacts on us;

• interest rate risk and changes in market interest rates, including the impact on our customers and related demand for our products;

• our ability to identify and complete internal initiatives and/or acquisitions in order to grow our business;

• our ability to effectively integrate Park Environmental Equipment, LLC (“ParkUSA”) and other acquisitions into our business and operations and achieve significant administrative and operational cost synergies and accretion to financial results;

• effects of security breaches, computer viruses, and cybersecurity incidents;

• impacts of U.S. tax reform legislation on our results of operations;

• adequacy of our insurance coverage;

• supply chain challenges;

• labor shortages;

• ongoing military conflicts in Ukraine and related consequences;

• operating problems at our manufacturing operations including fires, explosions, inclement weather, and floods and other natural disasters;

• impacts of pandemics, epidemics, or other public health emergencies, such as coronavirus disease 2019 (“COVID‑19”); and

• other risks discussed in our Annual Report on Form 10‑K for the year ended December 31, 2021 (“2021 Form 10‑K”) and from time to time in our other Securities and Exchange Commission (“SEC”) filings and reports.

Such forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this 2022 Q3 Form 10‑Q. If we do update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements.

Overview

Northwest Pipe Company is a leading manufacturer of water related infrastructure products. In addition to being the largest manufacturer of engineered steel water pipeline systems in North America, we manufacture high-quality precast and reinforced concrete products; water, wastewater, and stormwater equipment; steel casing pipe, bar-wrapped concrete cylinder pipe, and one of the largest offerings of pipeline system joints, fittings, and specialized components. Strategically positioned to meet growing water and wastewater infrastructure needs, we provide solution-based products for a wide range of markets under the ParkUSA, Geneva Pipe and Precast, Permalok®, and Northwest Pipe Company lines. Our diverse team is committed to quality and innovation while demonstrating our core values of accountability, commitment, and teamwork. We are headquartered in Vancouver, Washington, and have 13 manufacturing facilities across North America.

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Our water infrastructure products are sold generally to installation contractors, who include our products in their bids to federal, state, and municipal agencies, privately-owned water companies, or developers for specific projects. We believe our sales are substantially driven by spending on urban growth and new water infrastructure with a recent trend towards spending on water infrastructure replacement, repair, and upgrade. Within the total range of products, our steel pipe tends to fit the larger-diameter, higher-pressure pipeline applications, while our precast concrete products mainly serve stormwater and sanitary sewer systems.

In October 2021 we acquired Park Environmental Equipment, LLC (ParkUSA), a precast concrete and steel fabrication-based company in Texas that develops and manufactures water, wastewater, and environmental solutions. Effective in the fourth quarter of 2021, as a result of the acquisition of ParkUSA, we revised our historical one segment position and identified the new operating segments, Engineered Steel Pressure Pipe (“SPP”) and Precast Infrastructure and Engineered Systems (“Precast”), to align with changes made in our internal management structure and our reporting structure of financial information used to assess performance and allocate resources. For detailed descriptions of these segments, see Note 15, “Segment Information” of the Notes to Condensed Consolidated Financial Statements in Part I – Item 1. “Financial Statements” of this 2022 Q3 Form 10‑Q.

Our Current Economic Environment

Demand for our Precast products is generally influenced by general economic conditions such as housing starts, population growth, interest rates, and rates of inflation. According to the United States Census Bureau, privately-owned housing starts in September 2022 were at a seasonally adjusted annual rate of 1.4 million, compared to a seasonally adjusted annual rate of 1.6 million in June 2022, and the population of the United States is expected to increase by approximately 2 million people in 2022. Additionally, while recent and anticipated future increases in the federal funds rate by the Federal Reserve are expected to temper demand for housing, the immediate impacts have been muted by the demand for housing, stymied by recent labor and commodity shortages currently limiting the supply of new homes.

Our SPP projects are often planned for many years in advance, as we operate that business with a long-term time horizon for which the projects are sometimes part of 50‑year build-out plans. Long-term demand for water infrastructure projects in the United States appears strong. Even though recent demand for engineered steel pressure pipe has improved, a shift to a recessionary economy could strain governmental and water agency budgets and financing which could impact prospects for our business in the medium term. Additionally, we have experienced effects of the current labor shortage at certain manufacturing facilities, for which we are mitigating the impact through the use of overtime and third-party outsourcing as warranted. It is possible that a prolonged shortage of qualified, available workers could have an adverse effect on our business.

Purchased steel typically represents between 25% and 35% of cost of sales, and higher steel costs generally result in higher selling prices and revenue; however, volatile fluctuations in steel markets can affect our business. SPP contracts are generally quoted on a fixed-price basis, and volatile steel markets can result in selling prices that no longer correlate to the cost available at the time of steel purchase. Steel markets have remained volatile through the first three quarters of 2022, with prices dropping significantly in the third quarter. The reduced steel costs have begun and will continue to be realized in our financial results.

Russia’s invasion of Ukraine is considered to be largely responsible for increased fuel costs, increasing our delivery costs. While these costs are generally passed along to the customer, there can be no assurance that all of these increased costs will be recouped, which could be material until world economic forces stabilize. Freight costs represent approximately 5% of cost of sales of our SPP business, for which the risk is more significant due to the long lead times between when an SPP contract is entered and the product is shipped.

Implementation of Enterprise Resource Planning System at ParkUSA

In the third quarter of 2022, we implemented our enterprise resource planning system at the ParkUSA manufacturing facilities. Due primarily to an underinvestment in systems preceding our acquisition, and vastly broader product offerings, this implementation has caused, and may continue to cause, disruption and inefficiencies in ParkUSA’s operations.

Impact of the COVID‑19 Pandemic on Our Business

In March 2020, the World Health Organization declared COVID‑19 a pandemic. The impacts of the COVID‑19 pandemic, and the resurgence of new COVID‑19 virus variants, on global and domestic economic conditions, including the impacts of labor and raw material shortages, the long-term potential to reduce or delay funding of municipal projects, and the continued disruptions to and volatility in the financial markets remain uncertain. While the COVID‑19 pandemic has caused various direct and indirect financial impacts associated with project bidding, execution, and product deliveries over the past couple of years, we remain unable to predict the ultimate impact that the COVID‑19 pandemic may have on our business, future results of operations, financial position, or cash flows. We continue to monitor the impact of the COVID‑19 pandemic on all aspects of our business.

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Results of Operations

The following tables set forth, for the periods indicated, certain financial information regarding costs and expenses expressed in dollars (in thousands) and as a percentage of total net sales.

	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
		$		% of Net Sales				$		% of Net Sales
Net sales:
Engineered Steel Pressure Pipe	$	83,663			68.0	%	$	69,439			82.0	%
Precast Infrastructure and Engineered Systems		39,321			32.0			15,204			18.0
Total net sales		122,984			100.0			84,643			100.0
Cost of sales:
Engineered Steel Pressure Pipe		69,467			56.5			60,595			71.6
Precast Infrastructure and Engineered Systems		28,399			23.1			11,685			13.8
Total cost of sales		97,866			79.6			72,280			85.4
Gross profit:
Engineered Steel Pressure Pipe		14,196			11.5			8,844			10.4
Precast Infrastructure and Engineered Systems		10,922			8.9			3,519			4.2
Total gross profit		25,118			20.4			12,363			14.6
Selling, general, and administrative expense		10,654			8.6			5,562			6.6
Operating income		14,464			11.8			6,801			8.0
Other income		11			-			171			0.2
Interest expense		(964	)		(0.8	)		(112	)		(0.1	)
Income before income taxes		13,511			11.0			6,860			8.1
Income tax expense		3,555			2.9			1,914			2.3
Net income	$	9,956			8.1	%	$	4,946			5.8	%

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	Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
		$		% of Net Sales				$		% of Net Sales
Net sales:
Engineered Steel Pressure Pipe	$	235,446			67.1	%	$	188,244			81.6	%
Precast Infrastructure and Engineered Systems		115,391			32.9			42,522			18.4
Total net sales		350,837			100.0			230,766			100.0
Cost of sales:
Engineered Steel Pressure Pipe		202,956			57.9			165,631			71.8
Precast Infrastructure and Engineered Systems		83,897			23.9			34,459			14.9
Total cost of sales		286,853			81.8			200,090			86.7
Gross profit:
Engineered Steel Pressure Pipe		32,490			9.2			22,613			9.8
Precast Infrastructure and Engineered Systems		31,494			9.0			8,063			3.5
Total gross profit		63,984			18.2			30,676			13.3
Selling, general, and administrative expense		30,149			8.6			17,729			7.7
Operating income		33,835			9.6			12,947			5.6
Other income		56			-			260			0.1
Interest expense		(2,393	)		(0.6	)		(687	)		(0.3	)
Income before income taxes		31,498			9.0			12,520			5.4
Income tax expense		8,310			2.4			3,268			1.4
Net income	$	23,188			6.6	%	$	9,252			4.0	%

Three and Nine Months Ended September 30, 2022 Compared to Three and Nine Months Ended September 30, 2021

Net sales. Net sales increased 45.3% to $123.0 million in the third quarter of 2022 compared to $84.6 million in the third quarter of 2021 and increased 52.0% to $350.8 million in the first nine months of 2022 compared to $230.8 million in the first nine months of 2021.

SPP net sales were $83.7 million in the third quarter of 2022 compared to $69.4 million in the third quarter of 2021 and $235.4 million in the first nine months of 2022 compared to $188.2 million in the first nine months of 2021. The 20.5% increase in the third quarter of 2022 compared to the third quarter of 2021 was driven by a 17% increase in tons produced resulting from changes in project timing and a 3% increase in selling price per ton due to changes in product mix. The 25.1% increase in the first nine months of 2022 compared to the first nine months of 2021 was driven by a 37% increase in selling price per ton due to increased materials costs and changes in product mix, partially offset by a 9% decrease in tons produced resulting from changes in project timing. Bidding activity, backlog, and production levels may vary significantly from period to period affecting sales volumes.

Precast net sales were $39.3 million in the third quarter of 2022 compared to $15.2 million in the third quarter of 2021 and $115.4 million in the first nine months of 2022 compared to $42.5 million in the first nine months of 2021. The 158.6% increase in the third quarter of 2022 compared to the third quarter of 2021 was primarily due to the ParkUSA operations acquired in October 2021, which contributed $20.5 million in net sales. In addition, the segment realized a 23.9% increase in net sales at the pre-existing precast operations due to a 49% increase in selling prices due to the high demand for our concrete products coupled with increased material costs, partially offset by a 17% decrease in volume shipped due to changes in product mix. The 171.4% increase in the first nine months of 2022 compared to the first nine months of 2021 was primarily due to the acquired ParkUSA operations, which contributed $64.4 million in net sales. In addition, the segment realized a 20.0% increase in net sales at the pre-existing precast operations due to a 46% increase in selling prices due to the high demand for our concrete products coupled with increased material costs, partially offset by an 18% decrease in volume shipped due to changes in product mix.

Gross profit. Gross profit increased 103.2% to $25.1 million (20.4% of net sales) in the third quarter of 2022 compared to $12.4 million (14.6% of net sales) in the third quarter of 2021 and increased 108.6% to $64.0 million (18.2% of net sales) in the first nine months of 2022 compared to $30.7 million (13.3% of net sales) in the first nine months of 2021.

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SPP gross profit increased 60.5% to $14.2 million (17.0% of SPP net sales) in the third quarter of 2022 compared to $8.8 million (12.7% of SPP net sales) in the third quarter of 2021 and increased 43.7% to $32.5 million (13.8% of SPP net sales) in the first nine months of 2022 compared to $22.6 million (12.0% of SPP net sales) in the first nine months of 2021. The increase in the third quarter of 2022 compared to the third quarter of 2021 was due to increased production volume and product pricing, while the increase in the first nine months of 2022 compared to the first nine months of 2021 was due entirely to improved product pricing. SPP gross profit in the first nine months of 2022 was reduced, in part, as a result of a $2.0 million product liability settlement reserve recorded in the first quarter.

Precast gross profit increased 210.4% to $10.9 million (27.8% of Precast net sales) in the third quarter of 2022 compared to $3.5 million (23.1% of Precast net sales) in the third quarter of 2021 and increased 290.6% to $31.5 million (27.3% of Precast net sales) in the first nine months of 2022 compared to $8.1 million (19.0% of Precast net sales) in the first nine months of 2021. The increase was due to contributions from the ParkUSA operations, as well as improved pricing at the pre-existing precast operations.

Selling, general, and administrative expense. Selling, general, and administrative expense increased 91.5% to $10.7 million (8.7% of net sales) in the third quarter of 2022 compared to $5.6 million (6.6% of net sales) in the third quarter of 2021 and increased 70.1% to $30.1 million (8.6% of net sales) in the first nine months of 2022 compared to $17.7 million (7.7% of net sales) in the first nine months of 2021. The increase in the third quarter of 2022 compared to the third quarter of 2021 was primarily due to the acquired ParkUSA operations, including $1.3 million in higher compensation-related expense and $0.8 million in higher amortization expense. We also incurred $3.1 million in higher compensation-related expense, $0.2 million in higher travel expense, and $0.5 million in lower professional fees compared to the third quarter of 2021. The increase in the first nine months of 2022 compared to the first nine months of 2021 was primarily due to the acquired ParkUSA operations, including $4.4 million in higher compensation-related expense and $2.4 million in higher amortization expense. We also incurred an additional $4.9 million in higher compensation-related expense and $0.5 million in higher travel expense compared to the first nine months of 2021.

Income taxes. Income tax expense was $3.6 million in the third quarter of 2022 (an effective income tax rate of 26.3%) compared to $1.9 million in the third quarter of 2021 (an effective income tax rate of 27.9%) and was $8.3 million in the first nine months of 2022 (an effective income tax rate of 26.4%) compared to $3.3 million in the first nine months of 2021 (an effective income tax rate of 26.1%). The estimated effective income tax rates for the third quarter of 2022 and 2021 and the first nine months of 2022 and 2021 were impacted by non-deductible permanent differences. The estimated effective income tax rate can change significantly depending on the relationship of permanent income tax differences and tax credits to estimated pre-tax income or loss and the changes in valuation allowances. Accordingly, the comparison of estimated effective income tax rates between periods is not meaningful in all situations.

Liquidity and Capital Resources

Sources and Uses of Cash

Our principal sources of liquidity generally include operating cash flows and the Credit Agreement dated June 30, 2021 with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, and the lenders from time to time party thereto, including the initial sole lender, Wells Fargo (the “Lenders”), as amended by the Incremental Amendment dated October 22, 2021 and the Second Amendment to Credit Agreement dated April 29, 2022 (together, the “Amended Credit Agreement”). From time to time our long-term capital needs may be met through the issuance of long-term debt or additional equity. Our principal uses of liquidity generally include capital expenditures, working capital, organic growth initiatives, acquisitions, and debt service. Information regarding our cash flows for the nine months ended September 30, 2022 and 2021 are presented in our Condensed Consolidated Statements of Cash Flows contained in Part I – Item 1. “Financial Statements” of this 2022 Q3 Form 10‑Q, and are further discussed below. We are actively managing the business to maintain cash flow and believe we have liquidity to meet our anticipated funding requirements and other near-term obligations.

As of September 30, 2022, our working capital (current assets minus current liabilities) was $173.3 million compared to $164.1 million as of December 31, 2021. Cash and cash equivalents totaled $3.7 million and $3.0 million as of September 30, 2022 and December 31, 2021, respectively.

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Fluctuations in SPP working capital accounts result from timing differences between production, shipment, invoicing, and collection, as well as changes in levels of production and costs of materials. We typically have a relatively large investment in working capital, as we generally pay for materials, labor, and other production costs in the initial stages of a project, while payments from our customers are generally received after finished product is delivered. A portion of our revenues are recognized over time as the manufacturing process progresses; therefore, cash receipts typically occur subsequent to when revenue is recognized and the elapsed time between when revenue is recorded and when cash is received can be significant. As such, our payment cycle is a significantly shorter interval than our collection cycle, although the effect of this difference in the cycles may vary by project, and from period to period. As of September 30, 2022, Inventories and Accounts payable included $4.1 million of steel for which we expect to settle a quality claim with the supplier.

As of September 30, 2022, we had $71.8 million of outstanding revolving loan borrowings, $3.5 million of outstanding current debt, $95.0 million of operating lease liabilities, and $2.7 million of finance lease liabilities. As of December 31, 2021, we had $86.8 million of outstanding revolving loan borrowings, $98.4 million of operating lease liabilities, and $2.2 million of finance lease liabilities.

Net Cash Provided by (Used in) Operating Activities

Net cash provided by (used in) operating activities was $25.5 million in the first nine months of 2022 compared to $(13.6) million in the first nine months of 2021. Net income, adjusted for non-cash items, provided $38.0 million of operating cash flow in the first nine months of 2022 compared to $21.0 million of operating cash flow in the first nine months of 2021. The net change in working capital used was $12.5 million of operating cash flow in the first nine months of 2022 compared to $34.6 million of operating cash flow in the first nine months of 2021.

Net Cash Used in Investing Activities

Net cash used in investing activities was $12.1 million in the first nine months of 2022 compared to $7.8 million in the first nine months of 2021. Capital expenditures were $11.8 million in the first nine months of 2022 compared to $8.1 million in the first nine months of 2021, which was primarily for standard capital replacement. We currently expect capital expenditures in 2022 to be approximately $25 million to $26 million, which includes approximately $9 million of investment in our new reinforced concrete pipe mill and the remainder primarily for standard capital replacement.

Net Cash Used in Financing Activities

Net cash used in financing activities was $12.7 million in the first nine months of 2022 compared to $13.3 million in the first nine months of 2021. Net borrowings (repayments) on the line of credit were $(14.9) million in the first nine months of 2022 compared to $2.2 million in the first nine months of 2021. Net borrowings (repayments) on other debt were $3.5 million in the first nine months of 2022 compared to $(13.8) million in the first nine months of 2021.

We anticipate that our existing cash and cash equivalents, cash flows expected to be generated by operations, and additional borrowing capacity under the Amended Credit Agreement and other loans will be adequate to fund our working capital, debt service, and capital expenditure requirements for at least the next twelve months. To the extent necessary, we may also satisfy capital requirements through additional bank borrowings, senior notes, term notes, subordinated debt, and finance and operating leases, if such resources are available on satisfactory terms. We have from time to time evaluated and continue to evaluate opportunities for acquisitions and expansion. Any such transactions, if consummated, may necessitate additional bank borrowings or other sources of funding. As previously discussed, we acquired ParkUSA in October 2021 which was funded primarily by borrowings on the line of credit.

On November 3, 2020, our shelf registration statement on Form S‑3 (Registration No. 333‑249637) covering the potential future sale of up to $150 million of our equity and/or debt securities or combinations thereof, was declared effective by the SEC. This shelf registration statement, which replaced the shelf registration statement on Form S‑3 that expired on September 15, 2020, provides another potential source of capital, in addition to other alternatives already in place. We cannot be certain that funding will be available on favorable terms or available at all. To the extent that we raise additional funds by issuing equity securities, our shareholders may experience significant dilution. As of the date of this 2022 Q3 Form 10‑Q, we have not yet sold any securities under this registration statement, nor do we have an obligation to do so. Please refer to the factors discussed in Part I – Item 1A. “Risk Factors” in our 2021 Form 10‑K.

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On September 2, 2022, we entered into an Open Market Sale Agreement (the “At-the-Market Offering”) with Jefferies LLC (“Jefferies”), pursuant to which we may issue and sell shares of our common stock, par value $0.01 per share, having aggregate offering sales proceeds of up to $50,000,000 (the “Shares”) from time to time through Jefferies as our sales agent. We may sell the Shares in amounts and at times to be determined by us from time to time subject to the terms and conditions of the At-the-Market Offering, but we have no obligation to sell any of the Shares under the At-the-Market Offering. The Shares to be sold under the At-the-Market Offering, if any, will be offered and sold pursuant to our shelf registration statement on Form S‑3 discussed above, and the prospectus supplement dated September 2, 2022 filed by us. We will pay Jefferies a cash commission of up to 3.0% of gross proceeds from the sale of the Shares pursuant to the At-the-Market Offering. We have also agreed to provide Jefferies with customary indemnification and contribution rights. No proceeds were raised under the At-the-Market Offering during the three and nine months ended September 30, 2022.

Credit Agreement

The Amended Credit Agreement provides for a revolving loan, swingline loan, and letters of credit in the aggregate amount of up to $125 million (“Revolver Commitment”). The Amended Credit Agreement will expire, and all obligations outstanding will mature, on June 30, 2024. We may prepay outstanding amounts in our discretion without penalty at any time, subject to applicable notice requirements. As of September 30, 2022 under the Amended Credit Agreement, we had $71.8 million of outstanding revolving loan borrowings, $1.1 million of outstanding letters of credit, and additional borrowing capacity of $52 million. Based on our business plan and forecasts of operations, we expect to have sufficient credit available to support our operations for at least the next twelve months.

Revolving loans under the Amended Credit Agreement bear interest at rates related to, at our option and subject to the provisions of the Amended Credit Agreement, either: (i) Base Rate (as defined in the Amended Credit Agreement) plus the Applicable Margin; (ii) Adjusted Term Secured Overnight Financing Rate (“SOFR”) (as defined in the Amended Credit Agreement) plus the Applicable Margin; or (iii) Adjusted Daily Simple SOFR (as defined in the Amended Credit Agreement) plus the Applicable Margin. The “Applicable Margin” is 1.75% to 2.35%, depending on our Consolidated Senior Leverage Ratio (as defined in the Amended Credit Agreement) and the interest rate option chosen. Interest on outstanding revolving loans is payable monthly. Swingline loans under the Amended Credit Agreement bear interest at the Base Rate plus the Applicable Margin. The Amended Credit Agreement requires the payment of a commitment fee of between 0.30% and 0.40%, based on the amount by which the Revolver Commitment exceeds the average daily balance of outstanding borrowings (as defined in the Amended Credit Agreement). Such fee is payable monthly in arrears. We are also obligated to pay additional fees customary for credit facilities of this size and type.

The letters of credit outstanding as of September 30, 2022 relate to workers’ compensation insurance. Based on the nature of these arrangements and our historical experience, we do not expect to make any material payments under these arrangements.

The Amended Credit Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants, events of default, and indemnification provisions in favor of the Lenders. The negative covenants include restrictions regarding the incurrence of liens and indebtedness, annual capital expenditures, certain investments, acquisitions, and dispositions, and other matters, all subject to certain exceptions. The Amended Credit Agreement requires us to regularly provide financial information to Wells Fargo and to maintain a consolidated senior leverage ratio no greater than 2.50 to 1.00 (subject to certain exceptions) and a minimum consolidated earnings before interest, taxes, depreciation, and amortization (as defined in the Amended Credit Agreement) of at least $31.5 million for the four consecutive fiscal quarters most recently ended. Pursuant to the Amended Credit Agreement, we have also agreed that we will not sell, assign, or otherwise dispose or encumber, any of our owned real property. The occurrence of an event of default could result in the acceleration of the obligations under the Amended Credit Agreement. We were in compliance with our financial covenants as of September 30, 2022. Based on our business plan and forecasts of operations, we believe we will remain in compliance with our financial covenants for the next twelve months.

Our obligations under the Amended Credit Agreement are secured by a senior security interest in substantially all of our and our subsidiaries’ assets.

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Recent Accounting Pronouncements

For a description of recent accounting pronouncements affecting our company, including the dates of adoption and estimated effects on financial position, results of operations, and cash flows, see Note 16, “Recent Accounting and Reporting Developments” of the Notes to Condensed Consolidated Financial Statements in Part I – Item 1. “Financial Statements” of this 2022 Q3 Form 10‑Q.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our Condensed Consolidated Financial Statements included in Part I – Item 1. “Financial Statements” of this 2022 Q3 Form 10‑Q, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our Condensed Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. On an ongoing basis, we evaluate all of our estimates, including those related to revenue recognition, business combinations, inventories, property and equipment, including depreciation and valuation, goodwill, intangible assets, including amortization, share-based compensation, allowance for doubtful accounts, income taxes, and litigation and other contingencies. Actual results may differ from these estimates under different assumptions or conditions.

There have been no significant changes in our critical accounting estimates during the nine months ended September 30, 2022 as compared to the critical accounting estimates disclosed in our 2021 Form 10‑K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a discussion of our market risk associated with commodity prices and foreign currencies, see Part II – Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” of our 2021 Form 10‑K.

Interest Rate Risk

Our debt bears interest at both fixed and variable rates. As of September 30, 2022 and December 31, 2021, we had $75.3 million and $86.8 million, respectively, of variable-rate debt outstanding. We have managed a portion of our variable-rate debt with an interest rate swap agreement to effectively convert a portion of our variable-rate debt to fixed-rate debt. The principal objective of this contract is to reduce the variability of the cash flows in interest payments associated with a portion of our variable-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. We have elected to apply the hedge accounting rules in accordance with authoritative guidance for this contract.

As of September 30, 2022, the total notional amount of the interest rate swap was $31.7 million, which will amortize ratably on a monthly basis to zero by the April 2024 maturity date. We receive floating interest payments monthly based on the SOFR and pay a fixed rate of 1.941% to the counterparty.

Assuming average interest rates and borrowings on variable-rate debt, a hypothetical 1.0%, or 100 basis points, change in interest rates would not have a material impact on our interest expense.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a‑15(e) and 15d‑15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to provide reasonable assurance that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”) and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosures.

In connection with the preparation of this Quarterly Report on Form 10‑Q for the quarter ended September 30, 2022, our management, under the supervision and with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2022. As a result of the assessment, our CEO and CFO have concluded that, as of September 30, 2022, our disclosure controls and procedures were effective.

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As discussed in Note 2, “Business Combination” of the Notes to Condensed Consolidated Financial Statements in Part I – Item 1. “Financial Statements” of this 2022 Q3 Form 10‑Q, we completed the acquisition of 100% of Park Environmental Equipment, LLC (“ParkUSA”) on October 5, 2021. As part of our post-closing integration activities, we are engaged in the process of assessing the internal controls of ParkUSA. We have begun to integrate policies, processes, people, technology, and operations for the post-acquisition combined company, and we will continue to evaluate the impact of any related changes to internal control over financial reporting. As permitted for newly acquired businesses by interpretive guidance issued by the staff of the SEC, management has excluded the internal control over financial reporting of ParkUSA from the evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2022. We have reported the operating results of ParkUSA in our condensed consolidated statements of operations and cash flows from the acquisition date through September 30, 2022. As of September 30, 2022, total assets related to ParkUSA represented approximately 16.7% of our total assets, recorded on a preliminary basis as the measurement period for the business combination remained open as of September 30, 2022. Revenues from ParkUSA represented approximately 18.4% of our total consolidated revenues for the nine months ended September 30, 2022.

Changes in Internal Control over Financial Reporting

Except for changes in internal controls that we have made related to the integration of ParkUSA into the post-acquisition combined company, the most noteworthy of which are those controls impacted by the implementation of our enterprise resource planning system, there were no significant changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – OTHER INFORMATION

Item 1. Legal Proceedings

We are party to a variety of legal actions arising out of the ordinary course of business. Plaintiffs occasionally seek punitive or exemplary damages. We do not believe that such normal and routine litigation will have a material impact on our consolidated financial results. We are also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines, penalties, and other costs in substantial amounts. See Note 10, “Commitments and Contingencies” of the Notes to Condensed Consolidated Financial Statements in Part I – Item 1. “Financial Statements” of this 2022 Q3 Form 10‑Q.

Item 1A. Risk Factors

In addition to the other information set forth in this 2022 Q3 Form 10‑Q, the factors discussed in Part I – Item 1A. “Risk Factors” in our 2021 Form 10‑K and any subsequently filed quarterly reports on Form 10‑Q could materially affect our business, financial condition, or operating results. The risks described in our 2021 Form 10‑K and subsequent Form 10‑Q’s are not the only risks facing us. There are additional risks and uncertainties not currently known to us or that we currently deem to be immaterial, that may also materially adversely affect our business, financial condition, or operating results.

Item 6. Exhibits

(a) The exhibits filed as part of this 2022 Q3 Form 10‑Q are listed below:

Exhibit Number	Description
1.1	Open Market Sale AgreementSM, dated September 2, 2022 between Northwest Pipe Company and Jefferies LLC, incorporated by reference to the Company’s Current Report on Form 8‑K, as filed with the Securities and Exchange Commission on September 2, 2022
31.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Exhibit Number	Description
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1	Interim Funding Agreement dated August 2, 2022 by and between Wells Fargo Equipment Finance, Inc. and Geneva Pipe and Precast Company
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Document
101.DEF	Inline XBRL Taxonomy Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

^SM “Open Market Sale Agreement” is a service mark of Jefferies LLC.

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SIGNATURES

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: November 9, 2022

NORTHWEST PIPE COMPANY
By:	/s/ Scott Montross
	Scott Montross
	Director, President, and Chief Executive Officer
	(principal executive officer)
By:	/s/ Aaron Wilkins
	Aaron Wilkins
	Senior Vice President, Chief Financial Officer, and Corporate Secretary
	(principal financial and accounting officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Scott Montross, certify that:

1. I have reviewed this Quarterly Report on Form 10‑Q of Northwest Pipe Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2022	By:	/s/ Scott Montross
		Scott Montross
		Director, President, and Chief Executive Officer
		(principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Aaron Wilkins, certify that:

1. I have reviewed this Quarterly Report on Form 10‑Q of Northwest Pipe Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2022	By:	/s/ Aaron Wilkins
		Aaron Wilkins
		Senior Vice President, Chief Financial Officer, and Corporate Secretary
		(principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Northwest Pipe Company (the “Company”) on Form 10‑Q for the period ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Scott Montross, Director, President, and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Scott Montross

Scott Montross

Director, President, and Chief Executive Officer

November 9, 2022

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Northwest Pipe Company (the “Company”) on Form 10‑Q for the period ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Aaron Wilkins, Senior Vice President, Chief Financial Officer, and Corporate Secretary of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Aaron Wilkins

Aaron Wilkins

Senior Vice President, Chief Financial Officer, and Corporate Secretary

November 9, 2022

EX-99.1

Exhibit 99.1

Interim Funding Agreement Wells Fargo Equipment Finance, Inc. I 600 South 4th Street I MAC N9300-100 I Minneapolis, MN 55415

This Agreement dated as of August 2, 2022 by and between Wells Fargo Equipment Finance, Inc. ("Creditor") and the undersigned lessee or purchaser or borrower from Creditor, as the case may be (the "Customer").

WHEREAS Creditor has agreed to finance certain equipment for the Customer by way of lease, installment sale contract or promissory note (the "Contract"), such equipment being described as follows (the "Equipment"):

See attached Schedule A.

After Customer signs this Agreement, Customer authorizes Creditor to insert any missing information or change any inaccurate information (such as the model year of the Equipment or its serial number or VIN) into this Equipment description.

WHEREAS the vendor or vendors of the Equipment require progress payments to be made.

NOW THEREFORE the parties hereby agree as follows:

1.	Creditor agrees to make progress payments to the vendor or vendors of the Equipment subject to the terms of this Agreement.
2.	The aggregate amount advanced by Creditor hereunder shall not exceed $13,500,000, and Creditor shall not advance any progress payment hereunder without the prior written authorization of the Customer.
3.	Creditor shall not advance any progress payment hereunder until it shall have first received the following: (a) the Contract duly signed by the Customer and all other related documentation that can be delivered prior to the Customer's acceptance of the Equipment, and (b) all advance payments and security deposits required by the Contract.
4.	The term "Cutoff Date" as used in this Agreement means the earliest to occur of the following dates: (a) November 30, 2022 (or such later date as Creditor may in its sole discretion designate by written notice to Customer); (b) the date there occurs an Event of Default as defined in the Contract (notwithstanding that the Equipment has not then been delivered and accepted); or (c) the date there occurs a material adverse change in the financial condition, business, or prospects of the Customer from that considered by Creditor in making its decision to finance the Equipment. Notwithstanding the foregoing, if the date set forth in clause (a) above is later than August 20, 2022 (the "Approval Expiration Date") the Cutoff Date shall be the Approval Expiration Date unless Creditor extends the Approval Expiration Date after reviewing Customer's updated financial, credit, business and other information as may be required by Creditor.
5.	If on the Cutoff Date the Equipment has not been delivered to and accepted by the Customer under the Contract as evidenced by a delivery and acceptance certificate executed by the Customer in form and substance satisfactory to Creditor, then upon demand at any time after the Cutoff Date the Customer shall pay Creditor the total amount advanced hereunder and remaining unpaid on the Cutoff Date together with accrued but unpaid interest thereon determined as provided below, and Creditor shall no longer be obligated to make advances hereunder. Upon such payment, Creditor shall transfer all of its right, title, and interest in the Equipment and in progress payments advanced hereunder to the Customer without recourse or any warranty whatsoever. In order to protect its ability to acquire use of the Equipment, the Customer may, if Creditor has not demanded payment within 10 business days after the specific date set forth in clause (a) of the definition of Cutoff Date, pay Creditor within such period the amount that would have been due had such a demand been made, but if no such payment is made within such period, the Customer shall have no right to acquire use of the Equipment under the Contract, and Creditor may, at its option, by written notice to the Customer, declare the Contract and all of Creditor's obligations thereunder terminated and acquire the Equipment for its own account or make any other arrangement with the vendor it can negotiate or demand payment from the Customer as provided above.

THIS AGREEMENT INCLUDES THE TERMS ON THE ATTACHED PAGE(S).

Creditor: Wells Fargo Equipment Finance, Inc.	Customer: Geneva Pipe and Precast Company
/s/ Kathleen Hatella	/s/ Aaron Wilkins
By	By
Kathleen Hatella Authorized Signer	Aaron Wilkins, CFO
Title	Print Name and Title

6. Whether or not the Equipment Is accepted by the Customer under the Contract, the Customer agrees to pay Creditor interest on the unpaid balance of the amount advanced hereunder from the date of the initial advance until the advances are fully paid at an annual rate (computed on the basis of a 360‑day year, actual days elapsed) as follows: the rate per annum determined by Creditor equal to (i) Term SOFR plus (ii) 1.75%. "Term SOFR" means the Term SOFR Reference Rate for a tenor comparable to one month on the day (such day, the "Term SOFR Determination Day") that is two (2) Business Days prior to the date of determination, as such rate is published by the Term SOFR Administrator; provided, however, that (x) if as of 5:00 p.m. (New York time) on any Term SOFR Determination Day, the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator, so long as such first preceding Business Day is not more than three (3) Business Days prior to such Term SOFR Determination Day; and (y) if Term SOFR determined as provided above (including pursuant to clause (x) of this proviso) shall ever be less than 0% (the "Benchmark Floor"), then Term SOFR shall be deemed to be the Benchmark Floor. "SOFR" means a rate per annum equal to the secured overnight financing rate as administered by the SOFR Administrator. "SOFR Administrator" means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate). "Term SOFR Administrator" means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by Creditor in its reasonable discretion). "Term SOFR Reference Rate" means the forward-looking term rate based on SOFR. "Business Day" means any day except (i) a Saturday, (ii) a Sunday, or (iii) any day on which the Securities Industry and Financial Markets Association, or any successor thereto, recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities. "Conforming Changes" means any technical, administrative or operational changes (including, without limitation, changes to the definition of "Business Day," the definition of "Interest Period" or any similar or analogous definition, the timing and frequency of determining rates and making payments of interest, prepayment provisions and other technical, administrative or operational matters) that Creditor decides may be appropriate to reflect the adoption and implementation of a Benchmark Replacement or to permit the use and administration of Term SOFR or a Benchmark Replacement by Creditor. The rate shall initially be determined on the first day of the month in which a progress payment is advanced hereunder and such initial rate shall remain in effect through the last day of the calendar month in which the advance is made. The interest rate in effect for each month thereafter during the term of this Agreement shall be the same percentage over Term SOFR, determined on the first day of each calendar month (each such monthly period, an "Interest Period"). In connection with the use or administration of Term SOFR, Creditor will have the right to make Conforming Changes from time to time and any amendments implementing such Conforming Changes will become effective without any further action or consent of Customer. Creditor will promptly notify Customer of the effectiveness of any Conforming Changes in connection with the use or administration of Term SOFR. Subject to paragraph 16 below, if Creditor determines (any determination of which shall be conclusive and binding on Customer) that either (i) Term SOFR for the applicable Interest Period cannot be determined pursuant to the definition thereof other than as a result of a Benchmark Transition Event (an "Inability Determination") or (ii) any law has made it unlawful, or that any governmental authority has asserted that it is unlawful, for Creditor to make or maintain an advance based on SOFR or Term SOFR, or to determine or charge interest rates based upon SOFR or Term SOFR (an "Illegality Determination"), then Creditor will so notify Customer. From the date of an Inability Determination or an Illegality Determination until Creditor revokes such Inability Determination or notifies Customer that the circumstances giving rise to such Illegality Determination no longer exist, as applicable, the Adjusted Prime Rate shall replace Term SOFR for any determination of interest hereunder for any affected Interest Period hereunder (with the margin that had been added to Term SOFR added to the Adjusted Prime Rate); provided, however, that no such determination of interest shall take effect during any applicable Interest Period as a result of an Inability Determination. Notwithstanding any of the foregoing to the contrary, if a Benchmark Replacement is subsequently determined in accordance with applicable Benchmark Replacement Provisions, that Benchmark Replacement, plus any applicable margin, will then supersede the foregoing with respect to the replaced Benchmark. "Adjusted Prime Rate" means, at any time, the amount equal to (a) the Prime Rate as of such time less (b) the amount (which may be a positive or negative number or zero and which amount shall remain the same from the date of an Inability Determination or an Illegality Determination until Creditor revokes such Inability Determination or notifies Customer that the circumstances giving rise to such Illegality Determination no longer exist, as applicable) equal to (i) the Prime Rate as of the date of the last available Term SOFR less (ii) the last available Term

	SOFR (if such Term SOFR is greater than the Prime Rate, so that (i) minus (ii) results in a negative number, then the negative number shall be added to (a) to arrive at the Adjusted Prime Rate); provided, however, that if Adjusted Prime Rate would be less than the Benchmark Floor, then Adjusted Prime Rate shall be deemed to be the Benchmark Floor. "Prime Rate" means at any time the rate of interest most recently announced within Wells Fargo Bank, National Association ("Bank") at its principal office as its Prime Rate, with the understanding that the Prime Rate is one of Bank's base rates and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as Bank may designate. If the rate of interest announced by Bank as its Prime Rate at any time is less than the Benchmark Floor, then for purposes of this Agreement the Prime Rate shall be deemed to be the Benchmark Floor.
7.	Interest shall be payable monthly beginning with the 20th day of the month following the month in which the first advance is made and on the same day of each month thereafter and also on the maturity date. The maturity date of this obligation is the earliest of (x) the date Creditor demands payment pursuant to paragraph 5, (y) the date the Equipment is accepted by the Customer under the Contract, or (z) the date the Customer prepays as permitted by paragraph 5.
8.	Some items of Equipment may be delivered by the vendor to the Customer without the Customer having accepted the items under the Contract. The Customer agrees to maintain insurance on each item of Equipment as required by the Contract from the date it is delivered to the Customer regardless of whether the Customer has accepted the item under the Contract.
9.	Although the Customer has agreed to reimburse Creditor as provided in paragraph 5 for amounts advanced by Creditor hereunder, such amounts do not constitute loans to the Customer, and Creditor as the party making the progress payments to the vendor or vendors reserves for its own benefit all rights to the Equipment and to the benefits of amounts advanced hereunder subject only to its obligations under the Contract and under this Agreement.
10.	Creditor makes no representation as to when the Equipment may be delivered by the vendor thereof.
11.	This Agreement may not be assigned by the Customer without the prior written consent of Creditor. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto.
12.	This Agreement shall be governed by the same substantive laws that govern the Contract.
13.	If Customer is not an individual, (i) the execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of Customer and will not violate any provision of Customer's governing documents; (ii) the person signing on behalf of Customer is duly authorized; and (iii) this Agreement constitutes a legal, valid and binding obligation of Customer.
14.	Customer hereby grants to Creditor a security interest in any and all right, title or interest that Customer now has or may hereafter acquire in or to the Equipment to secure Customer's now existing and hereafter arising obligations and indebtedness to Creditor (except QFC Obligations) whether arising hereunder, under the Contract or under any other agreement or transaction at any time owing by Customer to Creditor. Upon the occurrence of any default in making payment hereunder or any event of default under any other agreement made by Customer in favor of Creditor, Creditor shall have all of the rights and remedies of a secured party under the Uniform Commercial Code. "QFC Obligations" means obligations arising under a securities contract, commodities contract, forward contract, repurchase agreement, swap agreement, or any similar agreement (as defined for purposes of Treasury Part 148 under 12 U.S.C. 5390(c)(8)(H) or FDIC Part 371 under 12 U.S.C. 1821(e)(8)(D)) that the FDIC determines by regulation, resolution, or order to be a qualified financial contract.
15.	Creditor may in its sole discretion, accept a photocopy, electronically transmitted facsimile, pdf or other reproduction of this Agreement and/or any document related hereto (a "Counterpart") as the binding and effective record of this Agreement and/or such other document, whether or not an ink signed copy hereof or thereof is also received by Creditor from Customer, provided, however, that if Creditor accepts a Counterpart as the binding and effective record of this Agreement or any other document, the Counterpart acknowledged by Creditor (either in ink or electronically) shall constitute the record hereof or thereof. Customer represents that the signature that appears on the Counterpart that is transmitted by Customer to Creditor in any manner described above is intended by Customer to authenticate the Counterpart notwithstanding that such signature is electronic, facsimile or a reproduction and Customer further agrees that a Counterpart of this Agreement or such other document received by Creditor, shall, when acknowledged by Creditor (either in ink or electronically), constitute an original document for the purposes of establishing the provisions hereof or thereof and shall be legally admissible under the best evidence rule and binding on and

enforceable against Customer. If Creditor accepts a Counterpart of a document as the binding and effective record thereof, only such Counterpart acknowledged by Creditor's ink or electronic signature may be marked "Original" and perfection of a security interest by possession or control may only be accomplished by possession or control of the Counterpart that bears Creditor's acknowledgement.

16. Benchmark Replacement Provisions. Notwithstanding anything to the contrary contained herein:

(a) Benchmark Replacement. If a Benchmark Transition Event occurs, the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder on the Benchmark Replacement Date without any further action or consent of Customer.

(b) Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, Creditor will have the right to make Conforming Changes from time to time and any amendments implementing such Conforming Changes will become effective without any further action or consent of Customer.

(c) Notices: Standards for Decisions and Determinations. Creditor will promptly notify Customer of (i) the implementation of any Benchmark Replacement, and (ii) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. Any determination, decision or election that may be made by Creditor pursuant to these provisions, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and will be made in its sole discretion and without Customer consent.

(d) Certain Defined Terms. As used herein:

"Benchmark" means, initially, the Term SOFR Reference Rate for a tenor comparable to one month; provided, however, that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate for a tenor comparable to one month or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has become effective pursuant to the provisions of this Agreement.

"Benchmark Administrator" means, initially, the Term SOFR Administrator or any successor administrator of the then-current Benchmark or any insolvency or resolution official with authority over such administrator.

"Benchmark Replacement" means the sum of: (x) the alternate rate of interest that has been selected by Creditor as the replacement for the then-current Benchmark and (y) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Creditor, in each case giving due consideration to (i) any selection or recommendation by the Relevant Governmental Body at such time for a replacement rate, the mechanism for determining such a rate, the methodology or conventions applicable to such rate, or the spread adjustment, or method for calculating or determining such spread adjustment, for such rate or (ii) any evolving or then­ prevailing market convention for determining a rate of interest as a replacement to the then-current Benchmark, the methodology or conventions applicable to such rate, or the spread adjustment, or method for calculating or determining such spread adjustment, for such rate for U.S. dollar-denominated syndicated or bilateral credit facilities; provided, however, that if the Benchmark Replacement as determined as provided would be less than the Benchmark Floor, then the Benchmark Replacement shall be deemed to be the Benchmark Floor for the purposes hereof.

"Benchmark Replacement Date" means the date specified by Creditor in a notice to Customer following a Benchmark Transition Event.

"Benchmark Transition Event" means the occurrence of one or more of the following events with respect to the then-current Benchmark: a public statement or publication of information by or on behalf of the Benchmark Administrator or a regulatory supervisor for the Benchmark Administrator announcing that (a) the Benchmark Administrator has ceased or will cease to provide the Benchmark, permanently or indefinitely or (b) the Benchmark is not, or as of a specified future date will not be, representative.

"Relevant Governmental Body" means the Board of Governors of the Federal Reserve System and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System and/or the Federal Reserve Bank of New York or any successor thereto.

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Nov. 01, 2022
Document Information [Line Items]
Entity Central Index Key	0001001385
Entity Registrant Name	Northwest Pipe Co.
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	0-27140
Entity Incorporation, State or Country Code	OR
Entity Tax Identification Number	93-0557988
Entity Address, Address Line One	201 NE Park Plaza Drive, Suite 100
Entity Address, City or Town	Vancouver
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98684
City Area Code	360
Local Phone Number	397‑6250
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	NWPX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		9,927,360

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Net sales	$ 122,984	$ 84,643	$ 350,837	$ 230,766
Cost of sales	97,866	72,280	286,853	200,090
Gross profit	25,118	12,363	63,984	30,676
Selling, general, and administrative expense	10,654	5,562	30,149	17,729
Operating income	14,464	6,801	33,835	12,947
Other income	11	171	56	260
Interest expense	(964)	(112)	(2,393)	(687)
Income before income taxes	13,511	6,860	31,498	12,520
Income tax expense	3,555	1,914	8,310	3,268
Net income	$ 9,956	$ 4,946	$ 23,188	$ 9,252
us-gaap_EarningsPerShareAbstract
Basic (in dollars per share)	$ 1.00	$ 0.50	$ 2.34	$ 0.94
Diluted (in dollars per share)	$ 0.99	$ 0.50	$ 2.32	$ 0.93
Shares used in per share calculations:
Basic (in shares)	9,927	9,871	9,909	9,849
Diluted (in shares)	10,010	9,921	9,988	9,918

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Net income	$ 9,956	$ 4,946	$ 23,188	$ 9,252
Other comprehensive income (loss), net of tax:
Net current period other comprehensive income (loss)	608	54	482	160
Comprehensive income	10,564	5,000	23,670	9,412
Foreign Exchange Forward [Member]
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on cash flow hedges	158	25	(245)	73
Interest Rate Swap [Member]
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on cash flow hedges	428	0	661	0
Pension Plan [Member]
Other comprehensive income (loss), net of tax:
Pension liability adjustment	$ 22	$ 29	$ 66	$ 87

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 3,706	$ 2,997
Trade and other receivables, less allowance for doubtful accounts of $498 and $503	73,975	52,664
Contract assets	117,260	107,170
Inventories	71,578	59,651
Prepaid expenses and other	4,326	5,744
Total current assets	270,845	228,226
Property and equipment, less accumulated depreciation and amortization of $115,377 and $106,957	124,228	121,266
Operating lease right-of-use assets	94,166	98,507
Goodwill	55,504	53,684
Intangible assets, net	36,334	39,376
Other assets	5,400	6,620
Total assets	586,477	547,679
Current liabilities:
Current debt	3,525	0
Accounts payable	40,444	32,267
Accrued liabilities	32,561	24,498
Contract liabilities	16,243	2,623
Current portion of operating lease liabilities	4,725	4,704
Total current liabilities	97,498	64,092
Borrowings on line of credit	71,817	86,761
Operating lease liabilities	90,231	93,725
Deferred income taxes	10,982	10,984
Other long-term liabilities	7,272	8,734
Total liabilities	277,800	264,296
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued or outstanding	0	0
Common stock, $.01 par value, 15,000,000 shares authorized, 9,927,360 and 9,870,567 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	99	99
Additional paid-in-capital	126,686	125,062
Retained earnings	183,092	159,904
Accumulated other comprehensive loss	(1,200)	(1,682)
Total stockholders’ equity	308,677	283,383
Total liabilities and stockholders’ equity	$ 586,477	$ 547,679

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Allowance for doubtful accounts	$ 498	$ 503
Accumulated depreciation and amortization	$ 115,377	$ 106,957
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	15,000,000	15,000,000
Common stock, shares issued (in shares)	9,927,360	9,870,567
Common stock, shares outstanding (in shares)	9,927,360	9,870,567

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Pension Plan [Member] Common Stock [Member]	Pension Plan [Member] Additional Paid-in Capital [Member]	Pension Plan [Member] Retained Earnings [Member]	Pension Plan [Member] AOCI Attributable to Parent [Member]	Pension Plan [Member]	Foreign Exchange Forward [Member] Common Stock [Member]	Foreign Exchange Forward [Member] Additional Paid-in Capital [Member]	Foreign Exchange Forward [Member] Retained Earnings [Member]	Foreign Exchange Forward [Member] AOCI Attributable to Parent [Member]	Foreign Exchange Forward [Member]	Interest Rate Swap [Member] Common Stock [Member]	Interest Rate Swap [Member] Additional Paid-in Capital [Member]	Interest Rate Swap [Member] Retained Earnings [Member]	Interest Rate Swap [Member] AOCI Attributable to Parent [Member]	Interest Rate Swap [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balances (in shares) at Dec. 31, 2020																9,805,437
Balance at Dec. 31, 2020																$ 98	$ 123,013	$ 148,381	$ (1,866)	$ 269,626
Net income																0	0	9,252	0	9,252
Pension liability adjustment	$ 0	$ 0	$ 0	$ 87	$ 87
Unrealized gain (loss) on cash flow hedges						$ 0	$ 0	$ 0	$ 73	$ 73					$ 0
Share-based compensation expense																$ 0	2,437	0	0	2,437
Issuance of common stock under stock compensation plans, net of tax withholdings (in shares)																65,130
Issuance of common stock under stock compensation plans, net of tax withholdings																$ 1	(1,167)	0	0	(1,166)
Balances (in shares) at Sep. 30, 2021																9,870,567
Balance at Sep. 30, 2021																$ 99	124,283	157,633	(1,706)	280,309
Balances (in shares) at Jun. 30, 2021																9,870,567
Balance at Jun. 30, 2021																$ 99	123,686	152,687	(1,760)	274,712
Net income																0	0	4,946	0	4,946
Pension liability adjustment	0	0	0	29	29
Unrealized gain (loss) on cash flow hedges						0	0	0	25	25					0
Share-based compensation expense																$ 0	597	0	0	597
Balances (in shares) at Sep. 30, 2021																9,870,567
Balance at Sep. 30, 2021																$ 99	124,283	157,633	(1,706)	280,309
Balances (in shares) at Dec. 31, 2021																9,870,567
Balance at Dec. 31, 2021																$ 99	125,062	159,904	(1,682)	283,383
Net income																0	0	23,188	0	23,188
Pension liability adjustment	0	0	0	66	66
Unrealized gain (loss) on cash flow hedges						0	0	0	(245)	(245)	$ 0	$ 0	$ 0	$ 661	661
Share-based compensation expense																$ 0	2,477	0	0	2,477
Issuance of common stock under stock compensation plans, net of tax withholdings (in shares)																56,793
Issuance of common stock under stock compensation plans, net of tax withholdings																$ 0	(853)	0	0	(853)
Balances (in shares) at Sep. 30, 2022																9,927,360
Balance at Sep. 30, 2022																$ 99	126,686	183,092	(1,200)	308,677
Balances (in shares) at Jun. 30, 2022																9,927,360
Balance at Jun. 30, 2022																$ 99	125,517	173,136	(1,808)	296,944
Net income																0	0	9,956	0	9,956
Pension liability adjustment	$ 0	$ 0	$ 0	$ 22	$ 22
Unrealized gain (loss) on cash flow hedges						$ 0	$ 0	$ 0	$ 158	$ 158	$ 0	$ 0	$ 0	$ 428	$ 428
Share-based compensation expense																$ 0	1,169	0	0	1,169
Balances (in shares) at Sep. 30, 2022																9,927,360
Balance at Sep. 30, 2022																$ 99	$ 126,686	$ 183,092	$ (1,200)	$ 308,677

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Pension Plan [Member]
Pension liability adjustment, tax expense/benefit	$ 0	$ 0	$ 0	$ 0
Foreign Exchange Forward [Member]
Unrealized gain (loss) on cash flow hedges, tax expense/benefit	142	$ 8	83	$ 21
Interest Rate Swap [Member]
Unrealized gain (loss) on cash flow hedges, tax expense/benefit	$ 141		$ 218

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net income	$ 23,188	$ 9,252
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and finance lease amortization	9,321	8,358
Amortization of intangible assets	3,369	947
Deferred income taxes	(3)	(89)
Share-based compensation expense	2,477	2,437
Other, net	(305)	106
Trade and other receivables	(21,588)	3,181
Contract assets, net	3,531	(35,055)
Inventories	(11,927)	(13,813)
Prepaid expenses and other assets	8,789	6,383
Accounts payable	8,350	6,725
Accrued and other liabilities	315	(2,057)
Net cash provided by (used in) operating activities	25,517	(13,625)
Cash flows from investing activities:
Purchases of property and equipment	(11,792)	(8,126)
Other investing activities	(288)	304
Net cash used in investing activities	(12,080)	(7,822)
Cash flows from financing activities:
Borrowings on line of credit	121,103	4,720
Repayments on line of credit	(136,047)	(2,567)
Borrowings on other debt	3,525	0
Payments on other debt	0	(13,762)
Payments on finance lease obligations	(409)	(297)
Tax withholdings related to net share settlements of equity awards	(853)	(1,166)
Other financing activities	(47)	(220)
Net cash used in financing activities	(12,728)	(13,292)
Change in cash and cash equivalents	709	(34,739)
Cash and cash equivalents, beginning of period	2,997	37,927
Cash and cash equivalents, end of period	3,706	3,188
Noncash investing and financing activities:
Accrued property and equipment purchases	614	756
Accrued consideration in acquisition of business	1,820	0
Right-of-use assets obtained in exchange for operating lease liabilities	26	4,669
Right-of-use assets obtained in exchange for finance lease liabilities	$ 894	$ 855

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Note 1 - Organization and Basis of Presentation

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Organization and Basis of Presentation

Northwest Pipe Company (collectively with its subsidiaries, the “Company”) is a leading manufacturer of water related infrastructure products, and operates in two segments, Engineered Steel Pressure Pipe (“SPP”) and Precast Infrastructure and Engineered Systems (“Precast”). This segment presentation is consistent with how the Company’s chief operating decision maker, its Chief Executive Officer, evaluates performance of the Company and makes decisions regarding the allocation of resources.

In addition to being the largest manufacturer of engineered steel water pipeline systems in North America, the Company manufactures high-quality precast and reinforced concrete products; water, wastewater, and stormwater equipment; steel casing pipe, bar-wrapped concrete cylinder pipe, and one of the largest offerings of pipeline system joints, fittings, and specialized components. Strategically positioned to meet growing water and wastewater infrastructure needs, the Company provides solution-based products for a wide range of markets under the ParkUSA, Geneva Pipe and Precast, Permalok®, and Northwest Pipe Company lines. The Company is headquartered in Vancouver, Washington, and has 13 manufacturing facilities across North America.

The Condensed Consolidated Financial Statements are expressed in United States Dollars and include the accounts of the Company and its subsidiaries over which the Company exercises control as of the financial statement date. Intercompany accounts and transactions have been eliminated.

Effective in the fourth quarter of 2021, as a result of the acquisition of Park Environmental Equipment, LLC (“ParkUSA”), the Company revised its historical one segment position and identified the new operating segments, SPP and Precast, to align with changes made in its internal management structure and its reporting structure of financial information used to assess performance and allocate resources. See Note 15, “Segment Information” for detailed descriptions of these segments. As a result, certain amounts from the prior year financial statements have been reclassified in order to conform to the current year presentation.

The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. The financial information as of December 31, 2021 is derived from the audited Consolidated Financial Statements presented in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2021 (“2021 Form 10‑K”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission and the accounting standards for interim financial statements. In the opinion of management, the accompanying Condensed Consolidated Financial Statements include all adjustments necessary (which are of a normal and recurring nature) for the fair statement of the results of the interim periods presented. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto together with management’s discussion and analysis of financial condition and results of operations contained in the Company’s 2021 Form 10‑K.

Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2022.

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Note 2 - Business Combination

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Business Combination Disclosure [Text Block]

2. Business Combination

On October 5, 2021, the Company completed the acquisition of 100% of Park Environmental Equipment, LLC (ParkUSA) for a purchase price of $90.2 million in cash which is included in the Precast segment for all periods following the acquisition date. ParkUSA is a precast concrete and steel fabrication-based company that develops and manufactures water, wastewater, and environmental solutions. Operations continue with ParkUSA’s previous management and workforce at its three Texas manufacturing facilities located in Houston, Dallas, and San Antonio.

The following table summarizes the purchase consideration and fair value of the assets acquired and liabilities assumed as of October 5, 2021 (in thousands):

Assets
Cash and cash equivalents	$	278
Trade and other receivables		11,034
Inventories		12,773
Prepaid expenses and other		293
Property and equipment		8,076
Operating lease right-of-use assets		58,301
Intangible assets		31,000
Deferred income taxes		347
Total assets acquired		122,102
Liabilities
Accounts payable		2,029
Accrued liabilities		4,067
Operating lease liabilities		58,301
Total liabilities assumed		64,397
Goodwill		32,519
Total purchase consideration	$	90,224

The tangible and intangible assets acquired and liabilities assumed were recognized based on their estimated fair values on the acquisition date, with the excess purchase consideration recorded as goodwill. As a result of additional information obtained during the measurement period about facts and circumstances that existed as of the acquisition date, the Company recorded measurement period adjustments during the three and nine months ended September 30, 2022 which resulted in a $1.8 million increase in goodwill and purchase consideration related to the settlement of working capital. The measurement period for the ParkUSA acquisition was complete as of September 30, 2022.

The following table summarizes the components of the intangible assets acquired and their estimated useful lives:

	Estimated Useful Life		Fair Value
	(In years)		(In thousands)
Customer relationships		10.0	$	19,800
Trade names and trademarks		10.0		9,600
Patents		21.0		1,300
Backlog		0.6		300
Total intangible assets		10.2	$	31,000

Goodwill arose from the acquisition of an assembled workforce, expansion of product offerings, and management’s industry know-how, and is deductible for tax purposes.

The Company incurred transaction costs associated with this acquisition of $0 and $0.1 million during the three and nine months ended September 30, 2022, respectively and $0.6 million and $0.8 million during the three and nine months ended September 30, 2021, respectively. These transaction costs are included in Selling, general, and administrative expense in the Condensed Consolidated Statements of Operations.

Unaudited Pro Forma Disclosures

The following unaudited pro forma summary presents the consolidated results of the Company as if the acquisition of ParkUSA had occurred on January 1 of the year prior to the acquisition (in thousands):

	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
Net sales	$	105,345	$	283,005
Net income		2,477		12,247

This unaudited pro forma consolidated financial data is included only for the purpose of illustration and does not necessarily indicate what the operating results would have been if the acquisition of ParkUSA had occurred on January 1 of the year prior to the acquisition. Moreover, this information is not indicative of what the Company’s future operating results will be. The information prior to the acquisition is included based on prior accounting records maintained by ParkUSA. The pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of ParkUSA to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied on January 1 of the year prior to the acquisition. Adjustments also include an increase of interest expense as if the Company’s debt obtained in connection with the acquisition of ParkUSA had been outstanding since January 1 of the year prior to the acquisition. The provision for income taxes has also been adjusted for all periods, based upon the foregoing adjustments to historical results.

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Note 3 - Inventories

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Inventory Disclosure [Text Block]

3. Inventories

Inventories consist of the following (in thousands):

	September 30, 2022		December 31, 2021
Raw materials	$	52,915	$	44,697
Work-in-process		3,817		3,018
Finished goods		12,646		10,096
Supplies		2,200		1,840
Total inventories	$	71,578	$	59,651

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Note 4 - Goodwill

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Goodwill Disclosure [Text Block]

4. Goodwill

The Company has recorded goodwill in connection with its business acquisitions within the Precast reportable segment. The changes in the carrying amount of goodwill for the nine months ended September 30, 2022 were as follows (in thousands):

Goodwill, December 31, 2021	$	53,684
Measurement period adjustment (Note 2)		1,820
Goodwill, September 30, 2022	$	55,504

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Note 5 - Current Debt

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Long-Term Debt [Text Block]

5. Current Debt

In August 2022, the Company entered into an Interim Funding Agreement (“IFA”) with Wells Fargo Equipment Finance, Inc. (“WFEF”) allowing for aggregate interim funding advances up to $13.5 million of equipment purchased for a new reinforced concrete pipe mill, to be converted into a term loan upon final delivery and acceptance of the financed equipment. The IFA bears interest at the Term Secured Overnight Finance Rate plus 1.75%, requires monthly payments of accrued interest, and grants a security interest in the equipment to WFEF. As of September 30, 2022, the outstanding balance was $3.5 million, which is classified as a current liability since there is not a firm commitment for long-term debt financing.

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Note 6 - Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Fair Value Disclosures [Text Block]

6. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date.

The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. These levels are: Level 1 (inputs are quoted prices in active markets for identical assets or liabilities); Level 2 (inputs are other than quoted prices that are observable, either directly or indirectly through corroboration with observable market data); and Level 3 (inputs are unobservable, with little or no market data that exists, such as internal financial forecasts). The Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The following table summarizes information regarding the Company’s financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):

	Total			Level 1		Level 2			Level 3
As of September 30, 2022
Financial assets:
Deferred compensation plan	$	3,410		$	2,902	$	508		$	-
Interest rate swaps		879			-		879			-
Foreign currency forward contracts		1,123			-		1,123			-
Total financial assets	$	5,412		$	2,902	$	2,510		$	-
Financial liabilities:
Foreign currency forward contracts	$	(1,209	)	$	-	$	(1,209	)	$	-
As of December 31, 2021
Financial assets:
Deferred compensation plan	$	4,321		$	3,830	$	491		$	-
Foreign currency forward contracts		17			-		17			-
Total financial assets	$	4,338		$	3,830	$	508		$	-
Financial liabilities:
Foreign currency forward contracts	$	(661	)	$	-	$	(661	)	$	-

The deferred compensation plan assets consist of cash and several publicly traded stock and bond mutual funds, valued using quoted market prices in active markets, classified as Level 1 within the fair value hierarchy, as well as guaranteed investment contracts, valued at principal plus interest credited at contract rates, classified as Level 2 within the fair value hierarchy. Deferred compensation plan assets are included within Other assets in the Condensed Consolidated Balance Sheets.

The foreign currency forward contracts and interest rate swaps are derivatives valued using various pricing models or discounted cash flow analyses that incorporate observable market parameters, such as interest rate yield curves and currency rates, and are classified as Level 2 within the fair value hierarchy. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or the Company. The foreign currency forward contracts and interest rate swaps are presented at their gross fair values. Foreign currency forward contract and interest rate swap assets are included within Prepaid expenses and other and foreign currency forward contract liabilities are included within Accrued liabilities in the Condensed Consolidated Balance Sheets.

The net carrying amounts of cash and cash equivalents, trade and other receivables, accounts payable, accrued liabilities, and borrowings on the line of credit approximate fair value due to the short-term nature of these instruments.

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Note 7 - Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

7. Derivative Instruments and Hedging Activities

In the normal course of business, the Company is exposed to interest rate and foreign currency exchange rate fluctuations. Consistent with the Company’s strategy for financial risk management, the Company has established a program that utilizes foreign currency forward contracts and interest rate swaps to offset the risks associated with the effects of these exposures.

For each derivative entered into in which the Company seeks to obtain cash flow hedge accounting treatment, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking the hedge transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method of measuring ineffectiveness. This process includes linking all derivatives to specific firm commitments or forecasted transactions and designating the derivatives as cash flow hedges. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. The effective portion of these hedged items is reflected in Unrealized gain (loss) on cash flow hedges on the Condensed Consolidated Statements of Comprehensive Income. If it is determined that a derivative is not highly effective, or that it has ceased to be a highly effective hedge, the Company is required to discontinue hedge accounting with respect to that derivative prospectively.

As of September 30, 2022, the total notional amount of the foreign currency forward contracts was $17.8 million (CAD$24.6 million) and $7.3 million (EUR$7.4 million), which included $0.7 million (CAD$1.0 million) of foreign currency forward contracts not designated as cash flow hedges. As of December 31, 2021, the total notional amount of the foreign currency forward contracts was $19.0 million (CAD$24.1 million), and all foreign currency forward contracts were designated as cash flow hedges. As of September 30, 2022, the Company’s foreign currency forward contracts mature at various dates through October 2023 and are subject to an enforceable master netting arrangement.

As of September 30, 2022, the interest rate swap, which effectively converts a portion of the Company’s variable-rate debt to fixed-rate debt, was designated as cash flow hedge. The Company receives floating interest payments monthly based on the Secured Overnight Financing Rate (“SOFR”) and pays a fixed rate of 1.941% to the counterparty. As of September 30, 2022, the total notional amount was $31.7 million, which amortizes ratably on a monthly basis to zero by the April 2024 maturity date.

On August 9, 2022, the Company entered into an interest rate swap transaction which will begin April 3, 2023 at a notional amount of $15.0 million, which will amortize ratably on a monthly basis to zero by the April 2028 maturity date. The Company will receive floating interest payments monthly based on the 30‑day Average SOFR and will pay a fixed rate of 2.96% to the counterparty.

The following table summarizes the gains (losses) recognized on derivatives in the Condensed Consolidated Financial Statements (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022			2021
Foreign currency forward contracts:
Net sales	$	599	$	145	$	841		$	44
Property and equipment		32		-		(95	)		-
Interest rate swaps:
Interest expense		4		-		(78	)		-
Total	$	635	$	145	$	668		$	44

As of September 30, 2022, unrealized pretax gains (losses) on outstanding cash flow hedges in Accumulated other comprehensive loss was $0.3 million, of which $0.4 million, $(1.1) million, and $0.6 million are expected to be reclassified to Net sales, Property and equipment, and Interest expense, respectively, within the next twelve months as a result of underlying hedged transactions also being recorded in these line items. See Note 13, “Accumulated Other Comprehensive Loss” for additional information regarding foreign currency forward contract gains and losses.

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Note 8 - Stockholders' Equity

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

8. Stockholders’ Equity

At-the-Market Offering

On September 2, 2022, the Company entered into an Open Market Sale Agreement (the “At-the-Market Offering”) with Jefferies LLC (“Jefferies”), pursuant to which the Company may issue and sell shares of its common stock, par value $0.01 per share, having aggregate offering sales proceeds of up to $50,000,000 (the “Shares”) from time to time through Jefferies as its sales agent. The Company may sell the Shares in amounts and at times to be determined by the Company from time to time subject to the terms and conditions of the At-the-Market Offering, but it has no obligation to sell any of the Shares under the At-the-Market Offering. The Shares to be sold under the At-the-Market Offering, if any, will be offered and sold pursuant to the Company’s shelf registration statement on Form S‑3 (File No. 333‑249637) filed with the Securities and Exchange Commission, which became effective on November 3, 2020, and the prospectus supplement dated September 2, 2022 filed by the Company. The Company will pay Jefferies a cash commission of up to 3.0% of gross proceeds from the sale of the Shares pursuant to the At-the-Market Offering. The Company has also agreed to provide Jefferies with customary indemnification and contribution rights. No proceeds were raised under the At-the-Market Offering during the three and nine months ended September 30, 2022.

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Note 9 - Share-based Compensation

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

9. Share-based Compensation

The Company has one active stock incentive plan for employees and directors, the 2022 Stock Incentive Plan, which provides for awards of stock options to purchase shares of common stock, stock appreciation rights, restricted and unrestricted shares of common stock, restricted stock units (“RSUs”), and performance share awards (“PSAs”). In addition, the Company has one inactive stock incentive plan, the 2007 Stock Incentive Plan, under which previously granted awards remain outstanding.

The Company recognizes the compensation cost of employee and director services received in exchange for awards of equity instruments based on the grant date estimated fair value of the awards. The Company estimates the fair value of RSUs and PSAs using the value of the Company’s stock on the date of grant. Share-based compensation cost is recognized over the period during which the employee or director is required to provide service in exchange for the award and, as forfeitures occur, the associated compensation cost recognized to date is reversed. For awards with performance-based payout conditions, the Company recognizes compensation cost based on the probability of achieving the performance conditions, with changes in expectations recognized as an adjustment to earnings in the period of change. Any recognized compensation cost is reversed if the conditions are ultimately not met.

The following table summarizes share-based compensation expense recorded (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cost of sales	$	474	$	202	$	822	$	685
Selling, general, and administrative expense		695		395		1,655		1,752
Total	$	1,169	$	597	$	2,477	$	2,437

Restricted Stock Units and Performance Share Awards

The Company’s stock incentive plan provides for equity instruments, such as RSUs and PSAs, which grant the right to receive a specified number of shares over a specified period of time. RSUs and PSAs are service-based awards that vest according to the terms of the grant. PSAs have performance-based payout conditions.

The following table summarizes the Company’s RSU and PSA activity:

	Number of RSUs and PSAs (1)			Weighted-Average Grant Date Fair Value
Unvested RSUs and PSAs as of December 31, 2021		161,131		$	30.26
RSUs and PSAs granted		116,622			30.68
Unvested RSUs and PSAs canceled		(8,248	)		31.18
RSUs and PSAs vested (2)		(68,581	)		29.29
Unvested RSUs and PSAs as of September 30, 2022		200,924			30.80

(1)	The number of PSAs disclosed in this table are at the target level of 100%.
(2)	For the PSAs vested on March 31, 2022, the actual number of common shares that were issued was determined by multiplying the PSAs at the target level of 100%, as disclosed in this table, by a payout percentage based on the performance-based conditions achieved. The payout percentage was 141% for the 2020-2021 performance period and 93% for the 2021 performance period.

The unvested balance of RSUs and PSAs as of September 30, 2022 includes approximately 149,000 PSAs at the target level of 100%. The vesting of these awards is subject to the achievement of specified performance-based conditions, and the actual number of common shares that will ultimately be issued will be determined by multiplying this number of PSAs by a payout percentage ranging from 0% to 200%.

Based on the estimated level of achievement of the performance targets associated with the PSAs as of September 30, 2022, unrecognized compensation expense related to the unvested portion of the Company’s RSUs and PSAs was $4.6 million, which is expected to be recognized over a weighted-average period of 1.6 years.

Stock Awards

For the nine months ended September 30, 2022 and 2021, stock awards of 11,380 shares and 12,606 shares, respectively, were granted to non-employee directors, which vested immediately upon issuance. The Company recorded compensation expense based on the weighted-average fair market value per share of the awards on the grant date of $30.75 in 2022 and $30.94 in 2021.

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Note 10 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

10. Commitments and Contingencies

Portland Harbor Superfund Site

In December 2000, a section of the lower Willamette River known as the Portland Harbor Superfund Site was included on the National Priorities List at the request of the United States Environmental Protection Agency (“EPA”). While the Company’s Portland, Oregon manufacturing facility does not border the Willamette River, an outfall from the facility’s stormwater system drains into a neighboring property’s privately owned stormwater system and slip. Also in December 2000, the Company was notified by the EPA and the Oregon Department of Environmental Quality (“ODEQ”) of potential liability under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). A remedial investigation and feasibility study of the Portland Harbor Superfund Site was directed by a group of 14 potentially responsible parties known as the Lower Willamette Group under agreement with the EPA. The EPA finalized the remedial investigation report in February 2016, and the feasibility study in June 2016, which identified multiple remedial alternatives. In January 2017, the EPA issued its Record of Decision selecting the remedy for cleanup at the Portland Harbor Superfund Site, which it believes will cost approximately $1 billion at net present value and 13 years to complete. The EPA has not yet determined who is responsible for the costs of cleanup or how the cleanup costs will be allocated among the more than 150 potentially responsible parties. Because of the large number of potentially responsible parties and the variability in the range of remediation alternatives, the Company is unable to estimate an amount or an amount within a range of costs for its obligation with respect to the Portland Harbor Superfund Site matters, and no further adjustment to the Condensed Consolidated Financial Statements has been recorded as of the date of this filing.

The ODEQ is separately providing oversight of voluntary investigations and source control activities by the Company involving the Company’s site, which are focused on controlling any current “uplands” releases of contaminants into the Willamette River. No liabilities have been established in connection with these investigations because the extent of contamination and the Company’s responsibility for the contamination have not yet been determined.

Concurrent with the activities of the EPA and the ODEQ, the Portland Harbor Natural Resources Trustee Council (“Trustees”) sent some or all of the same parties, including the Company, a notice of intent to perform a Natural Resource Damage Assessment (“NRDA”) for the Portland Harbor Superfund Site to determine the nature and extent of natural resource damages under CERCLA Section 107. The Trustees for the Portland Harbor Superfund Site consist of representatives from several Northwest Indian Tribes, three federal agencies, and one state agency. The Trustees act independently of the EPA and the ODEQ. The Trustees have encouraged potentially responsible parties to voluntarily participate in the funding of their injury assessments and several of those parties have agreed to do so. In June 2014, the Company agreed to participate in the injury assessment process, which included funding $0.4 million of the assessment. The Company has not assumed any additional payment obligations or liabilities with the participation with the NRDA, nor does the Company expect to incur significant future costs in the resolution of the NRDA.

In January 2017, the Confederated Tribes and Bands of the Yakama Nation, a Trustee until they withdrew from the council in 2009, filed a complaint against the potentially responsible parties including the Company to recover costs related to their own injury assessment and compensation for natural resources damages. The Company does not have sufficient information to determine the likelihood of a loss in this matter or the amount of damages that could be allocated to the Company.

The Company has insurance policies for defense costs, as well as indemnification policies it believes will provide reimbursement for the remediation assessed. However, the Company can provide no assurance that those policies will cover all of the costs which the Company may incur.

All Sites

The Company operates its facilities under numerous governmental permits and licenses relating to air emissions, stormwater runoff, and other environmental matters. The Company’s operations are also governed by many other laws and regulations, including those relating to workplace safety and worker health, principally the Occupational Safety and Health Act and regulations there under which, among other requirements, establish noise and dust standards. The Company believes it is in material compliance with its permits and licenses and these laws and regulations, and the Company does not believe that future compliance with such laws and regulations will have a material adverse effect on its financial position, results of operations, or cash flows.

Other Contingencies and Legal Proceedings

From time to time, the Company is party to a variety of legal actions, including claims, suits, complaints, and investigations arising out of the ordinary course of its business. The Company maintains insurance coverage against potential claims in amounts that are believed to be adequate. To the extent that insurance does not cover legal, defense, and indemnification costs associated with a loss contingency, the Company records accruals when such losses are considered probable and reasonably estimable. The Company believes that it is not presently a party to legal actions, the outcomes of which would have a material adverse effect on its business, financial condition, results of operations, or cash flows.

Commitments

As of September 30, 2022, the Company’s commitments include approximately $7.3 million relating to its investment in a new reinforced concrete pipe mill for which the Company has not yet received the equipment.

Guarantees

The Company has entered into certain letters of credit that total $1.1 million as of September 30, 2022. The letters of credit relate to workers’ compensation insurance.

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Note 11 - Revenue

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

11. Revenue

The Company manufactures water infrastructure steel pipe products, which are generally made to custom specifications for installation contractors serving projects funded by public water agencies, as well as precast and reinforced concrete products. Generally, each of the Company’s contracts with its customers contains a single performance obligation, as the promise to transfer products is not separately identifiable from other promises in the contract and, therefore, is not distinct.

SPP revenue for water infrastructure steel pipe products is recognized over time as the manufacturing process progresses because of the Company’s right to payment for work performed to date plus a reasonable profit on cancellations for unique products that have no alternative use to the Company. Revenue is measured by the costs incurred to date relative to the estimated total direct costs to fulfill each contract (cost-to-cost method). Contract costs include all material, labor, and other direct costs incurred in satisfying the performance obligations. The cost of steel material is recognized as a contract cost when the steel is introduced into the manufacturing process. Changes in job performance, job conditions, and estimated profitability, including those arising from contract change orders, contract penalty provisions, foreign currency exchange rate movements, changes in raw materials costs, and final contract settlements may result in revisions to estimates of revenue, costs, and income, and are recognized in the period in which the revisions are determined. Provisions for losses on uncompleted contracts, included in Accrued liabilities, are estimated by comparing total estimated contract revenue to the total estimated contract costs and a loss is recognized during the period in which it becomes probable and can be reasonably estimated.

Revisions in contract estimates resulted in an increase (decrease) in SPP net sales of $0.2 million and $(0.2) million for the three and nine months ended September 30, 2022, respectively, and approximately $0 and $2.1 million for the three and nine months ended September 30, 2021, respectively.

Precast revenue for water infrastructure concrete pipe and precast concrete products is recognized at the time control is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products. All variable consideration that may affect the total transaction price, including contractual discounts, returns, and credits, is included in net sales. Estimates for variable consideration are based on historical experience, anticipated performance, and management’s judgment. The Company’s contracts do not contain significant financing.

The Company does not recognize revenue on a contract until the contract has approval and commitment from both parties, the contract rights and payment terms can be identified, the contract has commercial substance, and its collectability is probable.

Disaggregation of Revenue

The following table disaggregates revenue by recognition over time or at a point in time, as the Company believes it best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Over time (Engineered Steel Pressure Pipe)	$	83,663	$	69,439	$	235,446	$	188,244
Point in time (Precast Infrastructure and Engineered Systems)		39,321		15,204		115,391		42,522
Net sales	$	122,984	$	84,643	$	350,837	$	230,766

Contract Assets and Liabilities

Contract assets primarily represent revenue earned over time but not yet billable based on the terms of the contracts. These amounts will be billed based on the terms of the contracts, which can include certain milestones, partial shipments, or completion of the contracts. Payment terms of amounts billed vary based on the customer, but are typically due within 30 days of invoicing.

Contract liabilities represent advance billings on contracts, typically for steel. The Company recognized revenue that was included in the contract liabilities balance at the beginning of each period of $2.8 million and $2.6 million during the three and nine months ended September 30, 2022, respectively and $1.5 million and $6.2 million during the three and nine months ended September 30, 2021, respectively.

Backlog

Backlog represents the balance of remaining performance obligations under signed contracts for SPP water infrastructure steel pipe products for which revenue is recognized over time. As of September 30, 2022, backlog was $295 million. The Company expects to recognize 25% of the remaining performance obligations in 2022, 52% in 2023, and the balance thereafter.

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Note 12 - Income Taxes

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

12. Income Taxes

The Company files income tax returns in the United States Federal jurisdiction, in a limited number of foreign jurisdictions, and in many state jurisdictions. With few exceptions, the Company is no longer subject to United States Federal, state, or foreign income tax examinations for years before 2018.

The Company recorded income tax expense at an estimated effective income tax rate of 26.3% and 26.4% for the three and nine months ended September 30, 2022, respectively and 27.9% and 26.1% for the three and nine months ended September 30, 2021, respectively. The Company’s estimated effective income tax rates for the three and nine months ended September 30, 2022 and 2021 were primarily impacted by non-deductible permanent differences.

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Note 13 - Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

13. Accumulated Other Comprehensive Loss

The following table summarizes changes in the components of Accumulated other comprehensive loss (in thousands). All amounts are net of income tax:

	Pension Liability Adjustment			Unrealized Loss on Foreign Currency Forward Contracts Designated as Cash Flow Hedges			Unrealized Gain on Interest Rate Swap Designated as Cash Flow Hedge		Total
Balances, December 31, 2021	$	(1,487	)	$	(195	)	$	-	$	(1,682	)
Other comprehensive income (loss) before reclassifications		61			(383	)		602		280
Amounts reclassified from Accumulated other comprehensive loss		5			138			59		202
Net current period other comprehensive income (loss)		66			(245	)		661		482
Balances, September 30, 2022	$	(1,421	)	$	(440	)	$	661	$	(1,200	)

The following table provides additional detail about Accumulated other comprehensive loss components that were reclassified to the Condensed Consolidated Statements of Operations (in thousands):

	Amount reclassified from												Affected line item
	Accumulated Other Comprehensive Loss												in the Condensed
	Three Months Ended						Nine Months Ended						Consolidated
Details about Accumulated Other	September 30,						September 30,						Statements of
Comprehensive Loss Components	2022			2021			2022			2021			Operations
Pension liability adjustment:
Net periodic pension cost:
Service cost	$	(2	)	$	(4	)	$	(5	)	$	(12	)	Cost of sales
		(2	)		(4	)		(5	)		(12	)	Net of tax
Unrealized gain (loss) on foreign currency forward contracts:
Gain (loss) on cash flow hedges		35			(15	)		(56	)		(71	)	Net sales
Loss on cash flow hedges		-			-			(127	)		-		Property and equipment
Associated income tax benefit		22			4			45			18		Income tax expense
		57			(11	)		(138	)		(53	)	Net of tax
Unrealized gain (loss) on interest rate swap:
Gain (loss) on cash flow hedge		4			-			(78	)		-		Interest expense
Associated income tax (expense) benefit		(1	)		-			19			-		Income tax expense
		3			-			(59	)		-		Net of tax
Total reclassifications for the period	$	58		$	(15	)	$	(202	)	$	(65	)

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Note 14 - Net Income Per Share

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

14. Net Income per Share

Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by giving effect to all potential shares of common stock, including stock options, RSUs, and PSAs, to the extent dilutive. Performance-based PSAs are considered dilutive when the related performance conditions have been met assuming the end of the reporting period represents the end of the performance period. In periods with a net loss, all potential shares of common stock are excluded from the computation of diluted net loss per share as the impact would be antidilutive.

Net income per basic and diluted weighted-average common share outstanding was calculated as follows (in thousands, except per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	9,956	$	4,946	$	23,188	$	9,252
Basic weighted-average common shares outstanding		9,927		9,871		9,909		9,849
Effect of potentially dilutive common shares (1)		83		50		79		69
Diluted weighted-average common shares outstanding		10,010		9,921		9,988		9,918
Net income per common share:
Basic	$	1.00	$	0.50	$	2.34	$	0.94
Diluted	$	0.99	$	0.50	$	2.32	$	0.93

(1) The weighted-average number of antidilutive shares not included in the computation of diluted net income per share was approximately 77,000 for the three months ended September 30, 2021. There were no antidilutive shares for the three and nine months ended September 30, 2022 and the nine months ended September 30, 2021.

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Note 15 - Segment Information

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

15. Segment Information

The operating segments reported below are based on the nature of the products sold and the manufacturing process used by the Company and are the segments of the Company for which separate financial information is available and for which operating results are regularly evaluated by the Company’s chief operating decision maker, its Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance. Management evaluates segment performance based on gross profit. The Company does not allocate selling, general, and administrative expenses, interest, other non-operating income or expense items, or taxes to segments.

The Company’s Engineered Steel Pressure Pipe segment (SPP) manufactures large-diameter, high-pressure steel pipeline systems for use in water infrastructure applications, which are primarily related to drinking water systems. These products are also used for hydroelectric power systems, wastewater systems, and other applications. In addition, SPP makes products for industrial plant piping systems and certain structural applications. SPP has manufacturing facilities located in Adelanto and Tracy, California; St. Louis, Missouri; Portland, Oregon; Saginaw, Texas; Parkersburg, West Virginia; and San Luis Río Colorado, Mexico.

The Company’s Precast Infrastructure and Engineered Systems segment (Precast) manufactures high-quality precast and reinforced concrete products, including manholes, box culverts, vaults, catch basins, oil water separators, pump lift stations, biofiltration, and other environmental and engineered solutions. Precast has manufacturing facilities located in Dallas, Houston, and San Antonio, Texas; and Orem, Salt Lake City, and St. George, Utah.

The following table disaggregates revenue and gross profit based on the Company’s reportable segments (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales:
Engineered Steel Pressure Pipe	$	83,663	$	69,439	$	235,446	$	188,244
Precast Infrastructure and Engineered Systems		39,321		15,204		115,391		42,522
Total	$	122,984	$	84,643	$	350,837	$	230,766
Gross profit:
Engineered Steel Pressure Pipe	$	14,196	$	8,844	$	32,490	$	22,613
Precast Infrastructure and Engineered Systems		10,922		3,519		31,494		8,063
Total	$	25,118	$	12,363	$	63,984	$	30,676

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Note 16 - Recent Accounting and Reporting Developments

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

16. Recent Accounting and Reporting Developments

There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s Condensed Consolidated Financial Statements and disclosures in Notes to Condensed Consolidated Financial Statements, from those disclosed in the Company’s 2021 Form 10‑K.

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Note 2 - Business Combination (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

Assets
Cash and cash equivalents	$	278
Trade and other receivables		11,034
Inventories		12,773
Prepaid expenses and other		293
Property and equipment		8,076
Operating lease right-of-use assets		58,301
Intangible assets		31,000
Deferred income taxes		347
Total assets acquired		122,102
Liabilities
Accounts payable		2,029
Accrued liabilities		4,067
Operating lease liabilities		58,301
Total liabilities assumed		64,397
Goodwill		32,519
Total purchase consideration	$	90,224

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

	Estimated Useful Life		Fair Value
	(In years)		(In thousands)
Customer relationships		10.0	$	19,800
Trade names and trademarks		10.0		9,600
Patents		21.0		1,300
Backlog		0.6		300
Total intangible assets		10.2	$	31,000

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
Net sales	$	105,345	$	283,005
Net income		2,477		12,247

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Note 3 - Inventories (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Schedule Of Inventory Current And Non Current [Table Text Block]

	September 30, 2022		December 31, 2021
Raw materials	$	52,915	$	44,697
Work-in-process		3,817		3,018
Finished goods		12,646		10,096
Supplies		2,200		1,840
Total inventories	$	71,578	$	59,651

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Note 4 - Goodwill (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Schedule of Goodwill [Table Text Block]

Goodwill, December 31, 2021	$	53,684
Measurement period adjustment (Note 2)		1,820
Goodwill, September 30, 2022	$	55,504

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Note 6 - Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Total			Level 1		Level 2			Level 3
As of September 30, 2022
Financial assets:
Deferred compensation plan	$	3,410		$	2,902	$	508		$	-
Interest rate swaps		879			-		879			-
Foreign currency forward contracts		1,123			-		1,123			-
Total financial assets	$	5,412		$	2,902	$	2,510		$	-
Financial liabilities:
Foreign currency forward contracts	$	(1,209	)	$	-	$	(1,209	)	$	-
As of December 31, 2021
Financial assets:
Deferred compensation plan	$	4,321		$	3,830	$	491		$	-
Foreign currency forward contracts		17			-		17			-
Total financial assets	$	4,338		$	3,830	$	508		$	-
Financial liabilities:
Foreign currency forward contracts	$	(661	)	$	-	$	(661	)	$	-

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Note 7 - Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Derivative Instruments, Gain (Loss) [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022			2021
Foreign currency forward contracts:
Net sales	$	599	$	145	$	841		$	44
Property and equipment		32		-		(95	)		-
Interest rate swaps:
Interest expense		4		-		(78	)		-
Total	$	635	$	145	$	668		$	44

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Note 9 - Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cost of sales	$	474	$	202	$	822	$	685
Selling, general, and administrative expense		695		395		1,655		1,752
Total	$	1,169	$	597	$	2,477	$	2,437

Schedule of Unvested Restricted Stock Units and Performance Share Awards Activity [Table Text Block]

	Number of RSUs and PSAs (1)			Weighted-Average Grant Date Fair Value
Unvested RSUs and PSAs as of December 31, 2021		161,131		$	30.26
RSUs and PSAs granted		116,622			30.68
Unvested RSUs and PSAs canceled		(8,248	)		31.18
RSUs and PSAs vested (2)		(68,581	)		29.29
Unvested RSUs and PSAs as of September 30, 2022		200,924			30.80

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Note 11 - Revenue (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Over time (Engineered Steel Pressure Pipe)	$	83,663	$	69,439	$	235,446	$	188,244
Point in time (Precast Infrastructure and Engineered Systems)		39,321		15,204		115,391		42,522
Net sales	$	122,984	$	84,643	$	350,837	$	230,766

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Note 13 - Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Schedule of Changes in Accumulated Other Comprehensive Income Loss [Table Text Block]

	Pension Liability Adjustment			Unrealized Loss on Foreign Currency Forward Contracts Designated as Cash Flow Hedges			Unrealized Gain on Interest Rate Swap Designated as Cash Flow Hedge		Total
Balances, December 31, 2021	$	(1,487	)	$	(195	)	$	-	$	(1,682	)
Other comprehensive income (loss) before reclassifications		61			(383	)		602		280
Amounts reclassified from Accumulated other comprehensive loss		5			138			59		202
Net current period other comprehensive income (loss)		66			(245	)		661		482
Balances, September 30, 2022	$	(1,421	)	$	(440	)	$	661	$	(1,200	)

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

	Amount reclassified from												Affected line item
	Accumulated Other Comprehensive Loss												in the Condensed
	Three Months Ended						Nine Months Ended						Consolidated
Details about Accumulated Other	September 30,						September 30,						Statements of
Comprehensive Loss Components	2022			2021			2022			2021			Operations
Pension liability adjustment:
Net periodic pension cost:
Service cost	$	(2	)	$	(4	)	$	(5	)	$	(12	)	Cost of sales
		(2	)		(4	)		(5	)		(12	)	Net of tax
Unrealized gain (loss) on foreign currency forward contracts:
Gain (loss) on cash flow hedges		35			(15	)		(56	)		(71	)	Net sales
Loss on cash flow hedges		-			-			(127	)		-		Property and equipment
Associated income tax benefit		22			4			45			18		Income tax expense
		57			(11	)		(138	)		(53	)	Net of tax
Unrealized gain (loss) on interest rate swap:
Gain (loss) on cash flow hedge		4			-			(78	)		-		Interest expense
Associated income tax (expense) benefit		(1	)		-			19			-		Income tax expense
		3			-			(59	)		-		Net of tax
Total reclassifications for the period	$	58		$	(15	)	$	(202	)	$	(65	)

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Note 14 - Net Income Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	9,956	$	4,946	$	23,188	$	9,252
Basic weighted-average common shares outstanding		9,927		9,871		9,909		9,849
Effect of potentially dilutive common shares (1)		83		50		79		69
Diluted weighted-average common shares outstanding		10,010		9,921		9,988		9,918
Net income per common share:
Basic	$	1.00	$	0.50	$	2.34	$	0.94
Diluted	$	0.99	$	0.50	$	2.32	$	0.93

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Note 15 - Segment Information (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales:
Engineered Steel Pressure Pipe	$	83,663	$	69,439	$	235,446	$	188,244
Precast Infrastructure and Engineered Systems		39,321		15,204		115,391		42,522
Total	$	122,984	$	84,643	$	350,837	$	230,766
Gross profit:
Engineered Steel Pressure Pipe	$	14,196	$	8,844	$	32,490	$	22,613
Precast Infrastructure and Engineered Systems		10,922		3,519		31,494		8,063
Total	$	25,118	$	12,363	$	63,984	$	30,676

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Note 1 - Organization and Basis of Presentation (Details Textual)	9 Months Ended
	Sep. 30, 2022
Number of Operating Segments	2
Number of Manufacturing Facilities	13

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Note 2 - Business Combination (Details Textual) - Park Environmental Equipment, LLC [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Oct. 05, 2021
Business Acquisition, Percentage of Voting Interests Acquired					100.00%
Payments to Acquire Businesses, Net of Cash Acquired, Total			$ 90,200
Goodwill, Purchase Accounting Adjustments	$ 1,800		1,820
Business Combination, Acquisition Related Costs	0	$ 600	100	$ 800
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred	$ 1,800		$ 1,800

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Note 2 - Business Combination - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Oct. 05, 2021	Sep. 30, 2022	Dec. 31, 2021
Liabilities
Goodwill		$ 55,504	$ 53,684
Park Environmental Equipment, LLC [Member]
Assets
Cash and cash equivalents	$ 278
Trade and other receivables	11,034
Inventories	12,773
Prepaid expenses and other	293
Property and equipment	8,076
Operating lease right-of-use assets	58,301
Intangible assets	31,000
Deferred income taxes	347
Total assets acquired	122,102
Liabilities
Accounts payable	2,029
Accrued liabilities	4,067
Operating lease liabilities	58,301
Total liabilities assumed	64,397
Goodwill	32,519
Total purchase consideration	$ 90,224

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Note 2 - Business Combination - Intangible Assets Acquired (Details) - Park Environmental Equipment, LLC [Member] $ in Millions	Oct. 05, 2021 USD ($)
Intangible Asset Acquired, Useful Life (Year)	10 years 2 months 12 days
Intangible Asset Acquired, Fair Value	$ 31.0
Customer Relationships [Member]
Intangible Asset Acquired, Useful Life (Year)	10 years
Intangible Asset Acquired, Fair Value	$ 19.8
Trademarks and Trade Names [Member]
Intangible Asset Acquired, Useful Life (Year)	10 years
Intangible Asset Acquired, Fair Value	$ 9.6
Patents [Member]
Intangible Asset Acquired, Useful Life (Year)	21 years
Intangible Asset Acquired, Fair Value	$ 1.3
Backlog [Member]
Intangible Asset Acquired, Useful Life (Year)	7 months 6 days
Intangible Asset Acquired, Fair Value	$ 0.3

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Note 2 - Business Combination - Pro Forma Summary (Details) - Park Environmental Equipment, LLC [Member] - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021
Net sales	$ 105,345	$ 283,005
Net income	$ 2,477	$ 12,247

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Note 3 - Inventories - Components of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Raw materials	$ 52,915	$ 44,697
Work-in-process	3,817	3,018
Finished goods	12,646	10,096
Supplies	2,200	1,840
Total inventories	$ 71,578	$ 59,651

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Note 4 - Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Goodwill		$ 53,684
Goodwill	$ 55,504	55,504
Park Environmental Equipment, LLC [Member]
Measurement period adjustment (Note 2)	$ 1,800	$ 1,820

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Note 5 - Current Debt (Details Textual) - Interim Funding AgreementIFA [Member] - USD ($) $ in Millions	1 Months Ended
	Aug. 31, 2022	Sep. 30, 2022
Debt Instrument, Face Amount	$ 13.5
Long-Term Debt, Total		$ 3.5
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	1.75%

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Note 6 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Deferred compensation plan	$ 3,410	$ 4,321
Total financial assets	5,412	4,338
Foreign currency forward contracts	(1,209)	(661)
Interest Rate Swap [Member]
Derivative assets	879
Foreign Exchange Forward [Member]
Derivative assets	1,123	17
Fair Value, Inputs, Level 1 [Member]
Deferred compensation plan	2,902	3,830
Total financial assets	2,902	3,830
Foreign currency forward contracts	0	0
Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member]
Derivative assets	0
Fair Value, Inputs, Level 1 [Member] | Foreign Exchange Forward [Member]
Derivative assets	0	0
Fair Value, Inputs, Level 2 [Member]
Deferred compensation plan	508	491
Total financial assets	2,510	508
Foreign currency forward contracts	(1,209)	(661)
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member]
Derivative assets	879
Fair Value, Inputs, Level 2 [Member] | Foreign Exchange Forward [Member]
Derivative assets	1,123	17
Fair Value, Inputs, Level 3 [Member]
Deferred compensation plan	0	0
Total financial assets	0	0
Foreign currency forward contracts	0	0
Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member]
Derivative assets	0
Fair Value, Inputs, Level 3 [Member] | Foreign Exchange Forward [Member]
Derivative assets	$ 0	$ 0

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Note 7 - Derivative Instruments and Hedging Activities (Details Textual) € in Millions, $ in Millions, $ in Millions	Apr. 03, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 CAD ($)	Sep. 30, 2022 EUR (€)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 CAD ($)
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months		$ (0.3)
Reclassified to Net Sales [Member]
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months		0.4
Reclassified to Property and Equipment [Member]
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months		(1.1)
Reclassified to Interest Expense [Member]
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months		0.6
Interest Rate Swap [Member]
Derivative, Notional Amount		$ 31.7
Derivative, Fixed Interest Rate		1.941%	1.941%	1.941%
Interest Rate Swap [Member] | Forecast [Member]
Derivative, Notional Amount	$ 15.0
Derivative, Fixed Interest Rate	2.96%
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member]
Derivative, Notional Amount		$ 17.8	$ 24.6		$ 19.0	$ 24.1
Designated as Hedging Instrument [Member] | Second Foreign Exchange Forward Contract [Member]
Derivative, Notional Amount		7.3		€ 7.4
Not Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member]
Derivative, Notional Amount		$ 0.7	$ 1.0

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Note 7 - Derivative Instruments and Hedging Activities - Summary of Gains (Losses) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Gains (losses) recognized on derivatives	$ 635	$ 145	$ 668	$ 44
Foreign Exchange Forward [Member] | Sales [Member]
Gains (losses) recognized on derivatives	599	145	841	44
Foreign Exchange Forward [Member] | Property and Equipment [Member]
Gains (losses) recognized on derivatives	32	0	(95)	0
Interest Rate Swap [Member] | Interest Expense [Member]
Gains (losses) recognized on derivatives	$ 4	$ 0	$ (78)	$ 0

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Note 8 - Stockholders' Equity (Details Textual) - USD ($)	Sep. 30, 2022	Sep. 02, 2022	Dec. 31, 2021
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
At-the-Market Offering [Member]
Equity Offering, Maximum Offering Amount		$ 50,000,000
Equity Offering, Commission, Percentage of Gross Proceeds		3.00%

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Note 9 - Share-based Compensation (Details Textual) $ / shares in Units, $ in Millions		9 Months Ended		12 Months Ended
		Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2021 $ / shares shares	Dec. 31, 2021	Dec. 31, 2020
Number Of Active Stock Incentive Plans		1
Number Of Inactive Stock Incentive Plans		1
Performance Shares [Member]
Performance Share Award Target Level, Percentage		100.00%
Performance Awards Issued Multiplier				93.00%	141.00%
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Number At Target Level Of Performance (in shares)		149,000
Performance Shares [Member] | Minimum [Member]
Performance Awards Issued Multiplier		0.00%
Performance Shares [Member] | Maximum [Member]
Performance Awards Issued Multiplier		200.00%
Restricted Stock Units and Performance Stock Awards [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $		$ 4.6
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)		1 year 7 months 6 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	[1]	116,622
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares		$ 30.68
Stock Awards [Member] | Director [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)		11,380	12,606
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares		$ 30.75	$ 30.94

[1] The number of PSAs disclosed in this table are at the target level of 100%.

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Note 9 - Share-based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based compensation expense	$ 1,169	$ 597	$ 2,477	$ 2,437
Cost of Sales [Member]
Share-based compensation expense	474	202	822	685
Selling, General and Administrative Expenses [Member]
Share-based compensation expense	$ 695	$ 395	$ 1,655	$ 1,752

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Note 9 - Share-based Compensation - RSU and PSA Activity (Details) - Restricted Stock Units and Performance Stock Awards [Member]	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Unvested RSUs and PSAs (in shares) | shares	161,131	[1]
Unvested RSUs and PSAs, weighted average grant date fair value (in dollars per share) | $ / shares	$ 30.26
RSUs and PSAs granted (in shares) | shares	116,622	[1]
RSUs and PSAs granted, weighted average grant date fair value (in dollars per share) | $ / shares	$ 30.68
Unvested RSUs and PSAs canceled (in shares) | shares	(8,248)	[1]
Unvested RSUs and PSAs canceled, weighted average grant date fair value (in dollars per share) | $ / shares	$ 31.18
RSUs and PSAs vested (in shares) | shares	(68,581)	[1],[2]
RSUs and PSAs vested, weighted average grant date fair value (in dollars per share) | $ / shares	$ 29.29	[2]
Unvested RSUs and PSAs (in shares) | shares	200,924	[1]
Unvested RSUs and PSAs, weighted average grant date fair value (in dollars per share) | $ / shares	$ 30.80

[1] The number of PSAs disclosed in this table are at the target level of 100%.

[2] For the PSAs vested on March 31, 2022, the actual number of common shares that were issued was determined by multiplying the PSAs by a payout percentage based on the performance-based conditions achieved. The payout percentage was 141% for the 2020-2021 performance period and 93% for the 2021 performance period.

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Note 10 - Commitments and Contingencies (Details Textual) $ in Millions	1 Months Ended
	Jan. 31, 2017 USD ($)	Sep. 30, 2022 USD ($)	Jun. 30, 2014 USD ($)
Other Commitment, Amount Paid for Equipment Purchased Yet Not Received		$ 7.3
Letters of Credit Outstanding, Amount		$ 1.1
Portland Harbor Natural Resources Trustee Council [Member]
Loss Contingency, Accrual, Current			$ 0.4
Portland Harbor Superfund Site [Member]
Number Of Potentially Responsible Parties	150
Estimated Cost of EPA Selected Remedy	$ 1,000.0
Estimated Time to Complete Selected EPA Remedy (Year)	13 years
Lower Willamette Group [Member]
Number Of Potentially Responsible Parties	14

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Note 11 - Revenue 1 (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Increase (Decrease) in Revenue from Contract with Customers, Including Assessed Tax	$ 200	$ 0	$ 200	$ 2,100
Contract with Customer, Liability, Revenue Recognized	2,800	$ 1,500	2,600	$ 6,200
Revenue, Remaining Performance Obligation, Amount	$ 295,000		$ 295,000

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Note 11 - Revenue 2 (Details Textual)	Sep. 30, 2022
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Percentage	25.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year)	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Percentage	52.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year)	1 year

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Note 11 - Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Net sales	$ 122,984	$ 84,643	$ 350,837	$ 230,766
Transferred over Time [Member]
Net sales	83,663	69,439	235,446	188,244
Transferred at Point in Time [Member]
Net sales	$ 39,321	$ 15,204	$ 115,391	$ 42,522

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Note 12 - Income Taxes (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Effective Income Tax Rate Reconciliation, Percent, Total	26.30%	27.90%	26.40%	26.10%

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Note 13 - Accumulated Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Balance	$ 296,944	$ 274,712	$ 283,383	$ 269,626
Net current period other comprehensive income (loss)	608	54	482	160
Balance	308,677	280,309	308,677	280,309
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Balance			(1,487)
Other comprehensive income (loss) before reclassifications			61
Amounts reclassified from Accumulated other comprehensive loss			5
Net current period other comprehensive income (loss)			66
Balance	(1,421)		(1,421)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Foreign Exchange Forward [Member]
Balance			(195)
Other comprehensive income (loss) before reclassifications			(383)
Amounts reclassified from Accumulated other comprehensive loss			138
Net current period other comprehensive income (loss)			(245)
Balance	(440)		(440)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Interest Rate Swap [Member]
Balance			0
Other comprehensive income (loss) before reclassifications			602
Amounts reclassified from Accumulated other comprehensive loss			59
Net current period other comprehensive income (loss)			661
Balance	661		661
AOCI Attributable to Parent [Member]
Balance	(1,808)	(1,760)	(1,682)	(1,866)
Other comprehensive income (loss) before reclassifications			280
Amounts reclassified from Accumulated other comprehensive loss			202
Net current period other comprehensive income (loss)			482
Balance	$ (1,200)	$ (1,706)	$ (1,200)	$ (1,706)

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Note 13 - Accumulated Other Comprehensive Loss - Reclassification of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Cost of sales	$ 97,866	$ 72,280	$ 286,853	$ 200,090
Net income	9,956	4,946	23,188	9,252
Net sales	122,984	84,643	350,837	230,766
Tax (expense) benefit	(3,555)	(1,914)	(8,310)	(3,268)
Interest expense	964	112	2,393	687
Income tax expense	3,555	1,914	8,310	3,268
Reclassification out of Accumulated Other Comprehensive Income [Member]
Net income	58	(15)	(202)	(65)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Foreign Exchange Forward [Member]
Net income	57	(11)	(138)	(53)
Net sales	35	(15)	(56)	(71)
Property and equipment	0	0	(127)	0
Tax (expense) benefit	22	4	45	18
Income tax expense	(22)	(4)	(45)	(18)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Interest Rate Swap [Member]
Net income	3	0	(59)	0
Tax (expense) benefit	1	0	(19)	0
Interest expense	4	0	(78)	0
Income tax expense	(1)	0	19	0
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Cost of sales	(2)	(4)	(5)	(12)
Net income	$ (2)	$ (4)	$ (5)	$ (12)

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Note 14 - Net Income Per Share (Details Textual) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	0	77,000	0	0

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Note 14 - Net Income Per Share - Loss Per Basic and Diluted Weighted Average Common Share Outstanding for Continuing and Discontinued Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Net income		$ 9,956	$ 4,946	$ 23,188	$ 9,252
Basic (in shares)		9,927	9,871	9,909	9,849
Effect of potentially dilutive common shares (in shares)	[1]	83	50	79	69
Diluted weighted-average common shares outstanding (in shares)		10,010	9,921	9,988	9,918
Basic (in dollars per share)		$ 1.00	$ 0.50	$ 2.34	$ 0.94
Diluted (in dollars per share)		$ 0.99	$ 0.50	$ 2.32	$ 0.93

[1] There were no antidilutive shares for the years ended December 31, 2021, 2020 or 2019.

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Note 15 - Segment Information - Information Related to the Operations of the Company's Operating Segments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Net sales	$ 122,984	$ 84,643	$ 350,837	$ 230,766
Gross profit	25,118	12,363	63,984	30,676
Operating Segments [Member] | Engineered Steel Pressure Pipe [Member]
Net sales	83,663	69,439	235,446	188,244
Gross profit	14,196	8,844	32,490	22,613
Operating Segments [Member] | Precast Infrastructure and Engineered Systems [Member]
Net sales	39,321	15,204	115,391	42,522
Gross profit	$ 10,922	$ 3,519	$ 31,494	$ 8,063