Slide 1: Investor Presentation August 2023
INVESTOR PRESENTATION AUGUST 2023 WWW.NWPIPE.COM
Slide 2: Forward Looking Statements; Non-GAAP Measures
FORWARD LOOKING STATEMENTS 2 Statements in this presentation 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 proj
Slide 3: About Northwest Pipe Company
ABOUT NORTHWEST PIPE COMPANY 3 Leading manufacturer of water-related infrastructure products including engineered steel pressure pipe and precast and reinforced concrete products • Founded in 1966 and headquartered in Vancouver, WA • Strategically positioned to meet North America's growing needs for
Slide 4: Growth Strategy
GROWTH STRATEGY 4 Northwest Pipe’s goal is to create transformational growth and profitability in order to drive shareholder value. The strategy is two-pronged: 1. Maximize steel pressure pipe water transmission business through cost reduction measures, Lean manufacturing and a continued emphasis on
Slide 5: Strong Demand Drives Strong Performance
STRONG DEMAND DRIVES STRONG 5 PERFORMANCE Backlog1 and Order Book2 Revenue ($ Millions) ($ Millions) Achieved record SPP backlog and maintained Grew SPP revenues by over 2x since 2017 and strong Precast order book in 2022 more than tripled the size of the Company $372 with the addition of Precast $4
Slide 6: Total Stockholder Return
TOTAL STOCKHOLDER RETURN 6 Northwest Pipe Company’s total stockholder returns have consistently outpaced the Russell 2000 Index, the S&P 600 Construction Machinery & Heavy Trucks Index and proxy peer group over the last five years. $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 12/17 12/18 12/19 1
Slide 7: Strategic Footprint with Customer Access Across the U.S.
STRATEGIC FOOTPRINT WITH 7 CUSTOMER ACCESS ACROSS THE U.S. 20-year water infrastructure investment need by state Northwest Pipe is well positioned to serve its customers and states that are most in need of water 1 infrastructure investment. CORPORATE HEADQUARTERS ENGINEERED STEEL PRESSURE PIPE PLANT
Slide 8: Large Addressable Market Opportunity
LARGE ADDRESSABLE MARKET 8 OPPORTUNITY Steel Pressure Pipe Concrete Pipe & Precast1 Solution-based NWPX’s products serve the Share: steel pressure pipe NWPX’s $3.5 – $150 M (~4%) and concrete and $5.0 B Share: precast structure $308 M (~55%) market for a wide range of use cases. Total Addressable Ma
Slide 9: Product Spread Strategy
PRODUCT SPREAD STRATEGY 9 An initiative to add the production of ParkUSA products to legacy Northwest Pipe plants, and vice versa in order to expand our production and maximize overall efficiencies. Level 1 Level 2 • Build out capacity utilization at ParkUSA plants in • Produce and ship ParkUSA prod
Slide 10: Q2 2023 Highlights
Q2 2023 HIGHLIGHTS 10 • Backlog of $343 million including confirmed orders1 for the Engineered Steel Pressure Pipe segment • Strong order book of $58 million for the Precast Infrastructure and Engineered Systems segment Net Sales by Segment Gross Profit by Segment ($ Millions) 35% ($ Millions) $3.5
Slide 11: Capital Allocation Strategy
CAPITAL ALLOCATION STRATEGY 11 Use of Cash Priorities: • Prioritizing organic growth through “Product Spread” strategy for ParkUSA Organic Growth • Reinvesting in Precast locations to increase production capabilities and capacity through expansion and automation • Focused on repaying debt incurred t
Slide 12: Acquisition Criteria
ACQUISITION CRITERIA 12 Northwest Pipe’s acquisition criteria focuses on organic growth, strong margin characteristics, solid asset efficiency and a positive cash flow profile. Priorities Include • Accretive to earnings • Asset efficiency • Strong financial performance • Industry and geographic loca
Slide 13: Social and Environmental Responsibility
SOCIAL AND ENVIRONMENTAL 13 RESPONSIBILITY We are highly focused on investing in our workforce, health and safety programs, social initiatives, and improvements to our environmental stewardship. Health & Safety Diversity & Inclusion Environmental Stewardship • Industry-leading safety performance ove
Slide 14: Strategic and Operational Initiatives
STRATEGIC AND OPERATIONAL 14 INITIATIVES 1. Integrate ParkUSA acquisition as quickly and as efficiently as possible 2. Improve performance through a persistent focus on margin over volume 3. Continue to implement cost reductions and efficiencies at all levels of the Company 4. Identify strategic opp
Slide 15: Investment Highlights
INVESTMENT HIGHLIGHTS 15 • Well-positioned to benefit from historic strong backlog and growing market demand for both new and existing water infrastructure upgrades • Large addressable market provides opportunities for further expansion • Diversification strategy helps reduce impacts from market cyc
Slide 16: Appendix
APPENDIX
Slide 17: Favorable SPP Market Dynamics
1 FAVORABLE SPP MARKET DYNAMICS 17 • U.S. water consumption equal to 82 gallons per person per day Infrastructure Dollars • Substantial non-revenue water loss: Impacting Starts Trajectory2 • 2.1 trillion gallons of treated drinking water lost annually due $80.0 Environmental Public Works to water ma
Slide 18: Demand Drivers
DEMAND DRIVERS 18 • Aging water and wastewater systems • Heightened need for upgrades, repairs, and replacements of existing water infrastructure • Housing starts • Population growth and new population centers intensify the need for new water infrastructure $3.5 – • Rising $5.0 B demand on developed
Slide 19: Competitive Strengths
COMPETITIVE 19 STRENGTHS Well-Positioned Industry Leader • Largest, most flexible capacity in the Steel Pressure Pipe (“SPP”) market • Skilled project management group • In-house fabrication capabilities provide a complete engineered system • Added core competency in precast concrete provides new op
Slide 20: Wide-Ranging Product Capabilities
WIDE-RANGING PRODUCT CAPABILITIES 20 Engineered Steel Permalok® Steel RCP & Precast Lined RCP Pipe Water Pipe Casing Pipe Concrete & Manholes Stormwater Wastewater Pump Lift Bar-Wrapped Technology Technology Stations Concrete Pipe
Slide 21: Strategic Acquisitions
STRATEGIC ACQUISITIONS 21 • Completed the acquisition of Geneva Pipe and Precast on January 31, 2020 for $49.4 million • Concrete pipe and precast concrete products, plants located in Utah • Products used for waste and storm water applications by cities, municipalities and local governments GENEVA •
Slide 22: Eastern Market Update: Water Transmission Projects
EASTERN MARKET UPDATE: 22 WATER TRANSMISSION PROJECTS H.R.3684 Infrastructure Investment and Jobs Act has been signed into law adding $55 billion in federal funding for relevant, water infrastructure projects through Fiscal Year 2026. • Houston – Surface Water Program • Bidding 1,500 tons of pipe in
Slide 23: Western Market Update: Water Transmission Projects
WESTERN MARKET UPDATE: 23 WATER TRANSMISSION PROJECTS • California – Prop 1 $7.5 B Bond for Water Infrastructure • The Sites Reservoir – water storage project with over 30 miles of 144” pipeline; received $30M in IIJA funding in Q4 2022 • Harvest Water – provides recycled wastewater for agricultural
Slide 24: Q&A
Q&A
Slide 25: Northwest Pipe Company August 2023
Northwest Pipe Company AUGUST 2023 WWW.NWPIPE.COM