Pipe extruder PW Eagle Inc. of Eugene, Ore., is expanding production capacity at its plant in Cameron Park, Calif.
Officials announced the move Aug. 8, when they held a conference call with analysts on the results of PW's second quarter. PW is the second publicly held pipe firm to announce improved financial results for the first half of 2005. Beachwood, Ohio-based Lamson & Sessions Co. reported record sales on July 26.
``Our business continued to perform well in the second quarter,'' said Jerry Dukes, president and chief executive officer. ``Volumes increased from the first quarter and we had record net sales for the second consecutive quarter. This represents the first time since the third quarter of 2002 that we have posted two consecutive profitable quarters.''
Officials did not disclose specifics of the expansion, other than to say that it is an expansion of its existing PVC proprietary product line. The company had sales of nearly $162 million for its quarter, and $304 million in total sales for the first half; that compares with sales of $118 million for the second quarter of 2004 and $224 million for the first half of 2004.
The company itself is in its best financial position in recent history, said Scott Long, chief financial officer. PW was able to reduce total debt by $15 million and is in compliance with all loan covenants, and it sold off the metals business of USPoly. That business represented $6 million in annual sales, and was divested because it did not fit into the company's core pipe and fittings business.
Dukes said the firm saw prices for PVC pipe and resin decline near the end of the second quarter, negatively impacting margins.
``We are not providing any outlook on margins for the third quarter; however, we anticipate continued steady demand in the third quarter, and with announced resin prices to take effect in September, we would expect pipe prices to increase as well,'' he said.