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Northwest Pipe Reports First Quarter 2014 Results and Announces Conference Call

VANCOUVER, WA -- (Marketwired) -- 05/07/14 -- Northwest Pipe Company (NASDAQ: NWPX) today announced its financial results for the quarter ended March 31, 2014. The Company will broadcast its first quarter 2014 earnings conference call on Thursday, May 8, 2014, at 8:00 am PDT.

First Quarter 2014 Results

Net sales from continuing operations for the quarter ended March 31, 2014 decreased 23.0% to $82.6 million compared to $107.3 million for the quarter ended March 31, 2013. Gross profit was $4.3 million (5.2% of net sales from continuing operations) in the first quarter of 2014, a decrease from $22.9 million (21.4% of net sales from continuing operations) in the first quarter of 2013. Net loss from continuing operations for the first quarter of 2014 was $1.2 million or $0.13 per diluted share compared to net income from continuing operations of $11.0 million or $1.16 per diluted share for the first quarter of 2013.

Water Transmission sales decreased by 45.3% to $43.0 million in the first quarter of 2014 from $78.6 million in the first quarter of 2013. The decrease in net sales was due to continued weakness in municipal markets. Water Transmission gross profit decreased to $1.7 million (3.9% of segment net sales) in the first quarter of 2014 from $19.9 million (25.3% of segment net sales) in the same quarter of 2013. Water Transmission gross profit decreased in total and as a percent of net sales due to the significant decrease in volume compared to the same period a year ago.

Tubular Products sales from continuing operations increased 38.0% to $39.6 million in the first quarter of 2014 from $28.7 million in the first quarter of 2013, driven by a 41% increase in tons sold from 27,600 tons in the first quarter of 2013 to 39,000 tons in the first quarter of 2014 and partially offset by a 2% decrease in average selling price per ton. Tubular Products gross profit from continuing operations decreased by 12.8% to $2.6 million (6.7% of segment net sales from continuing operations) in the first quarter of 2014 from $3.0 million (10.6% of segment net sales from continuing operations) in the first quarter of 2013. Gross profit was negatively impacted by planned downtime for the replacement of the existing front end of our 16 inch mill at our Atchison plant in March 2014.

As previously announced on March 31, 2014, the Company completed the sale of substantially all of its oil country tubular goods business. The net loss of discontinued operations in the first quarter of 2014 was $8.7 million or $0.91 per diluted share, which included a pre-tax loss on the sale of the business of $12.1 million.

As of March 31, 2014, the backlog of orders in the Water Transmission segment was approximately $148 million compared to a backlog of orders of $136 million as of March 31, 2013. The backlog includes confirmed orders, including the balance of projects in process, and projects for which the Company has been notified that it was the successful bidder even though a binding agreement has not been executed.


"Our first quarter was significantly affected by a series of charges related to our recent acquisitions, divestitures and scheduled downtime. We believe the second quarter of 2014 will improve. The Water Transmission segment is expected to have higher net sales, with gross margin in the low to mid-teens. We will start production on the Integrated Pipeline Project in the second quarter, and expect production will run through the fourth quarter of 2014," said Scott Montross, President and Chief Executive Officer of the Company. "We are still ramping up our Atchison operations after the planned downtime for our expansion. Second quarter's net sales in Tubular Products will be similar to the first quarter but we expect to see margin compression with the recent run up in steel coil prices."

Conference Call

The Company will hold its first quarter 2014 earnings conference call on Thursday, May 8, 2014 at 8:00 am PDT. The live call can be accessed by dialing 1-888-810-4934 passcode NWPIPE. For those unable to attend the live call, a replay will be available approximately one hour after the event and will remain available until Friday, June 6, 2014 by dialing 1-866-352-6820 passcode 6301.

About Northwest Pipe Company

Northwest Pipe Company is a leading manufacturer of welded steel pipe and tube products. The Tubular Products Group operates a state of the art electric resistance weld mill facility. The Tubular Products portfolio serves a wide-range of markets and its quality certified pipe and tube products are good for applications including: oil and gas, structural industrial, fire protection, low pressure and agricultural. The Water Transmission Group is the largest manufacturer of engineered steel pipe water systems in North America. With eight Water Transmission manufacturing facilities, the Group is positioned to meet North America's growing needs for water and wastewater infrastructure. The Water Transmission Group serves a wide-range of markets and their solution-based products are a perfect fit for applications including: water transmission, plant piping, energy, tunnels, river crossings, structural, industrial and construction. The Company is headquartered in Vancouver, Washington and has manufacturing facilities in the United States and Mexico.

Forward-Looking Statements

Statements in this press release by Scott Montross are "forward-looking" statements within the meaning of the Securities Litigation Reform Act of 1995 and Section 21E of the Exchange Act that are based on current expectations, estimates and projections about our business, management's beliefs, and assumptions made by management. 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, the timing of customer orders and deliveries, production schedules, the price and availability of raw materials, excess or shortage of production capacity, international trade policy and regulations and other risks discussed in our Annual Report on Form 10-K for the year ended December 31, 2013 and from time to time in our other Securities and Exchange Commission 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 release. 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.

                           NORTHWEST PIPE COMPANY
     (Dollar and share amounts in thousands, except per share amounts)

                                                        Three Months Ended
                                                             March 31,
                                                          2014       2013
                                                       ---------  ---------

Net sales:
  Water Transmission                                   $  42,999  $  78,613
  Tubular Products                                        39,648     28,722
                                                       ---------  ---------
    Net sales                                             82,647    107,335

Cost of sales:
  Water Transmission                                      41,331     58,743
  Tubular Products                                        37,002     25,673
                                                       ---------  ---------
    Total cost of sales                                   78,333     84,416

Gross profit:
  Water Transmission                                       1,668     19,870
  Tubular Products                                         2,646      3,049
                                                       ---------  ---------
    Total gross profit                                     4,314     22,919

Selling, General, and Administrative                       5,440      6,030
                                                       ---------  ---------

Operating income/(loss)
  Water Transmission                                        (299)    18,033
  Tubular Products                                         2,294      2,735
  Corporate                                               (3,121)    (3,879)
                                                       ---------  ---------
    Operating income/(loss)                               (1,126)    16,889

Other expense                                                 63         41
Interest income                                              (81)      (183)
Interest expense                                             770        957
                                                       ---------  ---------

Income/(loss) before income taxes from continuing
 operations                                               (1,878)    16,074

Provision for (benefit from) income taxes from
 continuing operations                                      (667)     5,098
                                                       ---------  ---------

Net income/(loss) from continuing operations              (1,211)    10,976

Discontinued operations
  Income/(loss) before income taxes from discontinued
   operations                                             (2,662)    (2,160)
  Loss on sale of business                               (12,083)         -
  Benefit from income taxes from discontinued
   operations                                             (6,066)      (690)
                                                       ---------  ---------
    Net loss from discontinued operations                 (8,679)    (1,470)

Net income/(loss)                                      $  (9,890) $   9,506
                                                       =========  =========

Basic Earnings (Loss) per Share
  Continuing operations                                $   (0.13) $    1.16
  Discontinued operations                                  (0.91)     (0.15)
                                                       ---------  ---------
  Total                                                $   (1.04) $    1.01
                                                       =========  =========

Diluted Earnings (Loss) per Share
  Continuing operations                                $   (0.13) $    1.16
  Discontinued operations                                  (0.91)     (0.16)
                                                       ---------  ---------
  Total                                                $   (1.04) $    1.00
                                                       =========  =========

Shares Used in Per Share Calculation:
  Basic                                                    9,508      9,437
                                                       =========  =========
  Diluted                                                  9,508      9,484
                                                       =========  =========

                           NORTHWEST PIPE COMPANY
                        (Dollar amounts in thousands)

                                                   March 31,    December 31,
                                                      2014          2013
                                                 ------------- -------------
  Cash and cash equivalents                      $          49 $         588
  Trade and other receivables, net                      57,482        72,470
  Costs and estimated earnings in excess of
   billings on uncompleted contracts                    44,328        50,468
  Inventories                                           62,974       110,392
  Other current assets                                  17,767         9,662
                                                 ------------- -------------
    Total current assets                               182,600       243,580
  Property and equipment, net                          133,303       143,061
  Other assets                                          46,693        46,818
                                                 ------------- -------------
    Total assets                                 $     362,596 $     433,459
                                                 ============= =============

  Current maturities of long-term debt           $       4,521 $       7,930
  Accounts payable                                      20,924        21,731
  Accrued liabilities                                   12,192        15,194
  Billings in excess of cost and estimated
   earnings on uncompleted contracts                    18,215         3,368
                                                 ------------- -------------
    Total current liabilities                           55,852        48,223
  Note payable to financial institution                 25,191        87,919
  Other long-term debt, less current maturities          1,357         6,322
  Other long-term liabilities                           29,098        29,145
                                                 ------------- -------------
    Total liabilities                                  111,498       171,609

Stockholders' equity                                   251,098       261,850
                                                 ------------- -------------
    Total liabilities and stockholders' equity   $     362,596 $     433,459
                                                 ============= =============

Robin Gantt
Chief Financial Officer

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