Good morning and welcome to the fourth quarter 2008 earnings release conference call. At this time, all participants are in a listen-only mode. (Operator Instructions). Today's conference is being recorded. If you have any objections you may disconnect at this time. Now, I'll turn the meeting over to Mr. Brian Dunham, CEO and President.

Thank you Corey. My name is Brian Dunham, I am the President and CEO of the company. I am joined by Stephanie Welty, our Chief Financial Officer. Before we begin, I would like to remind everyone that the statements we make in this call about our expectations for the future are forward-looking statements, and actual results could differ materially. Please refer to our most recent filing with the SEC for a discussion of risk factors that could cause actual results to differ materially. I'm pleased to announce record sales and record earnings for 2008. This is the fifth consecutive year that we have generated record sales. For the last four years we have added record earnings as well. For 2008 we generated revenue of $439.7 million and earnings of $32.3 million. This is an increase in revenue of 14.9% over 2007 and an increase in earnings of 55%. This equates to earnings per share of $3.46 in 2008 compared to $2.26 last year. With that, I will turn this over to Stephanie to review our financial results focusing on the fourth quarter.

Thank you Brian. Fourth quarter revenues were 110.2 million compared to 98.2 million in the fourth quarter of 2007. Net income for the fourth quarter of 2008 was 8.6 million while net income for the fourth quarter of '07 was 5.6 million. This translates to $0.92 per diluted share in the fourth quarter of 2008 versus $0.60 in the fourth quarter of 2007. Moving on to the quarterly result through the two business groups, Water Transmission revenue was 55.7 million in the fourth quarter of '08 compared to 80.3 million in the fourth quarter of '07. Gross profit was 11 million or 19.7% of revenue compared to 17 million or 21.2% of revenue last year. Fourth quarter results in the Water Transmission Group were affected by production downtime caused by the postponement of a major project, inclement weather and the installation of new equipment. Weather accounted for approximately 12 days of downtime and affected all but two plants. The installation of new equipment in our California plant accounted for a partial loss of production over about 50 days. In Tubular Products, we are happy to report that revenue and gross profit posted record levels in the fourth quarter for the third consecutive quarter. Tubular Products sales were 54.5 million in the fourth quarter of '08 up from 17.9 million in the fourth quarter of '07. In the fourth quarter a year ago we had virtually no energy pipe sales. We were in the process of establishing our relationship with our current sales agent and over the course of 2008 we saw rapid growth in our energy pipe business which drove our overall revenue growth. Gross profit for the Tubular Products was $13.5 million or 24.7% of revenues compared to $1 million or 5.5% of revenue in the fourth quarter of…

Thank you. Obviously we are very pleased to be able to report the record results for 2008 and a very strong fourth quarter that Stephanie has just described. As you all know, the economic environment has changed significantly in the last five months. As we look forward to the first quarter of 2009 and beyond, I will focus on the recession, the financial crisis, the changing cost of steel and finally the stimulus plan and how each of these may affect our businesses. As of the end of 2008, our backlog was approximately $190 million. While this is down from the 235 million we reported at the end of the third quarter, it is still at quite a healthy level. The change in the backlog was virtually entirely due to the Tubular Products business. The Water Transmission backlog has stayed at approximately the same level from Q3 to Q4. The change in the backlog brings us to the discussion about the recession and its effects on our Tubular Products Group. As most of you know, the bulk of our Tubular Products business is a short term inventory type business. During 2008, sales of our energy products grew dramatically. Demand is so high for these products that we began to build a longer-term backlog than we would normally expect. As the recession hit late in Q3 and early in Q4, one of the consequences was the decline in natural gas drilling activity and the decline in order activity for our energy products. Throughout the fourth quarter; however, we continue to supply our customers with pipe that they had previously ordered. This drove strong results in Q4 even if demand declined precipitously and have resulted in the decline in the backlog at year-end. In addition to energy products, for which demand is…

Thank you. At this time we are ready to begin the question and answer session. (Operator Instructions). Our first question comes from Brent Thielman of D.A. Davidson. Sir your line is open. Brent Thielman - D.A. Davidson & Co.: Good morning, Brian, Stephanie. Congratulations on a great quarter.

Thank you.

Thank you. Brent Thielman - D.A. Davidson & Co.: Brian, I just wanted to confirm, I think, I've missed the number. Did you say on the tubular business you expected first quarter revenues off 20 to 30% year-over-year?

Yes. Brent Thielman - D.A. Davidson & Co.: Okay. And in water I don't think you gave -- you quantified that you expect it to be down as well on a year-over-year --?

Yeah, I think it will be down a little bit year-over-year and as we've said the new mill installation at Adelanto was certainly a big part of that. It carried into 2009. We've also had several weather events during 2009 as well but even though it didn't seem to be a very extreme winter ahead at the wrong time in the wrong places. So, we were down for several days because of the weather in the first quarter already. Brent Thielman - D.A. Davidson & Co.: Okay. And I guess in tubular products I mean can you give any sense of where average selling prices are now; I mean, I guess, relative to the fourth quarter. In other words I mean how much of the strength in price may be you experienced in Q4 will continue into the first quarter?

Well it's a little bit difficult to do that because it varies from product to product and as you know we have a variety of different product lines that have different pricing. I would say in Tubular products it is historically true that the price does adjust to the change in cost of steel. Brent Thielman - D.A. Davidson & Co.: Okay.

And so steel is down -- figure steel down at least $500 a ton in Q1 from where it was at the peak. And by now prices have pretty much adjusted to that number. Brent Thielman - D.A. Davidson & Co.: Okay that's helpful. And then on the Utah facility, do you have an estimate of annual cost savings related to that closure?

It will be roughly 2 million annualized. Brent Thielman - D.A. Davidson & Co.: Okay. And then I guess just looking at the water transmission margins they did take out from the third quarter obviously a positive sign but despite what appeared to be increased downtime in your facilities, can you sort of explain what helped contribute to that in the quarter?

Yeah, I think, it really was just a better mix of projects going through the plans because the downtime obviously tends to reduce your overall margins, so that was not a bad performance. Brent Thielman - D.A. Davidson & Co.: Okay. And I guess do you see any significant near-term margin opportunities with the lower cost of steel for that business right now?

There are some possibilities, Brent, nothing that I can quantify at this point. Brent Thielman - D.A. Davidson & Co.: Sure, sure. Okay and then just lastly, I mean, do you see or foresee any near-term issues with steel availability just given a degree of production cuts by mills?

We don't -- at the current time, we do expect supply to get a little tighter. We do think that we'll see probably some increases, small increases starting in April in steel costs and we also think we'll see lead times staring to extend a little bit somewhere in that time frame, but at the moment we have no concern. Brent Thielman - D.A. Davidson & Co.: Okay, I'll jump back in queue. Thanks guys.

Thank you.

Ryan Connors of Boenning and Scattergood, you may ask your question. Ryan Connors - Boenning & Scattergood: Good morning Brian and Stephanie.

Good morning.

Hi. Ryan Connors - Boenning & Scattergood: A couple of questions. First off, I wanted to talk about fixed cost leverage. But Brian I know you talked about the steel prices and the impact of that on variable cost and you talked about some of the facility actions you're taking but I wondered if you could just talk about the fixed cost base in each of the two business units maybe in terms of the breakdown between fixed and variable costs over the last few quarters. Just trying to get an idea of what kind of -- and I guess in particular on Tubular Products trying to get an idea of what kind of negative operating leverage if you will, what the impact of that might be on margins especially in the first half as you discussed with volumes may be down significantly?

Well, I'm not exactly sure how you want to approach that discussion. There is the conflict of fixed versus variable cost and accounting is not quite the same the way it works in reality. So we typically have more what I would call semi-fixed cost within a range of production. And as we'll adjust our production what we will try to do is stay at the right end of that range if you will, and that generally means looking at shifts as opposed to smaller changes in terms of staffing levels. For example in our Atchison plant, we are at two shifts today where we were at three shifts a few months ago. The true fixed cost in this business you can be -- are not as great as you might expect and I don't have the numbers in front of me Ryan but we can certainly go through that in more detail. Ryan Connors - Boenning & Scattergood: Okay. So it sounds like you don't expect any kind of major impact in terms of having to spread a fixed cost base over a lower volume even in the Tubular business?

We think we are going to adjust reasonably effectively but yes there are some fixed costs and it will be hard to leverage against those fixed costs with lower volumes. So there will be some negative impact, but we should be able to adjust pretty efficiently. Ryan Connors - Boenning & Scattergood: Okay. And then I guess just the same discussion on the SG&A side, I mean, obviously historically you've run fairly lean there, 7, 8% of sales is how we look at it, percentage of sales. But given the dollar run rate there, could there be -- will that percentage increase on a percentage of sales basis, and if so, could it be meaningful, at least, in the first half?

Yeah, at least in the first half there's a possibility. We do see some reductions in cost there as well. Obviously we're doing the same types of things that many people are in order to manage our cost better. So we're aiming at not seeing that go up. But as we look at this year as you just implied, we see a very significant difference between Q -- or between the first half and the second half. And so first half might be a little more challenging. Ryan Connors - Boenning & Scattergood: Okay. And then just wanted to talk about some of the trade actions, Brian, you've talked in the past on tubular products. Obviously there are a few trade actions out there. They are either in place or pending that would levy fairly substantial tariffs against imports of some of the natural gas tubing products that are competing with yours. So if you can just talk -- update us on your outlook there in terms of how that impacts the outlook in terms of weather, the domestic suppliers, how that impacts volumes for the domestic suppliers and also how that might impact the pricing in the market with those tariffs either in place or coming on?

Well there is -- there was a successful trade case that affects ATI pipe and that is in place as well as other products. There is a proposed case on OCTG products but I really don't have any other details about that at this point in time. I will say that there was a significant amount of OCTG products that came into the country in the last couple of months. So, there is a significant amount of pipe on the ground or in the ports right now. Ryan Connors - Boenning & Scattergood: Okay, but you don't think for example if someone were to the school a thought that the domestic suppliers will, in theory, outperform the market because the -- some of the imports will be going away, I mean is there any truth to that kind of thinking.

That kind of -- that thought process is certainly based in -- on sound logic and there are efforts underway but whether or not those will be successful at this point I can't tell you. Ryan Connors - Boenning & Scattergood: Okay. And then just finally, just want to talk about the balance sheet. On the surface it certainly looks -- the balance sheet looks clean and the company looks very well positioned to weather the downturn, but I wondered if you could just address the issue of financial risk and maybe talk about what kind of scenario could possibly developed that you could envision where the company might face some kind of financial distress, how long would the downturn have to last, what kind of scenario would you have to seek?

Well I'm thinking about the way that question is phrased, there's always an answer to that, cause it's open-ended. But rather than respond to that let me tell you in terms of what we've looked at as to what we think are the likely scenarios that lay out over the next 12 months, we feel like we are in pretty good shape. As our business grows down, obviously, let's take the negative scenario where water transmission does not do as well as we think. It -- our balance sheet tends to start to kick out a lot of cash. So our balance sheet picture gets a lot better as that business slows down. It's almost more challenging if that business does better than we expect in order to have the capability to continue to finance it but we have a significant amount of capacity available as we speak today. So, we do not see the scenario that really gets us into trouble as being very realistic. Now if the recession carries on for years, obviously we and everybody else will have some problems. But as we've looked at the different scenarios that we think are likely, we haven't -- we have not been concerned about the financing. Ryan Connors - Boenning & Scattergood: Okay, well thanks for your time, very helpful.

Trey Snow with Priority Capital, you may ask your question.

Thanks. I also had a question on the imports. Are there particular products or diameters that are particularly out of balance?

I think the answer to that is probably yes. I don't think it's necessarily across the board, the -- in terms of size ranges and so on but I couldn't give you a lot of details regarding that. OCTG products, those oil country tubular goods, is where the most recent surge has come from, and that is essentially what they -- if you're not familiar with that terminology that essentially think of it as down-hole type products with verticals in gas or oil explorations.

Okay. And is there any way to put parameters around the size of this 'glut' I guess as you described in the press release?

There are different people -- did I use the word 'glut' in the press release?

Yes.

I think I will go back and look. There are different analysts who are far more tuned to that overall industry than I am and they have estimates out there, some of them six months supply, some of them 10 months supply, it's probably somewhere in that range. And of course as I said I don't believe it's across the board, I think it will be higher in some sizes than others.

Okay, thanks.

(Operator Instructions). Brent Thielman of D.A. Davidson, your line is open. Brent Thielman - D.A. Davidson & Co.: Hi, just one more from me. I guess Brian as you look at sort of near-term activity out there in Water Transmission and obviously backlog, it's down a little bit year-over-year; I mean do you think backlog has an opportunity to improve from current levels in the first quarter just based on what you see right now?

Yes. Brent Thielman - D.A. Davidson & Co.: Okay. Thank you.

At this time I am showing no further questions.

Okay, well that will then conclude our conference call for the fourth quarter of 2008. Thank you all for your interest in Northwest Pipe Company.

And this concludes today's conference. Thank you for your participation, you may disconnect at this time.