Good morning and thank you for standing by. As a reminder, your lines have been placed on listen-only mode until the question-and-answer Segment of today's conference call. Today's call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to Mr. Scott Montross, CEO of Northwest Pipe Company. Thank you, sir. You may now begin.

Thanks, Michelle. Good morning and welcome to Northwest Pipe's Conference Call. My name is Scott Montross, and I'm President and CEO of the Company and I'm joined by Robin Gantt, our Chief Financial Officer. As we begin, I would like to remind everyone that 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 SEC filing on Form 10-K for a discussion of risk factors that could cause actual results to differ materially from expectations. I will now turn to Robin who will discuss our fourth quarter and full year results.

Thank you, Scott. Our fourth quarter loss was $13.7 million or $1.43 per diluted share compared to a loss from continuing operations of $14 million or $1.47 per diluted share in the fourth quarter of 2014. We had a non-cash goodwill impairment of $16.1 million in the fourth quarter of 2014. Excluding this charge adjusted income from continuing operations in the fourth quarter of 2014 was $2.1 million or $0.21 per diluted share. Water Transmission sales decreased 31.5% to $39 million in the fourth quarter of 2015 from $56 million in the fourth quarter of 2014. Water Transmission gross loss as a percent of sales was negative 19.2% in the fourth quarter of 2015, from income of 17.5% in the fourth quarter of 2014. The decrease in sales was the results of 39% decrease in average selling prices due to mix of products produced coupled with lower steel cost. These were partially offset by increased production. Gross profit was negatively impacted by competitive pressure in the bidding for water infrastructure projects. There were some one-time adjustments for lower cost to market write-downs in steel and some employee related costs. However, the competitive bidding environment was the primary reason for the losses. Selling general and administrative cost decreased to $5.1 million in the fourth quarter of 2015 from $6.5 million in the fourth quarter of 2014. This decrease was due to lower wage, benefit and incentive plan expense and decreased expenses in all categories. Total company inventory decreased by $19.7 million in the fourth quarter from the third quarter of 2015. Moving onto the full year results. Our loss was $29.4 million or $3.07 per diluted share compared to a loss from continuing operations of $6.2 million or $0.65 per diluted share in 2014. Both years included non-cash goodwill impairment charges…

As of December 31, 2015 our Water Transmission backlog was approximately $116 million, a 15% increase from $101 million at the end of the third quarter. The tons in backlog have increased by 36% from the last quarter. The backlog was about $121 million as of December 31, 2014 and yet the tons in backlog now are almost double reflecting the impact of falling steel prices in a harsh bidding environment. We expect the first quarter of 2016 will have a lower revenue than the fourth quarter as we've had several delays impacting our production schedule, and those are project delays. The following is an outlook of the upcoming Water Transmission projects. The third Segment of IPL 15-2 has completed production. We were awarded the fourth Segment of IPL Segment 14, which started production in late February. IPL Segment 17, the tunnel portion is scheduled to bid in mid-April. IPL Segment 10-11 is scheduled to bid in late June. IPL Segment 17-18 is scheduled to bid in late November. The three IPL Segments that bid in 2016 total about 30,000 tons of requirements. We are awaiting the award of the Trinity River Main Stem project, the last part to the Lake Texoma program. Production is scheduled to start in the second quarter. This project has been delayed by a few months due to permitting issues. The Luce Bayou Interbasin Transfer Project in Houston is a major project with multiple segments that we expect to start bidding in the second quarter of 2016. This is a multi-year project that is expected to represent 90,000 tons of pipe. Major production on this project is not expected to begin until 2017, 2018. The Lower Bois D'arc Reservoir is a pipeline being planned by the North Texas Municipal Water District which could represent 30,000…

[Operator Instructions] Brent Thielman, you may ask your question.

Scott, can you give us a sense, if what you've been booking and putting in backlog in Q4 or even today is at least a better bid margins then six or nine months ago or whatever the kind of low point in the market you saw?

Well, I think that Brent what we've seen is, we saw a market that started in mid-2014 with the current bid environment and that really extended through 2015 and it's extending into 2016. So I think it's one of the things that you have to view as what the market looks like in 2015. Right, it was a relatively low bidding year. And it was and you've heard me say in these earnings call, it was very backend loaded. So total bidding was pretty low as far as tons are concerned. So what you have is, you have a situation where the backlog across the industry segment is pretty low and every job is pretty hotly contested. And on top of that, what you have is a situation where you have non-traditional supply coming into the market, which makes that bidding environment even worse. So that's really started to carry into 2016, but what we're seeing in 2016 is, we're actually seeing the tons in the market starting to improve and those improvements are really starting to be centered around California. We're looking at requirements in California that maybe three times higher than what we saw last year and the previous year. But I think part of the issue is, Brent until people start developing a backlog in the business, it's still the same situation for a period of time. The bidding is going to remain very harsh and that will extend into 2016. The other piece is, with what we've seen as far as the non-traditional supply coming into the business some of it being driven by pretty tough energy sector, how long does the energy sector stay bad or how long do they want to keep competing in the market, where it's really adding one more brick into the bag, doesn't really help anything. So we expect this to extend well into 2016. I think that, Robin gave some of the information when we were going through the script about in the fourth quarter. Obviously, the fourth quarter we had some adjustments in the fourth quarter that were related to employees, things like severance costs and things like that there we're not going to have going forward, but we still expect the first quarter to be pretty tough. Along with the fact that we're seeing lower production levels because of these project delays that we've seen in the Texas market. So I think that kind of gives you a broad overview of what we're looking at.

Okay, I appreciate that. and Scott are you seeing any evidence at all kind of the strategy kind of defending your market share is working, are you seeing any of these problematic participants fold, or ease off your core market at all?

Well, one thing you have to realize Brent is, I know all of our competitors obviously listen to our call, right. So, I want to be a little cautious about what I'm saying. But one of the things that we do know, even in this competitive bidding environment it is really important to defend your market share simply because when you have non-traditionals that are in the marketplace if you don't defend your market share, start giving up your market share and allow the non-traditionals to get a foothold into the market place, maybe it makes the current situation last even longer. So we've been pretty tough on defending the market share like I said, we have almost 50% market share and we continue to defend it. And I think a good example of what we've seen in the bidding environment is really what happened on the last IPL Segment, Segment 14. If you take a look at that segment it was roughly the same amount of tons that the first segment was, somewhere between 23,000 and 25,000 tons. But it was well less than half the price of what the first Segment. So that gives you a little indication of how this thing is going.

I see, okay. And, I know you guys have done a lot on the cost front over the years. I mean, it sounds like lower levels of profitability here to stay for a little while longer at least. Are there, other major company initiatives planned or moving forward from a cost perspective that are going kind of help offset these pressures?

What I would say, Brent. Is we've really been working cost pretty hard since the beginning of 2013 and I would give you an example of probably looking at the fourth quarter of 2014 as a good example, because at that point in time obviously we had divested the OCTG assets. So the people part of the OCTG assets are out of that fourth quarter 2014 number and the Permalok numbers are in because we purchased Permalok in late 2013. In the fourth quarter of 2014, we had a 1,034 employees. In the first quarter - toward the end of the first quarter of 2016 in fact March 1, we had 671 employees. So we've reduced the number of employees across the company by about 35%. Now, you would obviously expect that because we shut our Atchison facility down, so a big a part of that's tubular. But if you look at just the corporate reductions and the reductions that we’ve had at the Water Transmission plants, it's 25% plus. So just a few more facts about some of the things that we've done on costs. If you're - looking at 2016, we expect to run a relatively large amount of tons in 2016 because like I said, we're carrying a big backlog into that year, into 2016 into this year. If you look at 2016 and compare it to 2008, where we ran a very similar amount of tons in 2008, we're running those same amount of tons, with 45% less people. Our overhead spending during that period of time is down 32% and just looking at and going back to the 2014 comparison and the way we measure production at our Water Transmission plants, our tons per employee and this total employees, salaried, indirect and direct at our…

Okay, thank you. I'll turn it over.

And our next question comes from Bhupender. You may go ahead.

Scott, you talked about non-traditional players in the market and can you give us some color on that like, I believe you gave some names or some color like last quarter on the call. Just wanted to get a sense of, are this kind of serious player or they're just kind of a shift from oil and gas right now those players like you said, are testing the market here?

Well I think that, I don't like to mention competitors names during calls. But, what I would say is, this is specific to a plant in Miscopy, there's an API plant that was acquired out of bankruptcy sometime I guess in 2014. I think, the acquirer said in that call, that they were looking at the Water Transmission business and obviously, we're the only ones that really report the segment and seeing the margins that we're generating during this period of time, 2013 had 21.5% gross margin in water. The beginning of 2014 in the second quarter of 2014, we had a 18% margin in the second quarter and 22% margin in the third quarter. So I think, they looked at that and said, well if we have excess capacity maybe we'll use it for the Water Transmission market. So I think those people are pretty hot at looking at bidding Water Transmission jobs especially in Texas based on where they're positioned. Whether they say or not, it doesn't appear that they have a very good understanding of maybe some of the cost of these jobs and the way that they're bidding. So, at least right now they're impacting the market, Bhupender. Whether they say long-term it's hard to determine but what I would say, is when you add that one additional competitor to the Texas market it really changes dynamics of that market. So hopefully as they see that dynamic develop over a period of time and see what it's doing to the market, they'll make different decisions. But again, we can't really talk to what their thought process is. All we can talk to their actions in the market, but not only the non-traditional players that we're seeing in the market but some of the traditional players we're…

Right, your backlog has been pretty you can say like constant and it grew like sequentially, in the fourth quarter. How should we think about backlog going into conversion to sales actually in 2016?

Well, obviously the price levels are low, still out of 2015. But what I'll say is, like I said in the script. We have almost double the backlog in 2016 that we had at the end of 2015 and the revenue in backlog is about $4 million less. So you can do your triangulation out of that. We expect to run a pretty significant amount of tons in 2016. I think the expectations are that, the market is improving slightly. So maybe the revenue improves a little bit, but I think it's still going to be a pretty tough market situation to most of the year.

All right and you did actually give some bidding timeline for the IPL segment here from mid-April to late June and late November. Now, we have this like you said, the competition is pretty high and the IPL segments which are in front of you and some of the other projects. Do you see, your market share, which you've try to maintain sacrificing pricing here? Let's say but just wanted to get your view over the next three years, if we see some of this non-traditional competition come into the markets looking at the project pipeline, what you see? They're saying the same thing here. How do you actually retain your market share and what do you do? Are we expecting kind of gross margins at the levels or pretty lower levels here for the next two years or three years. What should be the inflection point for the margins to improve here as the market [indiscernible]?

As you know, Bhupender we don't give forward guidance.

Just an overall view from the market, not from [indiscernible].

Right now there's too much supply in the market place. A lot of its driven by some of the non-traditional supply that we're seeing. As far as the segments of IPL are concerned and you asked several questions and there's, so I can't remember all of them. I do think, there's going to be continued pressure on the IPL segments because like I said, as long as industry-wide backlogs remain relatively low and we had over 50% of the market in 2015 as long as they remain relatively low. I think bidding is going to remain pretty tough. And like I said before, one of the issues you have with. If you don't defend your market share and you have non-traditionals that are moving into the market. If they do get a foothold into the market, maybe they're there and it changes from supply to a [indiscernible] edition in the market. So certainly for the near future, we expect to defend what our market share is.

Okay, thanks a lot.

Thanks.

Thank you. [Operator Instructions] Brent Thielman, you may ask your question.

Appreciate all that, the color on the various market and kind of project opportunities out there. Texas is been and looks pretty good and sounds like California is turning, but my question is to you. Do you see the market developing broadly enough over the next few years that kind of maintaining this footprint, which is obviously largest in the industry, still makes sense from your perspective.

Well, obviously we see California and Texas and depending on the amount of work, that you have in Texas. You may have to deploy additional assets. Okay, so for example on the Lake Texoma project that we had in 2012 and 2013. We had the majority of the production coming out of our Saginaw facility. We also had some production coming out of Denver and believe it or not. We had some coming out of our Parkersburg, West Virginia facility. So depending on how much of this stuff hits at once, you could need to deploy more than one facility to be able to support those jobs. But like I said Brent, we see Texas is pretty good going forward in fact. If all this were kits [ph] in Texas, there's a lot of work, that's coming. We see California being good, but we also see the East Coast market and New York City being pretty good too and that's been okay, even during 2015 when everything else was a little bit rougher. So the nationwide footprint still makes sense because when you start looking at the nationwide footprint, we do all the time and obviously, we evaluate these assets all the time. If we didn't have a plant in Texas, we wouldn't have been able to participate in all the Texas work. If we didn't have a plant in Denver, Colorado we wouldn't have been able to participate in all the work going on in Southern delivery in Colorado, which was somewhere between $80 million and $100 million. We've seen lots of work in the past in California, if we didn't have a plant in California, you wouldn't be able to do that. So, I think we're careful looking at the assets. But obviously we're always doing that and making sure that we have the right thing that supports the market, that we see going forward. But again like I said, we're seeing California, we're seeing Texas. We still see a relatively busy East Coast and quite frankly, we see a market that with dodged numbers and looking at water construction projects it's growing 9% year-over-year. But we also all know about the massive build-up of water projects that are out there on the docket. And it is a massive build-up of projects and I think at some point, water becomes a very, very precious resource and it is going have to be moved from one place to another and really that's wide spread across the western United States. When you start looking at the East, what you're dealing with some older infrastructure. You're looking at some more replacement. So we do think, that footprint that we have right now makes sense as this more of it, continues to grow.

Okay, appreciate that. Thank you.

[Operator Instructions] sir at this time, I'm showing no further questions.

Okay, what I would say to end is that. Obviously, we're dealing with a pretty challenging market condition. You really can't do anything about irrational behaviour whether it's by non-traditional or traditional competitors. But what we can do, is keep positioning ourselves with our costs, reducing our costs at the plant making the efficiencies, more in line with lean manufacturing and reducing our cost to produce these things, that in line with managing our costs. We have zero debt and a net positive cash position and we don't have, any kind of bond payments that are due out in the future. Unlike a lot of people, that are in the current market situation right now. And you see that across the steel market, you see that across the energy tubular market, you see that across the energy business. So I think that we're pretty well positioned to weather this storm and as this market continues to improve, with our cost reductions. We're in a pretty good position to thrive, as this thing grows and builds because at some point, we expect that there's going to be an explosion of water requirements. So thank you for attending our call. Our next call has ended.

Early May.

Early May and hopefully, we continue to see improving market conditions and things continuing to get better. So thank you and have a good day.

And thank you, sir. This does conclude today's conference call. You may go ahead and disconnect at this time.