To our shareholders Integration Our revenue performance in 2000 belies the fact that this was another challenging year in the segments of the pipe and tube industry in which we compete. Northwest Pipe Company posted another set of record sales figures. Total sales increased to $281.4 million, a 17% increase over 1999, and the seventh consecutive year of record revenues. However, increasing raw materials costs and import penetration in the 1st half of the year in our tubular products markets, coupled with very competitive pricing in the Water Transmission Group, resulted in lower earnings. Net income was $10.7 million, or $1.62 per share, for the year. Strong third and fourth quarters in the water transmission markets buoyed the results in that segment. The Water Transmission Group reported sales of $155.1 million for the year, up from $137.4 million in 1999. Heightened competition in the very strong East Coast market contributed to the slight erosion in gross profits. We don’t anticipate any new capacity being added to the marketplace in 2001, and expect continued growth in infrastructure spending throughout the year. The Tubular Products Group faced pressure from foreign producers in the standard pipe and mechani- cal tubing markets. Although sales volumes in the segment showed exceptional gains, reaching $126.4 million, the result of the market pressures and higher priced raw materials inventory contributed to lower margins. The gross profit margin of 12.5% was down from the 16.1% reported in 1999. We continue to benefit from the acquisitions of the past five years, and in 2000 turned our attention on the process of realizing the potential synergies to be experienced by having a national presence. We believe our ability to use one plant’s capabilities to complement another’s needs will prove to be a competitive advantage for Northwest Pipe. The expertise of our people and national reach will be a powerful combination. We made great progress in 2000 in the integration of technology investments that we made in the last year. All stakeholders are better served with access to timely, accurate information to help them make better decisions. We will continue to stay close to developments in technology and e-commerce, only making investments in those opportunities that we believe will improve our relationships with our customers and coworkers, and contribute to increasing shareholder value. Northwest Pipe Company | 2