Welcome and thank you for standing-by for today’s 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 your President and CEO, Mr. Brian Dunham. Sir, you may begin.

Thank you, Christy. Welcome to Northwest Pipe’s conference call and the announcement of earnings for the second quarter of 2008. My name is Brian Dunham. I am the President and CEO of the company, and 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. With that, I will turn this over to Stephanie to review our financial results.

Thank you, Brian. For the second quarter of 2008, we generated a $112.1 million in revenue, $8.4 million in net income, and $0.90 per diluted share. For 2008 year-to-date, we generated $206.1 million in revenue, $13.4 million in net income and $1.44 per diluted share. With respect to Water Transmission, sales were $74.9 million for the quarter compared to $73.0 million in the second quarter of 2007. Gross profit was $14.8 million for the quarter or 19.7% of revenues, compared to $15.2 million or 20.8% of revenue for the second quarter last year. We expect the combination of a record backlog and strong third quarter booking will drive a strong second half. Gross margin was somewhat lower during the quarter largely due to the effect of higher steel costs. As you know, steel is our primary raw material and the cost of steel has increased dramatically. While we’re able to include these higher costs in our sales contracts, there have been some slight margin compression because in equal increase in both costs and revenues will result in the same margin dollar for the gross margin percentage. In the Tubular Product Group, sales were $37.2 million in the second quarter of 2007, up from $28.9 million in the second quarter of 2007 and $30.1 million in the first quarter of 2008. As expected we have seen a significant increase in the sales of energy products and continued strength and demand for fire protection sprinkler pipe and agricultural products. Sales growth is a function of both increased prices and higher levels of production. Gross profit for this group in the second quarter was $9.8 million compared to $3.6 million last year. Gross profit as a percent of revenue was 26.4% in the quarter, significantly higher than the 12.5% reported in the second…

Thank you. As we look ahead to the rest of the year, we continue to have high expectations. We ended the second quarter with a record backlog of $264 million. With this backlog, which is primarily for the Water Transmission Group and our current manufacturing schedule, we are expecting somewhat higher revenues in this Group in the second half of the year. We also expect healthy bookings in the third quarter, which should help us maintain a strong backlog through September before dropping off some by the end of the year, based on the timing and market activity. As mentioned earlier, margins in the Water Transmission Group were softer in the second quarter compared to the first quarter. While pricing has held up well, our costs have gone up dramatically with the cost of steel, and to a lesser degree with higher transportation costs. We have been very effective in anticipating these higher costs and building them into our fixed price contracts. However, as Stephanie explained, even as we offset these costs, we see our gross margin percentages decline as both our costs and revenues are increasing at about the same rate. As we look ahead, we see potential to improve margins yet this year. We expect a little more volume and that will help leverage against fixed costs, and we expect a little better mix of projects in the second half as well. As we have previously announced, we have two mills under construction for the Water Transmission Group. We expect to install one of these mills in our Adelanto, California facility, beginning late in third quarter and extending into Q4. We are planning for this and hope to avoid any significant disruption. But we believe this activity combined with the typical risk of bad weather conditions in Q4…

Thank you. We will now begin the question-and-answer portion of the today’s conference call. (Operator Instructions). Our first question comes from Ryan Connors. Your line is open.

Good morning and congratulations Brian and Stephanie to you and your colleagues on your success.

Thank you.

Thanks.

I guess, Brian, you made some comments about Tubular margins. But I guess, if we can just sort of drill down that a little bit. Obviously, 26% I think is the gross margin that’s impressive I think in that business where it’s usually low teens, I guess. So, really just trying to get a better handle around how sustainable that is? And in particular, I mean was there anything going on in the quarter from an inventory perspective that didn’t cause that or contributed to that in terms of lower cost of fuel going through the P&L or anything of that nature?

Well, I think all of that obviously always contributes. I don’t think it was extraordinary in this case. In other words, we didn’t have an extraordinary amount of inventory at the beginning of the quarter that we flushed through. But certainly, if we are doing an effective job of monitoring the price increases in steel, and those increases are falling through the market, you have an opportunity to have some gains on inventory to have on hand. So, as you look forward and you see price is moderate, I think it would be unrealistic to think we are going to replicate or improve upon that particular margin number as a percentage as we go forward. But we do think volume is going to continually be strong and we do think, we will continue to see pretty good margins in the second half of the year.

Okay. That’s great. Then I guess just kind of from a bigger picture perspective then on that Tubular Products business. You’ve talked in the past about margin goal for that segment being somewhere in the mid-teens. Can you just kind of reset us on your long-term thinking in terms of that business unit? Is that sort of still the long-term run rate type of goal, or is this kind of change you are thinking at all in terms of improving your outlook there?

I think there are some things that have happened, Ryan, that may change that outlook. And I rather than trying to give you a new target, let me just enumerate a couple of things. Obviously, the ITC ruling on Chinese product has an impact. There is a lot of product that was coming in from China, that is not coming in anymore, and won’t for some time. And I think that’s going to have an impact long term on prices of the certain segment of our business. Not having much of an impact so far, because we are really not focused on that segment right now. And that’s because of another change that has happened. The energy market of course is very strong, and we are really focusing most of our available capacity into the line pipe arena what where we’ve had a presence for the last few years, but that market is very, very strong right now. So, we have energy going very strong as we move into the new facility in Huston, we are going to get more into the OCTG end of energy. So, that can be little bit different market opportunity as well. And then on some of the standard type products we’d have this change in China, and all of those things I think contribute to the possibility of higher targets in the long run.

Okay. That’s very helpful, Brian. And then just a couple of questions on the Water Transmission side, you released only details on only contracts that are over $5 million in terms of your press releases. So I think we can get a pretty good track on that high end of the market. But I wonder if you can just give us some color even just kind of qualitatively on what kind of trends you are seeing in the projects below that $5 million threshold. Are you seeing that part of the market improve as well?

So, in general terms and as we said before, Ryan, we do believe that 2008 will be our best year ever for the total market opportunity that we can address. We certainly have seen some project slip, which is common. And at this point, I would say the second half of the year is probably going to look about like the first half in terms of the overall market opportunity. It’s going to be a little stronger in Q3, we think, than in Q4, which again is not unusual. So, we are anticipating a pretty good bookings quarter in Q3, and probably dropping off a little bit in Q4. And that’s not problematic for us really because the backlog is strong enough that we can manage our business quite some distance ahead, and we do expect 2009 again to be a very strong year coming up. So, the market is developing, I would say, generally as we thought it would develop. It’s maybe just slightly stronger in the first half than we thought particularly in Q2, and maybe will be a little bit weaker in the second half than we thought. But we don’t see anything there that we think is a troubling trend. We just think that’s the typical timing issues that we see.

Okay. And then just one last on, you mentioned transportation costs, Brian, obviously energy prices are up and that’s rises your shipping costs. I am wondering whether that impacts, how competitive you can be on some of the projects that are far remove, distant from your production facilities, and whether that’s sort of tightening the radius within which you are – your respective facilities are competitive. Is that the dynamic in pricing that takes place?

Yes, it certainly does have an impact, and as we talk it for and maybe not everyone is aware, but transportation costs can be a very significant part of the, particularly talking about the Water Transmission business. 7%, 10% is not [uncommon] of the total costs to be involved in transporting the pipe to the job site. And so, as those costs still up, it does, first of all, put some pressure on your margins that we didn’t anticipated and we have talked about that in the past. We typically have fixed price contracts, so we have to be very careful with rise in cost environment to anticipate and get those costs into our contract, in that they we are doing a pretty good job with that, but that certainly is a risk factor to start with. And secondly your overall costs of project is going up because of higher transportation, and so as a rule it's going to make you more competitive on projects that are closer to home and those that are further away. Now, from our particular standpoint, because we have plans to spread out through the country we think that probably gives us an opportunity rather than a risk, but it obviously depends on the specific jobs that are out there, jobs that have been in the San Francisco Bay area where our largest competitor has a plant. Obviously they have a bigger advantage to date than they did a year ago because of higher transportation costs. The good news for us is that we have got a lot of jobs bidding around the country where we are actually closer.

Okay. That’s great. Thanks for all the detail this morning.

You are welcome.

Our next question comes from Scott Graeme. Your line is open.

Yes, good morning. Newcomer to this story, I have got a couple of questions for you. I noticed, obviously the previous question about the operating margin in the Tubular business, obviously well above the past trend knowing, you guys say that you think second half margins in that business are going to be strong, just maybe kind of hoping maybe from modeling or other purposes you can maybe give a little bit more granularity on that strong defined as something in the upper teens range, your long-term goal or something north of the low double-digit level which has been your historical?

Yes, I think we are going to see a really pretty good quarter in Q3 where the numbers, as I said, I think it's unrealistic to expect that you are going to see the same result as you did in Q2, but I think it's going to be a pretty strong quarter in Q3. I think it will be between -- I think it will probably be in the high teens to low 20s, somewhere in that range and it may drop off a little from there in Q4. The manufacturing costs are in a pretty good shape as volumes pull us down a little bit our costs go up a little bit and obviously that has an impact. But the biggest driver is going to be what is happening in the market, and right now we are seeing pretty strong market conditions in the three areas that really are driving our business today and those are energy, non-residential construction and agriculture, and if you look at that and try to figure out where those overall markets are going to be, Ag might be close to a top right now. Non-residential construction, I think people assume it is going to down and we do too. However, we do think that we are gaining some market share in that, so that offsets some of that weakness in the overall market. And energy looks like it's going to continue to be very strong. So, if those conditions continue with construction coming down a little, Ag kind of topping but staying relatively steady, and energy being very strong, we should have pretty good results in the second half of the year. Again, Q4 probably won't be quite as good as Q3. Q3 probably won't be quite as good as Q2 at least in margin, but we are actually hoping to see some growth in revenues in Q3 -- small growth.

Got. Thank you. Now…

But defining strong, by saying strong I think three times. So…

Right. Yes. Thanks, that was good clarity. The other question I had was regarding the Las Vegas project and hoping that you might be able to -- just give us an update on kind of where that stands, how you are going to address capacity there? I might have a follow-up up on that but maybe just give you the floor.

I won't be a bit surprised if there is a follow-up on Las Vegas. That project, we believe, is not going to bid in 2008 and we have been saying for the last few months probably since our last conference call there are some things that had to happen. They just continue to not happen. So, it became clearer and clearer that it was not going to be in ’08. At the moment I think our best guess, and I am using guess, I think, as it’s defined, it is probably the third quarter of 2009. The job, we don’t know exactly yet what increments our job is going to bid in. We do think it will be broken into different pieces. They won’t bid the whole thing as one project. They will break it down, but whether that will be three pieces or five pieces or eight, we really don’t know a whole lot of other details about it as this point in time. In terms of how we will address it, we have been working to grow our capacity, both with some capital expenditures and I had mentioned the two new mills, and that’s clearly a part of that. And also the process change, and we continue to work through that. Our target has been to get to capacity level of $440 million by the end of September, and I think we are close to that target. We have had actually moved off the installation of one of those mills basically because of job requirements. So we won’t have it in by the end of September, but on the other hand, at the same time we know that Las Vegas has moved out, so we are not quite as -- we are not really concerned about it. So, we think we are not target to increase our capacity, so we can address major projects like Las Vegas, and there are others out there as well, and we just have to wait and see when that thing actually comes to bid.

So, your capacity planning here obviously has to be -- will be modified as we go along and you get more visibility on how these pieces break up. But, for example, I think you have a Utah plant, correct me if I am wrong?

Correct.

And is that where you are talking about, you are eyeing more capacity and is in fact this pipeline, maybe, you know, run this portion a bit through or near that facility? Will that facility be able to service, or we need another facility, do you think -- how do you think that’s going to shake out ultimately?

We don’t believe that we will need another facility to serve that project. One of these two mills, which are coming in is going to be installed in our Adelanto, California plant, which is probably the closest facility to the southern end of that pipeline. So we are going to beef up that capacity there. The other mill we have not determined where we are going to put it yet, we are going to wait and make that decision as the market opportunities become more clear. So, we think it will be fine in terms of capacity and will not require a complete new facility to meet that demand. However, Las Vegas has that they are one of the specifications they are considering is that they would require a portion of that job at least to be built at a facility located in the State of Nevada.

Right, that’s right, I assumed as well. That’s helpful. Thank you. Here is my last Question, the backlog which was really kind of jumped up this quarter, was there a whole bunch of, sort of, maybe, in factories waiting for shipment where the backlog was that high or is this just a real good balance of bookings and, sort of, spread. I think you have good visibility, I think, on the second half of the year. Is that more of a backlog issue where you just didn’t get some stuff out of the door, or maybe just a little more color on the backlog?

Well, I think Stephanie would always say we stack up too much in our plants. But, no, I think it is just a generally good mix. One of the things, as you look into Northwest Pipe, we are a -- defined by the American Institute of Certified Public Accountants as a contractor, construction contractor, and so we are required to use that complex [hedge] accounting which means basically we recognize revenue as we incur the cost. So the shipment date is nor really the driver. It’s when it’s built, that’s the driver. And I would say that the production flow through our facilities was pretty good in Q2. It was not a perfect quarter by any means. There are some things that we can do to improve, but there is no -- there wasn’t a backup of things there that caused a backlog to go up. It was truly new orders that were booked during the period.

And is the pricing in the backlog at parity with materials inflation or are you behind, you ahead?

Yes, the challenge in the Water Transmission business is that we do work off a generally fixed price contract. So, we have to anticipate what we think those costs will be when we actually order the material in order to get them into our bid and get them into the contract. And that is a challenge when prices are going up, I think we have done a very good job of responding to that challenge, but at this point I would say with very few exceptions, I think we are in pretty good shape in terms of getting those price contracts.

Thank you very much.

You are welcome.

Our next question comes from Brent Thielman. Your line is open.

Good morning. Congratulations on a great quarter.

Good morning. Thank you.

On the Water Transmission segment and so I had just given some of the comments in the press release relative to margins, it sounds like this sort of is going to approximate where we were here in the second quarter, what's the big driver of that going forward, I mean, is it a function of the material cost, production schedules, what's the bigger influence there for maybe not seeing potentially more margin expansion?

Well the margin, and this just gets tend to back over -- we were just talking about and in 2004 which is the last time we really saw this rapid run up in steel costs, we kind of went through the math and the math at that time was for about every 100 dollars of steel increase you see about a point decline in margin even if we passed it on to our customers dollar for dollar because your cost go up, your revenue goes up the same level, and so obviously the denominator is bigger and you have to show a lower margin. Today the math is about $150 a ton. So for every $150 ton that steel goes up, if we pass that $150 alone dollar for dollar in our contract to get it included our contract, you will see the margin come down about a point from where it would have been if steel had not started to run up. And today, steel is about a $1100 a ton. The base at the beginning of the year was about $600 a ton; so we are up about 500 bucks.

Okay.

So that's really accounting from most of that, and not all of that is in Q2. We also, as I said it wasn’t a perfect quarter, we had a couple of manufacturing issues that reduced the margin a little bit as well. But what that means is that in Q3 we will see a little bit more of that affect yet. However, we think in Q3, some increased volume plus just a little bit better pricing on some of the projects that we will be doing in Q3 could offset that, and we expect to see margins at this level or maybe in the little bit higher in Q3 even with a little bit more of a dilutive effect, if you will, because of higher steel costs in the projects.

Okay. And Brian I'd be interesting in your taking just how you think, sort of, obviously, I am sure prices of pipe are going pretty significantly, how the market sort of accepting that, particularly in the Water side right now?

Well, I think it’s accepting -- the market is accepting the price increases pretty well as you get into Water Transmission pipe, and part of that is that the dilutive affect obviously involve the other costs that are involved. Steel, for us, is about a third of our costs or maybe a quarter if you look at it on in terms of our selling price, I didn’t get that exact numbers, but let's say a quarter. So if an agency is buying pipes from us, only about 25% of the cost is steel. And then the agency is obviously is not buying pipes, they are buying a pipeline. It has got to be installed, and our basic pipeline, the rule of thumb is that there is about a dollar for installation cost. For every dollar there is a pipe. So that means, steel is now only about a 12.5% of the cost of the project. So when steel goes up as dramatically as it does there is dilutive effect against that in terms of the total amount of the project itself, still significant, but not like if you just look at the steel number where steel has virtually doubled. So that’s part of it, and then, of course, they obviously build these things over for a to last for a very good long period of time. So you start looking at the delta in costs on an annual basis, so you start looking at the delta in costs in terms of the water rates they have to raise to pay for it, and it becomes a little bit less significant then it seems like on the surface. So, I think that’s part of the issue why it has been so well accepted. Now, if you get on the other side in Tubular products, it’s a little bit tougher because steel is a much bigger percentage of those costs, and there you are really looking at those market conditions. So if the market is strong enough for our customers to pass those increases on to their customers, to the end user, and so far that’s been going pretty well in most of our product lines. We do some piling, as you know, and piling appears to be slowing down. Now, whether that’s economic consideration just in terms of constructions or it’s cost consideration, I am not sure. We could say yes, but certainly you see some products like that starting to slow down.

Okay, that’s very helpful. And then I apologize Brian, I think you might have mentioned there, but the timing of the two new large diameter mills, is that still on schedule?

Yes, because we revise the schedule every time it splits. So…

Yes.

So, it looks like it always on schedule. Now, were really looking at that for the last several months, at least, looking at a probably mid Q3, we are now thinking end of Q3 and moving into Q4 and we’re really -- we are kind of modifying that as we go partially to fit with what we see as our manufacturing demands as well.

Okay. But you did expect still these to be, sort of, on line next year?

Yes, we are very comfortable with that.

Okay. And then on the Tubular product side, you have got the new mill working on in Houston, when do you expect you could get the certification for that new mill -- I guess, I think it’s the API certification for that?

That’s a good question. I don’t know the exact timing, but there is a lead time associated with that, and there are certain products we will not be able to produce without that certification.

Okay.

And I can’t -- its not years and years, Brent it’s…

Yes, yes.

It’s possibly short, but there is some amount of lead time with that.

Okay. And then lastly, and I guess it’s sort of bounced around here but back to the Water Transmission business -- as we got out of Q1, I think, we sort of, have expectations of seeing significant revenue growth in the second half of the Water Business, and now it sounds like sort of somewhat better in terms of revenue growth that, and I am assuming growth of the first half, just some clarity there on your expectations, I guess. Is your outlook a little bit more tempered for that business in terms of revenue contributions or what will drive that?

It’s a little bit more tempered because for a couple of reasons. One, as I said, installing that mill in Adelanto, we were planning for, we are trying to modify our production around it, but obviously there is always a risk of some disruption -- well some disruption is almost guaranteed. There is a risk of more disruption then we anticipate, and, of course, that’s our largest volume plant. So, a couple of million dollars there is not unreasonable. And then also Q4 is always subject to weather issues and all types of disruption. So we usually try to talk people down a little bit on Q4.

Yes.

But we need to be in the 70s, and in terms of revenue in a quarter, we are nicely there this quarter. Hopefully we will be there again as we go forward in Q3 and then probably drop off a little bit in Q4. That will still be stronger, I think, in the second half than in the first half.

Sure, sure. Okay. Very good and congratulations again.

Thank you.

Our next question comes from Chris Terry. Your line is open.

Hey guys, congratulations. Outstanding quarter.

Thank you.

My questions have been answered. Brian, thank your for the details, I should appreciate it.

Well, my pleasure.

Our next question comes from [Matt Sherwood]. Your line is open.

Hi guys, again. Great quarter. I just had a quick question on the Tubular margins, I know you have spend some time on that, but I was just trying to understand that if you look at cost of goods sold, they are about 8% year-on-year, and we know how much steel prices are up year-on-year. So would you say that the units in that segment were down?

No, I think the units are up.

Okay. So, can you walk me through the math on how…

Are you looking at quarter or year-to-date?

I am looking at this quarter's cost of goods sold in that Tubular segment?

In this quarter, units are up not a significant amount. Units are up probably 15% or so year-over-year, speaking up for the six months, but they are up a little bit in the quarter.

So, would -- as you plan -- on the last call you said steel prices are about 80% of your cost in Tubular?

It varies by product line. So the mix is always a potential issue if you are trying to do that kind of an analysis.

Okay. So, you are saying it is just that you had better -- lower costs, higher price mix, a higher margin mix.

I have to dive into it. If you want to get into -- understand that a little bit better because I just don’t have it in front of me. But we could certainly talk about that, but overall volume was up -- the first half, like I said, probably about 15%. Volume in Q2 was up single digit, but it was up in two as well. We had a very strong second quarter last year in terms of overall volume.

Yes.

Probably the best we had in quite some time. So we are still up a little bit over that, and then, of course, pricing makes up for the bulk of the difference.

Yes.

But obviously there is going to be some mix in there too.

Okay. That's great. Then I just have a quick question, just a housekeeping question from a model -- the receivables were up a bunch, do you know what drove that?

We had just some extraordinary billing volumes because we are a construction accounting house. We recognize revenue as the work is completed, but we don’t usually bill until later down the line. And so, we earn revenues on a pretty steady stream, and we do sometimes have stronger billing periods than others, and you just hit the timing such that we had a lot of billing. So, what really happened is the charges move from unbilled revenue previously recognized…

Yes.

…to billings. And so it's a good indication of future cash flow.

Yes, it's great. And so you should have a -- and those receivables are with municipalities or with construction companies?

Particularly with the construction companies.

Yes, and of course, there is also receivables from the Tubular products business as well, but yes, the Water Transmission, our customer is typically a construction company.

Well, great quarter. Keep it up.

Thank you.

Our next question comes from Scott Graeme. Your line is open.

Hi. I am sorry, I just have a couple of follow-up questions. Okay. First one is back on Las Vegas, now, as some of this pipeline ends up spewing over into Nevada, doesn’t that require you to put some capital spending some capacity there as well?

You are talking about the major Las Vegas project to fill in the data project.

Right.

Yes. There are final spec to course are not out. But in the preliminary effect they have included language about having at least part of the pipeline built at a plant in Nevada.

Right. So, would that make this award or lets say a portion of this award still attractive for you?

We won’t know until we evaluate the final specifications, what our level of interest is in that project.

Got you, that’s great.

And that like I said if our current expectation is correct and they are going to bid that in a maybe late second quarter, excuse me, in the third quarter of next year. It will be quite sometime before we probably see the final specifications come out.

Okay. Then the second thing is that with the new mill capacity in California, worst case scenario what if you get none of the pieces of this project, does that is that mill still supportable with bookings elsewhere.

Well we are going to get none of it this year, because obviously they are not bidding at this year and I think we are going to have a pretty good year. The overall market is very strong, its obviously much stronger with the Vegas project included in it, but the overall market opportunities are very strong and we think they are going to be very strong. So, if we don’t get that job that means one of our competitors must get it and we will tir up their capacity and leave some more room for us on some other work.

Excellent. Thanks very much.

You bet.

Our next question comes from [Patel] your line is open. Sorry I probably said that wrong.

[Nitin Suraj].

Suraj, I am sorry.

He is still not there.

Mr. Suraj.

Hi, sorry about that guys.

There he is.

Here we go. With ball traveling at time, I am just jumping here for a minute. In regards to the monetary facility, can you speak how much of the work being done there as it relate to just water and general resource, the propane stuff. And then also how much of that contributed to the water transmission revenues?

Yes, I can speak to, but I am not sure I can give you very good answer. I don’t have that breakdown in front of me. We are still doing both there Suraj. So, we see both propane tanks and water transmitting sitting down there. I think the numbers are relatively light filled this quarter and hopefully we will see that start increasing here very soon, but I think its still a pretty small amount $2 million, $3 million probably of water transmission fitting.

Thank a lot, thanks for the clarity.

You’re welcome.

Our next question comes from [Aria Cole], your line is open.

Thank you. I was one of the mermaids so thanks for the Aria.

I have got an image in my mind now that I am going to have to work to get out.

Yes, I am a pretty boy. So this question is for Stephanie. I have been listening to the questions from your buy side and sell side audience. And it seems clear to me that there is not a good understanding of how steel prices impact your income statement. I know it’s a little complicated, could you just make an attempt to explain how a rising steel price environment is actually very beneficial to your company, because earlier comments suggest would make some walk ways, is steel prices actually hurt your business when they rise, in fact they actually help your profitability and maybe by chatting maybe about you’re the type of accounting you have, it might have people better appreciate how the environment weren’t actually excellent because you have steep rising steel prices as well as a very strong robust demand for your product.

Yes, the way that the steel prices operate are rather different. It’s the biggest positive impact comes in the tubular group. The primary driver for the positive impact in fact as we are able to sell the product at a pricing effect at the time of shipment. So, someone eluded earlier to this question of how much was this an inventory impact? Well to the extent you got rock coil on hand rust steel on hand or work in process that was acquired at lower steel prices and you are selling at perfect -- in a price and effect at the time of sales. You can see improving margins in rising prices, that’s just the mechanics of the way that industry operates. The issue is that we have to be careful about managing inventory as we hit the top. So, the big challenge will come as prices come back down and still the prices unaffected at the time of shipment and so we want to make sure we got a minimal amount of inventory on hand when that happen. So, we are just working with the mechanics of the market overall, and it’s a classic demand and supply issue.

Okay. Thank you.

Our next question comes from Chris Terry. Your line is open.

Hey guys, I had a follow-up. Brian on the Nevada project is there a particular reason behind the delay, I am kind of thinking is this engineering related to some design plans or is it anyway tied to bond sales out there?

Well it’s hard to know what all of the issues are, there is a lot of different pieces that have to be put together. They have to get approvals from a variety of different federal agencies some which they have, some which don’t have. They have to get approvals for withdrawing the water which has to go through almost a trail process and different basin in the state of Nevada. Some of which they have done at least preliminarily and some which have more to go and some of those are fairly controversial with obviously the people who see that as been detrimental to their particular area that they live in or their life style. So, there is a lot of issues involved there. They have to fund the projects, they have a lot of funding capacity and a lot of cash on hand, but they have to figure out specifically how they are going to fund these particular projects and if they are doing bonds sales for that obviously they got to go through that process as well. So, there is a lot of different moving pieces to put a project together of this size and I can’t tell you that anyone of those is the specific reason for the schedule if they have out there today as compared to what they had out there six months ago.

Okay, great and then with this project not included in the outlook for your strong bookings here over the next few months. Can you kind of point it from the direction of certain projects that would stick out that would kind of indicate to us what’s driving the market?

No, I don’t think we are going to go through listing a specific projects but there is a significant number of projects out there as I said we think for the year it’s going to be probably the best year we have ever seen. Most of those projects by far vast majority of those projects are small projects and again people miss this fact as we focus on the big once, but our average project size is still only about $1.5 million in size, so most of these you will never hear of. There are several that are more than that there are certainly be several opportunities for projects that we announced and we announced all those over $5 million, but we are not going through and detail those out at this time.

Okay, sure, alright. Guys thanks again and congratulations.

You’re welcome.

(Operator Instructions). Mr. Dunham, I am not showing any further questions at this time.

Okay that will conclude our conference call. Thank you for attending and for your interest in our Northwest Pipe. Thank you.

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