MINNEAPOLIS – July 24, 2000 – PW Eagle, Inc. (Nasdaq-NMS: "PWEI", formerly "EPII") today reported record sales and earnings for the three months and six months ended June 30, 2000. PW Eagle also reported pro forma financial information associated with its previously announced acquisition of Pacific Extruded Plastics Company (PWPipe) to provide insight into what the operating results might have been if the two businesses had been combined in prior periods. A summary of the unaudited results for the second quarter and for the six months ending June 30, 2000 and 1999 is set forth in the following table:

Income Statement Information

(In thousands, except for per share amounts)

	Three months ended June 30,		Six months ended June 30,
	2000	1999	2000	1999
Net sales	$106,748	$24,448	$199,347	$44,034
Gross profit	$36,661	$6,232	$65,973	$11,673
Net income	$13,199	$4,004	$22,365	$4,334
Basic earnings per share	$1.70	$.54	$2.91	$.57
Diluted earnings per share	$1.24	$.42	$2.12	$.45
EBITDA	$27,075	$3,233	$47,551	$4,698

Included in reported net income for the three month and six months ended June 30, 1999, is a $2,000,000 benefit resulting from the valuation allowance reversal associated with the Company’s deferred tax assets representing approximately $.21 reported diluted earning for the respective interim 1999 periods.

The pro forma financial information summarized below assumes that the acquisition of PWPipe took place on January 1, 1998, consistent with pro forma information included in the notes to the Company’s 1999 financial statements included in its March 2000 Form 10-K filing and includes certain adjustments to reflect what the Company will experience on an ongoing basis. A summary of the pro forma financial information for the three month and six month periods ending June 30, 1999 is set forth in the following table:

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Pro Forma Income Statement Information

(In thousands, except for per share amounts)

	Three months ended June 30,		Six months ended June 30,
	2000	1999	2000	1999
Net sales	$106,748	$77,212	$199,347	$137,859
Gross profit	$36,661	$20,466	$65,973	$36,696
Net income	$13,199	$4,247	$22,365	$5,677
Basic earnings per share	$1.70	$.57	$2.91	$.79
Diluted earnings per share	$1.24	$.44	$2.12	$.59
EBITDA	$27,075	$11,523	$47,551	$18,963

Included in the historical and pro forma financial information for the six month period ending June 30, 1999 are certain nonrecurring charges. These nonrecurring items reduce historical and pro forma net income by approximately $800,000 for the six months ended June 30, 1999. Absent these nonrecurring changes, pro forma basic and diluted earnings per share would be $0.90 and $0.67, respectively, for the six months ended June 30, 1999.

William H. Spell, CEO, stated: "We are extremely pleased with the record operating results for the second quarter and the first half of the year. Our gross margins and operating profits continue to be very strong, reflecting the impact of the significant capacity and process improvement investments that we have made over the last several years, the synergies that we are recognizing from the integration of the Eagle Pacific and PWPipe businesses, rising resin prices and rising prices for our products.

"These results are unusual considering that they were achieved during a period of rising interest rates and slowing construction spending. We continue to experience strong demand for our electrical, telecommunications and irrigation products, but during the last six months there has been a softening of demand for our potable water and sewer products. We believe that our industry is becoming more rational and is less likely to experience the large cyclical swings that it has experienced in the past. In addition, our long-term strategy of having both geographical and product line diversity should also moderate the cyclical swings. Our belief is based in part on the results of the last six months. Although the demand for waterworks products has softened, the price has not seen the large fluctuations that we have experienced historically. In addition, the strength of the electrical and telecommunications product lines has more than offset the softness in the waterworks marketplace."

Spell concluded, "The demand and supply of PVC resin seem to remain in good balance. Industry experts are not predicting any significant increases or decreases in resin prices for the balance of the year. Consequently, absent a slowdown in the economy that impacts our industry, we would expect to experience generally stable prices for our products and strong results for the balance of 2000."

PW Eagle will hold its second quarter conference call on July 25, 2000 at 11AM (Central Daylight Time) to discuss results for the second quarter and first half of the year. It will be available live on the Internet at www.streetevents.com (for individual investors, once at the site, click on the small "individual investor center" link, then search for the ticker symbol PWEI, then click on the conference call audio). The call will also be available for one week following its original webcast.

PW Eagle, Inc. is a leading extruder of PVC pipe and polyethylene pipe and tubing products. The Company operates nine manufacturing facilities in the midwestern and western United States. PW Eagle’s common stock is traded on the Nasdaq National Market under the symbol "PWEI".

Statements that PW Eagle, Inc. may publish, including those in this announcement, that are not strictly historical are "forward looking" statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements made by William H. Spell regarding the Company’s beliefs that (i) its industry is becoming more rational and is less likely to experience the large cyclical swings that it has experienced in the past, (ii) the Company’s long- term strategy of having both geographical and product line diversity should also moderate the cyclical swings, and (iii) absent a slowdown in the economy that impacts its industry, the Company would expect to experience generally stable prices for its products and strong results for the balance of 2000 are forward looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause results to differ materially from those expected and stated in this announcement. The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of changes in demand for the Company’s products, a slow down in the economy, higher interest rates, fluctuations in resin prices and other risks described from time to time in PW Eagle, Inc.’s SEC filings, including quarterly reports on Form 10-Q and annual reports on Form 10-K.

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PW EAGLE, INC.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except per share amounts

 

		Three months ended June 30,		Six months ended June 30,
		2000	1999	2000	1999
NET SALES		$106,748	$24,448	$199,347	$44,034
COST OF GOODS SOLD		70,087	18,216	133,374	32,361
Gross profit		36,661	6,232	65,973	11,673
OPERATING EXPENSES:
Selling expenses		8,054	2,954	15,221	5,496
General and administrative expenses		3,462	772	7,162	1,442
		11,516	3,726	22,383	6,938
OPERATING INCOME		25,145	2,506	43,590	4,735
OTHER EXPENSES (INCOME):
Interest expense		3,639	541	7,291	1,103
Other, net		(183)	(171)	(246)	(191)
Nonrecurring expenses		300	-	300	1,325
		3,756	370	7,345	2,237
INCOME BEFORE INCOME TAXES		21,389	2,136	36,245	2,498
INCOME TAX EXPENSE		8,190	(1,868)	13,880	(1,836)
NET INCOME		13,199	4,004	22,365	4,334
PREFERRED STOCK DIVIDENDS		-	200	-	401
NET INCOME APPLICABLE TO COMMON STOCK		$13,199	$3,804	$22,365	$3,933
NET INCOME PER COMMON SHARE:
Basic		$1.70	$.54	$2.91	$.57
Diluted		$1.24	$.42	$2.12	$.45
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		7,763	7,015	7,674	6,868
Diluted		10,682	9,629	10,558	9,553

PW EAGLE, INC.

CONDENSED BALANCE SHEETS (UNAUDITED)

(In thousands, except for shares and per share amounts)

ASSETS	June 30, 2000	Dec. 31, 1999
CURRENT ASSETS:
Cash and cash equivalents	$ 1,387	$ 2,669
Accounts receivable, net	37,789	26,159
Inventories	64,212	45,777
Deferred income taxes	642	2,487
Other	363	233
Total current assets	104,393	77,325
Property and equipment, net	72,853	74,895
OTHER ASSETS:
Deferred financing costs, net	4,532	5,300
Land held for sale	1,006	1,346
Goodwill, less accumulated amortization of $649 and $593, respectively	3,819	3,874
Deferred income taxes	705	4,901
Other	2,690	146
	12,752	15,567
TOTAL ASSETS	$ 189,998	$ 167,787
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Borrowings under revolving credit facility	$ 31,312	$ 30,558
Current maturities of long-term debt	10,423	10,441
Accounts payable	14,793	22,347
Accrued liabilities	19,084	12,165
?Total current liabilities	75,612	75,511
OTHER LONG-TERM LIABILITIES	2,631	79
LONG-TERM DEBT, less current maturities	32,500	37,500
SENIOR SUBORDINATED DEBT	27,387	26,752
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK; 8% cumulative dividend; convertible; $1,000 per share liquidation preference; $.01 par value; 10,000 shares authorized; none issued and outstanding	-	-
STOCK WARRANTS	5,887	5,887
SHAREHOLDERS’ EQUITY:
Series A preferred stock; 7% cumulative dividend; convertible; $2 per share liquidation preference; no par value; 2,000,000 shares authorized; issued and outstanding none and 18,750 shares, respectively	-	38
Undesignated stock, $.01 par value; 14,490,000 shares authorized; none issued and outstanding	-	-
Common stock; $.01 par value; 30,000,000 shares authorized; issued and outstanding 8,061,275 and 7,721,214 shares, respectively	80	77
Class B Common stock, $.01 par value; 3,500,000 shares authorized; none issued and outstanding	-	-
Additional paid-in capital	40,468	39,013
Unearned compensation	(537)	(587)
Notes receivable from officers and employees on common stock purchases	(1,208)	(1,296)
Retained earnings/(accumulated deficit)	7,178	(15,187)
Total stockholders’ equity	45,981	22,058
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY	$ 189,998	$ 167,787