UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 FORM 10–Q T       QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 OR £       TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition
  period from
  ____________
  to
  ____________
 Commission File Number 0–18050 PW EAGLE, INC.(Exact
  name of registrant as specified in its Charter)
  MINNESOTA
  41-1642846(State
  of incorporation)
  (I.R.S.
  Employer Identification No.)222 South Ninth
  Street, Suite 2880Minneapolis, Minnesota 55402(Address
  of principal executive offices)Registrants telephone number, including
  area code:
  (612)
  305-0339
  Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes
  T
  No
  £
 The number of shares of the registrants
Common Stock, $.01 par value per share, outstanding as of May 14, 2001 was
6,882,875. 
 
 PW EAGLE, INC.

INDEX



PART
  I.
  
  FINANCIAL
  INFORMATIONITEM 1.
  CONDENSED
  FINANCIAL STATEMENTSCondensed
  Statements of Operations  Three Months Ended March 31, 2001 and 2000
  (Unaudited)Condensed Balance Sheets 
  March 31, 2001 (Unaudited) and December 31, 2000Condensed Statements of Cash
  Flows  Three Months Ended March 31, 2001 and 2000 (Unaudited)Notes
  to Condensed Financial StatementsITEM
  2.
  MANAGEMENTS
  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM
  3.
  QUANTITATIVE
  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKPART
  II.
  
  OTHER
  INFORMATIONITEM 1.
  LEGAL PROCEEDINGSITEM
  2.
  CHANGES
  IN SECURITIES AND USE OF PROCEEDSITEM 3.
  DEFAULTS
  UPON SENIOR SECURITIESITEM
  4.
  SUBMISSION
  OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5.
  OTHER INFORMATIONITEM 6.
  EXHIBITS
  AND REPORTS ON FORM 8-KSIGNATURESPART I.            FINANCIAL
INFORMATION

ITEM 1.            CONDENSED FINANCIAL STATEMENTS

PW EAGLE, INC.Condensed
Statements of Operations  Three Months Ended March 31, 2001 and 2000
(Unaudited)(In thousands, except per share amounts)



Three
  months ended March 31,2001
  2000Net sales
  $58,045
  $92,599Cost of goods sold
  49,319
  63,287Gross profit
  8,726
  29,312Operating expenses:Selling expenses
  5,618
  7,167General and administrative expenses
  2,310
  3,7007,928
  10,867Operating income
  798
  18,445Other expenses
  (income):Interest expense
  3,030
  3,652Other, net
  (14)
  (63)3,016
  3,589Income (loss) before
  income taxes
  (2,218)
  14,856Income tax expense
  (benefit)
  (849)
  5,690Net income (loss)
  $(1,369)
  $9,166Net income (loss) per
  common share:Basic
  $(0.17)
  $1.21Diluted
  $(0.17)
  $0.87Average number of
  common shares outstanding:Basic
  7,887
  7,585Diluted
  7,887
  10,493

The accompanying notes are an integral
part of the unaudited condensed financial statements.

PW EAGLE, INC.Condensed
Balance Sheets March 31, 2001 and December 31, 2000(In thousands, except per share amounts)



March 31,
  2001
  December 31,
  2000(Unaudited)ASSETSCurrent assets:Cash and cash
  equivalents
  $535
  $816Accounts receivable,
  net
  26,051
  18,246Inventories
  49,714
  44,391Income tax receivable
  1,473
  3,376Other
  3,903
  3,782Total current assets
  81,676
  70,611Property and
  equipment, net
  76,702
  76,589Other assets
  10,975
  11,179Total assets
  $169,353
  $158,379LIABILITIES AND STOCKHOLDERS
  EQUITYCurrent liabilities:Borrowings under
  revolving credit facility
  $27,892
  $16,458Current maturities of
  long-term debt
  10,395
  10,408Accounts payable
  18,668
  7,839Accrued liabilities
  8,362
  16,447Total current
  liabilities
  65,317
  51,152Other long-term
  liabilities
  4,309
  3,793Long-term debt, less current
  maturities
  25,000
  27,500Senior subordinated
  debt
  28,411
  28,068Total liabilities
  123,037
  110,513Commitments and
  contingenciesStock warrants
  -
  5,887Stockholders equity:Series A preferred
  stock; 7% cumulative dividend; convertible; $2 pershare liquidation
  preference; no par value; 2,000,000 sharesauthorized; none
  issued and outstanding
  -
  -Undesignated stock;
  $.01 par value; 14,490,000 shares authorized; none issuedand outstanding
  -
  -Common stock; $.01 par
  value; 30,000,000 shares authorized; issued andoutstanding 8,080,675
  and 8,069,675 shares, respectively
  81
  81Class B common stock;
  $.01 par value; 3,500,000 shares authorized; none issuedand outstanding
  -
  -Additional paid-in
  capital
  40,717
  40,521Stock warrants
  5,887
  -Unearned compensation
  (553)
  (473)Notes receivable from
  officers and employees on common stock purchases
  (1,185)
  (1,181)Accumulated other
  comprehensive loss
  (293)
  -Retained earnings
  1,662
  3,031Total stockholders
  equity
  46,316
  41,979Total liabilities and
  stockholders equity
  $169,353
  $158,379

The accompanying notes are an integral
part of the unaudited condensed financial statements.



PW EAGLE, INC.Condensed
Statements of Cash Flows Three Months Ended March 31, 2001 and 2000
(Unaudited)(In thousands)



Three
  months ended March 31,2001
  2000Cash
  flows from operating activities:Net income
  $(1,369)
  $9,166Adjustments to reconcile net income
  to net cash (used in)provided by operating activitiesGain on sale of fixed assets
  (3)
  -Gain on sale of land held for sale
  -
  (60)Depreciation and amortization
  2,289
  1,969Amortization of debt issue costs,
  discounts and premiums
  453
  544Receivable provisions
  (1,858)
  (894)Deferred income taxes
  -
  5,355Non-cash compensation
  (43)
  112Change in operating assets and
  liabilities
  (7,505)
  (27,877)Net cash used in operating
  activities
  (8,036)
  (11,685)Cash
  flows from investing activities:Purchases of property and equipment
  (2,474)
  (1,002)Proceeds from property and
  equipment disposals
  13
  -Proceeds from sale of land held for
  sale
  -
  269Payments on notes receivable
  107
  59Net cash used in investing
  activities
  (2,354)
  (674)Cash
  flows from financing activities:Change in cash overdraft
  1,187
  698Borrowings under revolving credit
  facility
  11,434
  12,910Repayment of long-term debt
  (2,512)
  (2,509)Issuance of common stock
  -
  191Net cash provided by financing
  activities
  10,109
  11,290Net
  change in cash and cash equivalents
  (281)
  (1,069)Cash
  and cash equivalents at beginning of period
  816
  2,669Cash
  and cash equivalents at end of period
  $535
  $1,600SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION:Noncash activities:Preferred stock exchanged for common stock
  $-
  $38Issuance of subordinated debt for interest payment
  166
  163Additional paid in capital-stock compensation
  -
  112Tax benefits related to stock
  options
  -
  90Cancellation of restricted
  stock
  (102)
  -Issuance of restricted stock
  186
  14Issuance of common stock in
  exchange for notes receivable
  112
  -The accompanying notes are an integral
part of the condensed-unaudited financial statements.



PW EAGLE, INC.Notes to Condensed
Financial Statements (Unaudited)

1.          Presentation

On
June 15, 2000, Eagle Pacific Industries, Inc., changed its name to PW Eagle,
Inc., (the
Company).  On June 19, 2000, the
Companys stock began trading on the Nasdaq National Market under the symbol PWEI.

In
the opinion of management, the accompanying unaudited condensed financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position of the Company at
March 31, 2001, and the results of its operations and cash flows for the three
month periods ended March 31, 2001, and 2000. 
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to the rules and regulations of the Securities
and Exchange Commission.  Although the
Companys management believes that the disclosures are adequate to make the
information presented not misleading, it is suggested that these condensed
financial statements be read in conjunction with the financial statements of
the Company included with its Annual Report on Form 10-K for the year ended
December 31, 2000.

On
March 20, 2001, the Company signed an agreement with the holders of its
outstanding warrants to purchase 1,940,542 shares of common stock, whereby the
warrant holders have agreed to cancel their right to require the Company to
purchase their warrants (the Put Rights) upon a change of control of the
Company.  Due to the cancellation of the
Put Rights, the Company reclassified the stock warrants, which were previously
excluded from permanent equity in the condensed balance sheet with a value of
$5,887,000, as an addition to stockholders equity in its March 31, 2001
balance sheet.

Certain
reclassifications were made to the prior year financial statements to conform
to the March 31, 2001 presentation. 
Such reclassifications have no effect on net income or stockholders
equity as previously stated.

2.New Accounting Pronouncement

Effective
January 1, 2001 the Company adopted Statement of Financial Accounting  Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended and interpreted (FAS
133).  FAS 133 requires that all
derivative instruments, such as interest rate swap contracts, be recognized in
the financial statements and measured at their fair market value.  Changes in the fair market value of
derivative instruments are recognized each period in current earnings or
shareholders equity (as a component of other comprehensive income), depending
on whether a derivative is designated as a part of a hedge transaction and, if
it is, the type of hedge transaction. 
The adoption of FAS 133 did not have a material impact on the Companys
primary financial statements, but did result in the recording of an unrealized
loss of approximately $132,000, net of tax, in other comprehensive income.

In
the normal course of business, the Company is exposed to changes in interest
rates.  The Company has established
policies and procedures that govern the management of these exposures through
the use of financial instruments.  By
policy, the Company does not enter into such contracts for the purpose of
speculation.  In November 1999, under
covenants of our Senior Credit Facility, the Company entered into a fixed rate
agreement for three years with a LIBOR rate of 6.46%.

The
Companys objective in managing its exposure to interest rates is to decrease
the volatility that changes in interest rates might have on earnings and cash
flows.  To achieve this objective, the
Company uses a fixed rate agreement to adjust a portion of total debt, as
determined by management, that is subject to variable interest rates.  The Company designates this instrument as a
cash flow hedge.  Under the fixed rate
agreement, the Company agrees to pay fixed rates for interest.  This contract is considered to be a hedge
against changes in the amount of future cash flows associated with the
Companys interest payments related to a portion of its variable rate debt obligations.  Accordingly, the fixed rate agreement is
reflected at fair value in the Companys balance sheet and the related gains or
losses on this contract are deferred in shareholders equity as a component of
comprehensive income.  However, to the
extent that this contract is not effective in offsetting the change in interest
cash flows being hedged, the ineffective portion is immediately recognized in
earnings.

At
March 31, 2001, the Company had a fixed rate agreement to pay a 6.46% fixed
rate of interest and receive a variable rate of interest based on the one-month
LIBOR rate (ranging from 6.88% to 5.37% during the first three months of fiscal
2001) on a $17.5 million notional amount of indebtedness.  This amount decreases until the fixed rate
agreement terminates in September 2002.

3.Comprehensive Income

Comprehensive
income for the Company includes net income, transition adjustment for the
adoption of FAS 133, changes in fair market value of financial instruments
designated as hedges of interest rate exposure and the unrealized loss on securities
from non-qualified deferred compensation plans.  Comprehensive income for the three months ended March 31, 2001
and 2000 was as follows:



(in thousands)
  Three
  months ended March 31,2001
  2000Net
  income
  $(1,369)
  $9,166Other
  comprehensive income:Transition
  adjustment relating to the adoption of FAS 133,  net of taxes
  (132)
  -Changes
  in fair market value of financial instrument designated as a hedge ofinterest rate exposure, net of taxes
  (117)
  -Unrealized
  loss on securities from non-qualified deferred compensation plans
  (44)
  -Total
  comprehensive income
  $(1,662)
  $9,166

4.Inventory

(in
thousands)

March 31, 2001
  December 31, 2000Raw
  materials
  $9,845
  $9,348Finished
  goods
  39,869
  35,043$49,714
  $44,3915.          Earnings per
Common Share

The
following tables reflect the calculation of basic and diluted earnings per
common share (EPS).



Three months ended March 31,
  2001(in thousands, except for per share
  amounts)Income
  (loss)
  Shares
  Per
  Share
  AmountBasic EPSNet loss
  $(1,369)
  7,887
  $(0.17)Effect of dilutive securities
  -
  -
  -Diluted EPSNet loss
  $(1,369)
  7,887
  $(0.17)Options
to purchase 1,058,751 shares of common stock, warrants to purchase 1,940,542
shares of common stock, and 182,500 shares of unvested restricted stock were
outstanding at March 31, 2001, but were not included in the computation of
diluted EPS because inclusion of these shares would be antidilutive.

Three months ended March 31,
  2000(in thousands, except for per share
  amounts)Income
  Shares
  Per
  Share
  AmountBasic EPSNet income
  $9,166
  7,585
  $1.21Effect of dilutive securities
  -
  2,908
  -Diluted EPSNet income
  $9,166
  10,493
  $0.87Options
to purchase 18,541 shares of common stock were outstanding at March 31, 2000,
but were not included in the computation of diluted EPS because the options
exercise prices were greater than the average market price of the common
shares.

Both
basic and dilutive EPS were computed by dividing net income (loss) by weighted
average common shares outstanding.

6.Debt

The
fair market value of borrowing under the senior credit facility fixed rate
agreement and senior subordinated notes continue to approximate their carrying
value at March 31, 2001, as their applicable interest rates approximate current
market rates.

7.          Equity

In
March 2001, the Company
issued a restricted stock grant of 25,000 shares to an officer of the
Company.  These shares carry dividend
and voting rights.  Sales of these
shares are restricted prior to vesting. 
Additionally, the Company sold 15,000 shares of its common stock to an
officer and accepted a Promissory Note as partial payment for shares.  The promissory note bears interest at the
rate of the Companys Revolving Credit Facility.  Shares issued were recorded at fair market value on the date of
grant with the corresponding deferred charge as part of shareholders
equity.  In addition, during the three
months ended March 31, 2001, restricted stock totaling 43,500 shares was
cancelled.

Incentive
stock options to purchase 90,000 shares of the Companys common stock were
issued to certain officers of the Company during the three months ended March
31, 2001.  These options were issued at
fair market value on the date of grant and vest over five years.

On
May 4, 2001, the Company completed its modified Dutch Auction tender offer.
Pursuant to the tender offer, 1,197,800 shares of common stock were properly
tendered at $9.00 per share; 86,689 more than the 1,111,111 shares the Company
offered to purchase. The tender offer began April 3, 2001. Under terms of the
offer, the Company offered to purchase up to 1,111,111 shares of it common
stock within a price range of $7.50 to $9.00 per share. The tender offer
included a provision for the Company to purchase up to a maximum of 162,190
additional shares if the tender offer is over subscribed. The Company elected
to exercise this right and purchased all 1,197,800 shares tendered.

The
value of the shares purchased is approximately $10.8 million. The Company used
funds provided by its current revolving credit facility to purchase the
tendered shares. The shares purchased represent approximately 15% of the
Companys 8,080,675 shares of common stock outstanding on March 31, 2001. As a
result of the tender offer, the Company has 6,882,875 shares of common stock
outstanding.

8.          Litigation

On
July 21, 1999, Lamson & Sessions Co. (Lamson) filed a complaint against
the Company in United States District Court for the Northern District of Ohio,
Eastern Division to recover alleged damages incurred by Lamson in connection
with the termination of the Companys proposed acquisition of Lamsons PVC pipe
business.  On March 13, 2001, the
Company entered into a settlement agreement with Lamson and Sessions Co. and
agreed to pay Lamson approximately $2.0 million in consideration for Lamsons
release and satisfaction of all claims for damage.  The settlement represented the resolution of a contingency that
existed at December 31, 2000. 
Accordingly, the Company recorded the March 2001 settlement and
associated costs incurred in 2001 as a component of nonrecurring items in the
December 31, 2000 Statement of Operations presented in the Companys Report on
Form 10-K filed on April 2, 2001.

ITEM 2.            MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL
                           CONDITION AND
RESULTS OF OPERATIONS

PW EAGLE, INC.The following table sets forth items from
our Statement of Operations as a percentage of net sales:



Three
  months ended March 31,2001
  2000Net sales
  100.0%
  100.0%Cost of goods sold
  85.0
  68.3Gross profit
  15.0
  31.7Operating expenses
  13.6
  11.8Operating income
  1.4
  19.9Non-operating expense
  5.2
  3.9Income (loss) before
  income taxes
  (3.8)
  16.0Income tax expense
  (benefit)
  (1.4)
  6.1Net income (loss)
  (2.4)%
  9.9%We
posted first quarter net sales in 2001 of $58 million, decreasing 37% from 2000
to 2001.  Reduced demand for our
products due to the slowing economy, reduced product prices because of an over
supply of finished goods and reduced raw material costs were the major cause of
reduced net sales.  Pipe pounds sold
decreased by 20% from 2000 to 2001, and pipe prices decreased by 22% during the
same period.

Gross
profit, as a percentage of net sales, decreased by 17% in the first quarter of
2001 compared to the same period in 2000. 
Gross profit exceeded 31% in the first quarter of 2000 due to a
combination of strong demand for pipe and rising PVC resin and pipe
prices.  PVC resin prices increased in
2000 due to a strong demand for resin and increasing raw material costs.  The strong demand for pipe in 2000 allowed
us to increase pipe prices at a greater rate than resin price increases.  Adverse conditions originating in the second
half of last year continued to negatively affect our results of operations in
the first quarter of 2001.  During the
second half of last year a weakened demand for pipe and decreasing PVC resin
and pipe prices decreased our gross profits. 
The demand for pipe was reduced by the reluctance of distributors to
purchase pipe for inventory when pipe prices were dropping and market
conditions caused pipe prices to drop at a faster rate than resin prices.  Demand for our products has not materially
increased in the first quarter of 2001 as compared to the fourth quarter of 2000,
and as a result we have not been able to increase pipe prices.  This has resulted in continued weak margins
in the first quarter of 2001.

The
increase in operating expenses, as a percentage of net sales, from 2000 to 2001
is the result of decreased sales in combination with certain fixed operating
expenses.  Actual operating expenses
have decreased in the first quarter of 2001 as compared to the same period in
2000.

The
income tax provisions for the quarters ended March 31, 2001 and 2000 were
calculated based on managements then-current estimates of the annual effective
rate for the year.  The estimated
effective tax rate was approximately 38% for both periods presented.

Financial
Condition

We
had working capital of $16.4 million at March 31, 2001, and had excess
borrowing capacity under our Revolving Credit Facility of $21.0 million.

Cash
used in operating activities was $8.0 million in the first quarter of 2001
compared to $11.7 million in 2000.  The
primary use of net cash associated with operating activities was to fund the
growth in accounts receivable resulting from increased sales in the month of
March 2001 compared to the month of December 2000, and the related seasonal
growth in inventories.

We
used $2.4 million and $0.7 million for investing activities for the three
months ended March 31, 2001 and 2000, respectively, primarily for capital
expenditures.

Cash
provided from financing activities was $10.1 million and $11.3 million for the
three months ended March 31, 2001 and 2000, respectively.  The decrease is a result of decreased
borrowings under the revolving credit facility used to fund working capital
needs.

We
had commitments for capital expenditures of approximately $1.3 million at March
31, 2001, which will be funded from operating profits.  Additional sources of liquidity, if needed,
include our revolving credit line, additional long-term debt financing and the
sale of our equity securities under either a private or public offering.  We believe we have the financial resources
needed to meet our current and future business requirements, including capital
expenditures for expanding manufacturing capacity and working capital
requirements.

On
May 4, 2001, the Company completed its modified Dutch Auction tender offer.
Pursuant to the tender offer, 1,197,800 shares of common stock were properly
tendered at $9.00 per share; 86,689 more than the 1,111,111 shares the Company
offered to purchase. The tender offer began April 3, 2001. Under terms of the
offer, the Company offered to purchase up to 1,111,111 shares of it common
stock within a price range of $7.50 to $9.00 per share. The tender offer
included a provision for the Company to purchase up to a maximum of 162,190
additional shares if the tender offer is over subscribed. The Company elected
to exercise this right and purchased all 1,197,800 shares tendered.

The
value of the shares purchased is approximately $10.8 million. The Company used
funds provided by its current revolving credit facility to purchase the
tendered shares. The shares purchased represent approximately 15% of the
Companys 8,080,675 shares of common stock outstanding on March 31, 2001. As a
result of the tender offer, the Company has 6,882,675 shares of common stock
outstanding.

Outlook

The
statements contained above in Management's Discussion and Analysis of Financial
Condition and Results of Operations that are not strictly historical and the
statements set forth in this Outlook section are forward-looking statements
made under the safe harbor provisions of the Private Securities Litigation
Reform Act.  These statements reflect
our expectations and beliefs as of May 11, 2001 and are based on reasonable
assumptions as of that date.  These forward-looking
statements involve known and unknown business risks and uncertainties, many of
which are stated at the end of this outlook section, that may cause results to
differ materially from our expectations and beliefs stated herein.

We
expect the demand for plastic pipe to grow as acceptance of plastic pipe over
metal pipe continues and the overall economy continues to grow.  Industry growth projections call for sales
growth rates for plastic pipe of three percent or greater per year through
2003.  The actual growth rate in each
year may be less than or greater than three percent based on short term
economic conditions.  We have
historically been able to, and expect in the future to be able to, grow at
rates in excess of the industry averages due to our emphasis on customer
satisfaction and product quality.  Our
strategy has been, and continues to be, to concentrate growth initiatives in
higher profit products and geographic regions.

Our
gross margin percentage is sensitive to PVC and PE raw material resin prices
and the demand for PVC and PE pipe. 
Historically, when resin prices are rising or stable, our margins and
sales volume have been higher. 
Conversely, when resin prices are falling, our sales volumes and margins
have been lower.  Gross margins also
suffer when the supply of PVC and PE pipe increases faster than demand.  We believe that the supply of plastic pipe
in our industry is adequate to meet demand in 2001.  We also believe that the supply of PVC resin will be adequate to
meet demand during the first half of 2001. 
Because no new capacity has been initiated for some raw materials used
in the manufacture of PVC resin, such as vinyl chloride monomer and chlorine,
the production of PVC resin may be limited during the latter part of 2001 and
in 2002.

Due
to the commodity nature of PVC resin and PVC pipe and the dynamic supply and
demand factors worldwide, historically, the markets for both PVC resin and PVC
pipe have been very cyclical with significant fluctuations in prices and gross
margins.  Generally, after a period of
rising or stable prices, capacity has increased to exceed demand with a
resulting decrease in prices and gross margins.  Over the last ten years, there have been consolidations in both
markets, particularly with respect to PVC resin manufacturers.  During the same period, the capacity of the
PVC resin producers has increased from just over 9 billion pounds to almost 16
billion pounds today.  Published PVC
resin prices have fluctuated from a high of about $.44 per pound in 1988 to
about $.26 per pound in 1992 to almost $.40 per pound in 1995 to a low of about
$.25 per pound in 1999 to a high of $.40 in 2000 to about $.35 per pound at the
end of March 2001.

While
we expect the demand for PVC pipe to continue to increase over the long term,
we also expect that the industry will continue to be subject to cyclical
fluctuations and times when supply will exceed demand driving prices and gross
margins down.  These conditions could
result from a general economic slowdown either domestically or elsewhere in the
world or capacity increases in either the PVC resin or PVC pipe markets.  As a result of the size of both the PVC
resin and PVC pipe markets and the consolidation that has occurred in these
industries, we believe that fluctuations in prices from capacity increases are
likely to be less extreme than they have been historically.  General economic conditions both in the
United States and abroad will, however, continue to have a significant impact
on our prices and gross margins.

For
the second quarter of 2001, we currently anticipate net sales between $82 and $90
million with net income between $3.5 and $5.0 million, which would result in
earnings per share on a fully diluted basis between $0.30 and $0.50 and EBITDA
between $10 and $13 million.  EBITDA
represents earnings before interest, taxes, depreciation and amortization.  By comparison, for the second quarter of
2000, we reported net sales of $107 million with net income of $13.2 million or
$1.24 per share diluted earnings and EBITDA of $27.1 million.

We
continue to remain optimistic that the economy will improve later in 2001.  Consequently, for the year 2001, we
currently anticipate net sales between $300 and $320 million with net income
between $8 and $12 million or $0.85 to $1.05 per share diluted earnings and EBITDA
of $35 to $40 million.  These earnings
forecasts exclude any impact the recently completed Dutch Auction tender
offer would have on the earnings of the Company.  By comparison, for the year 2000, we reported net sales of $344
million with net income of $18.2 million or $1.72 per share diluted earnings
and EBITDA of $52 million.

As
previously discussed, PW Eagle completed its modified "Dutch Auction"
tender offer.  To illustrate the
potential impact of the "Dutch Auction" tender offer, the purchase of
1.2 million shares for $10.8 million would reduce net income by approximately
$0.6 million, but the per share diluted earnings would increase by
approximately $0.03 per share.

INFORMATION IN THIS OUTLOOK SECTION AND
OTHER STATEMENTS IN THIS FORM 10-Q ARE FORWARD LOOKING INFORMATION  ACTUAL RESULTS
MAY DIFFER

PW
Eagle, Inc.s statements under the caption Outlook, and those that are not
strictly historical in this Form 10-Q for the quarter ended March 31, 2001 are
all forward looking statements made under the safe harbor provisions of the
Private Securities Litigation Reform Act. 
These statements involve known and unknown risks and uncertainties that
may cause the actual results to differ materially from those expected and
forecasted in this Outlook section and Form 10-Q.  Actual results could differ as a result of:  (i) a further slowdown of economic growth in
the United States, particularly west of the Mississippi; (ii) the failure of
the Gross Domestic Product to grow beyond its first quarter level; (iii) an
increase in interest rates or the failure of the Federal Reserve to lower
interest rates further; (iv) a decline in the construction of commercial and
residential building; (v) a decline in our raw material prices; (vi) a greater
supply of PVC and PE pipe than market demand for such products caused by
cyclical fluctuations in the supply and demand for pipe; (vii) adverse weather
conditions and (viii); other risks described from time to time in our periodic
reports.

ITEM 3.            QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

We
are exposed to certain market risks on outstanding interest rate long-term debt
obligations totaling $45.4 million of our $62.9 million of long-term variable
rate debt at March 31, 2001.  Market
risk is the potential loss arising from adverse changes in market rates and
prices, such as interest rates.  Market
risk is estimated, as the potential increase in fair value resulting from a
hypothetical one percent increase in interest rates which would result in an
annual interest expense increase of approximately $454,000.

We
do not enter into derivatives or other financial instruments for trading or
speculative purposes.  We only enter
into financial instruments to manage and reduce the impact of changes in
interest on our credit facility.  In
November 1999, under covenants of our Senior Credit Facility, we entered into a
fixed rate agreement (the Contract) for three years with a LIBOR rate of
6.46%.  The Contract has a notional
amount of $17.5 million.

PART II.           OTHER
INFORMATION

ITEM 1.            LEGAL PROCEEDINGS

On
July 21, 1999, Lamson & Sessions Co. filed a complaint against the Company
in United States District Court for the Northern District of Ohio, Eastern
Division to recover alleged damages incurred by Lamson in connection with the
termination of the Companys proposed acquisition of Lamsons PVC pipe
business.  On March 13, 2001, the
Company entered into a settlement agreement with Lamson and agreed to pay
Lamson approximately $2.0 million in consideration for Lamsons release and
satisfaction of all claims for damages.

ITEM 2.            CHANGES IN SECURITIESAND
USE OF PROCEEDS



In
March 2001, the Company issued a restricted stock grant of 25,000 shares to an
officer of the Company and sold 15,000 shares of Common Stock to such officer
at a price of $7.4375 per share.  The
Company relied on the exemption from registration provided by Section 4(2) of
the Securities Act of 1933.  The
certificates representing the shares bear a restrictive securities legend.

ITEM 3.            DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.            SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS

None.

ITEM 5.            OTHER INFORMATION

In
February 2001, we
announced the retirement of our president, Jim Rash.  Mr. Rash has been president of PWPipe since 1982 and was made
president of PW Eagle upon the merging of PWPipe and Eagle Pacific Industries
in 1999.  Mr. Rash led the operating
management team that combined the Eagle Pacific Industries and PWPipe
operations, helping PW Eagle become the largest extruder of PVC pipe in the western
United States and the second largest in the entire U.S.

Larry
I. Fleming, previously senior vice president, sales and marketing for PW Eagle,
succeeded Mr. Rash immediately following his retirement.  Mr. Fleming has been an integral part of the
operating management of PWPipe and PW Eagle for more than 10 years and has more
than 20 years of experience in the plastic pipe industry.  In addition, the Company has hired N.
Michael Stickel to replace Mr. Fleming as senior vice president, sales and
marketing.  Mr. Stickel was previously
employed by PWPipe from 1985 to 1990 as senior vice president of sales and
marketing and grew sales during that time by over 240%.  He also managed PWPipe's PVC resin business
from 1990 to 1993.  Most recently, Mr.
Stickel served as vice president and general manager of Simpson Paper Company's
coated and specialty group.

ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

(a)         Exhibits
                           See Exhibit
Index on page following signatures.

(b)        Reports
on Form 8-K

We filed the
following reports on Form 8-K during the first quarter of 2001:

On March 2, 2001, we filed a Form 8-K reporting
the issuance of press releases announcing the financial results for the three
months and year ended December 31, 2000; the Companys long-term strategy and
outlook, and the Companys intention to commence a Dutch Auction tender offer
of its common stock.On March 16, 2001, the Company filed a Form 8-K
reporting the issuance of a press release announcing adjustments to its fourth
quarter and year 2000 financial results as a result of its settlement agreement
with The Lamson & Sessions Co.SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

PW EAGLE, INC.



By
  /s/
  William H. SpellWilliam H. SpellChief
  Executive OfficerBy
  /s/
  Roger R. RobbRoger R. RobbChief
  Financial Officer(Principal
  Financial and Accounting Officer)Dated: May 14, 2001

EXHIBIT INDEX



Number
  Description10.1
  Employment
  Agreement dated February 12, 2001 between the Registrant and N. Michael
  Stickel.10.2
  Form
  of Restricted Stock Agreement between the Registrant and N. Michael Stickel.10.3
  Form
  of Promissory Note between the Registrant and N. Michael Stickel.