RESC Roanoke Electric Steel (MM)

Roanoke Electric Steel Corporation Reports First Quarter Results ROANOKE, Va., March 9 /PRNewswire-FirstCall/ -- Roanoke Electric Steel Corporation reported a profit of $1,533,676 for the first quarter ended January 31, 2004, compared to a loss of $2,129,872 for the same period last year. Basic and diluted earnings per share were $.14, compared to basic and diluted loss per share of $.19 in the first quarter of 2003. Sales for the quarter were $87,255,510, a 42.73% increase from sales of $61,129,954 reported for the 2003 first quarter. Included in the quarterly results was a payment received of $3,061,820, or $1,410,887 additional earnings ($.13 per share), from graphite electrode plaintiffs in conjunction with a class action suit for antitrust violations. Donald G. Smith, Chairman and Chief Executive Officer, stated: "We are very pleased to report that for the fourth consecutive quarter our earnings per share have improved. The quarter was positively affected by an increase in selling prices for the majority of our products, as well as an increase in tonnage shipped across most of our product lines. The increased costs of scrap, our principal raw material, and alloys had a negative impact on the results forthe quarter. Our fabricating subsidiaries are still hampered by reduced margins for fabricated products, due to weak nonresidential construction activity. However, overall gross profit percentages improved for most of our subsidiariesin the first quarter of 2004, compared to the first quarter of 2003. Also affecting the results of the quarter were increased administrative costs in association with ongoing compliance efforts regarding the Sarbanes-Oxley Act." "We continue our efforts to pass price increases along to our customers, due to the increase in raw material costs. Three price increases for merchant and structural products, which have already been announced, will take effect during the secondquarter and will hopefully help maintain profit margins. We expect our fabricating facilities to continue to struggle, but our rolling mills and melt shops continue to be busy and, in some instances, are adding additional shifts to keep pace with rising demand for our products. Business conditions appear to be improving in certain markets, and we hope the momentum we have achieved over the last four quarters can continue." Consolidated Statements of Earnings (Unaudited) Three Months Ended January 31, 2004 2003 SALES $ 87,255,510 $ 61,129,954 COST OF SALES 78,403,653 58,056,795 GROSS EARNINGS 8,851,857 3,073,159 OTHER OPERATING EXPENSES (INCOME) Administrative 7,359,859 5,225,018 Interest, net 1,047,682 1,462,984 Profit sharing 956,488 80,400 Antitrust litigation settlement (3,061,820) (520,960) Total 6,302,209 6,247,442 EARNINGS (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 2,549,648 (3,174,283) INCOME TAX EXPENSE (BENEFIT) 1,015,972 (1,272,821) EARNINGS (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 1,533,676 (1,901,462) CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE --- (228,410) NET EARNINGS (LOSS) $ 1,533,676 $ (2,129,872) Earnings (loss) per share (basic and diluted) of common stock: Earnings (loss) before cumulative effect of change in accounting principle $ 0.14 $ (0.17) Cumulative effect of change in accounting principle --- (0.02) Net earnings (loss) per share of $ $ common stock 0.14 (0.19) Cash dividends per share of common stock $ 0.05 $ 0.05 Weighted average number of common shares outstanding : Basic 10,932,813 10,942,813 Diluted 10,970,133 10,958,945 This release contains various forward-lookingstatements which represent the Company's expectations or beliefs concerning future events. In accordance with the safe harbor provisions of the securities laws regarding such forward- looking statements, the Company notes that a variety of factors could cause actual results and experience to differ materially from those expressed in the forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of the Company's business include economic and industry conditions, timing of the recovery within our steel markets, availability and prices of utilities, supplies and raw materials, prices of steel products, foreign and domestic competition, foreign trade polices affecting imports and exports, governmental regulations, interest rates, inflation, labor relations, environmental concerns and compliance issues and others. Roanoke Electric Steel Corporation has steel manufacturing facilities in Roanoke, Virginia and Huntington, West Virginia,producing angles, rounds, flats, channels, beams, special sections and billets, which are sold to steel service centers, fabricators, original equipment manufacturers and other steel producers. Five subsidiaries are involved in various steel-related activities, consisting of scrap processing and bar joist, reinforcing bar and truck trailer beam fabrication. DATASOURCE: Roanoke Electric Steel Corporation CONTACT: T. Joe Crawford of Roanoke Electric Steel Corporation, +1-540-342-1831 Web site: http://www.roanokesteel.com/

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