RESC Roanoke Electric Steel (MM)

Roanoke Electric Steel Corporation Reports Record Sales and Second Quarter Results ROANOKE, Va., June 8 /PRNewswire-FirstCall/ -- Roanoke Electric Steel Corporation (NASDAQ:RESC) today reported net earnings for the second quarter ended April 30, 2004, of $5,222,056, compared to a net loss of $1,476,247 in the second quarter last year. Basic earnings per share for the quarter were $.48 ($.47 diluted), compared to basic loss per share of $.13 ($.13 diluted) in the 2003 second quarter. Sales for the quarter were a record $118,949,522, up 54.3% from sales of $77,075,724 for the same period last year. For the six months ended April 30, 2004, the Company reported net earnings of $6,755,732, compared to a net loss of $3,606,119 for the same period last year. Basic earnings per share were $.62 ($.61 diluted), compared to basic loss per share of $.31 ($.31 diluted) last year. Sales for the six months of 2004 were $206,205,032, a 49.2% increase from sales of $138,205,678 for the same period last year. Donald G. Smith, Chairman and Chief Executive Officer, stated: "We are very pleased to report that for the fifth consecutive quarter our earnings per share have improved. Revenues for the quarter were the highest of any quarter in the history of our Company. The increase in revenues was attributable to improved selling prices and shipments of most products. Although the cost of scrap, our principal raw material, increased, in most cases we were able to pass the increase along to our customers. Due to our increased revenues and increased capacity utilization, our gross earnings and earnings per share for the quarter were the highest since 1999. "Many of the markets that the Company services appear to be improving. One area that has been slow in improving is the nonresidential construction segment; however, during the quarter we saw signs of strengthening in that sector and expect that trend to continue. Our mills continue to be busy, and in early May we decided to start-up our second furnace and caster at the Roanoke mill. This additional capacity should help us meet the increased demand we are experiencing." Consolidated Statements of Earnings (Loss) (Unaudited) (Unaudited) Three Months Ended Six Months Ended April 30, April 30, 2004 2003 2004 2003 Sales $118,949,522 $ 77,075,724 $206,205,032 $138,205,678 Cost of sales 99,581,309 72,799,345 177,984,962 130,856,140 Gross earnings 19,368,213 4,276,379 28,220,070 7,349,538 Other operating expenses 10,668,055 6,740,496 16,970,264 12,987,938 Earnings (loss) before income taxes and cumulative effect of change in accounting principle 8,700,158 (2,464,117) 11,249,806 (5,638,400) Income tax expense (benefit) 3,478,102 (987,870) 4,494,074 (2,260,691) Earnings (loss) before cumulative effect of change in accounting principle 5,222,056 (1,476,247) 6,755,732 (3,377,709) Cumulative effect of change in accounting principle - - - - - - - - - (228,410) Net earnings (loss) $ 5,222,056 $ (1,476,247) $ 6,755,732 $ (3,606,119) Earnings (loss) per share of common stock: Earnings (loss) before cumulative effect of change in accounting principle: Basic $ 0.48 $ (0.13) $ 0.62 $ (0.31) Diluted $ 0.47 $ (0.13) $ 0.61 $ (0.31) Cumulative effect of change in accounting principle: Basic - - - - - - - - - (0.02) Diluted - - - - - - - - - (0.02) Net earnings (loss) per share of common stock: Basic $ 0.48 $ (0.13) $ 0.62 $ (0.33) Diluted $ 0.47 $ (0.13) $ 0.61 $ (0.33) Cash dividends per share of common stock $ 0.10 $ 0.05 $ 0.15 $ 0.10 Weighted average number of common shares outstanding: Basic 10,938,880 10,942,813 10,935,813 10,942,813 Diluted 11,040,420 10,947,957 11,007,791 10,952,580 This release contains various forward-looking statements which represent the Company's expectations or beliefs concerning future events. In accordance with the safe harbor provisions of the securities laws regarding such statements, the Company notes that a variety of factors, including economic and industry conditions, availability and prices of utilities, supplies and raw materials, prices of steel products, foreign and domestic competition, trade policies affecting imports and exports, governmental regulations, interest rates, inflation, labor relations, environmental concerns and compliance issues and other matters, could cause actual results and experience to differ materially from those expressed in the forward-looking statements. 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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