RESC Roanoke Electric Steel (MM)

Roanoke Electric Steel Corporation Reports Record Sales, Fourth Quarter and Year-End Results ROANOKE, Va., Dec. 9 /PRNewswire-FirstCall/ -- Roanoke Electric Steel Corporation (NASDAQ:RESC) today reported record net earnings for the fourth quarter ended October 31, 2004, of $15,932,971, compared to earnings of $700,735 in the fourth quarter last year. Basic earnings per share for the quarter were $1.45 ($1.44 diluted), compared to earnings per share of $.06 ($.06 diluted) in the 2003 fourth quarter. Sales for the quarter were a record $143,728,167, up 57% from sales of $91,600,033 for the same period last year. For the year ended October 31, 2004, the Company reported record net earnings of $30,446,248, compared to a net loss of $3,224,953 for fiscal 2003. Basic earnings per share were $2.78 ($2.76 diluted), compared to basic loss per share of $.29 ($.29 diluted) last year. Sales for fiscal 2004 were a record $479,377,188, a 54% increase from sales of $312,090,956 for fiscal 2003. Donald G. Smith, Chairman and CEO, and T. Joe Crawford, President and COO, stated: "Fiscal year 2004 was the best year in the history of our company, which was especially pleasing given the challenges of the last three years. The positive momentum which was established during 2003 not only continued, but grew significantly, with the establishment of new annual record totals for sales, net earnings and earnings per share. The improved performance for the year was, primarily, due to increased shipments and margins for mill products, as demand continued to be strong. The improved margins were attributable to increased selling prices. Our employees worked extremely hard in responding to the increased demand, and a number of production and shipment records were also set during the year to help meet our customers' needs. "As we look to fiscal 2005, we anticipate that the positive factors which have been driving our markets are sustainable and present a scenario for continued healthy price levels and volume for our products. Although our first quarter is historically challenging, due to the holidays and weather issues, our overall outlook for the year remains very positive." Consolidated Statements of Earnings (Loss) Unaudited Unaudited Three Months Ended Year Ended October 31, October 31, 2004 2003 2004 2003 SALES $143,728,167 $91,600,033 $479,377,188 $312,090,956 COST OF SALES 106,720,438 81,115,675 388,211,346 288,000,605 GROSS EARNINGS 37,007,729 10,484,358 91,165,842 24,090,351 OTHER OPERATING EXPENSES (INCOME) Administrative 9,007,220 6,967,014 31,666,334 23,285,533 Interest expense 1,732,330 1,333,764 4,480,195 5,435,464 Profit Sharing 1,808,682 1,078,691 9,622,733 1,309,091 Interest income (30,821) (84,590) (207,694) (433,558) Antitrust litigation settlement --- --- (3,061,820) (520,960) Total 12,517,411 9,294,879 42,499,748 29,075,570 EARNINGS (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 24,490,318 1,189,479 48,666,094 (4,985,219) INCOME TAX EXPENSE (BENEFIT) 8,557,347 488,744 18,219,846 (1,988,676) EARNINGS (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 15,932,971 700,735 30,446,248 (2,996,543) CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE --- --- --- (228,410) NET EARNINGS (LOSS) $15,932,971 $700,735 $30,446,248 $(3,224,953) EARNINGS (LOSS) PER SHARE OF COMMON STOCK Basic: Earnings (loss) before cumulative effect of accounting change $1.45 $0.06 $2.78 $(0.27) Cumulative effect of accounting change --- --- --- (0.02) Net earnings (loss) $1.45 $0.06 $2.78 $(0.29) Diluted: Earnings (loss) before cumulative effect of accounting change $1.44 $0.06 $2.76 $(0.27) Cumulative effect of accounting change --- --- --- (0.02) Net earnings (loss) $1.44 $0.06 $2.76 $(0.29) CASH DIVIDENDS PER SHARE OF COMMON STOCK $0.11 $0.05 $0.36 $0.20 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic 11,000,237 10,932,813 10,957,586 10,938,999 Diluted 11,089,635 10,946,104 11,034,445 10,945,346 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: Mark G. Meikle, or William M. Watson, Jr. of Roanoke Electric Steel Corporation, +1-540-342-1831 Web site: http://www.roanokesteel.com/ x

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