Feb. 27, 2006 — Bayou Steel Corp. reported net income of $3.2 million on net sales of 67.2 million for the first quarter (ending December 31, 2005) of fiscal 2006.

The $3.2 million net income ($1.60 per fully diluted share) compares to net income of $4.2 million ($2.01 per fully diluted share) for the same quarter last year. Sales, $67.2 million reflect an increase of $4.1 million compared to sales of $63.1 million for the same quarter last year. This increase is attributed to a 10,000-ton (7%) increase in shipping compared to the prior year quarter.

Comments—Jerry M. Pitts, President and CEO, commented, "Demand and prices have risen to levels not seen in our products in quite some time creating a strong business climate for Bayou Steel. Our backlog at the end of December was the highest in almost five years. Steel inventories at our customers are low by historical standards; so, we expect shipments to continue to grow this year and look forward to what we believe will be a strong market for the rest of fiscal 2006."

Mr. Pitts continued, "We are still dealing with circumstances created by the two major storms that made landfall along the Gulf Coast in 2005. Available labor and record high energy prices are still issues that are affecting operations. The Company has been able to maintain strong but less than maximum production levels and minimize production cost increases with the exception of energy costs which increased operating costs 24% over the same prior year period. Due to the success of our recent initiatives to attract and retain personnel in the wake of the challenges brought about by the hurricanes, we expect to increase operations by approximately 20% during the second fiscal quarter."

Mr. Pitts concluded, "We increased available cash by $9.4 million to $14.6 million as of December 31, 2005. We also have an available unused line of credit of $43 million with a major bank."