Bayou Steel Corp. reported net income of $4.2 million on sales of $63.1 million for the fiscal first quarter ended December 31, 2004.

Bayou Steel reported net income of $4.2 million ($2.01 per fully diluted share) for the first quarter of fiscal 2005, whereas the predecessor company reported a net loss of $0.6 million ($0.04 per fully diluted share) for the year-ago first quarter.

Sales of $63.1 million (on shipments of 113,080 tons) was sharply higher than the $51.7 million in sales (on shipments of 151,184 tons) for the prior comparable quarter for fiscal 2004. The average selling price increased 63% compared to the prior year comparable quarter, from $339 to $552 per ton. The selling price increase has generally been related to the sharply escalating prices for scrap and the increasing prices for alloys and fuel, which the company has been successful in passing through to its customers.

Jerry M. Pitts, President and CEO, commented, "Earnings in the first quarter of fiscal year 2005 have increased significantly as compared to the prior year quarter. Despite a decline in shipments, the strong selling prices contributed to the growth of sales and earnings. This favorable turnaround is largely the result of increased demand for our products, particularly in 2004, which allowed us to raise our product prices at a higher rate than the unprecedented increases in the cost of scrap. Although Bayou Steel experienced significant increases in the cost of other major commodity items, including electricity, natural gas, and alloys, our margins have significantly improved as our increased product pricing has outpaced that of scrap and other cost related items. Given the challenges of the last four years in the steel industry, it is especially pleasing to see a healthy market."

Mr. Pitts continued, "In December, we underwent a much-needed shutdown in the plants to conduct equipment maintenance that was partially deferred due to limited funds during the company's bankruptcy. Since the start-up, our production and efficiencies have increased in both our Louisiana and Tennessee plants. This will enable us to better capitalize on current great market conditions. In December, we opened a remote scrap processing location. After a ramp-up period, we expect this facility to provide the Louisiana plant with additional scrap metal. Lastly, we increased Tennessee's capacity utilization by 15% as we were able to purchase billets economically in the fall. Besides these positive actions, our market fundamentals remain healthy. We expect continued healthy price levels and volumes for our products. All of this encourages us going forward."

Bayou Steel Corp. manufacturers light structural and merchant bar products in LaPlace, La., and Harriman, Tenn. The company also operates three stocking locations along the inland waterway system near Pittsburgh, Chicago, and Tulsa.