Bayou Steel Corp. reported net income of $29.8 million on sales of $240.8 million for the year ending September 30, 2004. Results included income reported by Bayou Steel’s predecessor prior to the company’s emergence from bankruptcy on February 18, 2004.

Results—Bayou Steel reported net income totaling $13.8 million ($6.86 per fully diluted share) for the period from February 18, 2004 through September 30, 2004. Bayou’s Predecessor Company reported $16.0 million in income, including $19.5 million in net reorganization adjustments, from October 1, 2003 through February 17, 2004. The combined net income of $29.8 million for fiscal 2004 compares to a loss of $34.5 million reported by the predecessor company in fiscal 2003.

Sales of $240.8 million on shipments of 546,378 tons were sharply higher than the $150.3 million in sales on shipments of 497,868 tons for fiscal 2003. The average selling price increased from $298 to $437 per ton (47%) compared to fiscal 2003. In the fourth quarter ending September 30, 2004, the average selling price was $531 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 because of strong demand for the company's products.

Comments—Jerry M. Pitts, President and CEO, commented, "Earnings have surged in fiscal year 2004 as compared to the prior year. This favorable turnaround is largely the result of increased demand for our products, 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. Though the industry pricing trend is unclear, overall market demand for our products is still favorable."

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. We expect that production and efficiencies after our start-up will increase in both our Louisiana and Tennessee plants. This will enable us to better capitalize on these current great market conditions. All of this encourages us going forward."

Mr. Pitts concluded, "We are grateful to the many constituencies that continued to support us, especially when conditions were not so positive. We extend our sincere thanks to our employees, customers, vendors, local governmental bodies and communities who have faithfully stood with us."