California Steel Industries, Inc. reported net income of $9.7 million on sales of $306.6 million for the quarter ended June 30, 2005.

Second Quarter Results—The $9.7 million net income compares to second quarter 2004's net income of $26.3 million. The lower net is attributed to a lower average selling price and higher costs of steel slab, the company's feedstock to its hot strip rolling mill. EBITDA was $26.1 million, compared with 2004's second quarter results of $53.8 million.

CSI shipped 427,751 net tons of steel products, a 19% decrease compared to the second quarter of 2004. Sales revenues are 6% higher than second quarter 2004, although slightly lower than the first quarter of this year.

First Half Results—Net income of $31.7 million compares to $28.1 million for the first half of 2004. EBITDA is
$74.2 million, compared with 2004's $69.0 million. Sales revenues total $645.9 million, compared with $524.8 million in 2004.

Comments—"While the results for this quarter are respectable to historical levels, shipment levels are lower than typically seen at this time of year," said Masakazu Kurushima, President and CEO. "Demand for pipe products remains strong; however, demand for flat rolled products is lower, reflecting overall conditions in the steel industry," he continued.

The balance under the company's Revolving Credit Agreement was zero as of June 30, 2005, with availability of $108.0 million and a cash balance of $85.6 million.

As previously announced, in October 2004 CSI agreed to sell to Arcelor SA its four percent interest in the common stock of Companhia Siderurgica de Tubarao (CST). This sale, completed in June 2005, resulted in total cash received in the amount of $30.3 million. Also affecting the cash balance is the sale of a surplus parcel of real estate, for which cash received was $7.1 million.

California Steel Industries is the leading producer of flat rolled steel products in the western United States (the 11 states located west of the Rocky Mountains) based on tonnage billed, with a broad range of products, including hot rolled, cold rolled, electric resistant weld pipe and galvanized coil and sheet. Located in Fontana, Calif., CSI has about 1000 employees.