Metals USA, Inc. announced net income of $11.2 million on net sales revenue of $396.1 million for the three months ended September 30, 2005.

The $11.2 million net income ($0.53 per diluted share) were, as expected, less than those achieved during the record-setting third quarter of 2004 when the company recorded net income of $31.8 million ($1.53 per diluted share).

Average realized sales prices per ton and shipment volumes by the Flat Rolled and Plates and Shapes Groups were down 2.0% and 3.0%, respectively, compared to the same quarter last year. Compressed operating margins (attributable to almost 10.0% higher cost of sales per ton) account for substantially all the decline in profitability.

Demand was generally good, with prices increasing during the quarter. Net sales revenue was $396.1 million, against $412.6 million sold during third quarter 2004. Operating income was $20.0 million, compared to operating income of $52.6 million reported in the same quarter of 2004. Total EBITDA (as defined herein) was $21.0 million.

C. Lourenco Goncalves, President and CEO, stated, "While Metals USA is not dependent upon the automotive industry, the mid-year slowdown of that industry affected the steel business as a whole in July and part of August. Metals USA continued to reduce inventories, and paid down an additional $75.4 million of our debt during the third quarter. As soon as scrap prices increased and the market realized that inventories were low across the board, the leading steel mills successfully increased steel prices, benefiting all members of the supply chain, particularly service center companies like Metals USA."

Mr. Goncalves continued, "Following the restructure of the Building Products Group during the later part of last year, this division continues to deliver consistent, improved results, contributing $5.4 million of operating income this quarter."

Mr. Goncalves concluded saying, "We expect a strong and profitable fourth quarter, and are extremely excited with the prospects ahead of us."

Metals USA provides a wide range of products and services in the heavy carbon steel, flat-rolled steel, specialty metals, and building products markets.