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NS Group Reports 1st Quarter Earnings

April 26, 2004 — NS Group, Inc. announced net income of $5.0 million on net sales of $84.5 million for the quarter ended March 31, 2004.

Net sales for the quarter were $84.5 million, a 22% increase over sales for the fourth quarter of 2003. The company reported operating income of $5.5 million for the first quarter, which included restructuring charges of $1.9 million, compared to an operating loss of $0.4 million in the fourth quarter of 2003.

Net income, $5.0 million ($0.24 per diluted share), included $1.9 million ($0.09 per diluted share) in restructuring charges, and compares with net income of $3.5 million ($0.17 per diluted share) for the fourth quarter of 2003. Net income for the fourth quarter of 2003 included $4.0 million ($0.19 per diluted share) in other income related to a favorable legal settlement.

President and CEO, Rene J. Robichaud, stated, "We are very pleased to see our business return to profitability again. Our employees put in another great performance by keeping conversion costs low while maintaining our quality and customer service."

Robichaud went on to say, "Our cost of steel is now at record high levels. Despite this, we believe our second quarter financial performance will be much stronger due to positive OCTG industry fundamentals."

Based on publicly filed ownership reports, the company believes that it is reasonably possible that provisions of the U.S. Internal Revenue Service Code Section 382, which limits the utilization of net operating loss carryforwards (NOL's) for income tax purposes, will become effective for the company in the near future. If this occurs, the company's NOL's would be subject to an annual limitation for future periods, which would impact recognition of the company's income tax provision and payments.

NS Group, Inc. is a leading producer of seamless and welded tubular products serving the energy industry. These products are used in the drilling, exploration and transmission of oil and natural gas. The company's tubular products are marketed primarily in the United States and certain foreign markets.

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