NS Group, Inc. announced net income of $30.8 million on net sales of $139.9 million for the third quarter, and net income of $87.3 million on net sales of $446.7 million for the nine months ended September 30, 2005.

Third Quarter Results—The $30.8 million net income ($1.35 per diluted share) compares to net income of $37.2 million ($1.65 per diluted share) in the second quarter of 2005. The second quarter of 2005 included a reversal of tax valuation allowances that decreased income tax expense by $3.0 million ($0.13 per diluted share).

Net sales, $139.9 million, reflect a 17% decline from the second quarter of 2005. Operating income was $35.3 million, which compares to operating income of $40.0 million in the second quarter of 2005.

Nine Month Results—The $87.3 million net income ($3.86 per diluted share) compares to net income of $50.4 million ($2.35 per diluted share) in the prior-year period. Net sales, $446.7 million, compare to $316.1 million for the nine months ended September 30, 2004. Operating income was $97.9 million, compared to $52.6 million for the comparable period in 2004.

Comments—President and CEO, Rene J. Robichaud, stated, "I am especially proud of our employees' performance during September. Everyone worked very hard to satisfy customer demand in spite of the logistical and operational issues caused by hurricanes Katrina and Rita. These events have pushed some of our shipments into the fourth quarter. Nonetheless, we posted an operating income margin of 25% for the third quarter, our best margin performance ever. Based on our current outlook of market conditions, we expect fourth quarter financial results to approximate our 2005 second quarter record results."

Robichaud went on to say, "Thanks to the generosity of our employees, their donations combined with our company match have totaled over $86,000 for the American Red Cross hurricane relief effort."

"This year, NS Group has focused on meeting strong customer demand for our higher value-added alloy products. In April, we restarted our idled heat treat operation in Pennsylvania and now have it running at full capacity. In addition, during July and August we upgraded our heat treat facility in Oklahoma which resulted in downtime of approximately thirty days during the quarter, ten days beyond plan. This outage, together with unexpected difficulties in significantly expanding the labor force at our Oklahoma finishing facility, negatively impacted our welded alloy shipments in the third quarter. Our heat treat operations in Pennsylvania and Oklahoma now give us 280,000 tons of annual internal heat treat capacity compared to 170,000 at the beginning of the year," Robichaud said.

Repurchase Program—NS Group also announced that its Board of Directors has approved a repurchase program for up to 2,250,000 shares of its common stock, representing approximately 10% of its outstanding shares at September 30, 2005. The repurchases will be made by the company from time to time in open market purchases or through privately negotiated transactions through December 31, 2006, at times and in such amounts as management deems appropriate. Shares repurchased under the program may be retired or used for general corporate purposes, which may include the company's share-based compensation and employee benefit plans. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other market conditions.

Mr. Robichaud concluded, "This share repurchase program reflects the strength of our balance sheet and our continued confidence in our ability to generate substantial cash flow in the future." At September 30, 2005, the company had approximately $121 million in cash and investments and virtually no debt.

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