Roanoke Electric Steel Corp. reported record first quarter net earnings of $9,185,874 on sales of $131,309,983 for the period ended January 31, 2005.

Net earnings of $9,185,874 compare to net earnings of $1,533,676 for the same period last year. Basic earnings per share were $.83 ($.82 diluted), compared to basic earnings per share of $.14 ($.14 diluted) in the first quarter of 2004. Sales were $131,309,983, also a first quarter record and up 54.2% from sales of $85,173,685 for the same period last year.

Donald G. Smith, Chairman and CEO, and T. Joe Crawford, President and COO, stated: "We are very pleased to report that earnings for the first quarter of fiscal 2005 were the highest first quarter earnings in the history of our company. While the first quarter has historically been the most challenging for our company, due to the holidays and weather issues, to begin fiscal 2005 by establishing a new earnings record for the quarter is extremely gratifying. The improved performance for the quarter was, primarily, due to increased margins for mill products, as demand continued to be strong. The improved margins were attributable to increased selling prices. The cost of scrap metal, our principal raw material, appears to have stabilized, although it remains near historical highs.

"The performance from continuing operations for the first quarter of 2005 over 2004 was even stronger when taking into account two unusual items. First, included in the 2005 quarter is the charge associated with the sale of the assets of RESCO Steel Products Corp., a reinforcing bar fabrication operation which was no longer a good strategic fit for the company. Second, in the 1st quarter of 2004, we had the benefit of approximately $1,400,000 of additional earnings associated with the graphite electrode class action settlement, which was not present in 2005. In the absence of these two items, the improvement in earnings from continuing operations was over $9,600,000.

"Looking forward to the balance of fiscal 2005, we anticipate that the forces driving our markets will continue to present healthy price levels and demand for our products. The nonresidential construction market which began to show improvements in the second quarter of last year continues to improve, and we are optimistic that the trend will continue."

Roanoke Electric Steel Corp. has steel manufacturing facilities in Roanoke, Va., and Huntington, W.Va., producing angles, rounds, flats, channels, beams, special sections and billets, which are sold to steel service centers, fabricators, original equipment manufacturers and other steel producers. Four subsidiaries are involved in various steel-related activities, consisting of scrap processing and bar joists and truck trailer beam fabrication.