Feb. 24, 2006 — Russel Metals Inc. reported net earnings of $41.8 million on revenues of $646.9 million for the fourth quarter and net earnings of $124.7 million on revenues of $2.6 billion for the year 2005. Fourth quarter earnings per share ($0.83) were significantly ahead of consensus estimates and greater than each of the previous three quarters.

Fourth Quarter Results—Earnings of $41.8 million reflect a 4% decrease from fourth quarter 2004 net earnings of $43.5 million. Revenues of $646.9 million reflect a 4% increase from $623.3 million in 2004.

Steel pricing stabilized in the second half of 2005, reducing inventory holding losses which resulted in improved segment operating profits as a percentage of sales in all three of the company’s operating segments. Results included a favorable tax adjustment of $4.6 million, which caused earnings per share to be $0.09 higher.

Full Year Results—Net earnings of $124.7 million compare to net earnings of $177.8 million in 2004. Revenues, $2.6 billion, compare to revenues of $2.4 billion in 2004. Earnings per share was $2.47, which compares to EPS of $3.64 in 2004. The 2005 earnings, while below 2004, are significantly ahead of prior years as average steel transaction prices remained at historical highs.

Comments—Bud Siegel, President and CEO, stated, "During 2005 we experienced continued outstanding performance throughout our operations and the strength of the second half results further demonstrated our ability to maximize profits in a cyclical environment. The solid profits for 2005 were matched with strong cash flows and our already industry-leading balance sheet was further strengthened.

“In 2005, the company produced free cash flow of $130.6 million or $2.59 per share. The free cash flow supported increased dividend payments and the reduction of net interest bearing debt. The net interest-bearing debt as a percentage of capitalization improved to 23%, the strongest in our history."

Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors, under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, Leroux Steel, McCabe Steel, Megantic Metal, Metaux Russel, Milspec Industries, Pioneer Pipe, Russel Leroux, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.