Ryerson Tull, Inc. reported net income of $35.4 million on sales of $1.5 billion for the first quarter ended March 31, 2005.

The $35.4 million net income ($1.37 per diluted share) compares with $12.0 million ($0.46 per share) for the first quarter of 2004. Results included the contribution from Integris Metals, Inc., which was acquired on January 4, 2005, and restructuring and plant closure costs of $2.4 million pretax ($0.06 per share).

"Our strong results for the first quarter reflected the three fundamentals that guide our actions: an intense focus on operating efficiency; driving internal growth through marketing; and acquisitions that significantly and structurally improve our competitive position," said Neil S. Novich, Chairman, President, and CEO of Ryerson Tull.

Sales of $1.5 billion reflect an increase of 118.5% from the first quarter of 2004, and an increase of 70.4%, sequentially, from the fourth quarter of 2004, primarily due to the acquisition of Integris. "With the inclusion of Integris, our results will reflect a higher percentage of stainless and aluminum products-which now account for approximately one half of net sales," said Novich. "As a result, volume, average prices, and profitability measurements look somewhat different in the first quarter of 2005 than in prior periods."

Tons shipped increased 22.5% and 28.2%, respectively, from the first and fourth quarters of 2004. The average selling price per ton expanded 78.2%, year-over-year, and 33.1%, sequentially. Gross profit per ton improved to $301, compared with $188 in the first quarter of 2004 and $182 in the fourth quarter of 2004. The gross margin of 17.5% represents a 19.4% decline compared to the first quarter of 2004, and a 14.0% increase compared to the fourth quarter of 2004. Operating expenses per ton increased to $217 from $154 in the year-ago period and $175 in the prior period.

"As we are already running Ryerson Tull and Integris as one business, it quickly becomes difficult, if not impossible, to evaluate the two companies separately," said Novich. "But to help investors understand our performance, we've added a breakdown of Integris' net sales, gross profit, operating profit, and tons shipped for each quarter of 2004 to the supplemental data section of the earnings schedule."

Comparing current results with the combined historical results for Ryerson Tull and Integris, as stand-alone companies in the first quarter of 2004, tonnage declined 2%, year-over-year; net sales improved 31% (due to expansion in average selling price per ton); gross profit increased 17%; and operating profit expanded 40%. "These were excellent comparisons against a strong first quarter of 2004 that included pre-buying by customers, in anticipation of a price increase."

"The integration of Integris is progressing very well," continued Novich. "We have our management team in place, with each geographic market headed by one manager. We have done an excellent job of retaining customers. We remain confident in our ability to capture synergies and realize annualized cost savings of $30 million, going forward. And we expect to generate new growth opportunities as we cross sell our expanded product line and provide unparalleled service and geographic reach."

Financial Condition—Ryerson Tull ended the first quarter of 2005 with a debt-to-capital ratio of 74% and availability of approximately $167 million under its credit facility.

Outlook—"Overall, we foresee a slight softening in demand, due in part to excess industry inventory, and some softening in prices, largely driven by carbon flat rolled," concluded Novich. "However, over the medium to longer term, we expect our performance to reflect strategic advantages from the Integris acquisition and our ability to capture top- and bottom-line benefits."

Ryerson Tull, Inc. is a leading North American distributor and processor of metals, with 2004 revenues of $3.3 billion. In January 2005, Ryerson Tull acquired Integris Metals, Inc., which had 2004 revenues of $2.0 billion. The company services customers through a network of service centers across the United States and in Canada, Mexico, and India.