Ryerson Tull, Inc. reported net profit of $21.3 million on net sales of $794,706 million for the second quarter of 2004.

Second Quarter Results—Net profit of $21.3 million ($0.83 per diluted share) compares with a net loss of $4.1 million ($0.17 per share) in the second quarter of 2003, and a net profit of $12.0 million ($0.46 per diluted share) in the first quarter of 2004. Results included a pretax restructuring charge of $593,000 ($0.01 per share), a pretax gain of $2.3 million ($0.06 per share) on the sale of property, and $1.2 million after-tax ($0.05 per share) positive income adjustment associated with a discontinued operation. Second quarter 2003 results included a pretax charge of $1.5 million ($0.04 per share) for personnel reductions.

"We posted an excellent quarter, based on continued strong market conditions, combined with our successful marketing, cost, and productivity improvement programs," said Neil S. Novich, Chairman, President, and CEO of Ryerson Tull.

"Underlying demand remained strong in the second quarter," said Novich. Second quarter 2004 sales increased 46.5% from the second quarter of 2003, on a 9.9% increase in tons shipped and a 33.2% increase in the average selling price per ton. On a sequential basis, second quarter 2004 sales increased 12.7% from the first quarter of 2004, as a 5.5% decline in tons shipped was offset by a 19.2% increase in the average selling price per ton. "Second-quarter volume trailed first-quarter levels, due in part to some pre-buying in the first quarter of 2004, in anticipation of rising prices and product shortages."

"We continued to successfully manage margins in an increasing material cost environment, working with customers to adjust our prices accordingly," continued Novich. Gross profit per ton improved to $216 in the second quarter of 2004, compared with $166 in the year-ago period and $188 in the first quarter of 2004. Gross margins were 18.7% in the second quarter of 2004, compared with 19.1% percent in the second quarter of 2003 and 19.4% in the first quarter of 2004.

Second quarter 2004 operating expenses per ton were $162, compared to $169 in the second quarter of 2003 and $154 in the first quarter of 2004. Sequentially, volume was down and operating expenses were impacted by rising fuel and other commodity costs.

Acquisition of J&F—On June 14, 2004, Ryerson Tull signed a definitive agreement to acquire J&F Steel, a four-location carbon flat rolled processor. The acquisition remains on track to close in the third quarter of 2004. Ryerson Tull has renegotiated its bank line of credit and, subject to completion of the acquisition, the facility will increase from $450 million to $525 million. "The increased availability will more than cover the cash necessary to complete the acquisition," said Novich. Additionally, its maturity will be extended to the third quarter of 2008, from December 2006.

Financial Condition—"We continue to maintain a solid balance sheet," continued Novich. Ryerson Tull ended the second quarter with a debt-to-capital ratio of 43% and approximately $158 million available under its credit facility, compared with a debt-to-capital ratio of 44% and availability of $155 million at the end of the first quarter of 2004.

The company intends to make a $21.5 million voluntary contribution to its pension fund by September 15, 2004. "This contribution increases future funding flexibility and reduces costs," said Novich.

Outlook—"We anticipate the typical summer slowdown during the third quarter, resulting from our customers' vacation shutdowns," concluded Novich. "However, based on customer input, we expect underlying business conditions and metals demand to remain strong."

Ryerson Tull, Inc. is a leading North American distributor and processor of metals, with 2003 revenues of $2.2 billion. The company services customers through a network of service centers across the United States and in Canada, Mexico, and India.