April 11, 2006 — Schnitzer Steel Industries, Inc. reported net income of $21.1 million on revenues of $403 million for the company’s second fiscal quarter, and net income of $62.6 million on revenues of $792 million for the six months ended February 28, 2006.

Second Quarter Results—The $21.1 million net income ($0.68 per diluted share) compares to net income of $36 million ($1.15 per diluted share) for the second quarter of fiscal 2005. Revenues of $403 million compare to revenues of $216 million for the second quarter of fiscal 2005.

Six Month Results—The $62.6 million net income ($2.03 per diluted share) compares to net income of net income of $79 million ($2.53 per diluted share) for the first six months of fiscal 2005. Results included a $34 million (after tax) gain related to the disposition of joint venture assets under the company’s agreement with Hugo Neu for termination of their joint ventures. Net income was also reduced by an $11 million charge related to a reserve taken by the company for the estimated amount to settle the ongoing SEC and Department of Justice investigations into the company's past payment practices in Asia. Excluding the gain from the disposition of joint venture assets and the charge for the investigation reserve, year-to-date net income was $40 million ($1.30 per diluted share).

Comments—"Schnitzer Steel continued to take advantage of strong market fundamentals by posting another solid quarter," said John Carter, President and CEO. "We remain optimistic about our outlook and remain focused on maximizing the long-term value of our businesses. During the second quarter, we continued to make progress integrating the businesses acquired during the first quarter and to improve our productivity through several ongoing projects intended to upgrade and replace infrastructure and equipment across the company."

Commenting on first quarter results, Mr. Carter said, "Overall, the performance of each of our business segments was consistent with our expectations and market conditions. The Metals Recycling Business had a substantial increase in volume due to increased output in the Northeast and the completion of several sales on the West Coast which had been delayed from the first quarter. On the materials acquisition side, we had expected to see the decrease in the cost of buying our materials to be greater than the decrease in export sales prices, resulting in an improvement in margins. However, particularly in the Northeast and Southeast, the high price for recycled scrap metal continued to result in increased competition to purchase materials, primarily due to the strong domestic steel industry. Our operations in these regions actually experienced increased costs for the acquisition of raw materials."

"Our Steel Manufacturing Business had its second consecutive record quarter for earnings driven by continued strong West Coast demand for steel products. As expected, earnings in the Auto Parts Business were lower than the first quarter due to seasonal factors impacting retail sales at our self-service Pick-N-Pull stores and lower revenues from scrap sales which combined with a higher cost basis for inventory sold."

Schnitzer Steel Industries, Inc. is one of the largest manufacturers and exporters of recycled ferrous metals products in the United States with 28 operating facilities located in 11 states throughout the country, including six export facilities located on both the East and West Coasts and in Hawaii. Schnitzer's vertically integrated operating platform also includes its auto parts and steel manufacturing businesses. Schnitzer's auto parts business sells used auto parts through its 31 Pick-n-Pull self service facilities and 18 Greenleaf full service facilities located in 14 states and western Canada. With an annual production capacity of 700,000 tons, Schnitzer's steel manufacturing business, Cascade Steel Rolling Mills, produces finished steel products, including rebar, wire rod and other specialty products. Schnitzer commenced its 100th year of operations in 2006.