The $102-million earnings ($1.01 per diluted share) reflect an increase of 34% compared to earnings of $76 million in the first quarter of 2006. Net income per share was relatively unchanged from the fourth quarter. Revenues of $866 million reflect a 30% increase from $666 million in the first quarter of 2006, largely due to the acquired Roanoke facilities not being included in first-quarter 2006 results.

First quarter consolidated shipments of 1.3 million tons were 19% higher than the first quarter of 2006 and 8% higher than the fourth quarter of 2006. Three of the company's long products divisions each achieved record shipments in the first quarter due to continued strong demand within the non-residential construction and industrial markets.

Management Comments—"The first quarter was another excellent quarter for Steel Dynamics," said Keith Busse, President and CEO of Steel Dynamics. "First-quarter results came in comfortably above our most recent guidance of $0.94 to $0.98 per diluted share. Operating results were strong at each of our mills, with sustained strength in the long products markets and continued recovery in the flat rolled market. SDI's operating margin was 20% in the first quarter, and cash flow from operations was $148 million. The cost of ferrous resources increased moderately during the quarter. However, higher scrap costs were somewhat offset by scrap surcharges, increased shipping volumes, and product mix.

Operating Results—Operating profit per ton shipped was $136, down from $150 in the fourth quarter of 2006. The company says that market softness for flat-rolled steel caused average consolidated selling price to decrease to $689 per ton shipped, compared to $720 for the fourth quarter. The lower average selling price was principally offset by cost declines due to mix, cost improvement, and cost compression. Average scrap costs were up $15 per net ton charged and were a factor in the operating margin decline.

In January, Flat Roll Division shipments reached 612,000 tons, beginning a recovery from the fourth quarter's slower pace of 581,000 tons. The Iron Dynamics Division performed well, feeding 56,000 tonnes of liquid pig iron and hot-briquetted iron into the Flat Roll Division's electric arc furnaces. Order entry rates remain steady for flat-rolled products for the second quarter, with prices increasing moderately due to improving market conditions. All of SDI's long products divisions (52% of shipments in the first quarter) are experiencing strong shipping rates, increased selling values, and solid order books.

Management Outlook—"Our outlook for the second quarter remains positive," Busse said. "Our current expectation is for earnings to be in the range of $0.95 to $1.00 per diluted share, after taking into consideration an estimated reduction of $0.08 per diluted share due to the redemption of our $300 million 9 1/2% Senior Unsecured Notes. The cost for ferrous resources for delivery mid-to-late second quarter is trending down, which should provide some relief from the margin compression we expect to experience early in the quarter."

"Just over a year ago we completed the merger of the Roanoke Electric Steel Corp. into Steel Dynamics," Busse said. "We are very pleased with the integration of the Roanoke operations with SDI, which began with the approval of the merger by Roanoke shareholders on April 11, 2006. Since the date of the merger, both of the steelmaking operations we acquired, the Roanoke Bar Division and Steel of West Virginia, Inc., have produced at record levels, achieving shipments totaling 941,000 tons over the last four quarters. The Roanoke acquisition has made a positive contribution to our revenue and operating income while providing SDI with a more diversified product mix."

In April, the company completed an offering of unsecured $500 million 6 3/4% Senior Notes due 2015. A portion of the proceeds from this offering will be used to redeem the company's $300 million 9 1/2% Senior Unsecured Notes due 2009 on May 3, 2007. The remainder of the proceeds will be used to repay amounts outstanding on the company's revolving credit facility and for general corporate purposes. During the first quarter of 2007, the company purchased approximately 2.8 million shares of its common stock in open market trades, after which approximately 2.9 million shares remained available for purchase pursuant to the company's current repurchase program.