Jan. 24, 2006 — Steel Dynamics, Inc. announced net income of $65 million on net sales of $570 million for the fourth quarter, and net income was $222 million on net sales of $2.2 billion for the year 2005.

Fourth Quarter Results—The $65 million net income ($1.31 per diluted share) compares to net income of $82 million ($1.47 per diluted share) in the fourth quarter of 2004. Fourth quarter diluted earnings per share increased 42% from $.92 in the prior quarter. Net sales of $570 million were 5% lower than the fourth quarter of 2004.

Consolidated shipments were up 9% to 920,000 tons compared to 846,000 tons in the fourth quarter of 2004. Consolidated shipments were essentially the same as in the third quarter of 2005. The average consolidated selling price per ton shipped increased 15% to $619 from $540 in the third quarter, but was 13% lower than the $710 achieved in the fourth quarter of 2004. The cost of steel scrap per net ton charged increased $41 from the third quarter to the fourth quarter. Natural gas and electrical energy costs also increased substantially quarter over quarter.

Full Year Results—The $222 million net income ($4.35 per diluted share) compares to 2004 net income of $295 million ($5.27 per diluted share). The $2.2 billion net sales represent a 2% increase over 2004 net sales of $2.1 billion. Operating income was $109 per ton shipped with an operating margin of 18%. After staffing new operations, employment in 2005 increased to 1,795, resulting in revenues per employee of $1.3 million. Consolidated shipments for 2005 grew 5% to 3.6 million tons.

Capital expenditures of $63 million were somewhat lower than initially planned as several projects were delayed. These and other contemplated growth opportunities will likely increase SDI's capital expenditures in 2006.

Comments—"2005 was a very strong year for Steel Dynamics," said Keith Busse, President and CEO. "Although steel demand fell off sharply in the first half of the year, steel shipments rebounded in the second half of the year with backlogs remaining strong as we move forward in 2006. Overall, though, we were able to maintain strong profit margins for the year in spite of selling prices and steel scrap costs fluctuating dramatically throughout the year."

Segment Analysis—In 2005 the Flat Roll Division continued to be the dominant contributor to SDI's results with shipments of 2.4 million tons of hot-rolled and finished steels, accounting for 67% of SDI's steel operations shipments. Increased sales of coated products, including light-gauge galvanized and painted flat-roll steel, resulted in a richer product mix, enhancing the division's profit margins. In addition, the division has made and is continuing to make modifications to operating procedures and equipment that will allow it to increase annual flat roll production capacity to approximately 2.7 million tons in 2006. Caster modifications planned for 2006 are expected to bring the Butler mill's annual production capacity to nearly 3.0 million tons, dependent upon mix, in 2007.

The Structural & Rail Division, in its third full year of operations, achieved record shipping volumes, revenues, and margins. Demand for wide-flange beams for non-residential construction improved during the middle of the year and has remained strong through the second half. Shipments of 827,000 tons in 2005 were 13% higher than 2004 shipments of 734,000 tons. The Columbia City mill operated at near-capacity in the second half, and finished the year with an approximately three-month backlog. Limited amounts of rail were produced and shipped in 2005.

Growth in the second year of operations of the Bar Products Division in Pittsboro, Ind., proved to be more challenging than in its first year due to weaker markets for special-bar-quality (SBQ) products and the mill's continued role as a spot-market provider. Nevertheless, the Bar Products Division shipped 357,000 tons in 2005, a 12% increase compared to 318,000 tons in 2004. Late in the year, plans were announced to add an SBQ finishing facility at Pittsboro, which is expected to be in operation by the end of the first quarter. This will allow the division to offer a variety of value-added processes and services to meet the needs of a growing list of SBQ clients. These new capabilities are expected to allow the Bar Products Division to secure a higher proportion of contract business for SBQ products in 2006. The division expects to achieve shipments of over 400,000 tons for 2006.

New Millennium Building Systems again achieved record shipments and operating income in 2005. The company's new production facility in Lake City, Fla., began joist production in March and became profitable in its fourth month. Market demand for New Millennium's products was strong at both the Indiana and Florida plants.

"Looking ahead to 2006, we are optimistic about the sustainability of favorable domestic steel market conditions, especially for construction steels and bar products," Busse said. "The U.S. economy remains strong, which suggests steel demand should continue to be strong across most steel-consuming market sectors. Steel inventories appear to be in line now, if not low by historical standards, and consequently we expect SDI's steel shipments to continue to grow this year. SDI anticipates first quarter results to be relatively unchanged, if not up slightly, from the fourth quarter. Selling values could rise slightly, but it is too soon to make that call. We expect scrap prices on a linked-quarter basis will be relatively unchanged.

"We currently expect the previously announced merger of Roanoke Electric Steel with Steel Dynamics to close by the end of the first quarter of 2006. Roanoke posted excellent operating results in its fiscal year ended October 31. We believe that together, the two companies can achieve operating synergies and produce even greater returns which will be additive to SDI's growth. Combining Roanoke's capacity with SDI's recent capacity improvements, our overall steelmaking capability could approach 5 million tons in 2006."