EMJ Reports Second Quarter Fiscal 2004 Results.

Business Editors

LYNWOOD, Calif.--(BUSINESS WIRE)--Oct. 22, 2003

The Earle M. Jorgensen Company ("EMJ") today reported results for the company's second fiscal quarter and first six months ended Sept. 29, 2003.

Revenues increased 2.7% to $231.2 million and operating income increased 1.4% to $14.0 million for the second quarter of fiscal 2004, when compared to $225.2 million and $13.8 million, respectively, for the same period in fiscal 2003. Net income for second quarter of fiscal 2004 was $1.3 million versus $1.6 million for the same period in fiscal 2003. Second quarter fiscal 2004 includes $2.4 million of pre-tax income for redemption of life insurance policies.

For the first six months of fiscal 2004 revenues increased 4.2% to $469.5 million when compared to $450.4 million for fiscal 2003. Operating income increased 86.4% to $30.2 million for fiscal 2004, as compared to $16.2 million for fiscal 2003. Fiscal 2003 included a loss of $12.3 million resulting from early termination of debt. Net income for the six months ended Sept. 29, 2003 was $4.0 million compared to a loss of $6.8 million for the same period in fiscal 2003. The fiscal 2004 results include a gain of $1.1 million from the sale of surplus property during the first quarter and $3.5 million of pre-tax income for redemption of life insurance policies for the first six months of fiscal 2004.

Maurice S. Nelson, Jr., EMJ's President and Chief Executive Officer stated: "We continue to be pleased with our results for the first six months of Fiscal 2004 which were achieved in a continued difficult economic environment. Our Canadian operations continue to enjoy record results due to increased capacity and efficiencies from new facilities, effective marketing of core products and services and favorable economic conditions.

"Our gross and operating margins have remained consistent throughout fiscal 2004, reflecting our ongoing strategy of successfully marketing our core products and services while maintaining disciplined cost controls. We believe this strategy, together with maintaining balanced inventories, has and will continue to allow us to effectively compete in the marketplace.

"Our Chicago expansion has been completed and is fully operational. We are pleased with the positive impact that this project has made to our recent results."

The company will complete its move of its corporate headquarters from Brea to Lynwood, Calif., effective Nov. 1.

EMJ is one of the largest independent distributors of metal products in North America with 35 service and processing centers. EMJ inventories more than 25,000 different bar, tubing, plate, and various other metal products, specializing in cold finished carbon and alloy bars, mechanical tubing, stainless bars and shapes, aluminum bars, shapes and tubes, and hot-rolled carbon and alloy bars.

The company has scheduled a conference call with industry analysts and other interested persons to discuss its second quarter and fiscal 2004 results. The call will take place on Oct. 24, 2003 at 10 a.m. PST. The dial-in phone number for those interested in participating on the call is 800-370-8105. The company's results can also be found on its Internet Web site at www.emjmetals.com/emjonline/pr.asp.

This release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from expectations and are subject to risks, uncertainties and other factors over which we have no control, such as the cyclicality of the metals industry and the industries that purchase our products, fluctuations in metals prices, risks associated with the implementation of new technology, general economic conditions, competition in the metals service center industry and our "on-time or free" delivery guaranty. These factors and additional information are included in the company's reports on file with the Securities and Exchange Commission. In particular, we refer you to our Registration Statement on Form S-4 filed on July 3, 2002.

                      Earle M. Jorgensen Company
                         Financial Highlights
                              (in $000's)

                                 Three Months Ended   Six Months Ended
                                       Sept.:               Sept.:
                                   2003     2002        2003     2002
       Statement of Operations
        and Other Data:
Revenues                       $231,216 $225,231    $469,516 $450,364
Gross Profit                     64,240   63,612     131,102  126,878
   Warehouse and delivery
    expense                      32,302   31,387      64,826   61,925
   Selling expense                8,215    8,052      16,632   15,993
   General and administrative
    expense                       9,732   10,324      19,412   20,453
   Loss on early retirement of
    debt                            --       --          --   12,278

Operating expenses               50,249   49,763     100,870  110,649

Operating income                 13,991   13,849      30,232   16,229
Net interest expense             12,583   12,189      25,210   22,557
Income before income taxes        1,408    1,660       5,022   (6,328)
Net income                        1,250    1,556       4,045   (6,780)
EBITDA (a)                       16,836   16,718      35,877   21,839
Capital expenditures              2,394    4,586       4,293    9,167

Reconciliation of EBITDA:
   Net Income (loss)              1,250    1,556       4,045   (6,780)
   Depreciation and
    amortization                  2,845    2,869       5,645    5,610
   Net interest expense          12,583   12,189      25,210   22,557
   Provision for income taxes       158      104         977      452

   EBITDA                        16,836   16,718      35,877   21,839

Note (a): "EBITDA" represents net income (loss) before net
interest expense, provision for income taxes and depreciation and
amortization. Consistent with Item 10(e) of Regulation S-K, our EBITDA
has not been adjusted to exclude any other non-cash charges or
liabilities or any recurring or non-recurring items, such as accruals
for postretirement benefits aggregating $188 and $120 for the second
quarter and $375 and $240 for the six-months ended September 2003 and
2002, respectively. In addition, the company's EBITDA for the
six-months ended September 2002 has not been adjusted for a loss of
$12,278 related to early retirement of debt. The company believes that
EBITDA is commonly used as a measure of performance for companies in
its industry and is frequently used by analysts, investors, lenders
and other interested parties to evaluate a company's financial
performance and its ability to incur and service debt. The company's
EBITDA is used by management as a performance measure to assess its
financial results in connection with determining incentive
compensation, and is also used by the independent appraisal firm in
connection with its annual valuation of its equity. While providing
useful information, the company's EBITDA should not be considered in
isolation or as a substitute for consolidated statement of operations
and cash flows data prepared in accordance with accounting principles
generally accepted in the United States, and should not be construed
as an indication of a company's operating performance or as a measure
of liquidity.


                                                        Sept.   March
                                                          29,      31,
                                                        2003     2003
       Balance Sheet Data:
Cash and cash equivalents                            $13,389  $20,030
Accounts receivable, net                             104,584   97,292
Inventory                                            223,606  213,590
Net property, plant and equipment                    111,612  113,037
Total assets                                         512,028  490,741
Accounts payable                                     117,717  119,815
Accrued liabilities                                   54,995   45,514
Revolving credit facility                             80,151   72,007
Other long-term debt (including current portion)     258,540  258,530
Total stockholder's deficit                          (42,599) (48,016)