EMJ Reports Second Quarter Results.

Business Editors

BREA, Calif.--(BUSINESS WIRE)--Oct. 28, 2002

The Earle M. Jorgensen Co. ("EMJ") today reported earnings for the company's second fiscal quarter and first six months ended Sept. 27, 2002.

For the second quarter of fiscal 2003, revenues were $225.2 million and operating income was $13.8 million, compared with $223.7 million and $16.4 million, respectively, for the same period in fiscal 2002. Net income reported for second quarter of fiscal 2003 was $1.6 million, compared with $5.3 million for the same period in fiscal 2002.

For the first six months of fiscal 2003, revenues were $450.4 million and operating income was $28.5 million, compared with $462.4 million and $29.8 million, respectively, for the same period in fiscal 2002. After recognizing an extraordinary loss of $12.3 million resulting from early termination of debt, the company reported a net loss of $6.8 million for the first six months of fiscal 2003, compared with net income of $5.8 million for the same period in fiscal 2002. The fiscal 2002 period included a non-operating excise tax of $1.9 million related to an IRS settlement agreement.

Maurice S. Nelson, Jr., EMJ's president and chief executive officer stated: "Overall, the operating results in the second quarter of fiscal 2003 were comparable to the operating results in the first quarter. Metal prices remained somewhat volatile and demand from our larger customers in key industries, such as industrial equipment, oil and gas services and construction and farm equipment, continued to be weak.

"However, our average selling prices and tonnage shipped during the second quarter of fiscal 2003 increased slightly when compared to the second quarter of fiscal 2002 period due in part to our success in marketing our core products and value-added services to new and existing customers.

"During the first six months of fiscal 2003, tonnage shipped declined 2% and average prices decreased 1%, when compared to the same period in fiscal 2002 primarily due to the economic slowdown in the United States partially offset by stronger economic conditions in Canada.

"Even during these times of economic uncertainty and difficult business conditions, our gross margins remained over 28% and our operating margins exceeded 6%. These results continue to reflect the effectiveness of our marketing efforts, and benefits realized from improved productivity and from our ability to maintain cost structures that are aligned with the prevailing levels of business."

Nelson concluded his remarks by stating: "We will continue to focus on productivity and cost reduction efforts, while maintaining well-balanced inventories and providing customer service that we believe is unequaled in the industry. We are confident that these and other operating and growth strategies, including the expansion and automation of our Chicago facility, will position us to outperform the industry when an economic recovery occurs or as general economic conditions improve."

EMJ, with headquarters in Brea, 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 the results of the second quarter of fiscal 2003. The call will take place on Oct. 29, 2002 at 9 a.m. PST. The dial-in phone number for those interested in participating on the call is 800/837-5468.

This release may contain forward-looking statements relating to future events or financial results. Actual events or results may differ materially subject to risks, uncertainties and other factors over which the company has no control. These factors and additional information are included in the company's reports on file with the Securities and Exchange Commission.

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


                                 Second Quarter       Six Months
                                Ended September:   Ended September:
                                  2002     2001      2002     2001
 Statement of Operations and       (Unaudited)        (Unaudited)
          Other Data:
Revenues                      $225,231 $223,719  $450,364 $462,391
Gross Profit                    63,612   65,095   126,878  132,804
   Warehouse and delivery
    expense                     31,387   30,994    61,925   63,937
   Selling expense               8,052    7,718    15,993   16,525
   General and administrative
    expense                     10,324    9,267    20,453   21,307
   Restructuring and other
    non-recurring charges           --      731        --    1,227
Operating expenses              49,763   48,710    98,371  102,996
Operating income                13,849   16,385    28,507   29,808
Net interest expense            12,189   10,842    22,557   21,594
Income before income taxes and
  extraordinary loss             1,660    5,543     5,950    6,295(a)
Extraordinary loss --  early
 termination of debt                --      --     12,278       --
Net income (loss)                1,556    5,316    (6,780)   5,808
EBITDA (b)                      16,838   19,451    34,357   35,638
Capital expenditures             4,586    6,992     9,167    9,894

(a) This amount is after a non-operating expense of $1.9 million
for excise tax paid under an IRS settlement.

(b) "EBITDA" represents income from operations before net interest
expense, taxes, depreciation, amortization, LIFO adjustments,
non-recurring charges and certain other non-cash expenses, including
accruals for postretirement benefits.

                                                         As of:
                                                   Sept. 27,  March 31
                                                      2002      2002
                Balance Sheet Data:               (Unaudited)

Cash and cash equivalents                            $14,771  $21,300
Accounts receivable, net                             103,892   89,279
Inventory                                            214,604  186,868
Net fixed assets                                     114,793  111,243
Total assets                                         500,335  443,998
Accounts payable                                     112,390   88,484
Accrued liabilities                                   54,817   36,237
Revolver                                              79,601   81,700
Other long-term debt (including current portion)     258,710  211,195
Total stockholder's deficit                          (44,558) (15,786)