EMJ Reports Third-Quarter Results.

Business Editors

BREA, Calif.--(BUSINESS WIRE)--Jan. 17, 2003

The Earle M. Jorgensen Co. ("EMJ") today reported earnings for the company's third fiscal quarter and first nine months ended Dec. 31, 2002.

For the third quarter of fiscal 2003, revenues were $223.6 million and operating income was $13.8 million, compared with $208.1 million and $8.7 million, respectively, for the same period in fiscal 2002. Net income reported for the third quarter of fiscal 2003 was $1.2 million, compared with a net loss of $1.4 million for the same period in fiscal 2002.

For the first nine months of fiscal 2003, revenues were $673.9 million and operating income was $42.3 million, compared with $670.5 million and $38.5 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 $5.6 million for the first nine months of fiscal 2003, compared with net income of $4.4 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, "Our business levels remained stable during the third quarter of fiscal 2003 and our operating results were comparable to the results we realized in the first two quarters of fiscal 2003.

"Tonnage sold during the third quarter of fiscal 2003 increased 7% when compared to same period of fiscal 2002 reflecting increased tonnage shipped to customers in key industries, such as machine tools, transportation, metal fabrication and wholesale, power transmission equipment and medical equipment.

"Year-to-date, tonnage sold increased 1% when compared to the fiscal 2002 period, which helped offset the effects of generally weaker metal prices. Our Canadian operations continued to benefit from their new facilities, effective marketing of core products and services and overall better economic conditions.

"Our gross margins remained over 28% and our operating margins exceeded 6%, which reflect the effectiveness in marketing our core products and service, 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 believe we are gaining market share through our core products strategies and excellent customer service. The recent completion of the first phase of the expansion and automation of our Chicago facility has already contributed to this growth and we are excited by the opportunities to further grow our business.

"We will continue to aggressively market our capabilities and to control costs, 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 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 third quarter of fiscal 2003. The call will take place on Jan. 24, 2003, at 7 a.m. PST. The dial-in phone number for those interested in participating on the call is 800/686-8478.

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 $000s)

                                 Third Quarter      Nine Months
                                 Ended December    Ended December
                                 2002     2001     2002     2001
 Statement of Operations and      (Unaudited)       (Unaudited)
  Other Data:

Revenues                       $223,573 $208,076 $673,936 $670,467
Gross Profit                     63,719   58,316  190,596  191,120
   Warehouse and delivery
    expense                      31,959   30,275   93,883   94,212
   Selling expense                7,818    7,460   23,811   23,986
   General and administrative
    expense                      10,126   11,514   30,580   32,821
   Restructuring and other non-
    recurring charges                --      385       --    1,612
Operating expenses               49,903   49,634  148,274  152,631
Operating income                 13,816    8,682   42,322   38,489
Net interest expense             12,529   10,184   35,086   31,778
Income (loss) before income
 taxes and extraordinary loss     1,287   (1,502)   7,236    4,792 (a)
Extraordinary loss -- early
 termination of debt                 --       --   12,278       --
Net income (loss)                 1,153   (1,426)  (5,628)   4,382
EBITDA (b)                       16,214   11,931   50,570   47,568
Capital expenditures              3,903    9,569   13,070   19,463


(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 post-retirement benefits.

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

Cash and cash equivalents                           $  9,877 $ 21,300
Accounts receivable, net                              92,691   89,279
Inventory                                            225,080  186,868
Net property, plant and equipment                    113,684  111,243
Total assets                                         483,330  443,998
Accounts payable                                     112,058   88,484
Accrued liabilities                                   31,295   36,237
Revolving credit facility                             89,261   81,700
Other long-term debt (including current portion)     260,183  211,195
Total stockholders' deficit                          (48,986) (15,786)