Russel Metals Announces Strong Fourth Quarter 2005 Earnings of $0.83 Per Share, Ahead of Previous Three Quarters.

TORONTO -- Russel Metals Inc. (TSX:RUS) today reported fourth quarter 2005 earnings per share of $0.83, significantly ahead of consensus estimates and greater than each of the previous three quarters. The fourth quarter 2005 earnings were $41.8 million, down 4% from fourth quarter 2004 net earnings of $43.5 million. Fourth quarter 2005 revenues were $646.9 million, up 4% from $623.3 million in 2004.

Steel pricing stabilized in the second half of 2005, reducing inventory holding losses which resulted in improved segment operating profits as a percentage of sales in all three operating segments. Included in the fourth quarter results was a favourable tax adjustment of $4.6 million, which caused earnings per share to be $0.09 higher.

The earnings per share for the year ended December 31, 2005 was $2.47 versus $3.64 in 2004. The 2005 earnings, while below 2004, are significantly ahead of prior years as average steel transaction prices remained at historical highs. The net earnings for 2005 were $124.7 million versus $177.8 million in 2004. Revenues were $2.6 billion in 2005 versus $2.4 billion in 2004.

Bud Siegel, President and CEO, stated, "During 2005 we experienced continued outstanding performance throughout our operations and the strength of the second half results further demonstrated our ability to maximize profits in a cyclical environment. The solid profits for 2005 were matched with strong cash flows and our already industry-leading balance sheet was further strengthened.

In 2005, the Company produced free cash flow of $130.6 million or $2.59 per share. The free cash flow supported increased dividend payments and the reduction of net interest bearing debt. The net interest bearing debt as a percentage of capitalization improved to 23%, the strongest in our history."

The Board of Directors approved a quarterly dividend of $0.35 per common share payable March 15, 2006 to shareholders of record as of March 7, 2006.

The Company will be holding an Investor Conference Call on Friday, February 24, 2006 at 9:00 a.m. ET to review its fourth quarter and year-end results for 2005. The dial in telephone number for the call is 1-800-346-5998.

For those unable to participate in the conference call, it will be recorded and available for listening at 1-800-558-5253 until midnight, Friday, March 3, 2006. You will be required to enter reservation number 21268315 in order to access the call.

Additional supplemental financial information is available in our investor conference call package located on our website at www.russelmetals.com.

Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors, under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, Leroux Steel, McCabe Steel, Megantic Metal, Metaux Russel, Milspec Industries, Pioneer Pipe, Russel Leroux, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.

RUSSEL METALS INC.
                     CONSOLIDATED BALANCE SHEETS
                              (UNAUDITED)

At December 31($000)                              2005          2004
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ASSETS
Current
  Cash                                        $ 47,055         $ 634
  Accounts receivable                          359,594       360,696
  Inventories                                  474,034       553,915
  Prepaid expenses and other assets              7,010         7,069
  Income taxes receivable                          304         5,996
  Discontinued operations                            -         9,483
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                                               887,997       937,793

Property, Plant and Equipment                  181,841       180,655
Assets Held For Sale                             5,085         6,291
Deferred Financing Charges                       7,240         8,357
Goodwill                                         9,205         9,205
Future Income Tax Assets                           994         1,614
Other Assets                                     2,821         2,566
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                                           $ 1,095,183   $ 1,146,481
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
  Bank indebtedness                            $ 2,098      $ 33,242
  Accounts payable and accrued
   liabilities                                 312,937       348,166
  Income taxes payable                           5,588        60,049
  Discontinued operations                        2,386         9,403
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                                               323,009       450,860

Other Accrued Liabilities                       15,210        11,440
Long-Term Debt                                 204,033       210,630
Pensions and Benefits                            8,949        10,146
Future Income Tax Liabilities                    5,285         6,831
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                                               556,486       689,907
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Shareholders' Equity                           538,697       456,574
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                                           $ 1,095,183   $ 1,146,481
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                        RUSSEL METALS INC.
     CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
                           (UNAUDITED)


                              Quarters Ended             Years Ended
($000, except per                December 31,            December 31,
 share data)                  2005      2004        2005        2004
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Revenues                 $ 646,908 $ 623,274 $ 2,615,246 $ 2,412,502
Cost of sales and
 operating expenses        586,066   550,070   2,413,705   2,089,391
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Earnings before the
 following                  60,842    73,204     201,541     323,111
Restructuring                 (620)      682      (1,140)      3,632
Debt restructuring costs         -       546           -      13,718
Interest expense, net        3,647     4,317      17,529      20,024
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Earnings before income
 taxes                      57,815    67,659     185,152     285,737
Provision for income
 taxes                     (15,999)  (21,885)    (60,374)   (105,268)
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Earnings from
 continuing operations      41,816    45,774     124,778     180,469
Loss from discontinued
 operations                      -    (2,244)        (62)     (2,623)
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Net earnings for the
 period                     41,816    43,530     124,716     177,846

Retained earnings --

Dividends on preferred
 shares                          -         -           -        (611)
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Earnings available to
 common shareholders        41,816    43,530     124,716     177,235
Dividends on common
 shares                    (12,662)   (8,723)    (45,434)    (25,004)
Retained earnings,
 beginning of the
 period                    312,861   227,926     262,733     110,502
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Retained earnings,
 end of the period       $ 342,015 $ 262,733   $ 342,015   $ 262,733
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Basic earnings per
 common share
 - continuing operations    $ 0.83    $ 0.92      $ 2.47      $ 3.70
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Basic earnings per
 common share               $ 0.83    $ 0.87      $ 2.47      $ 3.64
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Diluted earnings per
 common share
 - continuing operations    $ 0.81    $ 0.91      $ 2.42      $ 3.61
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Diluted earnings per
 common share               $ 0.81    $ 0.86      $ 2.42      $ 3.56
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                           RUSSEL METALS INC.
                   CONSOLIDATED CASH FLOW STATEMENTS
                              (UNAUDITED)

                              Quarters ended             Years ended
                                 December 31,            December 31,
($000)                        2005      2004        2005        2004
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Operating activities
  Earnings from
   continuing operations  $ 41,816  $ 45,774   $ 124,778   $ 180,469
  Depreciation and
   amortization              4,923     4,738      19,158      18,598
  Future income taxes       (2,073)    2,630       6,305       5,021
  Gain (loss) on sale of
   fixed assets and
   assets held for sale        (56)       15      (1,972)        264
  Stock-based
   compensation                 84        67       1,309         804
  Restructuring costs            -     2,051           -       2,051
  Debt redemption costs          -       546           -       3,071
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Cash from operating
 activities before
 working capital            44,694    55,821     149,578     210,278
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Changes in non-cash
 working capital items
  Accounts receivable       17,479    39,022      (2,368)   (122,814)
  Inventories              (27,754)  (94,580)     76,475    (260,898)
  Accounts payable and
   accrued liabilities      36,728    11,322     (32,189)    128,473
  Current income taxes         575     9,379     (55,644)     54,711
  Other                     (1,266)   (1,412)         51      (2,075)
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Change in non-cash
 working capital            25,762   (36,269)    (13,675)   (202,603)
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Cash from operating
 activities                 70,456    19,552     135,903       7,675
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Financing activities
  (Decrease) increase
   in bank borrowing       (17,421)    1,237     (31,144)    (44,851)
  Issue of common shares       276       224       4,385      54,439
  Dividends on common
   shares                  (12,662)   (8,723)    (45,434)    (25,004)
  Dividends on
   preferred shares              -         -           -        (611)
  Deferred financing
   costs                      (150)   (1,958)       (338)     (9,117)
  Issuance of long-term
   debt                          -         -           -     235,200
  Repurchase of
   long-term debt                -         -           -    (184,715)
  Redemption of
   preferred shares              -         -           -     (30,000)
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Cash used in financing
 activities                (29,957)   (9,220)    (72,531)     (4,659)
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Investing activities
  Purchase of fixed
   assets                  (10,163)   (7,026)    (26,463)    (25,394)
  Proceeds on sale of
   fixed assets                182       278       1,644         849
  Proceeds from assets
   held for sale and
   sale of businesses            -     1,475       5,869       3,675
  Other                     (3,125)   (2,898)     (4,443)        305
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Cash used in investing
 activities                (13,106)   (8,171)    (23,393)    (20,565)
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Discontinued operations
  Operating activities           -    (1,412)        (62)     (1,174)
  Investing activities           -      (115)      6,504         349
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Cash from (used in)
 discontinued operations         -    (1,527)      6,442        (825)
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Increase (decrease) in
 cash                       27,393       634      46,421     (18,374)
Cash position, beginning
 of the period              19,662         -         634      19,008
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Cash position, end of
 the period               $ 47,055     $ 634    $ 47,055       $ 634
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Russel Metals Inc. (TSX:RUS)