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Roanoke Electric Steel Reports 1996 Sales And Earnings as Second Best on Record

ROANOKE, Va., Nov. 22 /PRNewswire/ -- Roanoke Electric Steel Corporation (Nasdaq-NNM: RESC) today reported earnings for the year ended October 31, 1996 of $15,414,834, or $1.96 per share of common stock, as the second best on record, but down 23.8% from last year's record earnings of $20,228,902, or $2.51 per share. Sales for 1996 were also the second best on record at $246,286,652, but were down 5.3% from last year's record sales of $259,968,524.

Earnings for the fourth quarter ended October 31, 1996 were $5,166,375, or 67 cents per share, down 25.9% from the $6,974,773, or 86 cents per share, earned for the same period last year. Sales for the fourth quarter of 1996 were $68,180,810, a 4.9% decrease from sales of $71,675,760 reported for the 1995 fourth quarter.

Donald G. Smith, Chairman and Chief Executive Officer, stated:

"Gross profit margins narrowed during the year, due mainly to lower selling prices for our mill products, as business conditions brought about reduced market demand and increased competition. However, strong business conditions continued within the construction industry as margins for fabricated products improved, and our fabricating subsidiaries attained record earnings. Unfortunately, the lower selling prices and margins for mill products prevented the mill from equaling the results of last year. In addition, billet shipments and earnings were negatively affected when the planned shutdown of our melt shop to install a new ladle furnace and upgrade an electric arc furnace was unexpectedly prolonged due to construction problems.

"As we begin 1997, backlogs and selling values of fabricated products are excellent, while the backlogs for mill products are at comfortable levels. Selling prices for mill products continue to be depressed; however, scrap steel prices are falling, which should result in improved margins in the first quarter. With no signs of recession and with markets continuing to look favorable, the prospects are encouraging for another good year in fiscal 1997.
 Roanoke Electric Steel Corporation
 Year Ended 3 Months Ended
 10/31/96 10/31/95 10/31/96 10/31/95
 Net Sales $246,286,652 $259,968,524 $68,180,810 $71,675,760


Earnings Before
 Income Taxes $ 24,720,642 $33,264,145 $7,667,757 $11,136,033
 Income Taxes $ 9,305,808 $13,035,243 $ 2,501,382 $ 4,161,260
 Net Earnings $15,414,834 $20,228,902 $5,166,375 $ 6,974,773


Net Earnings
 Per Share $1.96 $2.51 $.67 $ .86


Average Shares
 Outstanding* 7,876,987 8,045,644 7,632,899 8,067,500


* Adjusted for 3-for-2 stock split effective 5-1-95.

Roanoke Electric Steel Corporation is a mini-mill producer of finished steel products, consisting of angles, plain rounds, flats, channels and reinforcing bars, which are sold to steel fabricators and steel service centers, and semi-finished steel billets, which are sold to other steel producers. Four subsidiaries are involved in various steel-related activities, consisting of steel scrap processing, steel bar joist fabrication and reinforcing bar fabrication.

SOURCE Roanoke Electric Steel Corporation
 -0- 11/22/96


/CONTACT: T. Joe Crawford of Roanoke Electric Steel, 540-342-1831/

(RESC)

CO: Roanoke Electric Steel Corporation ST: Virginia IN: MNG SU: ERN SLS

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Date:Nov 22, 1996
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