Exhibit 99.1

Item 6. Selected Financial Data
(in thousands, except per share data)

Year Ended December 31,
2004 2003 2002 2001 2000
________ ________ ________ ________ ________

Net sales $976,255 $729,806 $602,707 $570,914 $656,487
Income from operations 89,548 56,876 46,770 34,806 57,458
Interest expense 12,915 13,096 8,283 13,351 17,267
Income before income taxes 81,479 44,465 39,046 21,583 40,948
Income taxes 31,768 17,562 15,615 8,741 16,584
Net income from continuing operations 49,711 26,903 23,431 12,842 24,364

Net income from continuing operations per
share - Basic $ 1.69 $ 1.12 $ 1.02 $ .68 $ 1.29
Weighted average shares
outstanding-Basic 29,362 24,143 22,921 18,886 18,866

Net income from continuing operations per
share - Diluted $ 1.68 $ 1.11 $ 1.00 $ .67 $ 1.28
Weighted average shares
outstanding-Diluted 29,596 24,387 23,279 19,159 19,028

Cash dividends per common share $ .146 $ .117 $ .103 $ .090 $ .077

Current assets $379,607 $249,450 $202,994 $166,615 $187,594
Current liabilities 137,352 98,756 64,748 61,551 55,187
Total assets 957,701 777,743 576,568 535,040 556,046
Total debt 310,039 242,250 166,932 212,275 255,853
Shareholders' equity 453,743 394,181 293,117 218,347 208,348

Capital expenditures $ 24,330 $ 22,050 $ 15,294 $ 13,697 $ 19,441
Depreciation 22,883 20,979 18,993 17,975 16,813
Amortization 1,315 804 554 4,025 3,776

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following Management's Discussion and Analysis of Financial
Condition and Results of Operations should be read in conjunction with
the Company's consolidated financial statements and notes thereto
included in Item 8 of this Form 10-K.

Overview

The consolidated financial statements present the financial condition
of the Company as of December 31, 2004 and 2003, and the consolidated
results of operations and cash flows of the Company for the years ended
December 31, 2004, 2003 and 2002.

On January 27, 2005, the Company sold the assets of its Milcor
subsidiary (which included Portals Plus). Milcor produced roof access
doors. In fiscal 2004, Milcor had net sales of $38.4 million and income
before taxes of $1.8 million. The financial information and other data
herein regarding the Company reflects the presentation of the Milcor
business as a discontinued operation.

The Company is organized into three reportable segments - Building Products,
Processed Metal Products and Thermal Processing. The Company
also held equity positions in two joint ventures as of December 31,
2004.

The Building Products segment processes sheet steel to produce a wide
variety of building and construction products. This segment's products
are sold to major retail home centers, such as The Home Depot, Lowe's,
Menards, and Wal-Mart. During 2004, the Company strengthened its
position in the Building Products market through the acquisition of
Renown (acquired January 1, 2004). This strategic acquisition enabled
the Company to broaden its geographic markets, solidify product
offerings, strengthen customer relationships and added approximately
$9.5 million to the Company's consolidated net sales for 2004. In 2005,
the Company believes the ongoing trend of increased use of metal
building products will continue because of favorable environmental
characteristics, cost efficiency and architectural design enhancements.

The Processed Metal Products segment produces a wide variety of
cold-rolled strip steel products, coated sheet steel products, powdered
metal products and strapping products. This segment primarily serves
the automotive industry's leaders, such as General Motors, Ford,
Chrysler, and Honda. This segment also serves the automotive supply and
commercial and residential metal building industry, as well as the
power and hand tool and hardware industries. During 2004, the Company
strengthened its Processed Metal Products segment through its
acquisition of SCM Metal Products, Inc. (acquired June 1, 2004) which
added approximately $34.8 million to the Company's consolidated net
sales for 2004. The automotive market is a very important part of the
Company's Processed Metal Products segment. In 2005, the Company plans
to continue its longstanding relationships with the domestic automotive
manufacturers, as well as enhance its present relationships with the
transplant automobile manufacturers and their suppliers.

The Thermal Processing segment provides a wide array of processes which
refine the metallurgical properties of customer-owned metal products
for a variety of consumer and industrial applications where critical
performance characteristics are required. This segment services such
customers as General Motors, Ford, Eaton Corporation, Dana Corporation,
and International Truck. In 2005, the Company believes the growing
trend in the outsourcing of thermal processing operations will continue
and that its thermal processing facilities are strategically located to
meet the needs of customers from a geographically diverse base of
operations.

The following table sets forth the Company's net sales by reportable segment for
the period ending December 31:

(in thousands)
______________
2004 2003 2002
________ ________ ________

Net sales

Building products $477,316 $371,957 $249,754
Processed metal products 395,287 268,512 272,796
Thermal processing 103,652 89,337 80,157
________ ________ ________
Total consolidated net sales $976,255 $729,806 $602,707
________ ________ ________

Year ended December 31, 2004 compared to year ended December 31, 2003

Consolidated

Net sales increased by approximately $246.4 million, or 33.8%, to
$976.3 million in 2004, from $729.8 million in 2003. The increase in
net sales was attributable to price increases we implemented due to
increases in raw material prices and increased sales volumes. The
increase in sales volumes resulted primarily from implementing our
strategy of using our national manufacturing, marketing and
distribution capabilities to sell products from a greater number of
product lines to both new and existing customers, especially national
customers, and from offering product extensions and design enhancements
to existing product lines, particularly in our Building Products
segment. Our net sales also increased due to the addition of net sales
of SCM Metal Products, Inc. (acquired June 1, 2004), a full year's
results from Air Vent (acquired May 1, 2003) and Construction Metals
(acquired April 1, 2003), and the addition of net sales of Renown
(acquired January 1, 2004), which together contributed approximately
$84.3 million in additional sales in 2004.

Cost of sales increased by approximately $187.8 million, or 32.0%, to
$775.0 million in 2004, from $587.1 million in 2003. This increase was
primarily due to higher sales volumes resulting from the expanded
penetration noted above, along with the increased cost of steel and
other metals used in our products. The 2004 acquisitions of SCM Metal
Products, Inc. and Renown and a full year's results from Construction
Metals and Air Vent contributed $65.7 million of the increase in cost
of sales. Cost of sales as a percentage of net sales decreased to 79.4%
in 2004 from 80.5% in 2003. The increase in gross margins was
attributable to higher selling prices and improved fixed cost
absorption due to higher unit volumes.

Selling, general and administrative expense increased by approximately
$25.9 million, or 30.2%, to $111.7 million in 2004, from $85.8 million
in 2003. This increase was due primarily to the addition of costs from
the SCM Metal Products, Inc. and Renown acquisitions, a full year of
expenses for Construction Metals and Air Vent, increased costs of
compliance with the provisions of the Sarbanes-Oxley Act, increased
incentive compensation relating to an increase in operating income and
net sales, and increased advertising and commissions. As a percentage
of net sales, selling, general and administrative expense decreased to
11.4% in 2004 from 11.8% in 2003 as a result of the higher net sales in
2004.

Interest expense of $12.9 million in 2004 was comparable to interest expense of
$13.1 million in 2003.

Equity in income of partnerships increased $4.1 million to $4.8 million
in 2004 from $0.7 million in 2003. The increase is the result of a full
year of earnings from our investment in Gibraltar DFC Strip Steel LLC
(investment made in December 2003).

As a result of the foregoing, income from continuing operations before
taxes increased by $37.0 million, or 83.2%, to $81.5 million in 2004
from $44.5 million in 2003.

Income taxes related to continuing operations approximated $31.8
million in 2004, based on a 39.0% effective rate compared with a 39.5%
effective rate in 2003.

Net income from discontinued operations, which reflects the results of
our Milcor subsidiary, was $1.0 million in 2004, compared to $50,000 in
2003.

Segment information

Building Products. Net sales increased by approximately $105.3 million,
or 28.3%, to $477.3 million in 2004 from $372.0 million in 2003. The
increase in net sales was the result of expanded sales penetration due
to the factors described in "- Consolidated" above. In addition, a full
year's results from Air Vent and Construction Metals and the net sales
of Renown resulted in additional sales of $49.6 million in 2004.

Income from operations increased by approximately $20.2 million, or
51.8%, to $59.1 million in 2004 from $38.9 million in 2003. Operating
margin increased to 12.4% of net sales in 2004 compared to 10.5% in
2003. The increase in gross margins was attributable to higher selling
prices and improved fixed cost absorption due to higher unit volumes.

Processed Metal Products. Net sales increased by approximately $126.8
million, or 47.2%, to $395.3 million in 2004 from net sales of $268.5
million in 2003. This increase was primarily a function of increases in
our selling prices due to the rise in overall metal prices in 2004 and
of higher sales volumes, particularly in sales of our coated steel and
painted products. In addition, the SCM Metal Products, Inc. business
added approximately $34.8 million to the segment's net sales in 2004.

Income from operations increased by approximately $18.4 million, or
72.8%, to $43.6 million in 2004 from $25.2 million in 2003. Operating
margin increased to 11.0% of net sales in 2004, compared to 9.4% in
2003. The increase in gross margins was attributable to higher selling
prices and improved fixed cost absorption due to higher unit volumes.

Thermal Processing. Net sales increased by approximately $14.3 million,
or 16.0%, to $103.7 million in 2004 from $89.3 million in 2003. The
increase in net sales was due primarily to improvements to the overall
economy during the year.

Income from operations increased by approximately $4.3 million, or
46.3%, to $13.7 million in 2004 from $9.4 million in 2003. Operating
margin increased to 13.2% of net sales in 2004, compared to 10.5% of
net sales in 2003, primarily due to increased capacity utilization at
our plants, which lowered per unit costs.

Year ended December 31, 2003 compared to year ended December 31, 2002

Consolidated

Net sales increased by approximately $127.1 million, or 21.1%, to
$729.8 million in 2003, from $602.7 million in 2002. The increase in
net sales was primarily due to the addition of net sales of B&W Heat
Treating (acquired July 1, 2002), Construction Metals (acquired April
1, 2003) and Air Vent (acquired May 1, 2003), which contributed
approximately $87.9 million in additional sales in 2003. The remaining
increase in net sales was the result of expanded sales penetration
achieved by using our national manufacturing, marketing and
distribution capabilities to sell products from a greater number
product lines to both existing and new customers, as well as through
product extensions and design enhancements to existing product lines.
Increases in net sales in our Building Products and Thermal Processing
segments more than offset decreases in our Processed Metal Products
segment, as explained below.

Cost of sales increased by approximately $102.9 million, or 21.2%, to
$587.1 million in 2003 from $484.2 million in 2002. This increase was
primarily due to higher sales volume as a result of the B&W Heat
Treating, Construction Metals and Air Vent acquisitions. Cost of sales
as a percentage of net sales remained relatively constant at 80.4% in
2003, compared to 80.3% in 2002.

Selling, general and administrative expense increased by approximately
$14.1 million, or 19.7%, to $85.8 million in 2003, from $71.7 million
in 2002. This increase was due primarily to the addition of costs from
the 2003 acquisitions. Selling, general and administrative expense as a
percentage of net sales decreased to 11.8% in 2003 from 11.9% in 2002.
This decrease was primarily due to the impact of our recent
acquisitions, which have lower selling, general and administrative
costs as a percentage of net sales than our existing operations.

Interest expense increased by approximately $4.8 million in 2003,
primarily due to an increase in debt used to finance the 2003
acquisitions of Construction Metals and Air Vent and our 50% interest
in Gibraltar DFC Strip Steel, LLC.

As a result of the foregoing, income from continuing operations before
taxes increased by $5.4 million, or 13.9%, to $44.5 million in 2003
from $39.1 million in 2002.

Income taxes approximated $17.6 million in 2003, based on a 39.5% effective
rate, compared with a 40% effective rate in 2002.

Net income from discontinued operations, which reflects the results of
our Milcor subsidiary, was $50,000 in 2003 compared to $423,000 in
2002.

Segment information

Building Products. Net sales increased by approximately $122.2 million,
or 48.9%, to $372.0 million in 2003 from $249.8 million in 2002. The
increase in net sales was due primarily to the addition of net sales of
Construction Metals (acquired April 1, 2003) and Air Vent (acquired May
1, 2003), which contributed approximately $82.4 million in additional
net sales in 2003. The remaining increase in net sales was the result
of expanded sales penetration due to the factors described under
"- Consolidated" above.

Income from operations increased by approximately $20.4 million, or
110.2%, to $38.9 million in 2003 from $18.5 million in 2002. Operating
margin increased to 10.5% of net sales in 2003, compared to 7.4% in
2002, primarily due to the higher income from operations of the 2003
acquisitions, and was partially offset by increases in raw material
costs during 2003.

Processed Metal Products. Net sales decreased by approximately $4.3
million, or 1.6%, to $268.5 million in 2003 from $272.8 million in
2002. This decrease was primarily due to decreases in automotive
production levels by the Big Three automotive manufacturers. which had
higher sales volumes but produced fewer vehicles, as well as reduced
sales to steel service centers attributable to the reduction in
processed steel demand for use in commercial building industry
applications.

Income from operations decreased by approximately $7.1 million, or
21.9%, to $25.2 million in 2003 from $32.3 million in 2002. Operating
margins decreased to 9.4% of net sales in 2003, compared to 11.8% in
2002, primarily due to higher raw material, transportation, workers'
compensation and fringe benefit costs.

Thermal Processing. Net sales increased by approximately $9.2 million,
or 11.5%, to $89.3 million in 2003 from $80.2 million in 2002. This
increase was due primarily to the addition of a full year of net sales
of B&W Heat Treating (acquired July 1, 2002), which contributed
approximately $5.5 million in additional net sales in 2003. The
remaining increase in net sales was primarily the result of increased
sales penetration by our new brazing operation in Fairfield, Ohio.

Income from operations decreased by approximately $0.5 million, or
5.2%, to $9.4 million in 2003 from $9.9 million in 2002. Operating
margin decreased to 10.5% of net sales in 2003 compared to 12.4% of net
sales in 2002, primarily due to higher material, utility, workers'
compensation and fringe benefit costs as a percentage of net sales.

Critical Accounting Policies

The preparation of the financial statements in conformity with U.S.
generally accepted accounting principles requires management to make
decisions based upon estimates, assumptions, and factors it considers
relevant to the circumstances. Such decisions include the selection of
applicable principles and the use of judgment in their application.

Our most critical accounting policies include:

o valuation of accounts receivable, which impacts selling, general and
administrative expense;

o valuation of inventory, which impacts cost of sales and gross margin;

o revenue recognition, which impacts net sales;

o the allocation of the purchase price of our acquisition-related assets and
liabilities, which affects our depreciation and amortization costs; and

o the assessment of recoverability of goodwill and other intangible and
long-lived assets, which impacts write-offs of goodwill, intangibles and
long-lived assets.

Management reviews the estimates, including, the allowance for doubtful
accounts and inventory reserves on a regular basis and makes
adjustments based on historical experiences, current conditions and
future expectations. Management believes these estimates are
reasonable, but actual results could differ from these estimates.

Valuation of accounts receivable. Our accounts receivable represent
those amounts that have been billed to our customers but not yet
collected. We record an allowance for doubtful accounts based on the
portion of those accounts receivable that we believe are potentially
uncollectible based on various factors, including historical
experience, creditworthiness of customers and current market and
economic conditions. If the financial condition of customers were to
deteriorate, resulting in impairment of their ability to make payments,
additional allowances may be required. Changes in judgments on these
factors could impact the timing of costs recognized.

Valuation of inventories. We state our inventories at the lower of cost
or market. We determine the cost basis of our inventory on a
first-in-first-out basis using either actual costs or a standard cost
methodology that approximates actual cost. We regularly review
inventory on hand and record provisions for obsolete and slow-moving
inventory based on historical and current sales trends. Changes in
product demand and our customer base may affect the value of inventory
on hand, which may require higher provisions for obsolete inventory.

Revenue recognition. We recognize revenue when all of the following
have occurred: products are shipped or service is provided, the
customer takes ownership and assumes the risk of loss, collection of
the relevant receivable is probable, persuasive evidence of an
arrangement exists and the sales price is fixed or determinable. We
treat sales returns, allowances and customer incentives as reductions
to sales, and we accrue for those items based on historical experience
and current estimates of future sales, revising our estimates
throughout the year when necessary.

Allocation to purchase price of acquired assets and liabilities. When
we acquire a new business, we must allocate the purchase price to the
assets acquired and the liabilities assumed in the transaction at their
respective estimated fair market values. We record any premium over the
fair market value of the net assets acquired as goodwill. The
allocation of the purchase price involves judgments and estimates both
in characterizing the assets and in determining their fair market
value. The way we characterize the assets has important implications,
as long-lived assets, for example, are depreciated or amortized,
whereas goodwill is tested annually for impairment, as explained below.
With respect to determining the fair market value of assets, the most
difficult estimations of individual fair market values are those
involving long-lived assets, such as property, plant and equipment and
identified intangible assets. We use all available information to make
these fair market value determinations and, for major business
acquisitions, engage an independent valuation specialist to assist in
the fair market value determination of the acquired long-lived assets.
Due to the subjectivity inherent in determining the estimated fair
market value of long-lived assets and the significant number of
business acquisitions that we have completed, we believe that the
recording of acquired assets and liabilities is a critical accounting
policy.

We have not yet completed the purchase price allocation with respect to
the assets we acquired and liabilities we assumed in the AMICO
acquisition. Significant judgments will be necessary to determine the
fair market value of the intangible assets and property, plant and
equipment acquired in that acquisition.

Depreciation, amortization and impairment testing of long-lived assets.
We depreciate long-lived assets with estimated useful lives over those
useful lives in proportion to the economic value consumed. We amortize
intangible assets with estimable useful lives (which consist primarily
of acquired customer lists, non-competition agreements and unpatented
technology) over those estimated useful lives in proportion to the
economic benefit consumed.

We test long-lived assets for impairment when events or changes in
circumstances indicate that the carrying amount of those assets may not
be recoverable and exceed their fair market value. This circumstance
exists if the carrying amount of the asset in question exceeds the sum
of the undiscounted cash flows expected to result from the use of the
asset. The impairment loss would be measured as the amount by which the
carrying amount of a long-lived asset exceeds its fair market value as
determined by discounted cash flow method or in the case of negative
cash flow, an independent market appraisal of the asset.

Goodwill impairment testing. We test goodwill annually for impairment
(or more often if indicators of impairment exist) at the reporting unit
level by comparing the fair market value of the reporting unit with its
carrying value. A reporting unit is either the same as, or one level
below, an operating segment. We have more reporting units than
operating segments, and our reporting units change over time. The
primary valuation method for determining the fair market value of the
reporting unit is a discounted cash flow analysis. If the goodwill is
indicated as being impaired (i.e., the fair market value of the
reporting unit is less than the carrying amount), the fair market value
of the reporting unit is then allocated to its assets and liabilities
in a manner similar to a purchase price allocation in order to
determine the implied fair market value of the reporting unit goodwill.
This implied fair market value of the reporting unit goodwill is then
compared with the carrying amount of the reporting unit goodwill, and,
if it is less, we then recognize an impairment loss.

The projection of future cash flows for the goodwill impairment
analysis requires significant judgments and estimates with respect to
future net sales related to the assets and the future cash outlays
related to those net sales. Actual net sales and related cash flows,
changes in anticipated net sales and related cash flows or use of
different assumptions or discount rates could result in changes in this
assessment.

Liquidity and Capital Resources

The Company's principal capital requirements are to fund its
operations, including working capital, the purchase and funding of
improvements to its facilities, machinery and equipment and to fund
acquisitions.

The Company's shareholders' equity increased by approximately $59.6
million or 15.1%, to $453.7 million, at December 31, 2004. This
increase was primarily due to net income of $50.8 million, including
earnings from the Company's 2004 acquisitions, the receipt of $5.0
million in net proceeds from the Company's common stock offering in
January 2004, as well as proceeds of $4.5 million from the exercise of
stock options.

During 2004, the Company's working capital increased $91.6 million, or
60.8%, to approximately $242.3 million. The increase in working capital
was primarily the result of an increase in inventory of $99.7 million,
driven by the current year acquisitions of Renown, SCM and Portals Plus
and increases in raw material cost, and accounts receivable of $43.4
million, as a result of increased sales and the aforementioned
acquisitions, partially offset by increases in accounts payable of
$20.9 million, due to the current year acquisitions and increased
material costs, and accrued expenses of $22.9 million due to increased
incentive compensation, rebates, and federal taxes payable, along with
a decrease in cash of $18.1 million. The remaining change in working
capital was primarily the result of increases in other current assets
of $5.2 million, and a decrease in the current portion of long-term
debt of $5.2 million.

The Company purchased all of the outstanding capital stock of Renown on
January 12, 2004, and Portals Plus on August 13, 2004 (which was
disposed of with Milcor on January 27, 2005) and purchased the assets
of SCM on June 1, 2004. The Company paid approximately $65.5 million in
cash for these acquisitions.

The Company's primary source of liquidity is its revolving credit
facility and term notes. Net cash used in continuing operating
activities for the year ended December 31, 2004 was $1.8 million and
primarily represents net income from continuing operations plus
non-cash charges for depreciation and amortization and changes in
working capital positions. Net cash used in continuing operating
activities in 2004 was due primarily to net income from continuing
operations of $49.7 million combined with depreciation and amortization
of $24.2 million, the provision for deferred income taxes of $6.8
million, increases in inventories of $88.1 million, accounts receivable
of $27.0 million, other assets of $2.4 million partially offset by
increases in accounts payable and accrued expenses of $37.9 million.

The net borrowings of $67.3 million and net proceeds from the issuance
of common stock of $9.6 million, along with cash on hand at the
beginning of the period were used to fund current operations, the
acquisitions of Renown, SCM and Portals of $65.5 million (net of cash
acquired), capital expenditures of $24.3 million and pay dividends of
$3.7 million.

The Company's revolving credit facility, which expires in June 2007,
provides an aggregate borrowing limit of $290.0 million. Additionally,
the revolving credit facility contains a $10.0 million expansion
feature at the Company's option, subject to approval by the
participating financial institutions. Borrowings thereunder are secured
with the Company's accounts receivable, inventories and personal
property and equipment. At December 31, 2004, the Company had used
approximately $157.6 million of the revolving credit facility, and had
outstanding letters of credit of $7.7 million, resulting in $134.7
million in availability. At December 31, 2004, the Company had interest
rate swap agreements outstanding which effectively converted $20
million of borrowings under its revolving credit agreement to fixed
interest rates ranging from 7.2% to 7.7%. Additional borrowings under
the revolving credit facility carry interest at LIBOR plus a fixed
rate. At December 31, 2004, additional borrowings under the revolving
credit facility aggregated $137.6 million. The weighted average
interest rate of these borrowings was 4.59% at December 31, 2004.

The Company's revolving credit facility contains various debt
covenants. At December 31, 2004, the Company was in compliance with all
covenants.

In June 2004, the Company entered into a $75.0 million private
placement of debt with The Prudential Insurance Company of America.
This senior secured note bears interest at 5.75% annually and has a
seven year term. The Company drew down $55.0 million of the note which
was outstanding at December 31, 2004, and will draw down the remaining
$20.0 million at specified dates and amounts which coincide with the
expiration of the interest rate swap agreements currently outstanding
under the Company's existing revolving credit facility. The initial
$55.0 million borrowing under this note was used to pay down a portion
of the existing revolving credit facility.

In January 2004, the underwriters of the Company's December 2003 common
stock offering exercised a portion of their over-allotment option, and
purchased an additional 321,938 shares of the Company's common stock at
$16.50 per share. Net proceeds to the Company from the purchase of
these additional shares were approximately $5.0 million and were used
to further reduce the Company's outstanding debt.

The Company believes that availability of funds under its credit
facility together with cash generated from operations will be
sufficient to provide the Company with the liquidity and capital
resources necessary to support its principal capital requirements,
including operating activities, capital expenditures, dividends and
future acquisitions.

Contractual Obligations

The following table summarizes the Company's contractual obligations at December
31, 2004:

Payments Due By Period
(in thousands)
______________

Less than More than
Contractual Obligations Total 1 Year 1 - 3 Years 3 - 5 Years 5 Years
________ ________ ________ ________ ________

Revolving credit facility $157,636 $ - $157,636 $ - $ -
Interest on revolving debt 18,088 7,235 10,853 - -
Long-term debt 152,403 14,692 48,152 33,659 55,900
Interest on long-term debt 35,771 9,078 15,282 6,532 4,879
Operating lease obligations 43,914 9,147 15,025 9,535 10,207
Pension and other
post-retirement obligations 6,200 169 361 572 5,098
Employment agreement 500 500 - - -
_________ _________ _________ _________ _________

Total $414,512 $ 40,821 $247,309 $ 50,298 $ 76,084
_________ _________ _________ _________ _________

Interest consists of payments for fixed rate debt and variable rate
debt based on the interest rates in effect at December 31, 2004.

Related Party Transactions

In connection with the acquisition of Construction Metals in April
2003, the Company entered into two unsecured subordinated notes
payable, each in the amount of $8.75 million (aggregate total of $17.5
million). These notes are payable to the former owners of Construction
Metals and are considered related party in nature due to the former
owners' current employment relationship with the Company. These notes
are payable in three equal annual principal installments of
approximately $2.9 million per note, beginning on April 1, 2004, with
the final principal payment due on April 1, 2006. These notes require
quarterly interest payments at an interest rate of 5.0% per annum.
Interest expense related to these notes payable aggregated
approximately $658,000 and $660,000 in 2004 and 2003, respectively. At
December 31, 2004 and 2003, the current portion of these notes payable
aggregated approximately $5.8 million and accrued interest aggregated
approximately $147,000 and $221,000, respectively.

The Company has certain operating lease agreements related to operating
locations and facilities with the former owners of Construction Metals
(related parties) or companies controlled by these parties. Rental
expense associated with these related party operating leases aggregated
approximately $1,304,000, and $512,000 in 2004 and 2003, respectively.

Recent Accounting Pronouncements

The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standard (SFAS) No. 123 (Revised 2004) (SFAS No.
123R), Share-Based Payment, in December 2004. SFAS No. 123R is a
revision of FASB Statement 123, Accounting for Stock-Based Compensation
and supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees, and its related implementation guidance. The Statement
focuses primarily on accounting for transactions in which an entity
obtains employee services in share-based payment transactions. SFAS No.
123R requires a public entity to measure the cost of employee services
received in exchange for an award of equity instruments based on the
grant-date fair value of the award (with limited exceptions). That cost
will be recognized over the period during which an employee is required
to provide service in exchange for the award. This statement is
effective as of the beginning of the first interim or annual reporting
period that begins after June 15, 2005 and the Company will adopt the
standard in the third quarter of fiscal 2005. The Company has not
determined the impact, if any, that this statement will have on its
consolidated financial position or results of operations.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary
Assets - An Amendment of APB Opinion No. 29, Accounting for Nonmonetary
Transactions (SFAS 153). SFAS 153 eliminates the exception from fair value
measurement for nonmonetary exchanges of similar productive assets in paragraph
21(b) of APB Opinion No. 29, Accounting for Nonmonetary Transactions, and
replaces it with an exception for exchanges that do not have commercial
substance. SFAS 153 specifies that a nonmonetary exchange has commercial
substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange. SFAS 153 is effective for non
monetary asset exchanges occurring in fiscal periods beginning after June 15,
2005 and is required to be adopted by the Company for such exchanges in the
third quarter of fiscal 2005. The Company is currently evaluating the effect
that the adoption of SFAS 153 will have on its consolidated results of
operations and financial condition but does not expect it to have a material
impact.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an
amendment of ARB No. 43, Chapter 4, (SFAS 151) which clarifies the
types of costs that should be expensed rather than capitalized as
inventory. This statement also clarifies the circumstances under which
fixed overhead costs associated with operating facilities involved in
inventory processing should be capitalized. The provisions of SFAS No.
151 are effective for fiscal years beginning after June 15, 2005 and
the Company will adopt this standard in the first quarter of fiscal
2006. The Company has not determined the impact, if any, that this
statement will have on its consolidated financial position or results
of operations.

In May 2004, the FASB released FASB Staff Position No. FAS 106-2 Accounting and
Disclosure Requirements Related to the Medicare Prescription Drug, Improvement
and Modernization Act of 2003 (FSP 106-2). The Medicare Prescription Drug
Improvement and Modernization Act of 2003 (the "Medicare Act") was enacted
December 8, 2003. On January 21, 2005, the Centers for Medicare and Medicaid
Services released the final regulations for implementing the Medicare Act. FSP
106-2 provides authoritative guidance on accounting for the federal subsidy
specified in the Medicare Act. The Medicare Act provides for a federal subsidy
equal to 28% of certain prescription drug claims for sponsors of retiree health
care plans with drug benefits that are at least actuarially equivalent to those
to be offered under Medicare Part D, beginning in 2006. The Company was unable
to conclude whether the benefits provided by the plan are actuarially equivalent
to Medicare Part D under the Act, and therefore we have not determined whether
we will need to amend our plan, nor what effect the Act will have on our
consolidated financial position, results of operations or cash flows.

In December 2003, the FASB issued SFAS 132 (revised 2003), Employer's
Disclosures About Pensions and Other Postretirement Benefits. SFAS 132 (revised
2003), revises employers' disclosures about pension plans and other
postretirement benefit plans. SFAS 132 (revised 2003), does not change the
measurement and recognition of those plans required by SFAS 87, Employers'
Accounting for Pensions, SFAS 88, Employers' Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for Termination Benefits, and
SFAS 106, Employers' Accounting for Postretirement Benefits Other Than Pensions.
SFAS 132 (revised 2003), retains the original disclosure requirements of SFAS
132 and requires additional expanded annual and interim disclosures to those in
the original SFAS 132 about the assets, obligations, cash flows, and net
periodic benefit costs of defined benefit pension plans and other defined
benefit postretirement benefit plans. The adoption of this Statement is required
for financial statements with fiscal years ending after December 15, 2003.
Implementation of SFAS 132 (revised 2003) did not have a material impact on the
Company's consolidated financial statements. The revised disclosure requirements
of this Statement are reflected in Notes 8 and 9 of the consolidated financial
statements included in Item 8 herein.

In May 2003, the FASB issued SFAS 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. SFAS
150 establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities
and equity. SFAS 150 applies specifically to a number of financial
instruments that companies have historically presented within their
financial statements either as equity or between the liabilities
section and the equity section, rather than as liabilities. SFAS 150 is
effective for financial instruments entered into or modified after May
31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. Implementation of SFAS
150 did not have a material impact on the Company's consolidated
financial statements.

In April 2003, the FASB issued SFAS 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS 149 clarifies the
accounting for derivatives, amending the previously issued SFAS 133,
Accounting for Derivative Instruments and Hedging Activities. SFAS 149
clarifies under what circumstances a contract with an initial net
investment meets the characteristics of a derivative, amends the
definition of any underlying contract, and clarifies when a derivative
contains a financing components in order to increase the comparability
of accounting practices under SFAS 133. SFAS 149 is effective for
contracts entered into or modified after June 30, 2003. The adoption of
SFAS 149 did not have a material impact on the Company's consolidated
financial statements.

In December 2003, the FASB issued FIN 46(R), Consolidation of Variable
Interest Entities. This interpretation of Accounting Research Bulletin
No. 51, Consolidated Financial Statements, replaced FIN 46 and
addresses consolidation of variable interest entities. FIN 46(R)
requires certain variable interest entities to be consolidated by the
primary beneficiary if the entity does not effectively disperse risks
among the parties involved. The provisions of FIN 46(R) effective
immediately for those variable interest entities created after January
31, 2003. The provisions are effective for financial statements issued
for the first interim or annual period ending after December 15, 2003
for those variable interests held prior to February 1, 2003. The
adoption of this Interpretation did not have any effect on the
Company's financial position or results of operations.

In December 2002, the FASB issued SFAS 148, Accounting for Stock-Based
Compensation - Transition and Disclosure, an Amendment of SFAS No. 123.
SFAS 148 amends SFAS 123, Accounting for Stock-Based Compensation, to
provide alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee
compensation. In addition, SFAS 148 amends the disclosure requirements
of SFAS 123 to require more prominent and more frequent disclosures in
the financial statements regarding the effects of stock-based
compensation. SFAS 148 is effective for financial statements for fiscal
years ending after December 15, 2002, including certain amendments to
required disclosures related to stock-based compensation included in
condensed financial statements for interim periods beginning after
December 15, 2002. Adoption of SFAS 148 did not have a material impact
on the Company's financial position, results of operations or cash
flows. For further discussion of the Company's stock-based compensation
arrangements, see Note 1 of the Company's consolidated financial
statements included in Item 8 herein.

In November 2002, the FASB issued FASB Interpretation No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others (FIN 45). FIN
45 requires the fair-value measurement and recognition of a liability
for the issuance of certain guarantees issued or modified on January 1,
2003 or after. Implementation of the fair-value measurement and
recognition provisions of FIN 45 did not have a material impact on the
Company's financial position or results of operations.

In June 2002, the FASB issued SFAS 146, Accounting for Exit or Disposal
Activities. SFAS 146 requires that a liability for a cost associated
with an exit or disposal activity be recognized when the liability is
incurred. The provisions of SFAS 146 are effective for exit or disposal
activities that were initiated after December 31, 2002 and did not have
a material impact on the Company's financial position or results of
operations.

Quantitative and Qualitative Disclosures about Market Risk

In the ordinary course of business, the Company is exposed to various
market risk factors, including changes in general economic conditions,
competition and raw materials pricing and availability. In addition,
the Company is exposed to market risk, primarily related to its
long-term debt. To manage interest rate risk, the Company uses both
fixed and variable interest rate debt. The Company also entered into
interest rate swap agreements that converted a portion of its variable
rate debt to fixed rate debt. At December 31, 2004, the Company had $20
million of revolving credit borrowings that was fixed rate debt
pursuant to these agreements.

The following table summarizes the principal cash flows and related
interest rates of the Company's long-term debt at December 31, 2004 by
expected maturity dates. The weighted average interest rates are based
on the actual rates that existed at December 31, 2004. The variable
rate debt consists primarily of the credit facility, of which $157.6
million is outstanding at December 31, 2004. A hypothetical 1% increase
or decrease in interest rates would have changed the 2004 interest
expense by approximately $1.8 million.

(in thousands)
______________

2005 2006 2007 2008 2009 Thereafter Total
____ ____ ____ ____ ____ __________ _____

Long-term debt (fixed) $14,292 $14,293 $ 33,459 $33,459 - $55,000 $150,503
Weighted average interest rate 6.33% 6.46% 6.64% 5.75% 5.75% 5.75%
Long-term debt (variable) $ 400 $ 200 $157,836 $ 100 $ 100 $ 900 $159,536
Weighted average interest rate 4.57% 4.58% 4.58% 3.23% 3.23% 3.23%
Interest rate swaps (notional amounts) $20,000
Interest pay rate 7.46%
Interest receive rate 2.41%

The fair value of the Company's debt was $319.0 million at December 31, 2004.

Safe Harbor Statement

The Company wishes to take advantage of the Safe Harbor provisions
included in the Private Securities Litigation Reform Act of 1995 (the
"Act"). Certain information set forth herein contains forward-looking
statements that are based on current expectations, estimates, forecasts
and projections about the Company's business, and management's beliefs
about future operations, results and financial position. These
statements are not guarantees of future performance and involve certain
risks, uncertainties and assumptions. Statements by the Company, other
than historical information, constitute "forward looking statements"
within the meaning of the Act and may be subject to a number of risk
factors. Factors that could affect these statements include, but are
not limited to, the following: the impact of changing steel prices on
the Company's results of operations; changing demand for the Company's
products and services; and changes in interest or tax rates. In
addition, such forward-looking statements could also be affected by
general industry and market conditions, as well as general economic and
political conditions.