##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from ___to___
 Commission file number 1-7537
 
 EARLE M. JORGENSEN COMPANY
 (Exact name of registrant as specified in its charter)
 Delaware
    
    65-1269024(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 
 
 Securities registered pursuant to Section 12(b) of the Act:
None
 
 Securities registered pursuant to Section 12(g) of the Act:
None
 
 o þ
 o þ
 þ o
 þ
  o o þ
 o þ
 
 DOCUMENTS
INCORPORATED BY REFERENCENone




---



##### Table of Contents



FORWARD-LOOKING STATEMENTS
   
    
    We service industries that are highly cyclical, and downturns in our customers industries could reduce our revenue and
profitability.
    
    If we were to lose any primary suppliers or otherwise be unable to obtain sufficient amounts of necessary metals on a
timely basis, we may not be able to meet our customers needs and may suffer reduced sales.
    
    The success of our business is affected by general economic conditions and, accordingly, our business was adversely
impacted by the economic slowdown or recession in 2003, 2002 and 2001. Similar changes in economic conditions could
occur in future periods.
    
    Our future operating results depend on a number of factors beyond our control, such as the prices for and the
availability of metals, which could cause our results to fluctuate significantly over time. During periods of low
customer demand it could be more difficult for us to pass through price increases to our customers, which could reduce
our gross profit and net income.
    
    Changes in demand for the products that we sell can cause significant fluctuations in both availability and cost of the
products. A significant or rapid decline in costs from current levels could have a severe negative impact on our gross
profit.
    
    Foreign currency exchange rates could change, which could affect the price we pay for certain metals and the results of
our foreign operations.
    
    There are risks and uncertainties involved in adopting or implementing new processes or new technologies, such as the
improvements of our information management system and the improvements at our Chicago facility which included
expanding and upgrading our Kasto automated inventory storage and
retrieval system.
    
    Our business is very competitive and increased competition could reduce our gross profit margins and net income.
    
    Our substantial indebtedness could impair our financial condition and reduce the funds available for other purposes,
and any failure to comply with the covenants contained in our debt instruments could result in an event of default that
could adversely affect our operating results.
    
    As a decentralized business, we depend on both senior management and our operating employees; if we are unable to
attract and retain these individuals, our results of operations may decline.
    
    We are subject to various environmental and other governmental regulations which may require us to expend significant
capital and incur substantial costs.
    
    We may discover internal control deficiencies in our decentralized operations, which may result in a negative impact on
our results of operations.
    
    Tax audits could result in additional taxes, plus interest and penalties being assessed against us.
    
    Other economic, business, competitive or regulatory factors may affect our businesses generally as described in our
filings with the SEC.
   i




---



##### 



INDEX
 PagePART IItem 1.
    
    Business
    
    
    1Industry Overview and Competition
    
    
    1Competitive Strengths
    
    
    2Operating Growth and Strategy
    
    
    2Products and Suppliers
    
    
    3Customers and Markets
    
    
    4Competition
    
    
    5Information Management Systems
    
    
    5Intellectual Property and Licenses
    
    
    5Employees
    
    
    5Foreign Operations
    
    
    6Health and Safety Regulations
    
    
    6Environmental Matters
    
    
    6Available Information
    
    
    7Item 1A.
    
    Risk Factors
    
    
    7Item 1B.
    
    Unresolved Staff Comments
    
    
    11Item 2.
    
    Properties
    
    
    11Item 3.
    
    Legal Proceedings
    
    
    12Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    13PART IIItem 5.
    

Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities
    
    
    14Item 6.
    
    Selected Financial Data
    
    
    14Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 8.
    
    Financial Statements and Supplementary Data
    
    
    25Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    25Item 9A.
    
    Controls and Procedures
    
    
    25Item 9B.
    
    Other Information
    
    
    25Item 10.
    
    Directors and Executive Officers of the Registrant
    
    
    25Item 11.
    
    Executive Compensation
    
    
    25Item 12.
    

Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    25Item 13.
    
    Certain Relationships and Related Transactions
    
    
    25PART IIIItem 14.
    
    Principal Accountant Fees and Services
    
    
    26PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    27SIGNATURES
    
    
    
    
    28Exhibit 12.1Exhibit 21.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
  ii




---



##### Table of Contents



PART I
 
 Item 1. Business
       
 Industry Overview and Competition
  1




---



##### Table of Contents



Competitive Strengths
  Excellent Product Selection and Service.
 Excellent Supplier Relationships.
 Broad Network of Strategically Located Facilities and Diverse Customer Base. ,
 Focus on Information Management Systems.
 Warehouse Automation.
 
 Operating and Growth Strategy
  Focus on Core Products.
 Focus on Timely and Reliable Delivery and Value-Added Services.
 2




---



##### Table of Contents



Expand Satellite Operations.
 Maintain Technology Leadership.
 
 Products and Suppliers
   3




---



##### Table of Contents



Year Ended March 31,2004
    
    2005
    
    2006Bars:Carbon and Alloy
    
    
    37.4
    %
    
    
    40.7
    %
    
    
    39.4
    %Stainless
    
    
    11.7
    
    
    
    11.0
    
    
    
    11.6Aluminum
    
    
    8.1
    
    
    
    7.0
    
    
    
    7.5Brass
    
    
    1.4
    
    
    
    1.4
    
    
    
    1.6Total
    
    
    58.6
    
    
    
    60.1
    
    
    
    60.1Tubing:Carbon and Alloy
    
    
    23.6
    
    
    
    23.2
    
    
    
    23.0Stainless
    
    
    2.8
    
    
    
    2.2
    
    
    
    2.0Aluminum
    
    
    2.7
    
    
    
    2.1
    
    
    
    1.9Total
    
    
    29.1
    
    
    
    27.5
    
    
    
    26.9Plate:Carbon and Alloy
    
    
    3.2
    
    
    
    3.6
    
    
    
    3.4Stainless
    
    
    1.2
    
    
    
    1.0
    
    
    
    1.1Aluminum
    
    
    2.0
    
    
    
    2.1
    
    
    
    1.7Total
    
    
    6.4
    
    
    
    6.7
    
    
    
    6.2Other
    
    
    5.9
    
    
    
    5.7
    
    
    
    6.8100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
   
 Customers and Markets
  4




---



##### Table of Contents



Year Ended March 31,2004
    
    2005
    
    2006General Machining
    
    
    28.1
    %
    
    
    29.3
    %
    
    
    29.6
    %Industrial Equipment
    
    
    7.7
    
    
    
    8.1
    
    
    
    8.4Transportation
    
    
    7.5
    
    
    
    6.7
    
    
    
    6.1Oil, Gas & Energy
    
    
    5.8
    
    
    
    4.8
    
    
    
    6.0Metals Service Centers & Wholesale Trade
    
    
    6.1
    
    
    
    6.3
    
    
    
    5.9Fluid Power
    
    
    6.0
    
    
    
    6.1
    
    
    
    5.9Fabricated Metal
    
    
    5.7
    
    
    
    6.0
    
    
    
    5.2Construction/Farm Equipment
    
    
    5.1
    
    
    
    5.5
    
    
    
    5.3Screw Machine Products
    
    
    5.0
    
    
    
    5.3
    
    
    
    4.8Power Transmission Equipment
    
    
    3.7
    
    
    
    3.8
    
    
    
    3.8All Other Industries
    
    
    19.3
    
    
    
    18.1
    
    
    
    19.0Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
  
 Competition
  
 Information Management Systems
  
 Intellectual Property and Licenses
  
 5




---



##### Table of Contents



Employees
  
 Foreign Operations
  
 Health and Safety Regulations
  
 Environmental Matters
   Forge (Seattle/Kent, WA).
    Clinton Drive (Houston, TX).
 6




---



##### Table of Contents




    
    filed a voluntary clean-up application with the Texas Commission for
Environmental Quality (TCEQ), that commits us to clean-up the soil
and groundwater at the site for the benzene and chlorinated solvents
to acceptable levels in accordance with TCEQ requirements;
    
    funded an escrow account with $0.5 million to be available to complete
required clean-up and subsequent monitoring activities; and
    
    indemnified the buyer for pre-existing environmental issues on the
site based on applicable TCEQ industrial/commercial standards.
  
 Available Information
   
 Item 1A. Risk Factors
 You should carefully consider the risks described below. If any of the following circumstances
described in these risk factors occurs, our business, financial condition or results of operations
could be materially adversely affected.
 Risks Relating to Our Business
 The prices we pay for metals may fluctuate due to a number of factors beyond our control, which
could adversely affect our operating results if we cannot pass on higher metal prices to our
customers.
   We operate in an industry that is subject to cyclical fluctuations and any downturn in general
economic conditions or our customers industries could negatively impact our revenues, gross profit
and net income.
  7




---



##### Table of Contents



The price of metals is subject to fluctuations in the supply and demand for metals worldwide and
changes in the worldwide balance of supply and demand could negatively impact our revenues, gross
profit and net income.
  We compete with a large number of companies in the metals service center industry, and if we are
unable to compete effectively, our revenues, gross profit and net income may decline.
  If our customers, which are primarily North American manufacturing and industrial companies,
relocate operations or outsource functions overseas, we would lose their business.
  If we were to lose any of our primary suppliers or otherwise be unable to obtain sufficient amounts
of necessary metals on a timely basis, we may not be able to meet our customers needs and may
suffer reduced sales.
  8




---



##### Table of Contents



Our business may be adversely affected by our on-time or free delivery guarantee if we are unable
to deliver our products on a timely basis.
  As a decentralized business, we depend on both senior management and our key operating employees;
if we are unable to attract and retain these individuals, our ability to operate and grow our
business may be adversely affected.
  Damage to our computer infrastructure and software systems could harm our business.
   Our business could be adversely affected by a disruption to our Chicago facilitys operations.
  
    
    damage to, or inoperability of, its automated warehouse system;
    
    a hardware or software error, failure or crash;
    
    a power or telecommunications failure; or
    
    fire, flood or other natural disaster.
  If we do not successfully implement our satellite operations growth strategy, our ability to grow
our business could be impaired.
 9




---



##### Table of Contents



Labor disruptions could adversely affect our operations.
  We are subject to various environmental and employee safety and health regulations, which could
subject us to significant liabilities and compliance expenditures.
    Our operating results have fluctuated, and are expected to continue fluctuating, depending on the
season, and such fluctuations may adversely affect our revenues, gross profit and net income.
  Risks Relating to Our Indebtedness
 We may not be able to generate sufficient cash flow to meet our debt service obligations.
 3 4
 10




---



##### Table of Contents



3 4 3 4
 
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
 3 4
  Owned(O)
    
    SizeCountry/City/State

    

Leased (L)
    

(Sq. Ft.)United States:Birmingham, Alabama (a)
    
    
    O
    
    
    
    80,000Phoenix, Arizona
    
    
    O
    
    
    
    72,200Little Rock, Arkansas
    
    
    L
    
    
    
    27,700Hayward, California
    
    
    O
    
    
    
    91,000Los Angeles, California (a distribution center and a plate processing center)(b)
    
    
    O
    
    
    
    319,400Denver, Colorado
    
    
    L
    
    
    
    77,400Hartford, Connecticut
    
    
    L
    
    
    
    33,400Orlando, Florida (a)
    
    
    L
    
    
    
    29,700Chicago, Illinois(c)
    
    
    O
    
    
    
    603,700Indianapolis, Indiana
    
    
    O
    
    
    
    225,000Eldridge, Iowa
    
    
    L
    
    
    
    140,500Boston, Massachusetts
    
    
    O
    
    
    
    63,500Detroit, Michigan (a)
    
    
    L
    
    
    
    28,700Minneapolis, Minnesota
    
    
    O
    
    
    
    169,200Kansas City, Missouri
    
    
    L
    
    
    
    147,000St. Louis, Missouri
    
    
    L
    
    
    
    108,100Rochester, New York (a)
    
    
    L
    
    
    
    31,500Charlotte, North Carolina
    
    
    O
    
    
    
    175,300Cincinnati, Ohio
    
    
    L
    
    
    
    125,200Cleveland, Ohio
    
    
    O
    
    
    
    200,200Cleveland, Ohio
    
    
    O
    
    
    
    137,800Tulsa, Oklahoma (a distribution center and tubular honing center)
    
    
    O
    
    
    
    148,500Portland, Oregon
    
    
    L
    
    
    
    33,800Philadelphia, Pennsylvania
    
    
    L
    
    
    
    27,200Wrightsville, Pennsylvania
    
    
    L
    
    
    
    124,500Memphis, Tennessee
    
    
    L
    
    
    
    56,500
 11




---



##### Table of Contents



Owned(O)
    
    SizeCountry/City/State

    

Leased
(L)
    
    (Sq. Ft.)Dallas, Texas
    
    
    O
    
    
    
    132,800Houston, Texas
    
    
    O
    
    
    
    95,200Houston, Texas  Trepanning
    
    
    L
    
    
    
    16,500Lafayette, LA (a)
    
    
    O
    
    
    
    65,000Salt Lake City, Utah (a)
    
    
    L
    
    
    
    25,400Seattle, Washington
    
    
    L
    
    
    
    83,600Spokane, Washington (a)
    
    
    L
    
    
    
    15,200Canada:Edmonton, Alberta
    
    
    L
    
    
    
    25,800North Bay, Ontario (a)
    
    
    L
    
    
    
    10,000Toronto, Ontario
    
    
    L
    
    
    
    91,790Quebec City, Quebec (a)
    
    
    L
    
    
    
    20,000Montreal, Quebec
    
    
    L
    
    
    
    82,700
 
 (a)
    
    Satellite operations.(b)
    
    Corporate headquarters is located at this facility.(c)
    
    Our Chicago facility supplies products to all of our other service centers. 
 Item 3. Legal Proceedings
 U.S. Department of Labor.
   12




---



##### Table of Contents



Champagne Metals
 Other.
 
 Item 4. Submission of Matters to a Vote of Security Holders
  13




---



##### Table of Contents



PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 Market Price and Holders.
  FISCAL
YEAR ENDED MARCH 31, 2006
    
    HIGH
    
    LOWFirst Quarter
    
    $
    9.20
    
    
    $
    6.70Second Quarter
    
    
    10.69
    
    
    
    8.05Third Quarter
    
    
    10.11
    
    
    
    8.24Fourth Quarter
    
    
    15.15
    
    
    
    9.80
 Dividends.
 3 4
 
 Item 6. Selected Financial Data
  14




---



##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
    Recent Developments
  15




---



##### Table of Contents



Revenues
  Cost of Sales
  Gross Profit
  Expenses
  Company Owned Life Insurance
  Segment
  Critical Accounting Policies
  16




---



##### Table of Contents



Revenue Recognition
  Allowances for Doubtful Accounts
  Inventory
  Inventory Reserves
  Accounting for Stock Options.
 Accounting for Stock Issued to Employees
 Accounting for Stock-Based
Compensation, Accounting for Stock-Based
CompensationTransition and DisclosureAn Amendment of FASB Statement No. 123.
 Pension and Other Post-Retirement Benefits
  Insurance Reserves
  17




---



##### Table of Contents



Incentive Compensation
  Contingencies
  Income Taxes
 Accounting for Income Taxes,
  Results of Operation
  Year Ended March 31,2005
    
    %
    
    2006
    
    %(Dollars in thousands)Statement of Operations Data:Revenues
    
    $
    1,608,890
    
    
    
    100.0
    %
    
    $
    1,789,776
    
    
    
    100.0
    %Gross profit
    
    
    424,019
    
    
    
    26.4
    
    
    
    460,924
    
    
    
    25.8Operating expenses
    
    
    289,318
    
    
    
    18.0
    
    
    
    282,292
    
    
    
    15.8Operating profit
    
    
    134,701
    
    
    
    8.4
    
    
    
    178,632
    
    
    
    10.0Net interest expense
    
    
    75,760
    
    
    
    4.7
    
    
    
    56,365
    
    
    
    3.1Net income
    
    
    97,503
    
    
    
    6.1
    
    
    
    76,300
    
    
    
    4.3
 Results of Operations  Year ended March 31, 2006 compared to year ended March 31, 2005
 Revenues.
 18




---



##### Table of Contents



Gross Profit.
 Expenses. , .
     Net Interest Expense.
   19




---



##### Table of Contents



Income Taxes.
 Liquidity and Capital Resources
 Working Capital.
  Capital Expenditures.
 Sources of Liquidity.
 Canadian Subsidiary Liquidity
 COLI Policies.
 Senior Secured Notes.
 3 4
 20




---



##### Table of Contents



Future Needs. 3 4
 3 4 3 4
 Contractual Obligations
  Payments Due By PeriodLess than One
    
    One to Three
    
    Three to Five
    
    More Than FiveTotal
    
    Year
    
    Years
    
    Years
    
    YearsLong-Term Debt
Obligations (a)
    
    $
    252,870
    
    
    $
    715
    
    
    $
    1,430
    
    
    $
    725
    
    
    $
    250,000Capital Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease
Obligations (b)
    
    
    99,340
    
    
    
    15,799
    
    
    
    24,292
    
    
    
    16,932
    
    
    
    42,317Purchase Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Long-Term
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Liabilities
Reflected on theBalance Sheet underGAAP(c)(d)
    
    
    23,578
    
    
    
    6,626
    
    
    
    8,379
    
    
    
    2,450
    
    
    
    6,123Total
    
    $
    375,788
    
    
    $
    23,140
    
    
    $
    34,101
    
    
    $
    20,107
    
    
    $
    298,440
 
 (a)
    
    Amounts include principal payments only. See Note 5 of the
Consolidated Financial Statements for information regarding interest
rates and payment dates.(b)
    
    Excludes cumulative sublease income of $6,355, consisting of $828;
$1,685; $1,737 and $2,105 for the above periods, respectively.(c)
    
    Includes estimated annual payments based on prior years trended
amounts for post-retirement benefits and estimated annual payments of
$1,000 over five years to meet ERISA minimum pension funding
requirements beginning in fiscal 2007.(d)
    
    Includes total special contribution to our stock bonus plan of
$10,955, consisting of $5,301, and $5,654 for the above periods,
respectively. 21




---



##### Table of Contents



Off-Balance Sheet Arrangements
 3 4
     Foreign Exchange Exposure
  Inflation
  Recent Accounting Developments
  22




---



##### Table of Contents



Accounting for Stock-Based Compensation Accounting for Stock-Based Compensation-Transition and Disclosure-An Amendment of FASB Statement
No123.
 Share-Based Payment
 Inventory Costs
 Accounting Changes and Error Corrections Accounting Changes Reporting Accounting Changes in Interim Financial Statements
  23




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
   24




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
   
 Item 9B. Other Information
  
 Item 10. Directors and Executive Officers of the Registrant
  
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
  
 Item 13. Certain Relationships and Related Transactions
  25




---



##### Table of Contents



PART III
 
 Item 14. Principal Accountant Fees and Services.
  Audit Fees2006
    
    $
    1,215,0002005
    
    $
    716,000Audit-Related Fees2006
    
    $
    297,0002005
    
    $
    57,000Tax Fees2006
    
    $
    337,0002005
    
    $
    181,000All Other Fees2006
    
    $
    285,0002005
    
    $
    430,000
  26




---



##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 Financial Statements.
  Financial Statement Schedules.
   Exhibits.
  27




---



##### Table of Contents



SIGNATURES
 th
 EARLE M. JORGENSEN COMPANYBy
    
    
    
    /s/ William S. JohnsonWilliam S. JohnsonVice President and Chief Financial Officer and Secretary(Principal Financial and Accounting Officer)
  Signatures
    
    Title
    
    Date/s/ R. Neil McCaffery
    
    Chief Executive Officer, President (Principal Executive Officer) and Director
    
    June 28, 2006R. Neil McCaffery/s/ William S. Johnson
    
    Vice President and Chief Financial Officer (Principal Financial and Accounting
    
    June 28, 2006William S. Johnson
    
    Officer), Secretary and Director/s/ David H. Hannah
    
    Chairman of the Board and Director
    
    June 28, 2006David H. Hannah/s/ Karla Lewis
    
    Director
    
    June 28, 2006Karla Lewis/s/ Gregg J. Mollins
    
    Director
    
    June 28, 2006Gregg J. Mollins
 28




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description2.1
    
    Agreement and Plan of Merger and Reorganization, dated as of December 17,
2004, amended as of January 28, 2005, and further amended as of March 3, 2005,
by and among Earle M. Jorgensen Company (the Company), Earle M. Jorgensen
Holding Company, Inc. (Holding), and EMJ Metals LLC. Incorporated by reference
to Annex A to the Companys Amendment No. 5 to Registration Statement on Form
S-4 as filed on March 11, 2005 (Registration No. 333-111882) (the Companys S-4
Amendment No. 5).2.3
    
    First Amendment to Agreement and Plan of Merger and Reorganization, dated
as of January 28, 2005, by and among the Company, Holding and EMJ Metals LLC.
Incorporated by reference to Exhibit 10.24 to the Companys Quarterly Report on
Form 10-Q for the fiscal quarter ended December 31, 2004 (the Companys
December 31, 2004 Form 10-Q).2.4
    
    Agreement and Plan of Merger dated January 17, 2006 by and among Reliance Steel
& Aluminum Co., EMJ and the Company. Incorporated by reference to Exhibit 2.1
to that Form 8-K filed January 19, 2006.2.5
    
    Second Amendment to Agreement and Plan of Merger and Reorganization, dated
as of March 3, 2005, by and among the Company, Holding and EMJ Metals LLC.
Incorporated by reference to Exhibit 2.4 to the Companys Amendment No. 4 to
Registration Statement on Form S-4 as filed on March 8, 2005 (Registration No.
333-111882) (the Companys S-4 Amendment No. 4).4.1
    
    Form of Indenture with respect to the Companys 9 3/4%
Senior Secured Notes due 2012. Incorporated by reference to Exhibit 4.17 to the
Companys 2002 Registration Statement.4.2
    
    Form of certificate for EMJs 9 3/4% Senior Secured
Notes, Series A, $248,435,000. Incorporated by reference to Exhibit 4.18(a) to
the Companys 2002 Registration Statement.4.3
    
    Form of certificate for EMJs 9 3/4% Senior Secured
Notes, Series A, $1,565,000. Incorporated by reference to Exhibit 4.18(b) to the
Companys 2002 Registration Statement.4.4
    
    Purchase Agreement, dated as of May 17, 2002, by and among the Company,
Credit Suisse First Boston Corporation, Deutsche Bank Securities, Inc. and J.P.
Morgan Securities, Inc., for an aggregate of $250,000,000 in principal amount of
EMJs 9 3/4% Senior Notes due 2012. Incorporated by
reference to Exhibit 4.19 of the Companys 2002 Registration Statement.4.5
    
    Security Agreement, dated as of May 22, 2002, by and among the Company and
other Grantors signatory thereto and The Bank of New York, as trustee.
Incorporated by reference to Exhibit 4.22 to the Companys 2002 Registration
Statement.4.6
    
    Intercreditor Amendment, dated as of May 22, 2002, by and among The Bank of
New York, as Trustee under the Indenture with respect to EMJs 9
3/4% Senior Notes, and Deutsche Bank Trust Company Americas,
as agent under the Credit Agreement. Incorporated by reference to Exhibit 4.23
to the Companys 2002 Registration Statement.4.7
    
    Form of Borrower Reaffirmation and Amendment to Security Agreement, dated
as of March 3, 2005, by and among the Company, Holding, each of those financial
institutions listed from time to time on Schedule I to the Third Amended and
Restated Credit Agreement, and Deutsche Bank Trust Company Americas, acting as
agent. Incorporated by reference to Exhibit 4.2 to the Companys Current Report
on Form 8-K as filed on March 7, 2005.4.8
    
    First Supplemental Indenture, by
and among the Company, RSAC Acquisition Corp.
and The Bank of New York Trust Company, N.A. Incorporated by reference to
Exhibit 4.1 of the Form 8-K filed April 7, 2006.4.9
    
    The Assignment and Assumption Agreement, by and among Reliance Steel & Aluminum
Co., RSAC Management Corp. and Deutsche Bank Trust Company Americas. Incorporated
by reference to Exhibit 4.3 of the Form 8-K filed April 7, 200610.1
    
    Holdings ESOP Trust Agreement. Incorporated by reference to Exhibit 10.32
to Holdings Annual Report on Form 10-K for the fiscal year ended March 31,
1991.10.2
    
    Lease and Agreement, dated as of August 1, 1991, by and between Advantage
Corporate Income Fund L.P. and the Company, relating to the sale and lease-back
of Kilsbys Kansas City, Missouri property. Incorporated by reference to Exhibit
10.30 to Amendment No. 3.10.3
    
    Industrial Building Lease, dated as of October 16, 1991, by and between Ira
Houston Jones and Helen Mansfield Jones, Roderick M. Jones and Cherilyn Jones,
Roger G. Jones and Norma Jean Jones, Robert M. Jones and Olga F. Jones and the
Company, relating to the sale and lease-back of the Alameda Street property in
Lynwood, California. Incorporated by reference to Exhibit 10.32 to Amendment No.
3.10.4
    
    Stock Purchase Agreement, dated as of June 30, 1992, by and among Forge
Acquisition Corporation, The Jorgensen Forge Corporation and the Company,
relating to the sale of the Companys Forge division. Incorporated by reference
to Exhibit 10.35 to Amendment No. 3.10.5
    
    Form of Management Agreement between the Company and Holding. Incorporated
by reference to Exhibit 10.46 to Amendment No. 2 filed on February 24, 1993 to
the Companys 1993 Registration Statement.10.6
    
    Form of Tax Allocation Agreement between the Company and Holding.
Incorporated by reference to Exhibit 10.47 to Amendment No. 3.
 29




---



##### Table of Contents



ExhibitNumber
    
    Description10.7
    
    Holding Stock Option Plan effective January 30, 1997. Incorporated by
reference to Exhibit 10.57 to the Companys Annual Report on Form 10-K for the
fiscal year ended March 31, 1997 (the Companys 1997 Form 10-K).10.8
    
    Form of Holding Incentive and Non-Qualified Stock Option Agreement.
Incorporated by reference to Exhibit 10.58 to the Companys 1997 Form 10-K.10.9
    
    Earle M. Jorgensen Company Management Incentive Compensation Plan.
Incorporated by reference to Exhibit 10.62 to the Companys Quarterly Report on
Form 10-Q for the fiscal quarter ended December 31, 1997.10.10
    
    Earle M. Jorgensen Employee Stock Ownership Plan, as amended and restated
effective as of April 1, 2001. Incorporated by reference to Exhibit 10.57 to the
Companys Quarterly Report on Form 10-Q for the fiscal quarter ended December
31, 2002 (the Companys December 31, 2002 Form 10-Q).10.11
    
    First Amendment to the Earle M. Jorgensen Employee Stock Ownership Plan (as
amended and restated effective as of April 1, 2001), effective as of January 15,
2002. Incorporated by reference to Exhibit 10.58 to the Companys December 31,
2002 Form 10-Q.10.12
    
    Second Amendment to the Earle M. Jorgensen Employee Stock Ownership Plan
(as amended and restated effective as of April 1, 2001), effective as of April
1, 2001. Incorporated by reference to Exhibit 10.59 to the Companys December
31, 2002 Form 10-Q.10.13
    
    Third Amendment to the Earle M. Jorgensen Employee Stock Ownership Plan (as
amended and restated effective as of April 1, 2001), effective as of January 1,
2002. Incorporated by reference to Exhibit 10.60 to the Companys December 31,
2002 Form 10-Q.10.14
    
    Fourth Amendment to the Earle M. Jorgensen Employee Stock Ownership Plan
(as amended and restated effective as of April 1, 2001), effective as of April
1, 2003. Incorporated by reference to Exhibit 10.21 to the Companys 2003 Form
10-K.10.15
    
    Fifth Amendment to the Earle M. Jorgensen Employee Stock Ownership Plan (as
amended and restated effective as of April 1, 2001), effective as of April 1,
2004. Incorporated by reference to Exhibit 10.23 to the Companys Quarterly
Report on Form 10-Q for the fiscal quarter ended September 29, 2004.10.16
    
    Lease and Agreement, dated as of September 1, 1991, by and between
Advantage Corporate Income Fund L.P. and the Company, relating to the sale and
lease-back of the Cincinnati, Ohio property. Incorporated by reference to
Exhibit 10.31 to the Companys 1993 Registration Statement.10.17
    
    Form of Indemnification Agreement of the Company. Incorporated by reference
to Exhibit 3.3 to Amendment No. 1 filed on April 8, 2004 to this Registration
Statement on Form S-4 as filed on January 13, 2004 (Registration No. 33-111882)
(the Companys 2004 Registration Statement).10.18
    
    Earle M. Jorgensen Company 2004 Stock Incentive Plan. Incorporated by
reference to Exhibit 10.27 to the Companys Amendment No. 2.10.19
    
    Form of Incentive Stock Option Agreement under the Earle M. Jorgensen
Company 2004 Stock Incentive Plan. Incorporated by reference to Exhibit 10.28 to
the Companys Amendment No. 2.10.20
    
    Form of Non-Qualified Stock Option Agreement under the Earle M. Jorgensen
Company 2004 Stock Incentive Plan. Incorporated by reference to Exhibit 10.29 to
the Companys Amendment No. 2.10.21
    
    Form of Restricted Stock Agreement under the Earle M. Jorgensen Company
2004 Stock Incentive Plan. Incorporated by reference to Exhibit 10.30 to the
Companys Amendment No. 2.10.22
    
    Sixth Amendment to the Earle M. Jorgensen Employee Stock Ownership Plan (as
amended and restated effective as of April 1, 2001, as renamed Earle M.
Jorgensen Stock Bonus Plan), effective as of April 1, 2004. Incorporated by
reference to Exhibit 10.35 to the Companys Amendment No. 2.10.23
    
    Seventh Amendment to the Earle M. Jorgensen Stock Bonus Plan (as amended
and restated effective as of April 1, 2001). Incorporated by reference to
Exhibit 10.36 to the Companys Amendment No. 2.10.24
    
    Supplemental SBP of Earle M. Jorgensen Holding Company, Inc., effective as
of March 31, 2006. Incorporated by reference to Exhibit 10.37 to the Companys
Amendment No. 2.10.25
    
    Amended Consent Order and Release, dated as of December 12, 2004, by and
among the Company, Holding, the Earle M. Jorgensen Employee Stock Ownership
Plan, the Benefits Committee of Holdings Board of Directors, and the United
States Department of Labor, as filed on January 3, 2005 with the United States
District Court for the Central District of California. Incorporated by reference
to Exhibit 10.38 to the Companys Amendment No. 2.10.26
    
    Amendment to the Earle M. Jorgensen Holding Company, Inc. Option Plan,
effective as of December 16, 2004. Incorporated by reference to Exhibit 10.40 to
the Companys Amendment No. 2.10.27
    
    Adjustment to Outstanding Stock Option Letter, dated as of December 17,
2004, by and between the Company and Maurice S. Nelson, Jr. Incorporated by
reference to Exhibit 10.41 to the Companys Amendment No. 2.10.28
    
    Form of Adjustment to Outstanding Stock Options Letter from the Company to
Option Holders of Holding. Incorporated by reference to Exhibit 10.42 to
Amendment No. 2.10.29
    
    Form of Transfer Restriction Agreement. Incorporated by reference to
Exhibit 10.43 to the Companys Amendment No. 2.10.30
    
    Form of Disposition of Stock Options Letter from the Company to Option
Holders of Holdings. Incorporated by reference to Exhibit 10.44 to Amendment No.
2.
 30




---



##### Table of Contents



ExhibitNumber
    
    Description10.31
    
    Earle M. Jorgensen Company IPO Cash Bonus Plan, dated as of January 28,
2005. Incorporated by reference to Exhibit 10.23 to the Companys December 31,
2004 Form 10-Q.10.32
    
    Eighth Amendment to the Earle M. Jorgensen Stock Bonus Plan (as amended and
restated effective as of April 1, 2001), effective as of March 28, 2005.
Incorporated by reference to Exhibit 4.24 to the Companys Registration
Statement on Form S-8 as filed on June 27, 2005 (Registration No. 333-126149)
(the Companys S-8).10.33
    
    Stock Bonus Plan Assumption Agreement, dated as of April 20, 2005, by and
between the Company and Holding. Incorporated by reference to Exhibit 4.27 to
the Companys S-8.10.34
    
    The Credit Agreement, dated April 3, 2006, by and between the Company and
Reliance and RSAC Management Corp.. Incorporated by reference to Exhibit 4.2 to
the Companys 8-K as filed on April 7, 2006.12.1*
    
    Statement of Computation of Ratio of Earnings to Fixed Charges.21.1*
    
    Subsidiaries of the Company.23.1*
    
    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.31.1*
    
    Certification of Chief Executive Officer pursuant to Rule
13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2*
    
    Certification of Chief Financial Officer pursuant to Rule
13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.32.1*
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Included in this filing. 31




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
 Report of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets at March 31, 2005 and 2006
    
    
    F-2Consolidated Statements of Operations for the years ended March 31, 2004, 2005 and 2006
    
    
    F-3Consolidated Statements of Stockholders Equity for the years ended March 31, 2004, 2005 and 2006
    
    
    F-4Consolidated Statements of Cash Flows for the years ended March 31, 2004, 2005 and 2006
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-9




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      /s/ Ernst & Young LLPErnst & Young LLP
   F-1




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 
 CONSOLIDATED BALANCE SHEETS
 (dollars in thousands, except share and per share data)
 March 31,2005
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    19,994
    
    
    $
    60,402Accounts receivable, less allowance for doubtful accounts
    
    
    177,298
    
    
    
    193,622Inventories
    
    
    252,222
    
    
    
    252,364Deferred income taxes
    
    
    30,800
    
    
    
    Other current assets
    
    
    10,989
    
    
    
    10,188Total current assets
    
    
    491,303
    
    
    
    516,576Net property, plant and equipment, at cost
    
    
    118,271
    
    
    
    139,122Cash surrender value of life insurance policies, net
    
    
    38,639
    
    
    
    42,006Debt issue costs, net of accumulated amortization
    
    
    7,158
    
    
    
    4,684Deferred income taxes
    
    
    
    
    
    
    9,003Other assets
    
    
    3,470
    
    
    
    1,991Total assets
    
    $
    658,841
    
    
    $
    713,382LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    199,630
    
    
    $
    199,610Accrued employee compensation and related taxes
    
    
    21,991
    
    
    
    24,994Accrued employee benefits
    
    
    14,040
    
    
    
    14,703Accrued interest
    
    
    29,323
    
    
    
    18,915Accrued stock bonus plan special contribution
    
    
    13,527
    
    
    
    5,301Accrued income taxes
    
    
    16,849
    
    
    
    3,183Other accrued liabilities
    
    
    8,969
    
    
    
    9,549Deferred income taxes
    
    
    
    
    
    
    3,621Current portion of long-term debt
    
    
    1,215
    
    
    
    715Total current liabilities
    
    
    305,544
    
    
    
    280,591Long-term debt
    
    
    515,674
    
    
    
    252,155Deferred income taxes
    
    
    2,645
    
    
    
    Other long-term liabilities
    
    
    21,151
    
    
    
    19,056Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity (deficit):Holding preferred and common stock subject to redemption
in certain circumstances, stated at redemption price
    
    
    78,119
    
    
    
    Holding series A preferred stock, $.01 par value,
13% cumulative (liquidation value of $24,755); 600,000
shares authorized; 247,546 shares issued (214,495 and 0
shares at stated value not subject to redemption at
March 31, 2005 and 2006, respectively)
    
    
    21,449
    
    
    
    Holding series B preferred stock, $.01 par value,
variable rate cumulative (liquidation value of $30,018);
100,000 shares authorized; 30,018 and 0 shares issued
at March 31, 2005 and 2006, respectively (3,152 and 0
shares at stated value not subject to redemption at
March 31, 2005 and 2006, respectively)
    
    
    3,152
    
    
    
    Holding common stock, $.01 par value; 19,500,000
shares authorized; 13,338,536 and 0 shares issued at
March 31, 2005 and 2006 (10,790,324 and 0 shares at $.01
par value not subject to redemption at March 31, 2005
and 2006, respectively)
    
    
    108
    
    
    
    Common stock, $.001 par value; 80,000,000 shares
authorized; 50,237,094 shares issued at March 31, 2006
    
    
    
    
    
    
    50Capital in excess of par value
    
    
    77,909
    
    
    
    364,018Reclassification to value preferred and common stock
subject to redemption in certain circumstances to its
redemption price
    
    
    (20,868
    )
    
    
    Accumulated other comprehensive income (loss):Foreign currency translation adjustment
    
    
    1,150
    
    
    
    1,914Additional minimum pension liability
    
    
    (2,738
    )
    
    
    (4,981
    )Accumulated deficit
    
    
    (275,721
    )
    
    
    (199,421
    )Treasury stock
    
    
    (68,733
    )
    
    
    Total stockholders equity (deficit)
    
    
    (186,173
    )
    
    
    161,580Total liabilities and stockholders equity
    
    $
    658,841
    
    
    $
    713,382
  F-2




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (dollars in thousands)
 Year Ended March 31,2004
    
    
    2005
    
    
    2006(Note 1)Revenues
    
    $
    1,040,367
    
    
    $
    1,608,890
    
    
    $
    1,789,776Cost of sales
    
    
    754,266
    
    
    
    1,184,871
    
    
    
    1,328,852Gross profit
    
    
    286,101
    
    
    
    424,019
    
    
    
    460,924Expenses:Warehouse and delivery
    
    
    135,421
    
    
    
    156,590
    
    
    
    169,550Selling
    
    
    38,254
    
    
    
    45,935
    
    
    
    42,606General and administrative
    
    
    42,934
    
    
    
    86,793
    
    
    
    70,136Total expenses
    
    
    216,609
    
    
    
    289,318
    
    
    
    282,292Income from operations
    
    
    69,492
    
    
    
    134,701
    
    
    
    178,632Interest expense, net
    
    
    89,927
    
    
    
    75,760
    
    
    
    56,365Income (loss) before income taxes
    
    
    (20,435
    )
    
    
    58,941
    
    
    
    122,267Income tax expense (benefit)
    
    
    3,127
    
    
    
    (38,562
    )
    
    
    45,967Net income (loss)
    
    
    (23,562
    )
    
    
    97,503
    
    
    
    76,300Preferred dividends
    
    
    (10,628
    )
    
    
    (5,510
    )
    
    
    Net income (loss) available to common stockholders
    
    $
    (34,190
    )
    
    $
    91,993
    
    
    $
    76,300
  F-3




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 (dollars in thousands, except share data)
 Reclassification tovalue preferredandcommon stockPreferred and
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    subject tocommon
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    redemption instock subject
    
    
    Holding
    
    
    Holding
    
    
    
    
    
    
    
    
    
    
    certain
    
    
    Accumulatedto redemption
    
    
    Series A
    
    
    Series B
    
    
    Holding
    
    
    Capital in
    
    
    circumstances to
    
    
    otherCommon
    
    
    Common
    
    
    in certain
    
    
    preferred
    
    
    preferred
    
    
    common
    
    
    excess of
    
    
    its redemption
    
    
    comprehensive
    
    
    Accumulated
    
    
    Treasuryshares
    
    
    stock
    
    
    circumstances
    
    
    stock
    
    
    stock
    
    
    stock
    
    
    par value
    
    
    price
    
    
    loss
    
    
    deficit
    
    
    stock
    
    
    TotalBalance at March 31, 2003 (Note 1)
    
    
    
    
    
    $
    
    
    
    $
    68,336
    
    
    $
    20,643
    
    
    $
    12
    
    
    $
    104
    
    
    $
    74,867
    
    
    $
    (6,628
    )
    
    $
    (3,884
    )
    
    $
    (342,823
    )
    
    $
    (55,798
    )
    
    $
    (245,171
    )Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,562
    )
    
    
    
    
    
    
    (23,562
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    412
    
    
    
    
    
    
    
    
    
    
    
    412Minimum pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    774
    
    
    
    
    
    
    
    
    
    
    
    774Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,376
    )Stock dividend on Holding Series B 4,568 shares
including issuance of 1,667 shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,667
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,568
    )
    
    
    2,901
    
    
    
    Reclassification of stock dividend on Holding
Series B for shares subject to redemption
    
    
    
    
    
    
    
    
    
    
    4,566
    
    
    
    
    
    
    
    (4,566
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of shares Holding Series A2 shares
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Issuance of shares Holding Series B1,667 shares
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    3Issuance of shares Holding common stock5,585 shares
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (58
    )
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    30Repurchase of stock for treasury
    
    
    
    
    
    
    
    
    
    
    (5,754
    )
    
    
    259
    
    
    
    2,904
    
    
    
    2
    
    
    
    2,379
    
    
    
    210
    
    
    
    
    
    
    
    
    
    
    
    (5,782
    )
    
    
    (5,782
    )Reclassification to value preferred and common stock
subject to redemption in certain circumstances to its
redemption value
    
    
    
    
    
    
    
    
    
    
    28,342
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,342
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at March 31, 2004
    
    
    
    
    
    $
    
    
    
    $
    95,525
    
    
    $
    20,902
    
    
    $
    14
    
    
    $
    106
    
    
    $
    77,188
    
    
    $
    (34,735
    )
    
    $
    (2,698
    )
    
    $
    (370,953
    )
    
    $
    (58,644
    )
    
    $
    (273,295
    )
  F-4




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY(Continued)
 (dollars in thousands, except share data)
 Reclassification tovalue preferredandcommon stockPreferred and
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    subject tocommon
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    redemption instock subject
    
    
    Holding
    
    
    Holding
    
    
    
    
    
    
    
    
    
    
    certain
    
    
    Accumulatedto redemption
    
    
    Series A
    
    
    Series B
    
    
    Holding
    
    
    Capital in
    
    
    circumstances to
    
    
    otherCommon
    
    
    Common
    
    
    in certain
    
    
    preferred
    
    
    preferred
    
    
    common
    
    
    excess of
    
    
    its redemption
    
    
    comprehensive
    
    
    Accumulated
    
    
    Treasuryshares
    
    
    stock
    
    
    circumstances
    
    
    stock
    
    
    stock
    
    
    stock
    
    
    par value
    
    
    price
    
    
    loss
    
    
    deficit
    
    
    stock
    
    
    TotalBalance at March 31, 2004
    
    
    
    
    
    $
    
    
    
    $
    95,525
    
    
    $
    20,902
    
    
    $
    14
    
    
    $
    106
    
    
    $
    77,188
    
    
    $
    (34,735
    )
    
    $
    (2,698
    )
    
    $
    (370,953
    )
    
    $
    (58,644
    )
    
    $
    (273,295
    )Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97,503
    
    
    
    
    
    
    
    97,503Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,223
    
    
    
    
    
    
    
    
    
    
    
    1,223Minimum pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (113
    )
    
    
    
    
    
    
    
    
    
    
    (113
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98,613Stock dividend on Series B 2,271 shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,271
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,271
    )
    
    
    
    
    
    
    Issuance of shares Holding Series A- issued shares
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Issuance of shares Holding Series B- issued shares
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2Issuance of shares Holding common stock  issued shares
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Repurchase of stock for treasury
    
    
    
    
    
    
    
    
    
    
    (10,097
    )
    
    
    547
    
    
    
    3,138
    
    
    
    2
    
    
    
    2,125
    
    
    
    4,286
    
    
    
    
    
    
    
    
    
    
    
    (10,093
    )
    
    
    (10,092
    )Exercise of stock options, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,894
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,894
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,557
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,557Deferred tax minimum pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,066
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,066
    )Reclassification of stock dividend on Series B shares
subject to redemption
    
    
    
    
    
    
    
    
    
    
    2,269
    
    
    
    
    
    
    
    (2,269
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Reclassification to value preferred and common stock
subject to redemption in certain circumstances to its
redemption value
    
    
    
    
    
    
    
    
    
    
    (9,582
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,582
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at March 31, 2005
    
    
    
    
    
    $
    
    
    
    $
    78,119
    
    
    $
    21,449
    
    
    $
    3,152
    
    
    $
    108
    
    
    $
    77,909
    
    
    $
    (20,868
    )
    
    $
    (1,588
    )
    
    $
    (275,721
    )
    
    $
    (68,733
    )
    
    $
    (186,173
    )
  F-5




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY(Continued)
 (dollars in thousands, except share data)
 Reclassification tovalue preferredandcommon stockPreferred and
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    subject tocommon
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    redemption instock subject
    
    
    Holding
    
    
    Holding
    
    
    
    
    
    
    
    
    
    
    certain
    
    
    Accumulatedto redemption
    
    
    Series A
    
    
    Series B
    
    
    Holding
    
    
    Capital in
    
    
    circumstances to
    
    
    otherCommon
    
    
    Common
    
    
    in certain
    
    
    preferred
    
    
    preferred
    
    
    common
    
    
    excess of
    
    
    its redemption
    
    
    comprehensive
    
    
    Accumulated
    
    
    Treasuryshares
    
    
    stock
    
    
    circumstances
    
    
    stock
    
    
    stock
    
    
    stock
    
    
    par value
    
    
    price
    
    
    loss
    
    
    deficit
    
    
    stock
    
    
    TotalBalance at March 31, 2005
    
    
    
    
    
    $
    
    
    
    $
    78,119
    
    
    $
    21,449
    
    
    $
    3,152
    
    
    $
    108
    
    
    $
    77,909
    
    
    $
    (20,868
    )
    
    $
    (1,588
    )
    
    $
    (275,721
    )
    
    $
    (68,733
    )
    
    $
    (186,173
    )Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76,300
    
    
    
    
    
    
    
    76,300Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    764
    
    
    
    
    
    
    
    
    
    
    
    764Minimum pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,243
    )
    
    
    
    
    
    
    
    
    
    
    (2,243
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74,821Initial public offering, net
    
    
    17,600,000
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    161,774
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    161,791Conversion of variable rate senior notes
of Holding, Holding preferred series A and B
shares, Holding warrants and Holding common
stock, into common stock
    
    
    30,917,094
    
    
    
    31
    
    
    
    (78,119
    )
    
    
    (21,449
    )
    
    
    (3,152
    )
    
    
    (108
    )
    
    
    106,146
    
    
    
    20,868
    
    
    
    
    
    
    
    
    
    
    
    68,733
    
    
    
    92,950Contribution
of shares to the retirement savings plan
    
    
    1,720,000
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,067
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,069Deferred tax minimum pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,029
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,029Exercise of stock options, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,071
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,071Balance at March 31, 2006
    
    
    50,237,094
    
    
    $
    50
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    364,018
    
    
    $
    
    
    
    $
    (3,067
    )
    
    $
    (199,421
    )
    
    $
    
    
    
    $
    161,580
  F-6




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (dollars in thousands)
 Year Ended March 31,2004
    
    
    2005
    
    
    2006(Note 1)Operating activities:Net income (loss)
    
    $
    (23,562
    )
    
    $
    97,503
    
    
    $
    76,300Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Special contribution to stock bonus plan
    
    
    
    
    
    
    24,480
    
    
    
    592Depreciation and amortization
    
    
    11,284
    
    
    
    11,721
    
    
    
    11,552Amortization and write-off of debt issue costs included in interest expense
    
    
    1,323
    
    
    
    1,756
    
    
    
    2,917Stock-based compensation
    
    
    
    
    
    
    1,557
    
    
    
    1,071Accrued postretirement benefits
    
    
    619
    
    
    
    822
    
    
    
    972Deferred income taxes
    
    
    
    
    
    
    (64,607
    )
    
    
    26,454Gain on sale of property, plant and equipment
    
    
    (1,335
    )
    
    
    (1,392
    )
    
    
    (53
    )Tax benefit from the redemption of stock options
    
    
    
    
    
    
    1,173
    
    
    
    22Provision for bad debts
    
    
    2,880
    
    
    
    1,873
    
    
    
    1,383Increase in cash surrender value of life insurance over premiums paid
    
    
    (5,276
    )
    
    
    (2,803
    )
    
    
    (6,584
    )Interest paid-in-kind on senior subordinated notes
    
    
    38,223
    
    
    
    20,509
    
    
    
    Changes in operating assets and liabilities:Increase in accounts receivable
    
    
    (38,680
    )
    
    
    (46,079
    )
    
    
    (17,707
    )Increase in inventories
    
    
    (11,658
    )
    
    
    (26,974
    )
    
    
    (142
    )Decrease (increase) in other current assets
    
    
    (1,932
    )
    
    
    (3,334
    )
    
    
    358Increase (decrease) in accounts payable and accrued liabilities and expenses
    
    
    55,912
    
    
    
    59,906
    
    
    
    (7,129
    )Decrease (increase) in non-trade receivables
    
    
    679
    
    
    
    (2,649
    )
    
    
    Other
    
    
    1,139
    
    
    
    2,155
    
    
    
    297Net cash provided by operating activities
    
    
    29,616
    
    
    
    75,617
    
    
    
    90,303Investing activities:Additions to property, plant and equipment
    
    
    (10,530
    )
    
    
    (22,975
    )
    
    
    (32,687
    )Proceeds from the sale of property, plant and equipment
    
    
    1,540
    
    
    
    6,715
    
    
    
    174Premiums paid on life insurance policies
    
    
    (1,298
    )
    
    
    (1,271
    )
    
    
    (592
    )Proceeds from redemption of life insurance policies
    
    
    2,892
    
    
    
    124
    
    
    
    3,809Net cash used in investing activities
    
    
    (7,396
    )
    
    
    (17,407
    )
    
    
    (29,296
    )Financing activities:Net payments under revolving loan agreements
    
    
    (19,399
    )
    
    
    (36,616
    )
    
    
    (16,922
    )Repayment of senior subordinated notes
    
    
    (25,390
    )
    
    
    
    
    
    
    Net Proceeds from initial public offering
    
    
    
    
    
    
    
    
    
    
    161,792Cash paid in exchange for senior variable notes
    
    
    
    
    
    
    
    
    
    
    (127,091
    )Cash paid upon conversion of Holding series A preferred stock
    
    
    
    
    
    
    
    
    
    
    (23,245
    )Cash paid upon conversion of Holding series B preferred stock
    
    
    
    
    
    
    
    
    
    
    (13,784
    )Payment of debt issue costs
    
    
    
    
    
    
    (2,000
    )
    
    
    Other debt payments, net
    
    
    (1,400
    )
    
    
    (2,115
    )
    
    
    (1,215
    )Purchase of stock, net
    
    
    (5,781
    )
    
    
    (13,158
    )
    
    
    Net cash used in financing activities
    
    
    (51,970
    )
    
    
    (53,889
    )
    
    
    (20,465
    )Effect of exchange rate changes on cash
    
    
    (17
    )
    
    
    27
    
    
    
    (134
    )Net increase (decrease) in cash
    
    
    (29,767
    )
    
    
    4,348
    
    
    
    40,408Cash and cash equivalents at beginning of year
    
    
    45,413
    
    
    
    15,646
    
    
    
    19,994Cash and cash equivalents at end of year
    
    $
    15,646
    
    
    $
    19,994
    
    
    $
    60,402
 F-7




---



##### Table of Contents



F-8




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2006
 1. Summary of Significant Accounting Policies
 Basis of Presentation and Consolidation
  Financial Restructuring
 Purchase
by Reliance Steel and Aluminum Co. 
 Company Background and Segment Information
 F-9




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 Disclosure About Segments of an
Enterprise and Related Information.
 Reclassification
 Use of Estimates
 Revenue Recognition
 Shipping and Handling Costs
 Accounts Receivable and Concentration of Credit Risk
 Property, Plant and Equipment
   Debt Issue Costs
 F-10




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 Stock-Based Compensation Accounting for
Stock-Based Compensation Accounting for
Stock-Based Compensation-Transition and Disclosure-An Amendment of FASB Statement No. 123.
 F-11




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 Accounting for Stock-Based
Compensation-Transition and Disclosure
   Income Taxes
 F-12




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
  Foreign Currency Translation Foreign Currency Translation
 Cash and Statements of Cash Flows
  Comprehensive Income
 Impact of Recently Issued Accounting Standards
 Share-Based Payment Accounting for Stock-Based Compensation, Accounting for Stock Issued to Employees Statement of Cash
Flows.
 Inventory Costs
 Accounting Changes and Error Corrections Accounting Changes Reporting Accounting Changes in Interim Financial Statements
  F-13




---



##### Table of Contents



2. Inventories
   F-14




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 3. Net Property, Plant and Equipment
  2005
    
    2006Land
    
    $
    18,484,000
    
    
    $
    23,332,000Buildings and leasehold improvements
    
    
    59,528,000
    
    
    
    67,747,000Machinery and equipment
    
    
    128,120,000
    
    
    
    135,774,000In-process costs
    
    
    4,378,000
    
    
    
    8,228,000210,510,000
    
    
    
    235,081,000Less accumulated depreciation
    
    
    92,239,000
    
    
    
    95,959,000Net property, plant and equipment
    
    $
    118,271,000
    
    
    $
    139,122,000
  4. Cash Surrender Value of Life Insurance
  F-15




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
  Surrender
    
    
    
    
    
    Net cashvalue before
    
    Loans
    
    surrenderloans
    
    Outstanding
    
    valueBalance at March 31, 2005
    
    $
    242,508,000
    
    
    $
    203,869,000
    
    
    $
    38,639,000Balance at March 31, 2006
    
    $
    265,150,000
    
    
    $
    223,144,000
    
    
    $
    42,006,000
  5. Long-Term Debt
  2005
    
    
    2006Revolving Loans (including $0 at March 31, 2005 and 2006, respectively, related
to a Canadian facility)
    
    $
    16,922,000
    
    
    $
    9 3/4% Senior Secured Notes due June 1, 2012
    
    
    250,000,000
    
    
    
    250,000,000Variable Rate Senior Notes
    
    
    245,882,000
    
    
    
    Industrial Development Revenue Bonds:Payable in annual installments of $500,000 commencing June 1, 1998, interest at 9%
    
    
    500,000
    
    
    
    Payable in annual installments of $715,000 commencing December 1, 2004, interest at
5.25%
    
    
    3,585,000
    
    
    
    2,870,000516,889,000
    
    
    
    252,870,000Less current portion
    
    
    1,215,000
    
    
    
    715,000$
    515,674,000
    
    
    $
    252,155,000
   F-16




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 Credit Agreements
        F-17




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 Senior Secured Notes
 1 2 3 4 3 4 3 4 3 4
 3 4
 Variable Rate Senior Notes
 3 4
  F-18




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 6. Income Taxes
  2004
    
    2005
    
    2006Current:Federal
    
    $
    
    
    
    $
    19,617,000
    
    
    $
    12,124,000State
    
    
    1,458,000
    
    
    
    2,254,000
    
    
    
    6,033,000Foreign
    
    
    1,669,000
    
    
    
    4,451,000
    
    
    
    1,336,000Total current
    
    
    3,127,000
    
    
    
    26,322,000
    
    
    
    19,493,000Deferred:Federal
    
    
    (10,267,000
    )
    
    
    (5,131,000
    )
    
    
    41,714,000State
    
    
    (733,000
    )
    
    
    (3,450,000
    )
    
    
    324,000Foreign
    
    
    
    
    
    
    
    
    
    
    360,000Valuation allowances
    
    
    11,000,000
    
    
    
    (56,303,000
    )
    
    
    (15,924,000
    )Total deferred
    
    
    
    
    
    
    (64,884,000
    )
    
    
    26,474,000$
    3,127,000
    
    
    $
    (38,562,000
    )
    
    $
    45,967,000
  2004
    
    2005
    
    2006Expected tax (benefit) at Federal statutory rate
    
    $
    (7,152,000
    )
    
    $
    20,539,000
    
    
    $
    42,794,000State tax expense, net of valuation allowance and federal taxes
    
    
    947,000
    
    
    
    (3,831,000
    )
    
    
    4,132,000Disallowed applicable high yield debt interest expense
    
    
    5,385,000
    
    
    
    2,935,000
    
    
    
    15,924,000Net increase in cash surrender values of life insurance
    
    
    (6,213,000
    )
    
    
    (7,527,000
    )
    
    
    (7,200,000
    )Change in federal valuation allowance
    
    
    11,000,000
    
    
    
    (51,605,000
    )
    
    
    (15,924,000
    )Other
    
    
    (840,000
    )
    
    
    927,000
    
    
    
    6,241,000Income tax provision
    
    $
    3,127,000
    
    
    $
    (38,562,000
    )
    
    $
    45,967,000
 F-19




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
    2005
    
    2006Deferred tax liabilities:Tax over book depreciation
    
    $
    11,280,000
    
    
    $
    16,522,000Purchase price adjustments
    
    
    33,067,000
    
    
    
    32,893,000Additional minimum pension liability
    
    
    1,066,000
    
    
    
    Total deferred tax liabilities
    
    
    45,413,000
    
    
    
    49,415,000Deferred tax assets:Applicable high yield debt interest
    
    
    43,010,000
    
    
    
    AMT and other credit carryforwards
    
    
    21,981,000
    
    
    
    33,362,000Pension accrual booked directly to equity
    
    
    
    
    
    
    1,963,000Net operating loss carryforwards
    
    
    9,339,000
    
    
    
    1,754,000Workers compensation and other insurance accruals
    
    
    3,828,000
    
    
    
    3,358,000Inventory and related reserves
    
    
    4,138,000
    
    
    
    4,226,000Retirement
savings plan accrual
    
    
    4,765,000
    
    
    
    3,175,000Other
    
    
    2,431,000
    
    
    
    6,959,000Valuation allowance for deferred tax assets
    
    
    (15,924,000
    )
    
    
    Net deferred tax assets
    
    
    73,568,000
    
    
    
    54,797,000Net deferred tax asset
    
    $
    (28,155,000
    )
    
    $
    (5,382,000
    )
  F-20




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2005
 7. Employee Benefit Plans
 Retirement Savings Plan
       F-21




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2005
   Pension Plans
   2004
    
    2005
    
    2006Service cost of benefits earned during the period
    
    $
    523,000
    
    
    $
    665,000
    
    
    $
    655,000Interest cost on projected benefit obligation
    
    
    879,000
    
    
    
    1,014,000
    
    
    
    1,057,000Expected return on plan assets
    
    
    (763,000
    )
    
    
    (1,004,000
    )
    
    
    (1,053,000
    )Amortization of prior service cost
    
    
    (37,000
    )
    
    
    131,000
    
    
    
    143,000Recognized net loss
    
    
    267,000
    
    
    
    180,000
    
    
    
    119,000Net periodic pension cost
    
    $
    869,000
    
    
    $
    986,000
    
    
    $
    921,000
 2005
    
    2006Weighted
average assumptions as of March 31:Discount Rate
    
    
    6.00
    %
    
    
    6.00
    %Expected
return on assets
    
    
    8.25
    %
    
    
    8.25
    %Rate on
compensation increase
    
    
    
    %
    
    
    
    %
 Categories of plan assets
    
2005
    
    2006Bonds
    
    
    15
    %
    
    
    38
    %Stocks
    
    
    85
    %
    
    
    59
    %Cash
    
    
    
    %
    
    
    3
    %
   F-22




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
  2005
    
    2006Change in Benefit Obligation:Benefit obligation at beginning of year
    
    $
    15,791,000
    
    
    $
    17,929,000Service cost
    
    
    665,000
    
    
    
    655,000Interest cost
    
    
    1,014,000
    
    
    
    1,057,000Change in assumptions
    
    
    
    
    
    
    2,243,000Amendments
    
    
    1,151,000
    
    
    
    85,000Benefit payments
    
    
    (955,000
    )
    
    
    (667,000
    )Actuarial loss (gain)
    
    
    263,000
    
    
    
    (65,000
    )Benefit obligation at end of year
    
    
    17,929,000
    
    
    
    21,237,000Change in Plan Assets:Fair value of plan assets at beginning of year
    
    
    11,719,000
    
    
    
    12,664,000Actual return on assets
    
    
    1,106,000
    
    
    
    883,000Benefit payments
    
    
    (955,000
    )
    
    
    (667,000
    )Company contributions
    
    
    794,000
    
    
    
    794,000Fees
    
    
    
    
    
    
    (15,000
    )Fair value of plan assets at end of year
    
    
    12,664,000
    
    
    
    13,659,000Unfunded
    
    
    (5,265,000
    )
    
    
    (7,578,000
    )Unrecognized prior service cost
    
    
    888,000
    
    
    
    831,000Unrecognized net actuarial gain
    
    
    2,761,000
    
    
    
    5,004,000Net amount recognized
    
    $
    (1,616,000
    )
    
    $
    (1,743,000
    )
   2005
    
    2006Amounts recognized in balance sheets consist of:Prepaid cost
    
    $
    
    
    
    $
    Accrued benefit liability
    
    
    (5,242,000
    )
    
    
    (7,555,000
    )Intangible asset
    
    
    888,000
    
    
    
    831,000Accumulated comprehensive loss-additional minimum liability
    
    
    2,738,000
    
    
    
    4,981,000Net amount recognized
    
    $
    (1,616,000
    )
    
    $
    (1,743,000
    )Weighted average assumptions as of March 31:Discount rate
    
    
    6.00
    %
    
    
    5.50
    %Rate of compensation increase
    
    
    
    
    
    
    Measurement date for assets and liabilities
    
    
    1/1/2005
    
    
    
    1/1/2006
 F-23




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
   Post-Retirement Benefit Plan
   2004
    
    
    2005
    
    
    2006Service cost of benefits earned during the period
    
    $
    293,000
    
    
    $
    340,000
    
    
    $
    378,000Interest cost on projected benefit obligation
    
    
    271,000
    
    
    
    295,000
    
    
    
    338,000Recognized net loss
    
    
    55,000
    
    
    
    187,000
    
    
    
    257,000Net periodic pension expense
    
    $
    619,000
    
    
    $
    822,000
    
    
    $
    973,000Weighted average assumptions as of March 31:Discount rate
    
    
    
    
    
    
    6.00
    %
    
    
    6.00
    %Health care cost trend rate
    
    
    
    
    
    
    11.00
    %
    
    
    10.00
    %
  Change in Benefit Obligation:
    
    2005
    
    
    2006Benefit obligation at beginning of year
    
    $
    4,916,000
    
    
    $
    5,463,000Service cost
    
    
    340,000
    
    
    
    378,000Interest cost
    
    
    295,000
    
    
    
    337,000Change in assumptions
    
    
    
    
    
    
    84,000Benefit payments
    
    
    (293,000
    )
    
    
    (278,000
    )Actuarial loss
    
    
    205,000
    
    
    
    564,000Benefit obligation at end of year
    
    
    5,463,000
    
    
    
    6,548,000Unfunded
    
    
    (5,463,000
    )
    
    
    (6,548,000
    )Unrecognized prior service cost
    
    
    
    
    
    
    Unrecognized net actuarial gain
    
    
    496,000
    
    
    
    886,000Accrued benefit cost
    
    $
    (4,967,000
    )
    
    $
    (5,662,000
    )Weighted average assumptions as of March 31:Discount rate
    
    
    6.00
    %
    
    
    5.50
    %Health care cost trend rate
    
    
    11.00
    %
    
    
    10.00
    %Measurement date for assets and liabilities
    
    
    1/1/2005
    
    
    
    1/1/2006
 F-24




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
  1% Increase
    
    1% DecreaseEffect on total service and interest cost components
    
    $
    112,000
    
    
    $
    (94,000
    )Effect on postretirement benefit obligation
    
    
    820,000
    
    
    
    (703,000
    )
 8. Stockholders Equity
 Holding Preferred and Common Stock Subject to Redemption
   Holding Series A Preferred Stock
  3 4
 F-25




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
   Series B Preferred Stock
  3 4
  Holding Common Stock
 3 4
 Company Common Stock
  F-26




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
   9. Stock Option Plans
 Holding Stock Option Plan
   WeightedAverageNumber of
    
    ExerciseShares
    
    PriceOutstanding at March 31, 2003
    
    
    2,136,500
    
    
    $
    5.87Exercised, Canceled or Expired
    
    
    (35,500
    )
    
    $
    7.83Outstanding at March 31, 2004
    
    
    2,101,000
    
    
    $
    5.84Exercised, Canceled or Expired
    
    
    (370,000
    )
    
    $
    5.47Outstanding at March 31, 2005
    
    
    1,731,000
    
    
    $
    5.92Outstanding
Options at March 31, 2005, as modified
    
    
    3,053,668
    
    
    $
    3.35Granted
    
    
    819,000
    
    
    $
    8.96Exercised, Canceled or Expired
    
    
    (12,000
    )
    
    $
    8.89Outstanding at March 31, 2006
    
    
    3,860,668
    
    
    $
    4.53
  Options Outstanding
    
    Options ExercisableWeighted AverageRemaining
    
    
    
    
    
    
    
    
    
    Average ExerciseRange of
    
    Outstanding at
    
    Contractual Life
    
    Weighted Average
    
    Exercisable At
    
    Price of OptionsExercise Price
    
    March 31, 2006
    
    In Years
    
    Exercise Price
    
    March 31, 2006
    
    Exercisable$1.89  $3.12
    
    
    2,161,027
    
    
    
    2.7
    
    
    $
    2.94
    
    
    
    2,161,027
    
    
    $
    2.94$4.14  $4.63
    
    
    892,641
    
    
    
    4.5
    
    
    $
    4.36
    
    
    
    892,641
    
    
    $
    4.36$7.24  $8.89
    
    
    734,000
    
    
    
    9.2
    
    
    $
    8.87
    
    
    
    191,000
    
    
    $
    8.80$9.80  $10.00
    
    
    73,000
    
    
    
    9.1
    
    
    $
    9.94
    
    
    

55,750
    
    
    $
    9.983,860,668
    
    
    
    4.5
    
    
    $
    4.53
    
    
    

3,300,418
    
    
    $
    3.78
 F-27




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 2004 Stock Incentive Plan
    10. Commitments and Contingencies
 Lease Commitments
   Fiscal year:2007
    
    $
    15,799,0002008
    
    
    13,447,0002009
    
    
    10,845,0002010
    
    
    8,821,0002011
    
    
    8,111,000Thereafter
    
    
    42,317,000Subtotal
    
    
    99,340,000Less: Non-cancelable subleases
    
    
    (6,355,000
    )Net lease obligations
    
    $
    92,985,000
 Other Commitments
  F-28




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 Governmental Matters
   The Department of Labor
   F-29




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
   Environmental
Contingencies
   Forge (Seattle/Kent, WA).
    F-30




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
   Clinton Drive (Houston, TX).
 
    
    filed a voluntary clean-up application with the Texas Commission for
Environmental Quality (TCEQ), that commits the Company to clean-up
the soil and groundwater at the site for the benzene and chlorinated
solvents to acceptable levels in accordance with TCEQ requirements;
    
    funded an escrow account with $0.5 million to be available to complete
required clean-up and subsequent monitoring activities; and
    
    indemnified the buyer for pre-existing environmental issues on the
site based on applicable TCEQ industrial/commercial standards.
   11. Legal
 Champagne Metals.
 Other.
 F-31




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 12. Quarterly Results of Operations (unaudited)
  2005
    
    Jun 30,
    
    Sep 29,
    
    Dec 31,
    
    Mar 31,(dollars in thousands)Revenues
    
    $
    361,636
    
    
    $
    389,271
    
    
    $
    401,683
    
    
    $
    456,300Gross profit
    
    
    105,561
    
    
    
    110,543
    
    
    
    107,750
    
    
    
    100,165Net income
    
    
    11,703
    
    
    
    21,852
    
    
    
    4,519
    
    
    
    59,429
 2006
    
    Jun 29,
    
    Sep 28,
    
    Dec 30,
    
    Mar 31,Revenues
    
    $
    443,972
    
    
    $
    412,916
    
    
    $
    428,818
    
    
    $
    504,070Gross profit
    
    
    115,598
    
    
    
    103,934
    
    
    
    110,308
    
    
    
    131,084Net income
    
    
    22,582
    
    
    
    18,878
    
    
    
    18,165
    
    
    
    16,675
 Accounting for Stock-Based Compensation.
  F-32




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
 March 31, 2006
 13. Subsequent Event
       F-33




---



##### Table of Contents



EARLE M. JORGENSEN COMPANY
 SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS AND RESERVES
 Column A
    

    Column B
    
    Column C
    
    Column D
    
    Column EBalance at
    
    Charges to
    
    Amounts
    
    Balance atbeginning
    
    costs and
    
    charged off
    
    endDescription
    
    of period
    
    expenses
    
    (net of recoveries)
    
    of periodAllowance for doubtful accountsYear ended March 31, 2004
    
    $
    390,000
    
    
    $
    2,880,000
    
    
    $
    (2,669,000
    )
    
    $
    601,000Year ended March 31, 2005
    
    
    601,000
    
    
    
    1,873,000
    
    
    
    (1,375,000
    )
    
    
    1,099,000Year ended March 31, 2006
    
    
    1,099,000
    
    
    
    1,383,000
    
    
    
    (1,491,000
    )
    
    
    991,000Reserve for inventoryYear ended March 31, 2004
    
    $
    3,177,000
    
    
    $
    1,123,000
    
    
    $
    (912,000
    )
    
    $
    3,388,000Year ended March 31, 2005
    
    
    3,388,000
    
    
    
    1,497,000
    
    
    
    (1,446,000
    )
    
    
    3,439,000Year ended March 31, 2006
    
    
    3,439,000
    
    
    
    1,010,000
    
    
    
    (313,000
    )
    
    
    4,136,000
 F-34