<PAGE>

                         SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549

                                     FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     FOR THE FISCAL QUARTER ENDED SEPTEMBER 29, 1998

                                         OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                           COMMISSION FILE NUMBER: 1-7537

                             EARLE M. JORGENSEN COMPANY
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                    DELAWARE                                    95-0886610
     -----------------------------------------           -----------------------
        (STATE OR OTHER JURISDICTION OF                     (I.R.S. EMPLOYER
         INCORPORATION OR ORGANIZATION)                    IDENTIFICATION NO.)

    3050 EAST BIRCH STREET, BREA, CALIFORNIA                      92821
   -------------------------------------------           -----------------------
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                    (ZIP CODE)


          Registrant's telephone number:      (714) 579-8823
                                              --------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

  Yes   X       No
       ---         ---

 State the aggregate market value of the voting stock held by non-affiliates of
the registrant.     None
                    ----

Outstanding common stock, par value $.01 per share, at September 29, 1998 -
128 shares
----------

<PAGE>

                                EARLE M. JORGENSEN
                             COMPANY  TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                     PAGE
                                                                                     ----
<S>                                                                                  <C>
PART I -  FINANCIAL INFORMATION

Item 1    CONSOLIDATED FINANCIAL STATEMENTS

          Consolidated Balance Sheets at September 29, 1998 (unaudited) and           2
               March 31, 1998

          Consolidated Statements of Operations for the Three Months and Six
               Months Ended September 29, 1998 and 1997 (unaudited)                   3

          Consolidated Statements of Cash Flows for the Six Months Ended
               September 29, 1998 and 1997 (unaudited)                                4

          Notes to Consolidated Financial Statements                                  5

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
          OF OPERATIONS                                                               6

PART II - OTHER INFORMATION                                                           11

SIGNATURES                                                                            12

</TABLE>



                                          1
<PAGE>

PART I - FINANCIAL INFORMATION

EARLE M. JORGENSEN COMPANY
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>

                                                                               SEPTEMBER 29,      MARCH 31,
                                                                                    1998             1998
                                                                               -------------      ---------
                                                                                (UNAUDITED)
<S>                                                                            <C>                <C>
ASSETS
Current assets:
     Cash                                                                            $14,830         $20,763
     Accounts receivable, less allowance for doubtful accounts of $715 and
        $406 at September 29, 1998 and March 31, 1998, respectively                   91,033         105,303
     Inventories                                                                     217,554         180,403
     Other current assets                                                              3,958           4,963
                                                                                  ----------      ----------
          Total current assets                                                       327,375         311,432
                                                                                  ----------      ----------

Property, plant and equipment, net of accumulated depreciation of $54,563
    and $53,385 at September 29, 1998 and March 31, 1998, respectively               104,123         106,643
Net cash surrender value of life insurance policies                                   21,434          16,470
Debt issue costs, net of accumulated amortization                                      7,159           7,316
Other assets                                                                           1,610           1,960
                                                                                  ----------      ----------
          Total assets                                                              $461,701        $443,821
                                                                                  ----------      ----------
                                                                                  ----------      ----------

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
     Accounts payable                                                                $67,232        $ 92,061
     Accrued employee compensation and related taxes                                   6,908          12,587
     Accrued employee benefits                                                         9,725          10,004
     Other accrued liabilities                                                        27,023          15,533
     Deferred income taxes                                                            21,963          21,963
     Current portion of long-term debt                                                 1,500           1,500
                                                                                  ----------      ----------
          Total current liabilities                                                  134,351         153,648
                                                                                  ----------      ----------

Long term debt                                                                       337,563         310,734
Deferred income taxes                                                                 13,371          12,709
Other long-term liabilities                                                            3,863           3,649

Stockholder's equity:
Preferred stock, $.01 par value; 200 shares authorized and unissued                       --              --
Common stock, $.01 par value; 2,800 shares authorized; 128 shares issued
   and outstanding                                                                        --              --
Additional paid in capital                                                           115,712         116,789
Accumulated other comprehensive loss--foreign currency
   translation adjustments                                                              (447)           (278)
Accumulated deficit                                                                 (142,712)       (153,430)
                                                                                  ----------      ----------
          Total stockholder's equity                                                 (27,447)        (36,919)
                                                                                  ----------      ----------
          Total liabilities and stockholder s equity                                $461,701        $443,821
                                                                                  ----------      ----------
                                                                                  ----------      ----------
</TABLE>

SEE ACCOMPANYING NOTES.


                                          2
<PAGE>

PART I - FINANCIAL INFORMATION (CONTINUED)

EARLE M. JORGENSEN COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                   THREE MONTHS ENDED              SIX MONTHS ENDED
                                              ----------------------------   ----------------------------
                                              SEPTEMBER 29,  SEPTEMBER 29,   SEPTEMBER 29,  SEPTEMBER 29,
                                                   1998           1997           1998            1997
                                              -------------  -------------   -------------  -------------
<S>                                           <C>            <C>             <C>            <C>
Revenues                                           $225,967       $259,501        $476,543       $519,434

Cost of sales                                       161,407        186,133         339,845        374,061
                                              -------------  -------------   -------------  -------------
     Gross profit                                    64,560         73,368         136,698        145,373

Expenses:
 Warehouse and delivery                              30,866         31,661          61,359         63,946
 Selling                                              8,624          9,600          17,818         19,052
 General and administrative                          12,274         15,382          25,785         29,569
                                              -------------  -------------   -------------  -------------
     Total expenses                                  51,764         56,643         104,962        112,567
                                              -------------  -------------   -------------  -------------

Income from operations                               12,796         16,725          31,736         32,806

Interest expense, net                                10,261         10,481          20,309         20,509
                                              -------------  -------------   -------------  -------------

Income before income taxes                            2,535          6,244          11,427         12,297

Income tax expense                                      129            ---             709            500
                                              -------------  -------------   -------------  -------------

Net income                                            2,406          6,244          10,718         11,797

Other comprehensive loss, net of income taxes
-- foreign currency translation adjustments             102            161             169             85
                                              -------------  -------------   -------------  -------------

Comprehensive income                                 $2,304         $6,083         $10,549        $11,712
                                              -------------  -------------   -------------  -------------
                                              -------------  -------------   -------------  -------------
</TABLE>

SEE ACCOMPANYING NOTES.


                                          3
<PAGE>

PART I - FINANCIAL INFORMATION (CONTINUED)

EARLE M. JORGENSEN COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                        SIX MONTHS ENDED
                                                                                 -------------------------------
                                                                                 SEPTEMBER 29,     September 29,
                                                                                      1998             1997
                                                                                 -------------     -------------
<S>                                                                              <C>               <C>          
OPERATING ACTIVITIES
Net income                                                                             $10,718          $11,797
Adjustments to reconcile net income to net cash used in operating activities:
     Depreciation and amortization                                                       4,481            4,818
     Amortization of debt issue costs and discount on senior notes                         647              947
     Gain on sale of property, plant and equipment                                        (406)            (376)
     ESOP contribution                                                                   1,765            1,616
     Provision for bad debts                                                               531              612
     Changes in assets and liabilities:
          Accounts receivable                                                           13,739            3,835
          Inventories                                                                  (37,151)         (27,443)
          Increase in cash surrender value of life insurance                            (5,766)          (4,043)
          Accounts payable and accrued liabilities and expenses                        (19,824)            (844)
          Accrued postretirement benefits                                                  240              240
          Current and deferred income taxes                                                662              500
          Other                                                                          1,234           (1,007)
                                                                                 -------------     -------------
          Net cash used in operating activities                                        (29,130)          (9,348)

INVESTING ACTIVITIES
Additions to property, plant and equipment                                              (4,280)          (2,539)
Proceeds from the sale of property, plant and equipment                                  2,733            4,475
Proceeds from sale of subsidiary                                                           ---            1,700
Proceeds from redemption of life insurance policies                                        802              371
                                                                                 -------------     -------------
          Net cash provided by (used in) investing activities                             (745)           4,007

FINANCING ACTIVITIES
Net borrowings under revolving loan agreements                                          27,829            6,314
Payments on other debt                                                                  (1,000)            (475)
Cash dividend to parent                                                                 (1,077)            (784)
Payment of debt issue costs                                                             (1,728)             ---
                                                                                 -------------     -------------
          Net cash provided by financing activities                                     24,024            5,055

Effect of exchange rate changes on cash                                                    (82)               4
                                                                                 -------------     -------------

NET DECREASE IN CASH                                                                    (5,933)            (282)
Cash at beginning of period                                                             20,763           21,477
                                                                                 -------------     -------------

CASH AT END OF PERIOD                                                                  $14,830          $21,195
                                                                                 -------------     -------------
                                                                                 -------------     -------------
</TABLE>

SEE ACCOMPANYING NOTES.


                                          4
<PAGE>

PART I - FINANCIAL INFORMATION (CONTINUED)

EARLE M. JORGENSEN COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER  29, 1998

1.   BASIS OF PRESENTATION

     The Earle M. Jorgensen Company (the "Company") is a wholly owned subsidiary
     of the Earle M. Jorgensen Holding Company, Inc. ("Holding").

     The accompanying consolidated condensed financial statements include the
     accounts of the Company and its wholly owned subsidiaries including Earle
     M. Jorgensen Company (UK) Ltd. (which was sold in January 1998), Kilsby
     Jorgensen S.A. de C.V. (which was sold in August 1997), Earle M. Jorgensen
     (Canada) Inc. and Stainless Insurance Ltd., a captive insurance subsidiary.
     All significant intercompany accounts and transactions have been
     eliminated.

     In the opinion of management, the accompanying unaudited consolidated
     condensed financial statements have been prepared in accordance with the
     instructions to Form 10-Q and include all adjustments (consisting of
     normally recurring accruals) and disclosures considered necessary for a
     fair presentation of the consolidated financial position of the Earle M.
     Jorgensen Company at September 29, 1998 and the consolidated results of
     operations for the three months and six months ended September 29, 1998 and
     1997 and consolidated cash flows for the six months ended September 29,
     1998 and 1997. The consolidated results of operations for the three months
     and six months ended September 29, 1998 are not necessarily indicative of
     the results to be expected for the full year. For further information,
     refer to the consolidated financial statements and footnotes included in
     the Company's Annual Report on Form 10-K for the year ended March 31, 1998.

     Certain prior year amounts have been reclassified to conform to the current
     year presentation.

2.   COMPREHENSIVE INCOME

     Effective April 1, 1998, the Company adopted SFAS No. 130, "Reporting
     Comprehensive Income", which establishes rules for the reporting and
     disclosure of comprehensive income and its components. Comprehensive income
     included foreign currency translation adjustments of ($102,000) and
     ($161,000) for the comparative three months and ($169,000) and ($85,000)
     for the comparative six months ended September 29, 1998 and 1997,
     respectively.  Prior to the adoption of SFAS No. 130, the Company's foreign
     currency translation adjustments were reported separately in stockholder's
     equity.  The adoption of SFAS No. 130 had no impact on the Company's net
     income or stockholder's equity.


                                          5
<PAGE>

PART I - FINANCIAL INFORMATION (CONTINUED)

EARLE M. JORGENSEN COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS: SIX MONTHS ENDED SEPTEMBER 29, 1998 COMPARED TO SIX
MONTHS ENDED SEPTEMBER 29, 1997.

REVENUE.  Revenues for the first six months of fiscal 1999 were $476.5 
million, compared to $519.4 million for the same period in fiscal 1998. 
Revenues from domestic operations decreased $28.5 million (5.8%) to $461.4 
million in the first six months of fiscal 1999 when compared to $489.9 
million for the same period in fiscal 1998. Revenues from domestic stock 
sales decreased approximately 4% as the result of decreases in tonnage 
shipped and average price.  In general, domestic revenues during the first 
six months of fiscal 1999 were impacted by repercussions from the financial 
crisis in Asia, weakness in the oil industry and from the overall slowdown in 
the U.S. economy. Revenues from international operations decreased $14.4 
million to $15.1 million in the first six months of fiscal 1999 when compared 
to $29.5 million for the same period in fiscal 1998 due to the sale of the 
Company's subsidiaries in the U.K. and Mexico during fiscal 1998.

GROSS PROFIT. Gross profit for first six months of fiscal 1999 was $136.7 
million, compared to $145.4 million for the same period in fiscal 1998. 
Consolidated gross margin for the first six months of fiscal 1999 increased 
to 28.7% compared to 28.0% for the same period in fiscal 1998. Gross profit 
for the fiscal 1999 and 1998 periods included a LIFO charge of $0.7 million 
and $1.3 million, respectively. Gross profit from international operations 
was $3.3 million and gross margin was 21.9% during the first six months of 
fiscal 1999, compared to $6.3 million and 21.4%, respectively, for the same 
period in fiscal 1998. The changes in gross profit and gross margin from 
international operations were due to the sale of the Company's subsidiaries 
in the U.K. and Mexico during fiscal 1998. Exclusive of international 
operations and LIFO adjustments, gross margin was 29.1% for the first six 
months of fiscal 1999 compared to 28.7% for the same period in fiscal 1998. 
The increase of 0.4% was attributable to changes in product mix, which do not 
reflect any identifiable trends in industry demand or Company strategy.

EXPENSES. Total operating expenses for the first six months of fiscal 1999 were
$105.0 million (22.0% of revenues), compared to $112.6 million (21.7% of
revenues) for the same period in fiscal 1998. The lower operating expenses
generally reflect the impact from lower revenues, the Company's sale of its
foreign operations in the U.K. and Mexico in fiscal 1998, and the results of the
ongoing reengineering and cost reduction programs designed to improve asset and
employee productivity and operating profits.

Warehouse and delivery expenses for the first six months of fiscal 1999 were 
$61.4 million (12.9% of revenues), compared to $63.9 million (12.3% of 
revenues) for the same period in fiscal 1998. The fiscal 1999 period reflects 
lower compensation expense, lower freight costs resulting from the decrease 
in tonnage shipped and the impact from the sale of the Company's U.K. and 
Mexican subsidiaries in fiscal 1998.

Selling expenses for the first six months of fiscal 1999 were $17.8 million
(3.7% of revenues), compared to $19.1 million (3.7% of revenues) for the same
period in fiscal 1998. The fiscal 1999 period reflects lower compensation
expense and the impact from the sale of the Company's U.K. and Mexican
subsidiaries in fiscal 1998.

General and administrative expenses for the first six months of fiscal 1999 were
$25.8 million (5.4% of revenues), compared to $29.6 million (5.7% of revenues)
for the same period in fiscal 1998. The fiscal 1999 period reflects lower
compensation expense and the impact from the sale of the Company's U.K. and
Mexican subsidiaries in fiscal 1998 partially offset by $1.0 million of expenses
accrued for the resolution of environmental issues related to a previously owned
subsidiary sold in 1992.


                                          6
<PAGE>

PART I - FINANCIAL INFORMATION (CONTINUED)

EARLE M. JORGENSEN COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS: SIX  MONTHS ENDED SEPTEMBER 29, 1998 COMPARED TO SIX
MONTHS ENDED SEPTEMBER 29, 1997. (CONTINUED)

NET INTEREST EXPENSE. Net interest expense was $20.3 million for the first six
months of fiscal 1999 compared to $20.5 for the same period in fiscal 1998. Such
amounts include interest and amortization of debt issue costs related to the
Company's revolving credit facility (the "Revolving Credit Facility"), its
9-1/2% senior notes (as applicable, the Company's 10 3/4% Senior Notes which
were redeemed on March 24, 1988 and its  "9-1/2% Senior Notes"), its variable
rate term loan (the "Term Loan") (in the fiscal 1999 period only) and interest
on borrowings against the cash surrender value of certain life insurance
policies.

Interest expense and amortization of debt issue costs related to the Company's
outstanding indebtedness (excluding borrowings against the cash surrender value
of certain life insurance policies) totaled $15.2 million for the first six
months of fiscal 1999 compared to $15.6 million for the same period in fiscal
1998. The average outstanding indebtedness during the first six months of fiscal
1999 was $335.1 million, compared to $299.6 million for the same period in
fiscal 1998. The weighted average interest rate on such indebtedness was 8.64%
during the first six months of fiscal 1999 versus 9.67% during the same period
in fiscal 1998. During the six months ended September 29, 1998 and 1997,
borrowings under the Company's Revolving Credit Facility averaged $117.7 million
and $126.2 million and the average interest rate on such borrowings was 7.73%
and 8.60%, respectively.

Interest expense associated with borrowings against the cash surrender value of
certain life insurance policies maintained by the Company was $5.1 million for
the fiscal 1999 period compared to $4.9 million for the same period in fiscal
1998.

The interest rates on the Company's 9-1/2 Senior Notes and on the borrowings
under the life insurance policies are fixed at 9.50% and 11.76%, respectively.
The interest rates on the Company's Revolving Credit Facility and Term Loan are
floating (7.30% and 8.94%, respectively, as of September 29, 1998). In June
1998, the Company entered into an interest rate swap agreement with Bankers
Trust Company that effectively fixed the interest rate on the Term Loans at
approximately 9.05% through June 2003. Such agreement requires Bankers Trust
Company to make payments to the Company each quarter in an amount equal to the
product of the notional amount of $95 million and the difference between the
London Interbank Offered Rate for three month maturities ("Three Month LIBOR")
and a reference rate of 5.6875%, if the Three Month LIBOR is greater than such
reference rate on a per diem basis. If Three Month LIBOR is lower than a
reference rate of 5.795%, the Company is required to pay Bankers Trust Company
an amount equal to the product of the notional amount and the difference between
such reference rate and Three Month LIBOR on a per diem basis.

INCOME TAXES. Income tax expense for the first six months of fiscal 1999 and
1998 included provisions for state franchise and foreign income taxes. Federal
tax provisions for the first six months of fiscal 1999 and 1998 were offset by
recognition of tax benefits associated with the Company's loss carryforwards.

RESULTS OF OPERATIONS: THREE MONTHS ENDED SEPTEMBER 29, 1998 COMPARED TO THREE
MONTHS ENDED SEPTEMBER 29, 1997.

REVENUE.  Revenues for the second quarter of fiscal 1999 were $226.0 million, 
compared to $259.5 million for the same period in fiscal 1998.  Revenues from 
domestic operations decreased $25.9 million (10.6%) to $219.0 million in the 
second quarter of fiscal 1999 when compared to $244.9 million for the same 
period in fiscal 1998.  Revenues from domestic stock sales decreased 
approximately 10% as the result of decreases in tonnage shipped and average 
price.  In general, domestic revenues during the second quarter of fiscal 
1999 were impacted by repercussions from the financial crisis in Asia, 
weakness in the oil industry and from the overall slowdown in the U.S. 
economy.  Revenues from international operations decreased $7.6 million to 
$7.0 million in the second quarter of fiscal 1999 when compared to $14.6 
million for the same period in fiscal 1998 due to the sale of the Company's 
subsidiaries in the U.K. and Mexico during fiscal 1998.

                                          7
<PAGE>

PART I - FINANCIAL INFORMATION (CONTINUED)

EARLE M. JORGENSEN COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS: THREE MONTHS ENDED SEPTEMBER 29, 1998 COMPARED TO THREE
MONTHS ENDED SEPTEMBER 29, 1997. (CONTINUED)

GROSS PROFIT.  Gross profit for the second quarter of fiscal 1999 was $64.6 
million, compared to $73.4 million for the same period in fiscal 1998. 
Consolidated gross margin for the fiscal 1999 and 1998 periods was 28.6% and 
28.3%, respectively.  The second quarters of fiscal 1999 and 1998 included a 
LIFO charge of $0.6 million and $0.5 million, respectively.  Gross profit 
from international operations was $1.5 million and gross margin was 21.4% for 
the second quarter of fiscal 1999 compared to $3.0 million and 20.5%, 
respectively, for the same period in fiscal 1998.  The changes in gross 
profit and gross margin from international operations were due to the sale of 
the Company's subsidiaries in the U.K. and Mexico during fiscal 1998. 
Exclusive of international operations and LIFO charges, the gross margin from 
domestic operations from the second quarter of fiscal 1999 improved to  29.1% 
as compared to 29.0% for the same period in fiscal 1998 due to changes in 
product mix.

EXPENSES.  Total operating expenses for the second quarter of fiscal 1999 were
$51.8 million, compared to $56.6 million for the same period in fiscal 1998.  As
a percentage of revenues, these expenses were 22.9% in the fiscal 1999 period
and 21.8% in the fiscal 1998 period.

Warehouse and delivery expenses for the second quarter of fiscal 1999 were $30.9
million (13.7% of revenues), compared with $31.7 million (12.2% of revenues) for
the same period in fiscal 1998.  The fiscal 1999 period reflects lower
compensation expense and the impact from the sale of the U.K. and Mexican
subsidiaries in fiscal 1998 partially offset by an increase in repair and
maintenance of warehouse equipment.

Selling expenses for the second quarter of fiscal 1999 were $8.6 million (3.8%
of revenues), compared with $9.6 million (3.7% of revenues) for the same period
in fiscal 1998.  The fiscal 1999 period reflects lower compensation expense and
the impact from the sale of the U.K. and Mexican subsidiaries in fiscal 1998.

General and administrative expenses for the second quarter of fiscal 1999 were
$12.3 million (5.4% of revenues), compared with $15.4 million (5.9% of revenues)
for the same period in fiscal 1998. The fiscal 1999 period reflects realized
gains (versus losses in fiscal 1998) on sales of assets, lower compensation
expense and the impact from the sale of the U.K. and Mexican subsidiaries in
fiscal 1998 partially offset by $1.0 million of expenses accrued for the
resolution of environmental issues related to a previously owned subsidiary sold
in 1992.

NET INTEREST EXPENSE.  Net interest expense was $10.3 million and $10.5 
million for the second quarter in fiscal 1999 and fiscal 1998, respectively. 
The Company's average outstanding indebtedness during the second quarter of 
fiscal 1999 was $345.8 million, compared to $301.1 million for the same 
period in fiscal 1998, and the average interest rate on such indebtedness was 
8.60% and 9.66% respectively.

INCOME TAXES.  Income tax expense for the three months ended September 29, 1998
and 1997 included provisions for state franchise and foreign income taxes.
Federal tax provisions for the three months ended September 29, 1998 and 1997
were offset by recognition of tax benefits associated with the Company's loss
carryforwards.


                                          8
<PAGE>

PART I - FINANCIAL INFORMATION (CONTINUED)

EARLE M. JORGENSEN COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash requirements for debt service and related obligations through
the end of fiscal 1999 are expected to consist primarily of interest payments
under its Revolving Credit Facility, interest and principal payments on its Term
Loan, interest payments on the 9-1/2% Senior Notes, dividend payments to Holding
in connection with the required repurchase of its capital stock from departing
stockholders pursuant to Holding's Stockholders' Agreement and the employee
stock ownership plan, capital expenditures and principal and interest payments
on the Company's industrial revenue bonds. As of September 29, 1998, principal
payments required by the Company's currently outstanding industrial revenue bond
indebtedness amount to $0.5 million in fiscal 2000, $1.4 million in fiscal years
2001 through 2004 and $6.2 million in the aggregate thereafter through 2010. The
Company will not be required to make any principal payments in respect of its
9-1/2% Senior Notes until 2005. The Company's Revolving Credit Facility will
mature in 2003 and its Term Loan will mature in 2004. The Term Loan requires
principal payments to be made in equal quarterly installments of $250,000. The
final installment due at maturity will repay in full all outstanding principal.
As of September 29, 1998, the Company was in compliance with all covenants under
its Revolving Credit Facility, its Term Loan and its 9-1/2% Senior Notes.
Although compliance with such covenants in the future is largely dependent on
the future performance of the Company and general economic conditions, for which
there can be no assurance, the Company expects that it will continue to be in
compliance with all of its debt covenants for the foreseeable future.

At September 29, 1998, the Company's primary sources of liquidity were 
available borrowings of $69.7 million under its Revolving Credit Facility, 
available borrowings of approximately $12.2 million against certain life 
insurance policies and internally generated funds.  Borrowings under the 
Company's Revolving Credit Facility are secured by the Company's domestic 
inventory and accounts receivable, and future availability under the facility 
is determined by prevailing levels of such assets.  The Company's Term Loan 
is secured by a first priority lien on a substantial portion of the Company's 
current and future acquired unencumbered property, plant and equipment.  The 
life insurance policy loans are secured by the cash surrender value of the 
policies and are non-recourse to the Company.  The interest rate on the loans 
is 0.5% greater than the dividend income rate on the policies.  For the first 
six months of fiscal 1999, dividend income earned under the policies totaled 
$4.4 million, compared to $4.6 million for the same period in fiscal 1998 and 
is reported as an offset to general and administrative expenses in the 
accompanying statements of operations. As of September 29, 1998, there was 
approximately $21.4 million of cash surrender value in all life insurance 
policies maintained by the Company, net of borrowings.

For fiscal 1999, the Company has planned approximately $15.3 million of capital
expenditures (including $4.3 million deemed carryover from the fiscal 1998
budget) to be financed from internally generated funds.  Approximately $8.1
million is for routine replacement of machinery and equipment and facility
improvements and expansions, $5.3 million is for the purchase of a leased
facility, and $1.9 million is for further additions to the Company's management
information systems.   During the first six months of fiscal 1999, the Company
spent $4.3 million for capital expenditures.

The Company's working capital at September 29, 1998 was $193.0 million when 
compared to $157.8 million at March 31, 1998.  The increase resulted from 
higher inventories ($37.2 million) and lower accounts payable and accrued 
liabilities ($19.3 million) offset by lower accounts receivable ($14.3 
million).

Net cash used in operating activities during the first six months of fiscal 1999
was $29.1 million, compared to $9.3 million in the same period of fiscal 1998.
The change in net cash used reflects higher inventory levels and a reduction in
accounts payable and accrued liabilities and expenses offset by lower accounts
receivable.


                                          9
<PAGE>

PART I - FINANCIAL INFORMATION (CONTINUED)


EARLE M. JORGENSEN COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

Net cash used in investing activities was $0.7 million during the first six 
months of fiscal 1999, compared to net cash provided of $4.0 million in the 
same period of fiscal 1998.  Investing activities during the fiscal 1999 
period were impacted by higher capital expenditures and proceeds received 
from redemption of life insurance policies and lower proceeds from fixed 
asset dispositions.

Net cash provided by financing activities during the first six months of fiscal
1999 totaled $24.0 million, compared to $5.1 million in the same period of
fiscal 1998.  The increase was primarily attributable to higher borrowings under
the Company's Revolving Credit Facility, offset by payments of debt issue costs
associated with a series of refinancing transactions consummated in March 1998.

As of September 29, 1998, the Company believes its sources of liquidity and
capital resources are sufficient to meet all currently anticipated operating
cash requirements, including debt service payments on its Revolving Credit
Facility, its Term Loan and its 9-1/2% Senior Notes prior to their respective
maturities. However, the Company anticipates that it will be necessary to
replace its Revolving Credit Facility on or prior to its maturity in 2003 and to
refinance all or a portion of its Term Loan on or prior to its maturity in 2004
and its 9-1/2% Senior Notes on or prior to their maturity in March 2005,
although there can be no assurance on what terms, if any, the Company would be
able to obtain such refinancing or additional financing. The Company's ability
to make interest payments on its Revolving Credit Facility and 9-1/2% Senior
Notes and principal and interest payments on its Term Loan will be dependent on
maintaining the level of performance reflected in the last twelve months, which
will be dependent on a number of factors, many of which are beyond its control,
and the continued availability of revolving credit borrowings.

YEAR 2000 COMPLIANCE

The Company has established an internal project team to investigate, remedy and
confirm compliance with Year 2000 standards. The Company has identified three
major areas critical for such compliance: (1) the Company's core management
information systems and network, (2) third party relationships, particularly
with material suppliers and (3) operations of the Company at the facility level
that are not a part of the management information system and network.

The review of the Company's management information systems and network is
substantially complete and the vast majority of software systems are compliant.
The Company has requested confirmation from hardware vendors that the network
server and personal computer systems are compliant. The Company expects that all
open items in its compliance review will be completed by March 1999, including a
full systems test.

The Company has sent a survey to all key material vendors and service providers
requesting information regarding their compliance with Year 2000 standards. This
information will be compiled, updated and furnished to the Company's
merchandising department and each facility for use in making sourcing decisions
next year.

The Company is developing checklists for each facility to review to identify and
investigate potential Year 2000 compliance issues in noninformation systems
operations and equipment. Each facility is responsible for contacting equipment
vendors and ensuring compliance at the operational level.  Identification of
items requiring enhancement or replacement will be completed by January 1999.

The costs of Year 2000 compliance have not been and are not expected to be
material to the Company's results of operations. The results of the Company's
investigations to date have not indicated any significant issues that cannot be
resolved well in advance of January 1, 2000 and, accordingly, the Company has
not developed a contingency plan.


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<PAGE>

PART II - OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

          (a)  EXHIBITS

               Exhibit 27. Financial Data Schedule

          (b)  REPORTS ON FORM 8-K

               The Registrant was not required to file a Form 8-K during the
               quarter ended September 29, 1998.


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<PAGE>

                                     SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                   EARLE M. JORGENSEN COMPANY


                                   /s/ Maurice S. Nelson, Jr.
                                   --------------------------
Date: November 11, 1998            Maurice S. Nelson, Jr.
                                   President, Chief Executive Officer

                                   /s/ Charles P. Gallopo
                                   ----------------------
Date: November 11, 1998            Charles P. Gallopo
                                   Vice President, Chief Financial Officer and
                                   Secretary (Principal Financial and Accounting
                                   Officer)


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