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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-Q

|ý                                              | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934     
|---------------------------------------------- | --------------------------------------------------------------------------------------------
|For the fiscal quarter ended December 31, 2002
|OR                                            
|o                                              | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

Commission file number: 1-7537

EARLE M. JORGENSEN COMPANY(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization)           |  | 95-0886610(I.R.S. Employer
Identification No.)
|-------------------------------------------------------------------------------- |  | ----------------------------------------------
|3050 East Birch Street, Brea, California(Address of principal executive offices) |  | 92821(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 o    No o

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 January 31, 2003  128 shares

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EARLE M. JORGENSEN COMPANY  TABLE OF CONTENTS

|                                                                                             |  |                                                                                                                                                             |  | PAGE
|-------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|PART I                                                                                      |  | FINANCIAL INFORMATION                                                                                                                                       |  |     
|Item 1.                                                                                      |  | Financial Statements                                                                                                                                        |  |     
|                                                                                             |  | Consolidated Condensed Balance Sheets at December 31, 2002 and March 31, 2002                                                                               |  | 2   
|                                                                                             |  | Consolidated Condensed Statements of Operations and Comprehensive Income for the Three Months and Nine Months Ended December 31, 2002 and December 31, 2001 |  | 3   
|                                                                                             |  | Consolidated Condensed Statements of Cash Flows for the Nine Months Ended December 31, 2002 and December 31, 2001                                           |  | 4   
|                                                                                             |  | Notes to Consolidated Condensed Financial Statements                                                                                                        |  | 5   
|Item 2.                                                                                      |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                       |  | 6   
|Item 3.                                                                                      |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                                  |  | 13  
|Item 4.                                                                                      |  | Controls and Procedures                                                                                                                                     |  | 14  
|PART II                                                                                     |  | OTHER INFORMATION                                                                                                                                           |  | 15  
|SIGNATURES                                                                                   |  | 16                                                                                                                                                         
|CERTIFICATION OF FINANCIAL REPORTS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 |  | 17                                                                                                                                                         

1

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PART IFINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

EARLE M. JORGENSEN COMPANY  CONSOLIDATED CONDENSED BALANCE SHEETS  (Dollars in thousands, except per share data)

|                                                                                                                                            |                                                                                                                                  | December 31,
2002           |         | March 31,
2002                             |        
|------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------- | ------------------------------------------ | -------
|
|ASSETS                                                                                                                                      |                                                                                                                                  |                             |         |                                            |        
|Current assets:                                                                                                                             |                                                                                                                                  |                             |         |                                            |        
|                                                                                                                                            | Cash                                                                                                                             |                             | $       | 9,877                                      |        
|                                                                                                                                            | Accounts receivable, less allowance for doubtful accounts of $910 and $452 at December 31, 2002 and March 31, 2002, respectively |                             |         | 92,691                                     |        
|                                                                                                                                            | Inventories                                                                                                                      |                             |         | 225,080                                    |        
|                                                                                                                                            | Other current assets                                                                                                             |                             |         | 7,054                                      |        
|                                                                                                                                            |                                                                                                                                  |                             |         |                                            |        
|                                                                                                                                            |                                                                                                                                  | Total current assets        |         |                                            | 334,702
|                                                                                                                                            |                                                                                                                                  |                             |         |                                            |        
|Property, plant and equipment, net of accumulated depreciation of $78,709 and $71,852 at December 31, 2002 and March 31, 2002, respectively |                                                                                                                                  |                             | 113,684 |                                            |        
|Net cash surrender value of life insurance policies                                                                                         |                                                                                                                                  |                             | 25,543  |                                            |        
|Debt issue costs, net of accumulated amortization                                                                                           |                                                                                                                                  |                             | 8,430   |                                            |        
|Other assets                                                                                                                                |                                                                                                                                  |                             | 971     |                                            |        
|                                                                                                                                            |                                                                                                                                  |                             |         |                                            |        
|                                                                                                                                            |                                                                                                                                  |                             |         | Total assets                               |        
|                                                                                                                                            |                                                                                                                                  |                             |         |                                            |        
|LIABILITIES AND STOCKHOLDER'S EQUITY                                                                                                        |                                                                                                                                  |                             |         |                                            |        
|Current liabilities:                                                                                                                        |                                                                                                                                  |                             |         |                                            |        
|                                                                                                                                            | Accounts payable                                                                                                                 |                             | $       | 112,058                                    |        
|                                                                                                                                            | Accrued employee compensation and related taxes                                                                                  |                             |         | 10,269                                     |        
|                                                                                                                                            | Accrued employee benefits                                                                                                        |                             |         | 10,305                                     |        
|                                                                                                                                            | Accrued interest                                                                                                                 |                             |         | 5,699                                      |        
|                                                                                                                                            | Other accrued liabilities                                                                                                        |                             |         | 5,022                                      |        
|                                                                                                                                            | Deferred income taxes                                                                                                            |                             |         | 19,013                                     |        
|                                                                                                                                            | Current portion of long-term debt                                                                                                |                             |         | 3,983                                      |        
|                                                                                                                                            |                                                                                                                                  |                             |         |                                            |        
|                                                                                                                                            |                                                                                                                                  | Total current liabilities   |         |                                            | 166,349
|                                                                                                                                            |                                                                                                                                  |                             |         |                                            |        
|Long term debt                                                                                                                              |                                                                                                                                  |                             | 345,461 |                                            |        
|Deferred income taxes                                                                                                                       |                                                                                                                                  |                             | 16,373  |                                            |        
|Other long-term liabilities                                                                                                                 |                                                                                                                                  |                             | 4,133   |                                            |        
|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                                          |                             |         |                                           |        
|                                                                                                                                            | Capital in excess of par value                                                                                                   |                             |         | 40,259                                     |        
|                                                                                                                                            | Accumulated other comprehensive loss                                                                                             |                             |         | (1,819                                     | )      
|                                                                                                                                            | Accumulated deficit                                                                                                              |                             |         | (87,426                                    | )      
|                                                                                                                                            |                                                                                                                                  |                             |         |                                            |        
|                                                                                                                                            |                                                                                                                                  | Total stockholder's deficit |         |                                            | (48,986
|                                                                                                                                            |                                                                                                                                  |                             |         |                                            |        
|                                                                                                                                            |                                                                                                                                  |                             |         | Total liabilities and stockholder's equity |        
|                                                                                                                                            |                                                                                                                                  |                             |         |                                            |        

See
accompanying notes to consolidated financial statements.

2

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EARLE M. JORGENSEN COMPANY  CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME  (Dollars in thousands)

|                                                                     |                            | Three Months Ended |         | Nine Months Ended |       
|-------------------------------------------------------------------- | -------------------------- | ------------------ | ------- | ----------------- | ------
|
|
|Revenues                                                             |                            | $                  | 223,573 |                   | $     
|Cost of sales                                                        |                            |                    | 159,854 |                   |       
|                                                                     |                            |                    |         |                   |       
|                                                                     |                            | Gross profit       |         |                   | 63,719
|Expenses:                                                            |                            |                    |         |                   |       
|                                                                     | Warehouse and delivery     |                    |         | 31,959            |       
|                                                                     | Selling                    |                    |         | 7,818             |       
|                                                                     | General and administrative |                    |         | 10,126            |       
|                                                                     |                            |                    |         |                   |       
|                                                                     |                            | Total expenses     |         |                   | 49,903
|                                                                     |                            |                    |         |                   |       
|Income from operations                                               |                            |                    | 13,816  |                   |       
|Interest expense, net                                                |                            |                    | 12,529  |                   |       
|                                                                     |                            |                    |         |                   |       
|Income (loss) before excise tax, income taxes and extraordinary item |                            |                    | 1,287   |                   |       
|Excise tax imposed under IRS settlement agreement                    |                            |                    |        |                   |       
|                                                                     |                            |                    |         |                   |       
|Income (loss) before income taxes and extraordinary item             |                            |                    | 1,287   |                   |       
|Income tax expense (benefit)                                         |                            |                    | 134     |                   |       
|                                                                     |                            |                    |         |                   |       
|Net income (loss) before extraordinary item                          |                            |                    | 1,153   |                   |       
|Extraordinary item  loss on early retirement of debt                |                            |                    |        |                   |       
|                                                                     |                            |                    |         |                   |       
|Net income (loss)                                                    |                            |                    | 1,153   |                   |       
|Other comprehensive income (loss), net of income taxes               |                            |                    | 24      |                   |       
|                                                                     |                            |                    |         |                   |       
|Comprehensive income (loss)                                          |                            | $                  | 1,177   |                   | $     
|                                                                     |                            |                    |         |                   |       

See
accompanying notes to consolidated financial statements.

3

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EARLE M. JORGENSEN COMPANY  CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS  (Dollars in thousands)

|                                                                                     |                                                                       | Nine Months Ended                                     |         
|------------------------------------------------------------------------------------ | --------------------------------------------------------------------- | ----------------------------------------------------- | --------
|
|
|OPERATING ACTIVITIES:                                                                |                                                                       |                                                       |         
|Net income (loss)                                                                    |                                                                       | $                                                     | (5,628  
|Adjustments to reconcile net income (loss) to net cash used in operating activities: |                                                                       |                                                       |         
|                                                                                     | Extraordinary item  loss on early retirement of debt                 |                                                       |         
|                                                                                     | Depreciation and amortization                                         |                                                       |         
|                                                                                     | Amortization of debt issue costs                                      |                                                       |         
|                                                                                     | Accrued postretirement benefits                                       |                                                       |         
|                                                                                     | Deferred income taxes                                                 |                                                       |         
|                                                                                     | Gain on sale of property, plant and equipment                         |                                                       |         
|                                                                                     | Provision for bad debts                                               |                                                       |         
|                                                                                     | Increase in cash surrender value of life insurance over premiums paid |                                                       |         
|                                                                                     | Changes in operating assets and liabilities:                          |                                                       |         
|                                                                                     |                                                                       | Accounts receivable                                   |         
|                                                                                     |                                                                       | Inventories                                           |         
|                                                                                     |                                                                       | Other current assets                                  |         
|                                                                                     |                                                                       | Accounts payable and accrued liabilities and expenses |         
|                                                                                     |                                                                       | Non-trade receivable                                  |         
|                                                                                     | Other                                                                 |                                                       |         
|                                                                                     |                                                                       |                                                       |         
|                                                                                     |                                                                       | Net cash used in operating activities                 |         
|                                                                                     |                                                                       |                                                       |         
|INVESTING ACTIVITIES:                                                                |                                                                       |                                                       |         
|Additions to property, plant and equipment                                           |                                                                       |                                                       | (13,070 
|Proceeds from the sale of property, plant and equipment                              |                                                                       |                                                       | 2,405   
|Premiums paid on life insurance policies                                             |                                                                       |                                                       | (1,198  
|Proceeds from redemption of life insurance policies                                  |                                                                       |                                                       | 683     
|                                                                                     |                                                                       |                                                       |         
|                                                                                     |                                                                       | Net cash used in investing activities                 |         
|                                                                                     |                                                                       |                                                       |         
|FINANCING ACTIVITIES:                                                                |                                                                       |                                                       |         
|Net borrowings under revolving loan agreements                                       |                                                                       |                                                       | 8,949   
|Proceeds from issuance of senior debt                                                |                                                                       |                                                       | 250,000 
|Repayments of term loan and senior debt                                              |                                                                       |                                                       | (201,000
|Payments of debt issue costs                                                         |                                                                       |                                                       | (10,668 
|Payments made upon early retirement of debt                                          |                                                                       |                                                       | (9,596  
|Payments on other debt                                                               |                                                                       |                                                       | (1,400  
|Cash dividend to parent                                                              |                                                                       |                                                       | (30,612 
|                                                                                     |                                                                       |                                                       |         
|                                                                                     |                                                                       | Net cash provided by financing activities             |         
|                                                                                     |                                                                       |                                                       |         
|Effect of exchange rate changes on cash                                              |                                                                       |                                                       | 3       
|                                                                                     |                                                                       |                                                       |         
|NET DECREASE IN CASH                                                                 |                                                                       |                                                       | (11,423 
|Cash at beginning of period                                                          |                                                                       |                                                       | 21,300  
|                                                                                     |                                                                       |                                                       |         
|                                                                                     |                                                                       | CASH AT END OF PERIOD                                 |         
|                                                                                     |                                                                       |                                                       |         

See
accompanying notes to consolidated financial statements.

4

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EARLE M. JORGENSEN COMPANY  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)  DECEMBER 31, 2002

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

The
accompanying unaudited consolidated condensed financial statements include the accounts of the Company and its wholly owned subsidiaries, including 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 Company at December 31, 2002 and the consolidated results of operations and comprehensive income and cash flows for the three months and nine months ended December 31, 2002 and
December 31, 2001. The consolidated results of operations and comprehensive income for the nine months ended December 31, 2002 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, 2002.

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

Other
comprehensive income included foreign currency translation income (loss) of 24,000 and $(99,000) for the three months ended December 31, 2002 and 2001, respectively, and
$115,000 and $(113,000) for the nine months ended December 31, 2002 and 2001, respectively. In addition, the nine months ended December 31, 2001 included a loss of $(4,286,000) relating
to the changes in the fair value of the Company's interest rate swap agreement. In May 2002, the Company terminated its interest rate swap agreement in connection with the prepayment of its
term loan (see Note 3 below).

On
May 22, 2002, the Company completed a private offering under Rule 144A of $250 million of 93/4% Senior Secured Notes due 2012, Series A. The
proceeds of the transaction were used by the Company to (i) redeem $105 million in aggregate principal amount of its outstanding 91/2% senior notes, plus call premium and
accrued interest, (ii) prepay $96 million of its term loan plus accrued interest, (iii) terminate its interest rate swap agreement, and (iv) pay a dividend to Holding in
the amount of $25 million to be used by Holding to repay or repurchase a portion of its senior indebtedness (the "Holding Notes") and/or capital stock. The Holding Notes are owned by an
affiliate of Kelso & Company, Holding's largest shareholder.

The
93/4% Senior Secured Notes are secured by a first-priority lien (subject to permitted liens) on substantially all of the Company's existing and future acquired
unencumbered property, plant and equipment and have covenants similar to those under the 91/2% senior notes. Interest payments will be made semi-annually on June 1
and December 1, commencing on December 1, 2002.

As
a result of this refinancing transaction, the Company recorded an extraordinary loss of $12,278,000 related to the early retirement of debt, consisting of the call premium paid, a
payment to terminate the interest rate swap agreement, the write-off of deferred financing costs, and certain other

5

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expenses incurred in connection with the refinancing transaction. No tax benefit was recorded in connection with this loss due to the uncertainty in realizing the resulting deferred tax asset.

On
August 30, 2002, the Company completed an exchange offering registered with the Securities and Exchange Commission of $250 million of its 93/4% Senior
Secured Notes due 2012, Series B for all of its outstanding 93/4% Senior Secured Notes due 2012, Series A.

In
April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No. 145, "Rescission of SFAS Statements No. 4, 44, and 64, Amendment of SFAS
No. 13, and Technical Corrections," which rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt," and an amendment of that statement, SFAS No. 64,
"Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements". This Statement also rescinds SFAS No. 44, "Accounting for Intangible Assets of Motor Carriers" and amends SFAS
No. 13, "Accounting for Leases," to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback transactions. The provisions of SFAS No. 145 relating to the rescission of SFAS No. 4, which are
effective for fiscal years beginning after May 15, 2002, require that any gain or loss on extinguishment of debt that was classified as an extraordinary item in prior periods presented be
reclassified if it does not meet the criteria in APB Opinion No. 30, "Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions." The Company is in the process of assessing the effect of adopting SFAS No. 145.

On
January 27, 2003, the Company signed a settlement agreement with the Department of Labor (the "DOL") in connection with their lawsuit brought against the Company
on March 8, 2002 (refer to the Company's Annual Report on Form 10-K for the year ended March 31, 2002 for further information). The key provisions of the agreement are
as follows: (i) the Company is not required to make any monetary payments under the agreement at this time; (ii) the Company is prohibited to make further common stock contributions to
the stock bonus plan; (iii) the Company will continue to obtain annual appraisals of its stock using methodology consistent with prior appraisals, and use that appraised value as the purchase
price for repurchases of common stock as it has done in the past, and; (iv) if the annual appraisal of the Company's common stock is less than $4.25 per share, the Company shall pay a floor
price of $4.25 per share in connection with the repurchase of common stock from departing employees for shares that were originally contributed to the stock bonus plan for the plan years 1994 through
2000.

If
the floor price is paid in connection with the repurchase of common stock from departing employees, the agreement also allows the DOL to assess the Company a penalty equal to 20% of
the amount calculated by multiplying the difference between the appraised value and the floor price by the number of shares repurchased at the floor price.

The
Company does not believe the settlement will have a material impact on its financial condition or future results of operations, and believes payments under the settlement, if any,
will most likely be paid in immaterial amounts which will be spread over many years.

6

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

Forward-Looking Information

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements that generally include the words "believe", "expect",
"intend", "anticipate", "will", and other similar expressions. This quarterly report may contain forward-looking statements that are based upon our management's then-current views,
understandings and assumptions regarding future financial results. These forward-looking statements involve risks and uncertainties that may affect our company's operations, markets, products,
services, prices and other factors as more fully discussed in our Registration Statement on Form S-4, File No. 333-91866, as filed on July 3, 2002, and the
amendments thereto, and in other filings with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, economic, competitive, legal and governmental
factors over which Earle M. Jorgensen Company has no control. Accordingly, there is no assurance that the expectations reflected in such forward-looking statements will be realized. We undertake no
obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

Overview

The metals service center industry continues to be adversely affected by weak economic conditions in the United States. Customers served by metals service centers
have reduced their inventories and production activities due to weakened demand and the uncertainty of an economic recovery. Pricing for metal products remains volatile due to competitive pressures
and changes in availability of inventories held by service centers or supplied by both domestic and foreign mills, and the impact of Section 201 tariffs on both pricing and availability of
certain metal products.

Our
tonnage shipped during the third quarter of fiscal 2003 was relatively strong and comparable with the past several quarters due to increasing demand and from success in gaining
market share, particularly in Canada. We believe we are gaining market share through our core products strategies and excellent customer service, and from the recent completion of the first phase of
the expansion and automation of our Chicago facility in July 2002.

However,
we continue to be challenged to further increase our market share due to competitive forces and overall weak demand in the United States for our core products and services sold
to customers in key industries we serve. We are confident that our well-balanced inventories, valued-added capabilities, aggressive marketing and unequaled customer service have and will
continue to differentiate us in the
marketplace and will position us to outperform the industry when an economic recovery occurs or as general economic conditions improve.

7

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The
following table provides a percentage breakdown of tonnage sold to key industries for the three and nine months ended December 31, 2002 and 2001:

|                                        |       | Three Months |       | Nine Months |      
|--------------------------------------- | ----- | ------------ | ----- | ----------- | -----
|
|
|Machine Tools                           |       | 27.5         | %     | 26.9        | %    
|Industrial Equipment                    |       | 8.5          |       | 9.9         |      
|Transportation                          |       | 8.5          |       | 8.2         |      
|Construction/Farm Equipment             |       | 7.7          |       | 8.2         |      
|Metal Service Centers & Wholesale Trade |       | 6.9          |       | 6.6         |      
|Fabricated Metal                        |       | 6.1          |       | 6.1         |      
|Screw Machine Products                  |       | 5.7          |       | 5.1         |      
|Fluid Power                             |       | 3.9          |       | 4.3         |      
|Oil, Gas & Energy                       |       | 3.8          |       | 4.1         |      
|Power Transmission Equipment            |       | 2.8          |       | 2.7         |      
|Primary Metal, Mills, Forgings          |       | 2.4          |       | 2.4         |      
|Printing and Paper Equipment            |       | 1.4          |       | 1.2         |      
|All Other Industries                    |       | 14.8         |       | 14.3        |      
|                                        | Total |              | 100.0 | %           | 100.0

We
continue to focus on improving business processes and reducing costs and believe our results reflect the benefits realized from improved productivity and from our ability to maintain
cost structures that are aligned with the prevailing levels of business. Our operating margin for the first nine months of fiscal 2003 was 6.3%, compared to 5.7% for the same period in fiscal 2002. As
of December 31, 2002, our total number of employees was 1,684, compared to 1,725 as of March 31, 2002 and 1,739 as of December 31, 2001.

Results of OperationsThree Months Ended December 31, 2002 Compared To Three Months Ended December 31, 2001

Revenues.Revenues for the third quarter of fiscal 2003 increased 7.4% to $223.6 million, from $208.1 million
for the same period in fiscal 2002. Revenues from our domestic operations increased 6.0% to $210.0 million in the third quarter of fiscal 2003, from $198.1 million for the same period in
fiscal 2002 reflecting a 7% increase in tonnage shipped attributable to better market penetration and stronger demand for product sold to customers in certain key industries we serve, including
machine tools, transportation, metal fabrication and wholesale, power transmission equipment and medical equipment. Average selling prices decreased 1% when compared to the third quarter of fiscal
2002. Revenues from our Canadian operations increased 36.0% to $13.6 million in the third quarter of fiscal 2003 from $10.0 million in the same period in fiscal 2002, due to stronger
economic conditions and better market penetration, caused in part from recently expanded facilities.

Gross Profit.Gross profit for the third quarter of fiscal 2003 increased 9.3% to $63.7 million, from
$58.3 million for the same period in fiscal 2002, while consolidated gross margins were 28.5% and 28.0%, respectively. Gross profit for the third quarter of fiscal 2003 included a LIFO credit
of $0.7 million versus no LIFO adjustment recorded in the third quarter of fiscal 2002. Gross profit from our Canadian operations was $2.9 million and gross margin was 21.3% during the
third quarter of fiscal 2003, compared to $2.1 million and 21.0%, respectively, for the same period in fiscal 2002. Exclusive of our Canadian operations and LIFO adjustments, gross margin was
28.6% for the third quarter of fiscal 2003 versus 28.4% for the same period in fiscal 2002.

8

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Expenses.Total operating expenses for the third quarter of fiscal 2003 increased 0.6% to $49.9 million (22.3% of
revenues), from $49.6 million (23.8% of revenues) for the same period in fiscal 2002. The increase in operating expenses includes transitional costs and expenses attributable to the expansion
and automation of our Chicago facility, which became operational in July 2002 and generally reflects the impact on variable expenses from changes in tonnage shipped. These additional costs and
expenses more than offset ongoing cost reduction initiatives and productivity improvements.

Warehouse
and delivery expenses for the third quarter of fiscal 2003 increased 5.6% to $32.0 million (14.3% of revenues), from $30.3 million (14.6% of revenues) for the
same period in fiscal 2002. The increase resulted primarily from higher occupancy, lease and related transitional costs and expenses associated with the expansion and automation of our Chicago
facility, higher equipment maintenance costs and depreciation, increased insurance costs, and increased packaging and freight expenses resulting from higher tonnage shipped.

Selling
expenses for the third quarter of fiscal 2003 increased 4.0% to $7.8 million (3.5% of revenues), from $7.5 million (3.6% of revenues) for the same period in fiscal
2002. The increase resulted from higher accruals for incentive compensation.

General
and administrative expenses for the third quarter of fiscal 2003 decreased 12.2% to $10.1 million (4.5% of revenues), from $11.5 million (5.5% of revenues),
excluding non-recurring charges, for the same period in fiscal 2002. The decrease resulted from higher income recognized in connection with our life insurance policies and lower relocation
and professional services expenses, offset by higher bad debt expense. Non-recurring charges of $0.4 million included in the third quarter of fiscal 2002 were associated with
headcount reductions and costs incurred in connection with facility consolidations.

Net Interest Expense.Net interest expense was $12.5 million during the third quarter of fiscal 2003 and
$10.2 million during the same period in fiscal 2002. Such amounts include interest related to our long-term debt and borrowings against the cash surrender value of certain life
insurance policies we maintain, and the amortization of debt issue costs.

Interest
expense and amortization of debt issue costs related to our outstanding indebtedness (excluding those borrowings against the cash surrender value of certain life insurance
policies) totaled $7.8 million for the third quarter of fiscal 2003, compared to $6.2 million for the same period in fiscal 2002. The increase in interest expense is the result of the
larger principal amount and higher interest
rate on our existing 93/4% senior secured notes as compared to our 91/2% senior notes and term loan which were redeemed and repaid in the first quarter of fiscal 2003.
Our average outstanding indebtedness during the third quarter of fiscal 2003 was $356.1 million, compared to $311.2 million for the same period in fiscal 2002. The increase in average
outstanding indebtedness was due to the issuance of $250 million of our 93/4% senior secured notes on May 22, 2002 to redeem and repay aggregate indebtedness of
$201 million represented by our 91/2% senior notes and term loan. The weighted average interest rate on our indebtedness was 7.95% during the third quarter of fiscal 2003 versus
6.47% during the same period in fiscal 2002. During the three months ended December 31, 2002 and December 31, 2001, borrowings under our credit facility averaged $98.5 million and
$99.8 million, and the average interest rate on such borrowings was 4.56% and 4.42%, respectively.

Interest
expense associated with borrowings against the cash surrender value of certain life insurance policies we maintain was $4.7 million during the third quarter of fiscal
2003, compared to $4.0 million for the same period in fiscal 2002.

The
interest rates on our existing senior secured notes and on the borrowings under the life insurance policies are fixed at 9.75% and 11.76%, respectively. The interest rate on our
credit facility is floating (4.10% as of December 31, 2002).

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Included
in the third quarter of fiscal 2002 was $0.6 million paid to Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company) pursuant to our interest rate
swap agreement covering a notional amount of $95.0 million under our term loan. Because the interest rate swap agreement was terminated in May 2002 in connection with the prepayment of
the term loan as part of our senior debt offering, no quarterly settlements were required in fiscal 2003.

Income Taxes.Income tax expense for the third quarter of fiscal 2003 and 2002 included provisions for state franchise and
foreign income taxes. Federal tax provisions for the third quarter of fiscal 2003 and 2002 were offset by recognition of tax benefits associated with our loss carryforwards.

Results of OperationsNine Months Ended December 31, 2002 Compared To Nine Months Ended December 31, 2001

Revenues.Revenues for the first nine months of fiscal 2003 increased 0.5% to $673.9 million, from
$670.5 million for the same period in fiscal 2002. Revenues from our domestic operations decreased 0.5% to $635.4 million in the first nine months of fiscal 2003, from
$638.3 million for the same period in
fiscal 2002. The decline in domestic revenues reflects lower average selling prices offset by a 1% increase in tonnage shipped attributable to stronger demand for our product sold to customers in
certain key industries we serve, including machine tools, metal fabrication and wholesale, power transmission equipment and medical equipment. Revenues from our Canadian operations increased 19.9% to
$38.5 million in the first nine months of fiscal 2003 from $32.1 million in the same period in fiscal 2002, due to stronger economic conditions and better market penetration, caused in
part from recently expanded facilities.

Gross Profit.Gross profit for the first nine months of fiscal 2003 decreased 0.3% to $190.6 million, from
$191.1 million for the same period in fiscal 2002, while consolidated gross margins were 28.3% and 28.5%, respectively. Gross profit for the first nine months of fiscal 2003 and fiscal 2002
included LIFO credit adjustments of $0.7 million and $1.3 million, respectively. Gross profit from our Canadian operations was $8.2 million and gross margin was 21.3% during the
first nine months of fiscal 2003, compared to $7.0 million and 21.8%, respectively, for the same period in fiscal 2002. Exclusive of our Canadian operations and LIFO adjustments, gross margin
was 28.6% for the first nine months of fiscal 2003 and fiscal 2002.

Expenses.Total operating expenses for the first nine months of fiscal 2003 decreased 2.8% to $148.3 million (22.0% of
revenues), from $152.6 million (22.8% of revenues) for the same period in fiscal 2002. Excluding non-recurring charges of $1.6 million included in the fiscal 2002 period
associated with headcount reductions and costs incurred in connection with facility consolidations, operating expenses for the first nine months of fiscal 2003 decreased 1.8%. Such decrease resulted
from ongoing cost reduction initiatives and productivity improvements, offset by certain transitional costs and expenses attributable to the expansion and automation of our Chicago facility, which
became operational in July 2002, and the impact on variable expenses from changes in tonnage shipped.

Warehouse
and delivery expenses for the first nine months of fiscal 2003 decreased 0.3% to $93.9 million (13.9% of revenues), from $94.2 million (14.0% of revenues) for the
same period in fiscal 2002. The decrease resulted primarily from lower compensation and vehicle expenses, offset by higher depreciation, property tax accruals and insurance costs, and increased
equipment lease and maintenance expenses. Some of the increase in these costs and expenses is attributable to the expansion and automation of our Chicago facility, which became operational in
July 2002. As of December 31, 2002, 1,024 employees were involved in warehouse and delivery activities, compared to 1,067 as of December 31, 2001.

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Selling
expenses for the first nine months of fiscal 2003 decreased 0.8% to $23.8 million (3.5% of revenues), from $24.0 million (3.6% of revenues) for the same period in
fiscal 2002. The decrease resulted from lower travel and entertainment expenses.

General
and administrative expenses for the first nine months of fiscal 2003 decreased 6.7% to $30.6 million (4.5% of revenues) from $32.8 million (4.9% of revenues),
excluding non-recurring charges, for the same period in fiscal 2002. The decrease resulted from lower professional services and relocation expenses, and higher income recognized in
connection with our life insurance policies, partially offset by higher accruals for incentive compensation, and increased insurance costs and bad debt expenses. Non-recurring charges of
$1.6 million included in the fiscal 2002 period were associated with headcount reductions and costs incurred in connection with facility consolidations.

Net Interest Expense.Net interest expense was $35.1 million during the first nine months of fiscal 2003 and
$31.8 million during the same period in fiscal 2002. Such amounts include interest related to our long-term debt and borrowings against the cash surrender value of certain life
insurance policies we maintain, and the amortization of debt issue costs.

Interest
expense and amortization of debt issue costs related to our outstanding indebtedness (excluding those borrowings against the cash surrender value of certain life insurance
policies) totaled $21.7 million for the first nine months of fiscal 2003, compared to $20.0 million for the same period in fiscal 2002. The increase in interest expense is the result of
the larger principal amount and higher interest rate on our existing 93/4% senior secured notes as compared to our 91/2% senior notes and term loan which were redeemed
and repaid in the first nine months of fiscal 2003. Our average outstanding indebtedness during the first nine months of fiscal 2003 was $353.3 million, compared to $309.9 million for
the same period in fiscal 2002. The increase in average outstanding indebtedness was due to the issuance of $250 million of our 93/4% senior secured notes on May 22, 2002
to redeem and repay aggregate indebtedness of $201 million represented by our 91/2% senior notes and term loan. The weighted average interest rate on our indebtedness was 7.99%
during the first nine months of fiscal 2003 versus 7.38% during the same period in fiscal 2002. During the nine months ended December 31, 2002 and December 31, 2001, borrowings under our
credit facility averaged $93.7 million and $98.2 million, and the average interest rate on such borrowings was 4.84% and 5.62%, respectively.

Interest
expense associated with borrowings against the cash surrender value of certain life insurance policies we maintain was $13.4 million during the first nine months of 2003,
compared to $11.7 million for the same period in fiscal 2002.

The
interest rates on our existing senior secured notes and on the borrowings under the life insurance policies are fixed at 9.75% and 11.76%, respectively. The interest rate on our
credit facility is floating (4.10% as of December 31, 2002).

Included
in the first nine months of fiscal 2002 was $1.3 million paid to Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company) pursuant to our interest
rate swap agreement covering a notional amount of $95.0 million under our term loan. Because the interest rate swap agreement was terminated in May 2002 in connection with the prepayment
of the term loan as part of our senior debt offering, no quarterly settlements were required in fiscal 2003.

Income Taxes.Income tax expense for the first nine months of fiscal 2003 and 2002 included provisions for state franchise
and foreign income taxes. Federal tax provisions for the first nine months of fiscal 2003 and 2002 were offset by recognition of tax benefits associated with our loss carryforwards.

Extraordinary Item.We recognized an extraordinary loss of $12.3 million in connection with the early retirement of
our 91/2% senior notes and term loan, which consisted of the call premium paid, a payment to terminate the interest rate swap agreement, the write-off of deferred financing
costs, and

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certain other expenses incurred in connection with the refinancing transaction. No tax benefit was recorded in connection with this loss due to the uncertainty in realizing the resulting deferred tax
asset.

Liquidity and Capital Resources

On May 22, 2002, we completed a private offering under Rule 144A of $250 million of 93/4% Senior Secured Notes due 2012,
Series A. The proceeds of the transaction were used to (i) redeem $105 million in aggregate principal amount of our outstanding 91/2% senior notes, plus call
premium and accrued interest, (ii) prepay $96 million of our term loan plus accrued interest, (iii) terminate our interest rate swap agreement, and (iv) pay a dividend to
Holding in the amount of $25 million to be used by Holding to repay or repurchase a portion of the Holding Notes and/or its capital stock. The Holding Notes are owned by an affiliate of
Kelso & Company, Holding's largest shareholder. The 93/4% senior secured notes are secured by a first-priority lien (subject to permitted liens) on substantially all of our
existing and future acquired unencumbered property, plant and equipment and have covenants similar to those under the indebtedness that was redeemed and prepaid. Interest payments will be made
semi-annually on June 1 and December 1, commencing on December 1, 2002.

Working
capital increased to $168.4 million at December 31, 2002 from $154.9 million at March 31, 2002, primarily as the result of higher inventories. During
the first nine months of fiscal 2003 our primary source of cash consisted of borrowings under our credit facility, $8.9 million. Our primary uses of cash included capital expenditures,
$13.1 million, dividends to Holding in connection with the required repurchase of its capital stock from departing stockholders, $5.6 million, and funding operating actvities,
$5.9 million.

Cash
used in operating activities was $5.9 million in the first nine months of fiscal 2003, compared to $8.7 million in the same period of fiscal 2002. The change was
primarily attributable to timing of payments to vendors relative to changes in working capital assets during the respective periods.

For
fiscal 2003, we have planned approximately $15.8 million of capital expenditures to be financed from internally generated funds and borrowings under our credit facility.
Approximately $14.4 million is for facility expansions and improvements (including a commitment of $11.8 million to substantially complete the expansion and automation of our facility in
Chicago) and routine replacement of
machinery and equipment, and $1.4 million is for further additions to our management information systems. During the first nine months of fiscal 2003, we spent $13.1 million for planned
capital expenditures, including $11.0 million for the Chicago project, the first phase of which became operational in July 2002.

Our
ongoing cash requirements for debt service and related obligations are expected to consist primarily of interest payments under our credit facility, interest payments on our senior
secured 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 our stock
bonus plan, capital expenditures and principal and interest payments on our industrial revenue bonds. As of December 31, 2002, principal payments required by our outstanding industrial revenue
bond indebtedness amount to $1.4 million in fiscal year 2004, $2.1 million in fiscal year 2005, $1.2 million in fiscal year 2006, $0.7 million in fiscal years 2007 and
2008, and $1.5 million in the aggregate thereafter through fiscal year 2011. We will not be required to make any principal payments on our senior secured notes until their maturity in fiscal
year 2012. Our credit facility will mature in fiscal year 2007. As of December 31, 2002, we were in compliance with all covenants under our credit facility and senior secured notes. Although
compliance with such covenants in the future is largely dependent on our future performance and general economic conditions, for which there can be no assurance, we expect to be in compliance with all
of our debt covenants for the foreseeable future.

As
of December 31, 2002, our primary sources of liquidity were available borrowings of $81.4 million under our credit facility, available borrowings of approximately
$3.1 million against certain

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life insurance policies we maintain and internally generated funds. Borrowings under our credit facility are secured by domestic inventory and accounts receivable, and future availability is
determined by prevailing levels of those assets. Our 93/4% senior secured notes are secured by a first priority lien (subject to permitted liens) on substantially all of our current and
future acquired unencumbered real property, plant and equipment. The life insurance policy loans are secured by the cash surrender value of the policies, are non- recourse, and bear
interest at a rate 0.5% greater than the dividend income rate on the policies. For the first nine months of fiscal 2003, dividend income earned under the policies totaled $12.2 million,
compared to $9.3 million for the same period in fiscal year 2002 and is reported as an offset to general and administrative expenses in the accompanying statements of operations. As of
December 31, 2002, there was approximately $25.5 million of cash surrender value in all life insurance policies we maintain, net of borrowings.

For
the third quarter and first nine months of fiscal 2003, EBITDA (as defined) totaled $16.2 million (7.2% of revenues) and $50.6 million (7.5% of revenues), respectively,
compared to $11.9 million (5.7% of revenues) and $47.6 million (7.1% of revenues) for the same periods in fiscal 2002. We define EBITDA as income from operations before depreciation and
amortization, LIFO adjustments, non-recurring charges and certain other non-cash expenses, including post-retirement accruals. EBITDA is provided as an important
measure of our ability to service debt and should not be considered in isolation or as a substitute for consolidated results of operations and cash flows data presented in the accompanying
consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

We
believe our sources of liquidity and capital resources are sufficient to meet all currently anticipated operating cash requirements, including debt service payments on our credit
facility and 93/4% senior secured notes prior to their scheduled maturities in fiscal years 2007 and 2012, respectively; however, we anticipate that it will be necessary to replace or
to refinance all or a portion of our credit facility and the senior secured notes prior to their respective maturities, although there can be no assurance on what terms, if any, we would be able to
obtain such refinancing or additional financing. Our ability to make interest payments on our credit facility and the senior secured notes 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 our control, and the continued availability of revolving credit borrowings.

Critical Accounting Policies

Management's discussion and analysis of our financial position and results of operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect
the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities, although no assurance can be given that actual results will not differ
from those estimates and judgments. Management believes the critical accounting policies and areas that require the most significant judgments and estimates to be used in the preparation of the
consolidated financial statements are revenue recognition, allowance for doubtful accounts, inventory reserves, pension and other postretirement benefits, insurance reserves, incentive compensation,
contingencies and income tax accounting. These critical accounting policies, which are fully discussed in our Annual Report on Form 10-K for the year ended March 31, 2002,
have been consistently applied to the consolidated financial statements included herein.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not use financial instruments or enter into hedging transactions for speculative or trading purposes with respect to managing market risks. However, we have
used and will continue to evaluate

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the use of financial instruments to reduce our exposure to higher interest costs during periods of rising interest rates. On May 22, 2002 we terminated a fixed rate interest rate swap
agreement covering $95.0 million of our term loan that was repaid in connection with the issuance of $250 million of our 93/4% senior secured notes. As of
December 31, 2002, we had no other financial instruments. Our exposure to changes in interest rates is not considered significant to our consolidated financial statements in the foreseeable
future.

Our
exposure to market risk for changes in foreign currency exchange rates is limited to our Canadian operations and the Canadian dollar. Changes in the exchange rate of the Canadian
dollar have not and
are not expected to have a material impact on our results of operations and cash flows. Due to our product mix and the frequency of our buying and selling activities over normal business cycles, our
exposure to changes in commodity prices is not considered material.

Item 4. CONTROLS AND PROCEDURES

Within 90 days prior to the filing of this report, an evaluation was carried out by our Chief Executive Officer and Chief Financial Officer, with the
assistance of other members of management, of the effectiveness of disclosure controls and procedures (as defined in Rule 15d-14(c) under the Securities Exchange Act of 1934). Based
upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective in ensuring that all material information required to
be filed in this quarterly report was gathered, analyzed and reported or otherwise made known to them in a timely fashion. There have been no significant changes in our internal controls, or in other
factors that could significantly affect these controls, subsequent to the date the evaluation was completed; however, management and our audit committee have engaged an independent contractor to
perform certain internal audit and control procedures that previously have been performed by our employees.

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PART IIOTHER INFORMATION

Item 1. Legal Proceedings

On January 27, 2003, we signed a settlement agreement with the Department of Labor (the "DOL") in connection with their lawsuit brought
against the Company on March 8, 2002 (refer to our Annual Report on Form 10-K for the year ended March 31, 2002 for further information). The key provisions of the
agreement are as follows: (i) we are not required to make any monetary payments under the agreement at this time; (ii) we are prohibited to make further common stock contributions to the
stock bonus plan; (iii) we will continue to obtain annual appraisals of our stock using methodology consistent with prior appraisals, and use that appraised value as the purchase price for
repurchases of common stock as we have done in the past, and; (iv) if the annual appraisal of our common stock is less than $4.25 per share, we shall pay a floor price of $4.25 per share in
connection with the repurchase of common stock from departing employees for shares that were originally contributed to the stock bonus plan for the plan years 1994 through 2000.

If
we pay the floor price in connection with the repurchase of common stock from departing employees, the agreement also allows the DOL to assess the Company a penalty equal to 20% of
the amount calculated by multiplying the difference between the appraised value and the floor price by the number of shares repurchased at the floor price.

We
do not believe the settlement will have a material impact on our financial condition or future results of operations, and we believe payments under the settlement, if any, will most
likely be paid in immaterial amounts which will be spread over many years.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K



| |  | 10.57 |  | Earle M. Jorgensen Company Employee Stock Ownership Plan, as amended and restated effective as of April 1, 2001.                                                          
| |  | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 10.58 |  | First Amendment to the Earle M. Jorgensen Company Employee Stock Ownership Plan (as amended and restated effective as of April 1, 2001), effective as of January 15, 2002.
| |  | 10.59 |  | Second Amendment to the Earle M. Jorgensen Company Employee Stock Ownership Plan (as amended and restated effective as of April 1, 2001), effective as of April 1, 2001.  
| |  | 10.60 |  | Third Amendment to the Earle M. Jorgensen Company Employee Stock Ownership Plan (as amended and restated effective as of April 1, 2001), effective as of January 1, 2002. 
| |  | 10.61 |  | Amendment 2002-1 to the Earle M. Jorgensen Hourly Employees Pension Plan, effective as of January 1, 2002.                                                                
| |  | 10.62 |  | Amendment 2002-1 to the Earle M. Jorgensen Company Employee Capital Accumulation Plan, effective as of April 1, 2002.                                                     
| |  | 99.1  |  | Certification of Financial Reports by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                  
| |  | 99.2  |  | Certification of Financial Reports by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                  



The
Company was not required to file a Form 8-K during the nine months ended December 31, 2002.

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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                                                                                                                
|---------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|Date: February 7, 2003 |  | /s/MAURICE S. NELSON, JR.President, Chief Executive Officer and
Chief Operating Officer                                                   
|Date: February 7, 2003 |  | /s/WILLIAM S. JOHNSONWilliam S. Johnson
Vice President, Chief Financial Officer and
Secretary (Principal Financial and Accounting Officer)

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CERTIFICATION OF FINANCIAL REPORTS  PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I,
Maurice S. Nelson, Jr., certify that:





Date:
February 7, 2003

|                                                                                                               |  | 
|-------------------------------------------------------------------------------------------------------------- |  | 
|/s/MAURICE S. NELSON, JR.Maurice S. Nelson, Jr.
President, Chief Executive Officer and Chief Operating Officer |  | 

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CERTIFICATION OF FINANCIAL REPORTS  PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I,
William S. Johnson, certify that:





Date:
February 7, 2003

|                                                                                              |  | 
|--------------------------------------------------------------------------------------------- |  | 
|/s/WILLIAM S. JOHNSONWilliam S. Johnson
Vice President, Chief Financial Officer and Secretary |  | 

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