STEEL TECHNOLOGIES INC - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

OR

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

For the transition period from __________ to __________

Commission file number 0-14061

STEEL TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)

Kentucky 61-0712014
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

15415 Shelbyville Road, Louisville, KY 40245
(Address of principal executive offices) (Zip Code)

(502) 245-2110
(Registrant's telephone number, including area code)

Not applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

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

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes X No____

Indicate the number of shares outstanding of each of the Issuer's classes of
common stock as of the latest practical date.

There were 12,922,050 shares outstanding of the Registrant's common stock as of
April 30, 2005.

STEEL TECHNOLOGIES INC.

INDEX

Page Number
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets
March 31, 2005 and September 30, 2004 ............................. 3

Condensed Consolidated Statements of Income and
Comprehensive Income Three and SIx Months Ended
March 31, 2005 and 2004 ........................................... 4

Condensed Consolidated Statements of Cash Flows Six Months
Ended March 31, 2005 and 2004 ..................................... 5

Notes to Condensed Consolidated Financial Statements .............. 6-10

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations .............................................11-21

Item 3. Quantitative and Qualitative Disclosures About Market
Risk .............................................................. 21

Item 4. Controls and Procedures ........................................... 21

PART II.OTHER INFORMATION

Item 6. Exhibits .......................................................... 22

Signature ................................................................. 22

Exhibit 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002

Exhibit 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002

Exhibit 32.1 Certification of Chief Executive Officer Pursuant to Title 18,
United States Code, Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2 Certification of Chief Financial Officer Pursuant to Title 18,
United States Code, Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002

Part I. - FINANCIAL INFORMATION
Item 1. Financial Statements

STEEL TECHNOLOGIES INC.
Condensed Consolidated Balance Sheets

(In thousands, except shares) March 31 September 30
(Unaudited) 2005 2004
- --------------------------------------------------------------------------------

ASSETS
Current assets:
Cash and cash equivalents ................... $ 8,638 $ 2,273
Trade accounts receivable, net .............. 116,473 123,546
Inventories ................................. 200,925 178,490
Deferred income taxes ....................... 2,424 2,471
Prepaid expenses and other assets ........... 4,096 5,629
--------- ---------
Total current assets ..................... 332,556 312,409

Property, plant and equipment, net ............. 110,756 108,593
Investments in and advances to unconsolidated
affiliates .................................. 25,574 22,312
Goodwill ....................................... 18,148 18,148
Other assets ................................... 2,421 1,544
--------- ---------
$ 489,455 $ 463,006
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................ $ 86,473 $ 90,859
Accrued liabilities ......................... 17,059 14,901
Income taxes payable ........................ 5,939 6,278
--------- ---------
Total current liabilities ................ 109,471 112,038

Long-term debt ................................. 112,000 114,000
Deferred income taxes .......................... 18,111 18,295
Other long-term liabilities..................... 1,140 424
--------- ---------
Total liabilities ........................ 240,722 244,757
--------- ---------
Commitments and contingencies

Shareholders' equity:
Preferred stock, no par value: 500,000 shares
authorized; none issued or outstanding..... - -
Common stock, no par value: 50,000,000 shares
authorized; issued and outstanding shares:
12,920,776 at March 31, 2005 and
12,804,073 at September 30, 2004............ 70,560 69,466
Treasury stock at cost: 2,634,716 shares at
March 31, 2005 and 2,626,742 at September
30, 2004.................................... (24,465) (24,238)
Additional paid-in capital .................. 5,170 5,170
Retained earnings ........................... 202,612 174,025
Accumulated other comprehensive loss ........ (5,144) (6,174)
--------- ---------
Total shareholders' equity ............... 248,733 218,249
--------- ---------
$ 489,455 $ 463,006
========= =========

The accompanying notes are an integral part of the condensed consolidated
financial statements.
3

STEEL TECHNOLOGIES INC.
Condensed Consolidated Statements of Income

(In thousands, except per share data) Three Months Ended Six Months Ended
(Unaudited) March 31 March 31
- --------------------------------------------------------------------------------
2005 2004 2005 2004
------------------------------------------

Sales ................................ $286,958 $184,842 $540,974 $315,631
Cost of goods sold ................... 255,268 165,266 476,838 285,278
-------- -------- -------- --------
Gross profit ................... 31,690 19,576 64,136 30,353

Selling, general and
administrative expenses ........... 9,624 8,474 19,745 15,090
Equity in net income of unconsolidated
affiliates ........................ 1,746 687 3,217 1,169
-------- -------- -------- -------
Operating income .................. 23,812 11,789 47,608 16,432

Interest expense, net ................ 1,330 1,047 2,509 2,059
(Gain) loss on disposals/writeoffs of
property, plant and equipment ..... (18) 12 (18) 12
-------- -------- -------- -------
Income before income taxes ........ 22,500 10,730 45,117 14,361

Provision for income taxes ........... 7,146 3,828 15,246 5,061
-------- -------- -------- -------
Net income ....................... $ 15,354 $ 6,902 $ 29,871 $ 9,300
-------- -------- -------- -------
Diluted weighted average number of
common shares outstanding ......... 13,104 10,098 13,097 10,037
======== ======== ======== =======

Diluted earnings per common share .... $ 1.17 $ 0.68 $ 2.28 $ 0.93
======== ======== ======== =======

Basic weighted average number of
common shares outstanding ......... 12,890 9,835 12,865 9,807
======== ======== ======== =======

Basic earnings per common share ...... $ 1.19 $ 0.70 $ 2.32 $ 0.95
======== ======== ======== =======

Cash dividends per common share ...... $ -- $ -- $ 0.10 $ 0.10
======== ======== ======== =======

Condensed Consolidated Statements of Comprehensive Income

(In thousands) Three Months Ended Six Months Ended
(Unaudited) March 31 March 31
- --------------------------------------------------------------------------------
2005 2004 2005 2004
------------------------------------------

Net income ........................... $ 15,354 $ 6,902 $ 29,871 $ 9,300
Foreign currency translation
adjustment ................... 532 532 1,030 (169)
Decrease in unrealized loss on cash
flow hedges, net of taxes .... - 78 - 159
-------- -------- -------- --------
Comprehensive income ................. $ 15,886 $ 7,512 $ 30,901 $ 9,290
======== ======== ======== ========

The accompanying notes are an integral part of the condensed consolidated
financial statements.

4

STEEL TECHNOLOGIES INC.
Condensed Consolidated Statements of Cash Flows

(In thousands) Six Months Ended
(Unaudited) March 31
- --------------------------------------------------------------------------------
2005 2004
---------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ......................................... $ 29,871 $ 9,300
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation ................................... 7,453 7,380
Deferred income taxes .......................... (293) 178
Equity in net income of unconsolidated
affiliates .................................... (3,217) (1,169)
(Gain) loss on disposals/writeoffs of property,
plant and equipment ........................... (18) 12
Increase (decrease) in cash resulting from
changes in:
Trade accounts receivable ................ 7,676 (31,445)
Inventories .............................. (21,780) (34,816)
Prepaids expenses and other assets ....... 702 1,169
Accounts payable ......................... (4,773) 27,314
Accrued liabilities and income taxes ..... 2,284 6,618
-------- --------
Net cash provided by (used in) operating activities ... 17,905 (15,459)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment ......... (9,434) (8,561)
Proceeds from sale of property, plant and equipment 116 -
-------- --------
Net cash used in investing activities ................. (9,318) (8,561)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt ....................... 78,000 32,000
Principal payments on long-term debt ............... (80,000) (53,720)
Cash dividends on common stock ..................... (1,284) (979)
Net issuance of common stock ....................... 867 47,547
Other .............................................. - 175
-------- --------
Net cash (used in) provided by financing activities ... (2,417) 25,023
-------- --------
Effect of exchange rate changes on cash ............... 195 (23)
-------- --------
Net increase in cash and cash equivalents ............. 6,365 980
Cash and cash equivalents, beginning of year .......... 2,273 2,758
-------- --------
Cash and cash equivalents, end of period .............. $ 8,638 $ 3,738
======== ========
Supplemental Cash Flow Disclosures:
Cash payment for interest ............................. $ 1,634 $ 2,302
======== ========
Cash payment for income taxes ......................... $ 15,507 $ 1,369
======== ========

The accompanying notes are an integral part of the condensed consolidated
financial statements.

5

STEEL TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. BASIS OF PRESENTATION:

The condensed consolidated balance sheet as of March 31, 2005 and the condensed
consolidated statements of income and comprehensive income for the three and six
months ended March 31, 2005 and 2004, and condensed consolidated cash flows for
the six months ended March 31, 2005 and 2004, have been prepared by Steel
Technologies Inc. (the Company) without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows as
of and for the three and six months ended March 31, 2005 and for all periods
presented have been made.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's annual report to
shareholders for the year ended September 30, 2004. The results of operations
for the three and six months ended March 31, 2005 are not necessarily indicative
of the operating results for the full year.

2. INVENTORIES:

Inventories consists of:

(In thousands) March 31 September 30
(Unaudited)) 2004 2004
- -------------------------------------------------------------------------------

Raw materials .................................... $ 141,748 $ 132,570
Finished goods and work in process ............... 59,177 45,920
---------- ----------
$ 200,925 $ 178,490
========== ==========

3. STOCK OPTIONS

At March 31, 2005, the Company had stock-based compensation plans which are
described more fully in Note 14 of Notes to Consolidated Financial Statements in
our Annual Report on Form 10-K for the fiscal year ended September 30, 2004. As
permitted by Statement of Financial Accounting Standards (SFAS) No. 123
"Accounting for Stock-Based Compensation" and amended by SFAS No. 148,
"Accounting for Stock-Based Compensation-Transition and Disclosure," the Company
follows the provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related Interpretations in
accounting for its stock option plans under the intrinsic value based method.
Accordingly, no stock-based compensation expense has been recognized for stock
options issued under the plans as all stock options granted under the plans had
an exercise price at least equal to the market value of the underlying common
stock on the date of grant. Had compensation expense been determined based on
the fair value of the

6

stock options at the grant date consistent with the provisions of SFAS No. 123,
the Company's net income and basic and diluted net income per share would have
been impacted as follows:

4. NET INCOME PER SHARE COMPUTATIONS:

The following is a reconciliation of the denominator of the basic and diluted
per share computations:

(In thousands, except per share data) Three Months Ended
(Unaudited) March 31
- --------------------------------------------------------------------------------
2005 2004
----------------------

Net income ............................................ $ 15,354 $ 6,902
--------- ---------
Shares (denominator) used for diluted
per share computations:
Weighted average shares of common stock
outstanding ................................... 12,890 9,835
Plus: dilutive effect of stock options ............ 214 263
--------- ---------
Diluted weighted average shares ............ $ 13,104 $ 10,098
--------- ---------
Shares (denominator) used for basic per
share computations:
Weighted average shares of common stock
outstanding .................................... 12,890 9,835
--------- ---------
Net income per share data:
Diluted ........................................... $ 1.17 $ 0.68
========= =========
Basic ............................................. $ 1.19 $ 0.70
========= =========

7

(In thousands, except per share data) Six Months Ended
(Unaudited) March 31
- --------------------------------------------------------------------------------
2005 2004
----------------------

Net income ............................................ $ 29,871 $ 9,300
--------- ---------
Shares (denominator) used for diluted
per share computations:
Weighted average shares of common stock
outstanding ................................... 12,865 9,807
Plus: dilutive effect of stock options ............ 232 230
--------- ---------
Diluted weighted average shares ............ $ 13,097 $ 10,037
--------- ---------
Shares (denominator) used for basic per
share computations:
Weighted average shares of common stock
outstanding .................................... 12,865 9,807
--------- ---------
Net income per share data:
Diluted ........................................... $ 2.28 $ 0.93
========= =========
Basic ............................................. $ 2.32 $ 0.95
========= =========

All outstanding options are included in the diluted earnings per share
calculation above for the three and six months ended March 31, 2005 and 2004.

5. RELATED PARTIES

Summarized condensed income statement information of Mi-Tech Steel, Inc.
(Mi-Tech Steel), a fifty percent owned unconsolidated affiliate accounted for by
the equity method, follows:

(In Thousands) Three Months Ended Six Months Ended
(Unaudited) March 31 March 31
- ----------------- --------------------- -----------------------
2005 2004 2005 2004
---- ---- ---- ----

Sales $80,859 $49,317 $151,400 $91,113
Gross profit 8,177 3,950 15,216 6,750
Net income 3,352 1,234 6,153 2,026

The Company has various transactions with Mi-Tech Steel. Both the Company and
Mi-Tech Steel buy and sell products and services at prevailing market prices
from each other. Beginning in February 2005, the Company incurred expenses from
Mi-Tech Steel for toll processing and storage services provided at its Decatur,
Alabama facility at agreed upon rates. Prior to February 2005, Mi-Tech Steel was
reimbursed for operating costs incurred at its Decatur, Alabama facility by its
owners. Equity in the net income of Mi-Tech Steel and management fee income are
also included in operating income of the Company. A summary of transactions
between the Company and Mi-Tech Steel during the three and six months ended
March 31, 2005 and 2004 follows:

8

(In Thousands) Three Months Ended Six Months Ended
(Unaudited) March 31 March 31
- ----------------- --------------------- --------------------
2005 2004 2005 2004
---- ---- ---- ----

Sales to Mi-Tech Steel $ 993 $ 694 $ 1,817 $ 1,198
Purchases from and expense
reimbursements to Mi-Tech Steel 602 219 1,139 434
Interest income from Mi-Tech Steel 24 16 44 16
Equity in net income of
Mi-Tech Steel 1,676 617 3,077 1,013

As a result of the transactions above, accounts receivable from Mi-Tech Steel
was $480,000 and $612,000 as of March 31, 2005 and September 30, 2004,
respectively, and accounts payable to Mi-Tech Steel was $300,000 and $1,285,000
as of March 31, 2005 and September 30, 2004, respectively.

During the three and six months ended March 31, 2005, the Company recorded sales
of $4,756,000 and $12,227,000, respectively, for scrap products sold to a
company owned by an officer and director of the Company compared to sales of
$4,866,000 and $7,564,000, respectively, during the three and six months ended
March 31, 2004. Accounts receivable from the aforementioned company were
$2,626,000 and $4,714,000 as of March 31, 2005 and September 30, 2004,
respectively. Management reports these transactions to the Audit Committee of
the Board of Directors as frequently as requested by the Committee, but at least
annually. Most recently, in April 2005, the Audit Committee reviewed and
approved these transactions. The Company has the ability to continue or cease
selling scrap steel to this company at any time.

6. IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

On December 16, 2004, the Financial Accounting Standards Board (FASB) issued
SFAS No. 123(R), "Share-Based Payment," that addresses the accounting for
share-based payment transactions in which an enterprise receives employee
services in exchange for (a) equity instruments of the enterprise or (b)
liabilities that are based on the fair value of the enterprise's equity
instruments or that may be settled by the issuance of such equity instruments.
SFAS No. 123(R) eliminates the ability to account for share-based compensation
transactions using APB Opinion No. 25 and requires instead that such
transactions be accounted for using a fair-value-based method. SFAS No. 123(R)
is effective for any annual period beginning after June 15, 2005. The Company is
currently analyzing the impact of SFAS No. 123(R).

On October 22, 2004 the American Jobs Creation Act of 2004 was passed and is
effective for our fiscal year ended September 30, 2006. This law provides a
phased in deduction for a percentage of qualified income from domestic
production activities. The Company will assess the impact of this change in tax
law as further authoritative guidance becomes available.

9

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an Amendment
of ARB No. 43." SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4,
"Inventory Pricing," to clarify the accounting for abnormal amounts of idle
facility expense, freight, handling costs, and spoilage, and requires that these
items be recognized as current-period charges regardless of whether they meet
the criterion of "so abnormal." In addition, SFAS No. 151 requires that
allocation of fixed production overheads to the costs of conversion be based on
the normal capacity of the production facilities. The provisions of SFAS No.
151 are effective for inventory costs incurred during fiscal years beginning
after June 15, 2005, with earlier application permitted. The Company does not
expect the adoption of SFAS No. 151 will have a material impact on our financial
position, results of operations or cash flows.

10

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

When used in the following discussion, the words "expects," "intends,"
"anticipates," "believes" and other similar expressions are intended to identify
forward-looking statements, which are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. Specific
risks and uncertainties include, but are not limited to, competitive factors
such as pricing and availability of steel; cyclicality of demand in the steel
industry, specifically in the automotive market; our ability to make and
integrate acquisitions; our inability to obtain sufficient capital resources to
fund our operations and our growth; risk of business interruptions affecting
automotive manufacturers; and reliance on key customers. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof. We undertake no obligation to republish revised
forward-looking statements to reflect the occurrence of unanticipated events or
circumstances after the date hereof. Unless the context otherwise requires,
references to "we," "us" or "our" refer collectively to Steel Technologies Inc.
and its subsidiaries.

Application of Critical Accounting Policies
- -------------------------------------------

Our condensed consolidated financial statements have been prepared in accordance
with generally accepted accounting principles. The preparation of these
financial statements requires management to make estimates and assumptions that
affect the amounts reported in the financial statements. Actual results could
differ from these estimates under different assumptions or conditions. On an
ongoing basis, we monitor and evaluate our estimates and assumptions.

A summary of significant accounting policies used in the preparation of the
consolidated financial statements are described in Note 1 of Notes to
Consolidated Financial Statements in our Annual Report on Form 10-K for the
fiscal year ended September 30, 2004.

Our most critical accounting policies include the valuation of accounts
receivable, which impacts selling, general and administrative expense, and the
assessment of recoverability of goodwill and long-lived assets. Management
reviews the estimates, including, but not limited to, the allowance for doubtful
accounts on a regular basis and makes adjustments based on historical
experiences, current conditions and future expectations. The reviews are
performed regularly and adjustments are made as required by currently available
information. We believe these estimates are reasonable, but actual results could
differ from these estimates.

Allowance for Doubtful Accounts Receivable
------------------------------------------

Our accounts receivable represent those amounts which have been billed to
our customers but not yet collected. An allowance for doubtful accounts is
maintained for estimated losses resulting from the inability of our
customers to make required payments. The allowance is maintained at a level
considered appropriate based on historical and other factors that affect
collectibility. The factors include historical trends

11

of write-offs, sales, recoveries and credit losses, the monitoring of
portfolio credit quality, and current and projected economic and market
conditions. If the financial condition of our customers were to
deteriorate, resulting in an impairment of the ability to make payments
beyond previously established terms, additional allowances may be required.
Uncollectible accounts receivable are written off against the allowance for
doubtful accounts receivable when management determines that the
probability of payment is remote and collections efforts have ceased.

Long-Lived Assets
-----------------

Long-lived assets with estimated useful lives are depreciated to their
residual values over those useful lives in proportion to the economic value
consumed. We review the carrying value of our long-lived assets for
impairment whenever changes in events and circumstances indicate that the
carrying amount of the assets may not be recoverable. If an evaluation is
required, the estimated future undiscounted cash flows associated with an
asset would be compared to the asset's carrying value to determine if a
write-down to market value or undiscounted cash flows value is required.
Future changes in circumstances, cash flow estimates and estimates of fair
value could affect the valuations.

Goodwill is reviewed annually, or sooner if indicators of impairment exist,
for impairment using the present value technique to determine the estimated
fair value of goodwill associated with each reporting entity. If the
goodwill is indicated as being impaired (the present value of cash flows
(fair value) of the reporting unit is less than the carrying amount), the
fair value of the reporting unit would then be allocated to our assets and
liabilities in a manner similar to the purchase price allocation in order
to determine the implied fair value of the reporting unit goodwill. This
implied fair value of the reporting unit goodwill would then be compared
with the carrying amount of the reporting unit goodwill and, if it were
less, we would then recognize an impairment loss.

Considerable management judgment is necessary to assess impairment and
estimate fair value. The projection of future cash flows for the goodwill
impairment analysis requires significant judgment and estimates with
respect to future revenues related to the assets and the future cash
outlays related to those revenues. Actual revenues and related cash flows
or changes in anticipated revenues and related cash flows could result in
changes in the assessment and result in an impairment charge. The
assumptions used in our evaluations, such as forecasted growth rates, cost
of capital, tax rates and residual values are consistent with our internal
projections and operating plans. The use of different assumptions,
including cash flows and discount rates, could increase or decrease the
related impairment charge.

Overview
- --------

We are one of the largest independent flat-rolled steel processors in North
America. Our North American platform of 20 facilities, including our
unconsolidated affiliates, is strategically positioned in the steel producing
and consuming markets throughout the United States and Mexico. We bring value to
our customers through precision steel processing as well as supply chain
management, quality control and technical support. We utilize the

12

most advanced equipment to produce high-quality steel products and specialize in
meeting exact specifications for customers in a variety of industries and end
use markets including automotive, lawn and garden, appliance and rail car
industries. Our broad geographic coverage allows us to provide our customers
with efficient just-in-time delivery.

We focus our sales and marketing strategies to more fully leverage our North
American platform of value added steel processing facilities. In recent years,
we have been successful in growing our volume across all operations and have
gained meaningful market growth, both with existing and new customers across a
wide range of end use markets. Our broad capabilities and geographic presence
offers distinct competitive advantages to customers that have multi-plant
operations throughout the United States, Canada and Mexico. This has allowed us
to expand with regional and large national accounts.

For the three months ended March 31, 2005, sales increased 55% to a record
$287.0 million from $184.8 million in the same period a year ago. Net income for
the second quarter increased to a record $15.4 million or $1.17 per diluted
share compared with net income of $6.9 million or $0.68 per diluted share in the
same period a year ago on approximately 30% more weighted average diluted shares
outstanding, which resulted from our successful completion of a secondary stock
offering of 2.9 million shares in March 2004. Results for the second quarter
2005 included an income tax benefit of approximately $0.06 per diluted share as
a result of changes in the tax laws effective January 1, 2005 for our Mexican
operations.

For the first six months of fiscal 2005 sales increased 71% to a record $541.0
million and year to date net income increased to a record $29.9 million or $2.28
per diluted share from $9.3 million or $0.93 per diluted share in the first six
months of fiscal 2004, on approximately 30% more weighted average diluted shares
outstanding.

Our results reflect continued strong contributions from all operations, greater
operating leverage from consistent volumes and cost controls, a strong pricing
environment and substantial growth from our Mi-Tech Steel joint venture.

Our tons sold of company-owned steel products in our second quarter of fiscal
2005 were 325,000, reflecting a decrease of 2.5% over the record levels of our
second quarter of fiscal 2004. Record shipments during the second quarter of
fiscal 2004 were positively impacted by greater demand during a tight steel
environment. We expect our tons sold for the third quarter to be similar to the
second quarter levels.

We continue to see softening in spot market prices for our raw materials. While
average transaction prices continue to remain at high historic levels, we expect
to see our average selling price reduced by approximately 5% in our third
quarter as compared to our second quarter of fiscal 2005.

Our largest unconsolidated affiliate, Mi-Tech Steel, Inc. (Mi-Tech Steel), also
produced record results in sales, volume shipped and profits in the second
quarter of fiscal 2005. Mi-Tech Steel plays an important role in our North
American platform and continues to benefit from strong Japanese transplant
automotive production growth. Mi-Tech Steel reported 64% growth in sales in the
second quarter of fiscal 2005 compared to the second quarter of

13

fiscal 2004 resulting in significantly higher contributions to our earnings. We
anticipate Mi-Tech Steel's revenues to grow by approximately 40% during the
third quarter of fiscal 2005 compared to the third quarter of fiscal 2004.

The steel producing industry continues to experience global consolidation. This
dynamic has created a stronger North American supply base with a more
disciplined approach to the market. As this consolidation continues, we continue
to be well aligned with the leading steel producers to meet our future growth
objectives. We remain committed to building upon our strong customer and
supplier relationships as we bring value to the supply chain through our North
American processing platform.

Our continued strong results have allowed us to reduce our bank borrowings by
$28 million during our second quarter of fiscal 2005 and increase our semiannual
dividend by 50% to $0.15 per share. As we continue to generate cash we will
continue to implement our growth strategies focused on acquisitions, investments
in current operations, greenfield expansions and investments in our existing
joint ventures. We intend to invest $17 million in capital projects in fiscal
2005. These projects will enhance our capabilities by further expanding
capacity, improving quality and service to our customers and lowering conversion
costs of current operations.

Financial Highlights (in thousands except per share data and percentages)
-------------------------------------------------------------------------

For the Three Months Ended March 31
2005 2004
--------------- ------------------
% of % of %
(Unaudited) Actual Sales Actual Sales Change
- --------------------------------- -------- ------- -------- --------- --------

Sales $286,958 100.0% $184,842 100.0% 55%
Gross profit 31,690 11.0 19,576 10.6 62
Selling, general and
administrative expenses 9,624 3.3 8,474 4.6 14
Equity in net income of
unconsolidated affiliates 1,746 0.6 687 0.4 154
Operating income 23,812 8.3 11,789 6.4 102
Interest expense, net 1,330 0.5 1,047 0.6 27
Net income 15,354 5.4 6,902 3.7 122
Diluted earnings per common share $1.17 $0.68 72

Other data
- ----------
Average days sales outstanding 36.5 51.6 (29)
Inventory turnover 5.1 5.6 (9)
Return on equity (annualized) 24.7% 14.2% 73

14

For the Six Months Ended March 31
2005 2004
--------------- ------------------
% of % of %
(Unaudited) Actual Sales Actual Sales Change
- --------------------------------- -------- ------- -------- --------- --------

Sales $540,974 100.0% $315,631 100.0% 71%
Gross profit 64,136 11.9 30,353 9.6 111
Selling, general and
administrative expenses 19,745 3.7 15,090 4.8 31
Equity in net income of
unconsolidated affiliates 3,217 0.6 1,169 0.4 175
Operating income 47,608 8.8 16,432 5.2 190
Interest expense, net 2,509 0.5 2,059 0.7 22
Net income 29,871 5.5 9,300 3.0 221
Diluted earnings per common share $2.28 $0.93 145
Cash dividends per common share $0.10 $0.10 -

Results of Operations
- ---------------------

Sales
-----

We posted net sales of $286,958,000 for the second quarter ended March 31,
2005, an increase of 55% from sales of $184,842,000 for the second fiscal
quarter ended March 31, 2004. Tons shipped of company-owned steel products
in the second quarter of fiscal 2005 decreased approximately 2.5% to
325,000 tons compared to the second quarter of fiscal 2004. Record
shipments last year were positively impacted by greater demand in a tight
steel environment. The average selling price of company-owned steel
products increased approximately 62% for the second quarter of fiscal 2005
as compared to the second quarter of fiscal 2004.

Sales for the six months ended March 31, 2005 increased by 71% to
$540,974,000 compared to $315,631,000 for the six months ended March 31,
2004. Tons shipped in the first six months of fiscal 2005 increased 6%
compared to the first six months of fiscal 2004. Average selling prices of
steel for the first six months of fiscal 2005 increased approximately 60%
compared to fiscal 2004.

Gross profit
------------

Our gross profit margin was 11.0% in the second quarter of fiscal 2005
compared to 10.6% in the second quarter of fiscal 2004. Cost of goods sold
increased 54.5% in the second quarter of fiscal 2005 compared to the second
quarter of fiscal 2004. Cost of materials sold increased $89,105,000 in the
second quarter of fiscal 2005 due to increased raw material costs. The
remaining increase in cost of goods sold in the second quarter of fiscal
2005 was $897,000 and was primarily a result of increased labor costs and
related fringe benefits.

15

For the first six months of fiscal 2005 our gross profit margin was 11.9%
compared to 9.6% for the first six months of fiscal 2004. Cost of goods
sold increased 67.2% in the first six months of fiscal 2005 compared to the
first six months of fiscal 2004. Cost of materials sold increased
$186,637,000 primarily due to higher raw material costs. The remaining
increase in cost of goods sold for the six months ended March 31, 2005
compared to March 31, 2004 of $4,923,000 was primarily a result of
increased labor costs, related fringe benefits and increased delivery costs
from higher sales volume.

Our gross profit margin declined slightly to 11.0% in the second quarter of
fiscal 2005 from 12.8% in the first quarter of fiscal 2005. As we see
increased availability of raw materials and increased competitive
pressures, we expect our selling prices during the third quarter of fiscal
2005 will be reduced by a greater percentage than our reduction in cost of
materials. Accordingly, we expect our gross profit margin will decline in
our third quarter of fiscal 2005 compared to our second quarter of fiscal
2005. We may offset lower gross profit trends by achieving production cost
efficiencies and product mix improvements.

Selling, general and administrative expenses
--------------------------------------------

Selling, general and administrative costs were $9,624,000 for the three
months ended March 31, 2005, compared to $8,474,000 for the three months
ended March 31, 2004. The increase is primarily attributable to an increase
in company wide bonus plan expenses of approximately $928,000 which are
tied to company profits, higher selling and administrative expenses of
approximately $477,000, a non-recurring state payroll tax incentive credit
of $355,000 received during the second quarter of fiscal 2004 and an
increase of $70,000 in remaining general expenses. These increases were
offset by a decrease in bad debt expense of $432,000 attributable to
favorable collection results and a decrease in property tax expense of
$248,000 as a result of the successful appeal of a state property tax
assessment.

Selling, general and administrative costs were $19,745,000 for the six
months ended March 31, 2005, compared to $15,090,000 for the six months
ended March 31, 2004. The increase is primarily attributable to an increase
in company wide bonus plan expenses of approximately $2,742,000 which are
tied to company profits, higher selling, administrative and travel expenses
of approximately $1,174,000, a non-recurring state payroll tax incentive
credit of $355,000 received during the second quarter of fiscal 2004, and
an increase of $633,000 in remaining general expenses. These increases were
offset by a decrease in bad debt expense of $249,000 attributable to
favorable collection results.

We continue to actively manage the level at which selling, general and
administrative expenses are added to our cost structure.

16

Equity in net income of unconsolidated affiliates
-------------------------------------------------

Our share of the income of our unconsolidated affiliates increased to
$1,746,000 for the second quarter of fiscal 2005 compared to $687,000 in
2004. For the six months ended March 31, 2005 income from unconsolidated
affiliates was $3,217,000 compared to $1,169,000 for the first six months
ended March 31, 2004.

Our largest unconsolidated affiliate, Mi-Tech Steel, experienced 64% sales
growth during the second quarter of fiscal 2005 and 66% sales growth for
the first six months of fiscal 2005. Mi-Tech Steel continues to benefit
from strong Japanese transplant and domestic market growth. Mi-Tech Steel
plays an important role in our North American platform and we anticipate
Mi-Tech Steel's revenues to grow by approximately 40% during the third
quarter of fiscal 2005 compared to the third quarter of fiscal 2004.

Interest expense
----------------

Net interest expense for the second quarter of fiscal 2005 increased to
$1,330,000 from $1,047,000 for the second quarter of fiscal 2004. Net
interest expense for the six months ended March 31, 2005 increased to
$2,509,000 compared to $2,059,000 during the same period of fiscal 2004.
The increase is primarily attributable to higher interest rates on variable
rate debt and higher interest on fixed rate debt that replaced variable
rate debt at lower rates during the first quarter of fiscal 2005 as
compared to the same period last year.

Income tax expense
------------------

Our effective income tax rate was approximately 31.8% and 35.7%,
respectively, for the second quarters of fiscal 2005 and 2004. For the
first six months of fiscal 2005 and 2004 our effective income tax rate was
33.8% and 35.2%, respectively. The decrease is primarily attributable to an
income tax benefit of approximately $830,000 recorded during the second
quarter of fiscal 2005 to reflect changes in tax laws effective January 1,
2005 for our Mexican operations. We estimate our effective income tax rate
will be approximately 34.5% for fiscal 2005.

Liquidity and Capital Resources
- -------------------------------

As of March 31, 2005, we had $223,085,000 of working capital, maintained a
current ratio of 3.0:1 and had total debt at 31% of capitalization. Generally,
in periods of economic expansion and increased demand for our products, our
working capital requirements increase. Conversely, in periods of economic
contraction and reduced demand for our products, our working capital
requirements decrease.

17

Average days sales outstanding to customers was 37 days as of March 31, 2005
from favorable collection results compared to 52 as of March 31, 2004. We expect
average days sales outstanding to return to a more normal trend of approximately
45 days during the third quarter of fiscal 2005. Average days inventory was
71 days as of March 31, 2005 compared to 65 days as of March 31, 2004. We expect
average days inventory to remain at 71 days during the third quarter of fiscal
2005.

Our average payment days to suppliers was 30 days as of March 31, 2005 compared
to 42 days as of March 31, 2004. We expect average payment days to suppliers to
remain at 30 days during the third quarter of fiscal 2005.

During the first six months of fiscal 2005, cash provided by operations was
$17,905,000 primarily from net income somewhat offset by changes in working
capital compared to cash used in operations of $15,459,000, primarily working
capital related, during the first six months of fiscal 2004.

During the first six months of fiscal 2005, we increased inventory by
$21,780,000 primarily because of higher raw material costs and we reduced our
accounts payable by $4,773,000 to meet our obligations to suppliers. These
working capital needs were offset by improved collections which contributed to a
decrease in accounts receivable of $7,676,000.

During the first six months of fiscal 2004, we increased inventory by
$34,816,000 and accounts receivable by $31,445,000 to support our sales growth,
which was partially offset by an increase in accounts payable of $27,314,000.

Capital expenditures for the first six months of fiscal 2005 totaled
approximately $9,434,000. We continue to expand production capacity to serve the
growing needs of customers and invest in automation to improve productivity and
make our operations more efficient. For fiscal 2005, the capital additions to
all facilities are expected to approximate $17,000,000.

We maintain an equity investment of $25,744,000 in our 90%-owned Mexican
subsidiary. Additional investments in our Mexican operations, if required, would
be financed with available funds from our credit facility.

The translation of the financial statements of our Mexican subsidiary from local
currencies to the U.S. dollar subjects us to exposure relating to fluctuating
exchange rates. However, this exposure is mitigated somewhat by a large
percentage of transactions denominated in the U.S. dollar. We do not consider
our exposure to exchange rate risks to be material and consider the Mexican peso
a relatively stable currency. We do not typically manage our related foreign
currency exchange rate risk through the use of financial instruments. Foreign
currency transaction losses included in sales were $230,000 and $396,000 during
the three and six months ended March 31, 2005, respectively, reflecting a
stronger average exchange rate of the peso relative to the U.S. dollar during
the first quarter of fiscal 2005. Foreign currency transaction gains included in
sales for the three and six months ended March 31, 2004 were $40,000 and
$80,000, respectively.

18

We maintain a 50% equity investment in Mi-Tech Steel and a 49% equity investment
in Ferrolux Metals. Additional equity contributions to our unconsolidated
affiliates are not required and we do not guarantee any obligations of our
unconsolidated affiliates. While distributions from Mi-Tech Steel are permitted,
if authorized by Mi-Tech Steel's board of directors, such distributions are
restricted by one of Mi-Tech Steel's loan agreements. Such restrictions limit
distributions to 15% of Mi-Tech Steel's net income in any fiscal year.
Distributions from Mi-Tech Steel are not, and are not expected to be, material
sources of liquidity for us. Mi-Tech Steel's liquidity needs are met primarily
by their cash flows from operating activities and existing line of credit
facility and shareholder loans. Cash flows from operations and available
borrowing capabilities are expected to meet Mi-Tech Steel's future needs.

On October 21, 2004, we issued $50,000,000 in unsecured senior notes which have
an average term of 9.4 years and a blended interest rate of 5.67%. The notes are
comprised of $10,000,000 of 5.33% Series A Senior Notes due October 21, 2011 and
$40,000,000 of 5.75% Series B Senior Notes due October 21, 2014. The proceeds
from the notes were used to reduce borrowings outstanding on our revolving line
of credit facility.

Borrowings and repayments under our line of credit agreement are initiated as
needed to fund our operating and investing activities described above. During
the first six months of fiscal 2005, we borrowed $78,000,000 to finance our
working capital needs and paid $80,000,000 on our bank line of credit, including
the proceeds from the $50,000,000 unsecured senior notes.

We have a $135,000,000 unsecured revolving credit facility that matures
September 2009. Our existing banking group can elect to expand the availability
to $200,000,000 at our request under certain circumstances. Interest on the
facility is paid with various variable options on the interest rate, none of
which are greater than the bank's prime rate. At March 31, 2005, there was
$62,000,000 outstanding on the credit facility.

Provisions contained in our debt agreements require us to maintain specified
levels of net worth, maintain certain financial ratios and limit capital
expenditures, operating leases, capital leases and addition debt. We are in
compliance with our loan covenants, and none of these covenants would restrict
the completion of currently planned capital expenditures.

Cash Requirements, Contractual Obligations and Contingencies
- ------------------------------------------------------------

Our liquidity needs are met primarily by our cash flows from operating
activities and our line of credit facility. Operating cash flows are somewhat
influenced by cyclicality of demand in the steel industry, especially in the
automotive market. We anticipate borrowing on our existing line of credit
facility to support our continued growth and to meet our working capital needs.
Cash flows from operations and available borrowing capabilities are expected to
meet our future needs.

On March 22, 2005, we announced that our Board of Directors voted to increase
the Company's semi-annual cash dividend 50% to $0.15 per share. The next
dividend is payable on May 24, 2005, to shareholders of record as of May 9,
2005.

19

We have entered into operating leases to meet the needs of our facilities and
agreements to purchase electricity to meet the needs of our Ottawa, Ohio
facility. These obligations have not changed significantly from those disclosed
in our Annual Report on Form 10-K for the year ended September 30, 2004. In
addition, we recently entered into an electricity agreement for our Canton,
Michigan facility. This agreement expires in March 2013 and there is no minimum
energy consumption required during the term of the agreement.

At this time, we have no other known material off-balance sheet arrangements,
contractual obligations, contingent liabilities or commitments that must be met
beyond the next twelve months.

We believe all manufacturing facilities are in compliance with applicable
federal and state environmental regulations. We are not presently aware of any
fact or circumstance, which would require the expenditure of material amounts
for environmental compliance.

Related Party Transactions
- --------------------------

We have various transactions with Mi-Tech Steel and we sell scrap steel products
to a company owned by Stuart N. Ray, an officer and director of Steel
Technologies (see Note 5 of our Notes to Condensed Consolidated Financial
Statements). Management reports these transactions to the Audit Committee of the
Board of Directors as frequently as requested by the Committee, but at least
annually. Most recently, in April 2005, the Audit Committee reviewed and
approved these transactions. We have the ability to continue or cease selling
scrap steel to this company at any time.

Recently Issued Accounting Pronouncements
- -----------------------------------------

On December 16, 2004, the Financial Accounting Standards Board (FASB) issued
SFAS No. 123(R), "Share-Based Payment," that addresses the accounting for
share-based payment transactions in which an enterprise receives employee
services in exchange for (a) equity instruments of the enterprise or (b)
liabilities that are based on the fair value of the enterprise's equity
instruments or that may be settled by the issuance of such equity instruments.
SFAS No. 123(R) eliminates the ability to account for share-based compensation
transactions using APB Opinion No. 25 and requires instead that such
transactions be accounted for using a fair-value-based method. SFAS No. 123(R)
is effective for any annual period beginning after June 15, 2005. We are
currently analyzing the impact of SFAS No. 123(R).

On October 22, 2004, the American Jobs Creation Act of 2004 was passed and is
effective for our fiscal year ended September 30, 2006. This law provides a
phased in deduction for a percentage of qualified income from domestic
production activities. We will assess the impact of this change in tax law as
further authoritative guidance becomes available.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an Amendment
of ARB No. 43." SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4,
"Inventory Pricing," to clarify the accounting for abnormal amounts of idle
facility expense, freight, handling costs, and spoilage, and requires that these
items be recognized as current-period

20

charges regardless of whether they meet the criterion of "so abnormal." In
addition, SFAS No. 151 requires that allocation of fixed production overheads to
the costs of conversion be based on the normal capacity of the production
facilities. The provisions of SFAS No. 151 are effective for inventory costs
incurred during fiscal years beginning after June 15, 2005, with earlier
application permitted. We do not expect the adoption of SFAS No. 151 will have a
material impact on our financial position, results of operations or cash flows.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material change during the six months ended March 31, 2005
from the disclosures about market risk provided in our Annual Report on Form
10-K for the year ended September 30, 2004.

Item 4. Controls and Procedures

Management, including our Chief Executive Officer and Chief Financial Officer,
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the second fiscal quarter covered by
this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that the disclosure
controls and procedures are effective to ensure that material information
required to be disclosed in the reports we file or submit under the Securities
Exchange Act of 1934 is made known to us by others within our company, including
our consolidated subsidiaries, particularly during the period for which reports
of our company, including this Quarterly Report on Form 10-Q, are being prepared
and to permit our company to report that information within the time period
specified to the Securities and Exchange Commission.

There were no changes in our internal control over financial reporting that
occurred during our second fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

21

Part II - Other Information

Item 6. Exhibits

Exhibits filed or furnished with this report:

Exhibit 31.1 Certification of Chief Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 Certification of Chief Financial Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1 Certification of Chief Executive Officer Pursuant
to Title 18, United States Code, Section 1350 as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

Exhibit 32.2 Certification of Chief Financial Officer Pursuant
to Title 18, United States Code, Section 1350 as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

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 thereunto duly authorized.

STEEL TECHNOLOGIES INC.
----------------------
(Registrant)

By /s/ Joseph P. Bellino
-----------------------------
Joseph P. Bellino
Chief Financial Officer
(Principal Financial and Chief Accounting Officer)

Dated May 9, 2005

22

EXHIBIT 31.1
CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bradford T. Ray, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Steel Technologies
Inc. for the fiscal quarter ending March 31, 2005;

2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
second fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.

Date: May 9, 2005

/s/ Bradford T. Ray
- --------------------
Bradford T. Ray
Chief Executive Officer

EXHIBIT 31.2
CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph P. Bellino, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Steel Technologies
Inc. for the fiscal quarter ending March 31, 2005;

2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
second fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.

Date: May 9, 2005

/s/ Joseph P. Bellino
- ---------------------
Joseph P. Bellino
Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO TITLE 18, UNITED STATES CODE, SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, I, Bradford T. Ray, Chief
Executive Officer of Steel Technologies Inc., (the Company) certify, to the best
of my knowledge, based upon a review of the Quarterly Report on Form 10-Q of the
Company for the quarter ended March 31, 2005:

(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.

/s/ Bradford T. Ray
-------------------
Bradford T. Ray
Chief Executive Officer
Date: May 9, 2005

EXHIBIT 32.1

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO TITLE 18, UNITED STATES CODE, SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, I, Bradford T. Ray, Chief
Executive Officer of Steel Technologies Inc., (the Company) certify, to the best
of my knowledge, based upon a review of the Quarterly Report on Form 10-Q of the
Company for the quarter ended March 31, 2005:

(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.

/s/ Joseph P. Bellino
---------------------
Joseph P. Bellino
Chief Financial Officer
Date: May 9, 2005