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NS Group, Inc. reported record net income of $37.2 million on record net sales of $167.8 million for the quarter, and net income of $56.6 million on net sales of $306.8 million for the six months ended June 30, 2005.

Second Quarter Results—Record net income of $37.2 million ($1.65 per diluted share) compares to net income of $19.3 million ($0.86 per diluted share) in the first quarter of 2005. Record net sales of $167.8 million reflect a 21% increase over sales for the first quarter of 2005.

The company reported record operating income of $40.0 million for the second quarter, a 77.2% increase over first quarter 2005 operating income of $22.6 million.

Six Month Results—Net income of $56.6 million ($2.51 per diluted share) compares to net income of $25.6 million ($1.20 per diluted share) in the prior-year period. Net sales of $306.8 million compare to $194.0 million for the six months ended June 30, 2004. Operating income was $62.6 million, compared to $27.1 million for the comparable prior-year period.

Results benefited from utilization of tax net operating loss carryforwards. In addition, net income for the three months ended June 30, 2005 benefited from a reduction in valuation allowances against certain deferred tax assets, which resulted in an effective income tax rate of 7.6% in the second quarter. The company estimates a 15% effective tax rate for the second half of 2005, and 13% for the full year of 2005.

Comments—President and CEO, Rene J. Robichaud, stated, "We are very pleased to report the best quarterly results in our company's history. Demand for and pricing of our energy products continued to benefit from the healthy drilling environment that exists in North America. Our employees' continued dedication to customer service and manufacturing excellence enabled us to realize impressive financial results. I congratulate them on their fine efforts."

Robichaud went on to say, "The outlook for the second half of 2005 continues to be good. Oil and natural gas prices are at high levels. Drilling for oil and natural gas remains strong both domestically and internationally. Total inventories of oil country tubular goods (OCTG), although rising, are still at relatively healthy levels in relation to the rising drill rig count. Imports continued to rise, capturing over 36 percent of the total U.S. market for the first half of 2005, compared to approximately 27 percent in the first half of 2004. We expect imports will continue to be a significant factor going forward. The cost of steel coil and scrap is expected to be relatively stable through the rest of the year."

NS Group, Inc. is a leading producer of seamless and welded tubular products serving the energy industry. These products are used in the drilling, exploration and transmission of oil and natural gas. The company's tubular products are marketed primarily in the United States and certain foreign markets.

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