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Schuff International Announces Financial Results for Second Quarter 2008

July 28, 2008

Schuff International, Inc. (OTC:SHFK), a family of companies providing fully integrated steel construction services, today reported financial results for the second quarter ended June 30, 2008.

Second Quarter 2008 Results:

Revenues for the second quarter ended June 30, 2008 were $180.1 million, a decrease of 8 percent over record year-ago revenues of $195.5 million. The decline in year-over-year revenues resulted primarily from the reduction in the number of major casino projects in Las Vegas compared with the previous year, financing-related delay of major projects throughout the company’s geographic segments, and softness in the joist business. Schuff benefited from strength in the Gulf Coast oil and gas and petrochemical markets as well as commercial and infrastructure projects in its Pacific segment.

Gross profit as a percentage of revenue was 22.7 percent for the period ended June 30, 2008, compared with 18.5 percent for the year-ago period.

Operating income for the quarter was $25.7 million, up 9.6 percent from $23.4 million in the second quarter of 2007. Operating margin increased to 14.3 percent from 12.0 percent in the year-ago period.

Net income for the quarter was $16.1 million, or $1.70 per diluted share, versus $13.8 million, or $1.47 per diluted share, a year ago.

Schuff International’s backlog was $588.3 million at June 30, 2008 ($263.3 million under contracts or purchase orders and $325.0 million under letters of intent) compared with $578.1 million ($484.4 million under contracts or purchase orders and $93.7 million under letters of intent) at March 31, 2008. Approximately $234.8 million, representing 39.9% of the company’s backlog at June 30, 2008, was attributable to 5 contracts, letters of intent, notices to proceed or purchase orders.

Six Months 2008 Results:

Revenues for the six months ended June 30, 2008 were $343.2 million, an increase of 5 percent over year-ago revenues of $328.1 million. Year-over-year revenue growth resulted primarily from strength in the Gulf Coast oil and gas and petrochemical markets as well as commercial and infrastructure projects in the Pacific segment.

Gross profit as a percentage of revenue was 22.1 percent for the six months ended June 30, 2008, compared with 18.9 percent for the year-ago period.

Operating income for first six months of 2008 was $46.5 million, up 22.2 percent from $38.0 million for the first six months of 2007. Operating margin increased to 13.5 percent from 11.6 percent in the year-ago period.

Net income for the six months ended June 30, 2008 was $28.5 million, or $3.01 per diluted share, versus $22.0 million, or $2.35 per diluted share, a year ago.

“We’re beginning to see evidence of a moderate slowdown in certain product and geographical segments of our business, such as the Las Vegas market.” said Scott A. Schuff, president and CEO. “But despite this revenue deceleration, Schuff saw margin improvement in the second quarter, largely as a result of our advanced design-build technology and resources. These capabilities give us end-to-end project management expertise and allow us to work with other contractors to ensure that project milestones are met on time and on budget. In addition, new commercial and infrastructure projects in our Pacific and Southeast segments, as well as strength in the Gulf Coast oil and gas and petrochemical markets, have helped keep our contract backlog at historically high levels. I’m particularly proud of the recent announcement of the completion of our new 150,000-square-foot steel fabrication plant in Humble, Texas, to support our continued growth in that region.”

About Schuff International, Inc.:

Schuff International, Inc. and its family of steel companies is the largest steel fabrication and erection company in the United States. The 32-year-old company is experiencing record growth with major projects in progress throughout the country. Schuff offers integrated steel construction services from a single source. Professional services include design-build, design-assist, engineering, BIM participation, 3D steel modeling/detailing, fabrication, advanced field erection, joist and joist girder manufacturing, project management and single-source steel management systems. Major market segments include industrial, public works, bridges, health care, gaming and hospitality, convention centers, stadiums, mixed-use and retail, transportation and international projects. Schuff International, Inc., which is headquartered in Phoenix, Arizona, owns and operates eight steel fabrication plants and two steel joist manufacturing plants. Companies include Schuff Steel Company located in Arizona, Nevada and California; Schuff Steel-Midwest Division located in Overland Park, Kansas, Ottawa, Kansas, and Denver, Colorado; Schuff Steel-Gulf Coast, Inc., located in Houston, Texas; Schuff Steel-Atlantic, Inc., located in Orlando, Florida, Albany, Georgia and Atlanta, Georgia; Schuff Steel Management Company-Southwest, Inc., located in Gilbert, Arizona; and Quincy Joist Company located in Quincy, Florida and Buckeye, Arizona. Schuff employs approximately 2,000 people throughout the country. For more information, visit www.schuff.com.

Certain statements in this news release may contain forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. These risks and uncertainties include, but are not limited to, the company’s ability to successfully and timely complete construction projects; the company’s ability to convert backlog into revenue; the potential delay, suspension, termination, or reduction in scope of a construction project; the continuing validity of the underlying assumptions and estimates of total forecasted project revenues, costs and profits and project schedules; the outcomes of pending or future litigation, arbitration or other dispute resolution proceedings; the availability of borrowed funds on terms acceptable to the company; the ability to retain certain members of management; the ability to obtain surety bonds to secure its performance under certain construction contracts; possible labor disputes or work stoppages within the construction industry; the ability of project owners to obtain financing for projects; and actions taken or not taken by third parties, including the company’s customers, suppliers, business partners, and competitors and legislative, regulatory, judicial and other governmental authorities and officials. The company cautions that these forward-looking statements are further qualified by other factors. The company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise.

Financial tables follow. . .

 SCHUFF INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)  Three months ended  Six months ended June 30             June 30 2008     2007      2008      2007 ------------------ --------- --------- (in thousands, except per share data)  Revenues                       $180,099 $195,483  $343,155  $328,114 Cost of revenues                139,238  159,285   267,156   266,075 ------------------ --------- --------- Gross profit                 40,861   36,198    75,999    62,039  General and administrative expenses                        15,194   12,773    29,541    24,023 ------------------ --------- --------- Operating income             25,667   23,425    46,458    38,016 Interest expense                 (1,184)  (2,375)   (2,427)   (4,186) Other income                        763      319       612       603 ------------------ --------- --------- Income before income taxes   25,246   21,369    44,643    34,433 Income tax provision             (9,105)  (7,566)  (16,132)  (12,419) ------------------ --------- --------- Net income                $ 16,141 $ 13,803  $ 28,511  $ 22,014 ================== ========= =========  Income per share: Basic                          $   2.25 $   1.94  $   3.98  $   3.09 ================== ========= ========= Diluted                        $   1.70 $   1.47  $   3.01  $   2.35 ================== ========= =========  Weighted average shares used in computation: Basic                            7,169    7,120     7,168     7,118 ================== ========= ========= Diluted                          9,671    9,624     9,670     9,626 ================== ========= ========= 

 SCHUFF INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED)  June 30   December 31 2008       2007 ---------- -----------  (in thousands) Assets Current assets: Cash and cash equivalents                      $  34,846  $   38,979 Restricted funds on deposit                          286         140 Receivables                                      185,386     158,849 Costs and recognized earnings in excess of billings on uncompleted contracts                23,796      18,091 Inventories                                       25,862      21,201 Deferred tax asset                                   711         711 Prepaid expenses and other current assets            905       1,356 ---------- ----------- Total current assets                              271,792     239,327  Property and equipment, net                        45,084      35,299 Goodwill, net                                      17,115      17,115 Other assets                                        5,282       5,295 ---------- ----------- $ 339,273  $  297,036 ========== =========== Liabilities and stockholders' equity Current liabilities: Accounts payable                               $  48,054  $   47,458 Accrued payroll and employee benefits             16,076      12,845 Accrued interest                                   1,345         435 Other current liabilities                          8,642       7,766 Income tax payable                                   328       7,590 Billings in excess of costs and recognized earnings on uncompleted contracts                65,768      49,342 Current portion of long-term debt               3,650       3,605 ---------- ----------- Total current liabilities                         143,863     129,041  Long-term debt                                     46,297      48,262 Deferred income taxes                               2,257       2,257 Other liabilities                                     316         318 ---------- ----------- 192,733     179,878 ---------- -----------  Stockholders' equity: Preferred stock, $.001 par value - authorized 1,000,000 shares; none issued                         -           - Common stock, $.001 par value - 20,000,000 shares authorized; 7,534,057 and 7,533,557 issued and 7,168,591 and 7,168,091 outstanding, respectively                             7           7 Additional paid-in capital                        17,954      17,083 Accumulated earnings                             130,187     101,676 Treasury stock - 365,466 and 413,144 shares, respectively, at cost                 (1,608)     (1,608) ---------- ----------- Total stockholders' equity                        146,540     117,158 ---------- ----------- $ 339,273  $  297,036 ========== =========== 

 SCHUFF INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  Six months ended June 30 2008      2007 ---------- --------- (in thousands) Operating activities Net income                                        $  28,511  $ 22,014 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation and amortization                      2,562     2,134 Loss from extinguishment of debt                      62        45 Loss on disposal of property and equipment            19         - Stock compensation                                    12         - Compensation expense - restricted stock grant        859       135 Changes in working capital components: Restricted cash                                   (356)        - Receivables                                    (26,537)  (22,203) Costs and recognized earnings in excess of billings on uncompleted contracts              (5,705)  (16,338) Inventories                                     (4,661)   (2,020) Prepaid expenses and other assets                  451       482 Accounts payable                                   596    10,660 Accrued payroll and employee benefits            3,231     6,468 Accrued interest                                   910      (620) Other accrued liabilities                          876     1,265 Income taxes payable                            (7,262)    2,515 Billings in excess of costs and recognized earnings on uncompleted contracts              16,426      (768) Other liabilities                                   (2)       35 ---------- --------- Net cash provided by operating activities     9,992     3,804  Investing activities Acquisition of property and equipment               (10,431)   (3,533) Proceeds from disposals of property and equipment        39        49 Decrease in other assets                               (285)     (697) ---------- --------- Net cash used in investing activities       (10,677)   (4,181)  Financing activities Principal payments on revolving line of credit and long-term debt                                  (3,448)  (15,523) Proceeds from revolving line of credit                    -     7,000 Proceeds from issuance of common stock                    -        33 Payment of debt issue costs                               -       (89) ---------- --------- Net cash used in financing activities        (3,448)   (8,579) ---------- ---------  (Decrease) increase in cash and cash equivalents                                 (4,133)   (8,956) Cash and cash equivalents at beginning of period     38,979    13,531 ---------- --------- Cash and cash equivalents at end of period                                   $  34,846  $  4,575 ========== ========= 



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