Metal Management Reports Results for the Period Ended June 30, 2006

-- Net Sales of $496 Million

-- Net Income of $44.9 Million

-- EPS of $1.70 per diluted share

-- EBITDA(1) (as defined) of $53.6 Million

Metal Management, Inc. (Nasdaq:MTLM), one of the nation's largestfull service scrap metal recyclers, today announced results for thefirst fiscal quarter ended June 30, 2006.

The company generated consolidated net sales of $496 million inthe first quarter of fiscal 2007 and net income of $44.9 million.EBITDA (as defined) was $53.6 million, and earnings per share were$1.70 per diluted common share. Earnings per share included a one-timegain of approximately $0.61 per diluted common share related to thesale of a joint venture interest.

"With strong earnings, record sales and the continued hard work ofour 1,800 dedicated employees, Metal Management's 2007 fiscal year isoff to a great start," said Daniel W. Dienst, Chairman, ChiefExecutive Officer and President of Metal Management. "We capitalizedon favorable ferrous and nonferrous market conditions during thequarter to achieve record revenues and the second highest quarterlyEBITDA in our Company's history. Metal Management is a strong,profitable industry leader, and through our aggressive investment innew facilities, equipment and technology we are well-positioned tocontinue creating value for our shareholders."

First Quarter Highlights

-- Consolidated net sales of $496 million for the quarter ended June 30, 2006, an increase of 30% as compared to net sales of $382 million for the quarter ended June 30, 2005.

-- Net income, after recording a gain on the sale of the Company's 28.5 percent interest in Southern Recycling L.L.C., was $44.9 million or $1.70 per diluted common share, compared to $5.4 million or $0.22 per diluted common share in the same period last year.

-- EBITDA (as defined) of $53.6 million in the quarter ended June 30, 2006 represented an increase of 313% over EBITDA (as defined) of $13.0 million in the quarter ended June 30, 2005.

-- Approximately 1.2 million tons of metal were processed and sold or brokered, including ferrous yard shipments of approximately 1.1 million tons and non-ferrous shipments of approximately 127 million pounds.

-- The Company turned ferrous inventories approximately 11 times and non-ferrous inventories (excluding stainless and alloy) approximately 11 times.

-- A dividend of $0.075 per share was paid to all shareholders of record.

-- Metal Management concluded the fiscal quarter with no borrowings under its line of credit and a solid cash and short-term investment position of $31.3 million.

"Operational excellence remains a key competitive advantage forMetal Management and this strength helped us achieve outstandingresults in our first fiscal quarter," said Mr. Dienst. "Once againthis quarter we leveraged Metal Management's transportation andlogistics expertise to take advantage of the attractive pricingenvironment here in the United States. We also continued to rapidlyturn our inventories in order to limit the impact of pricefluctuations. This disciplined inventory management was especiallyimportant in mitigating unprecedented nonferrous volatility."

Transaction Update

Mr. Dienst stated, "By remaining disciplined and opportunistic, weprofitably expanded Metal Management's operations and generatedoutstanding returns for our shareholders in the first fiscal quarter.Both of Metal Management's recently completed acquisitions were highlycomplementary and immediately accretive."

-- Morris Recycling: On February 27, 2006, Metal Management acquired substantially all of the assets of Morris Recycling, Inc. Now known as Metal Management Mississippi, the business has 10 facilities including a shredding plant adjacent to the Mississippi River. Metal Management Mississippi is now fully integrated and contributed to the Company's results in the first fiscal quarter.

-- Southern Recycling: On April 28, 2006, Metal Management completed the sale of its 28.5 percent ownership interest in Southern Recycling, L.L.C for approximately $46 million in cash. In connection with this transaction, the Company recorded a one-time gain of approximately $26.4 million pre tax, or $16.2 million after tax, representing approximately $0.61 per diluted share in the first fiscal quarter.

-- East Chicago: On May 16, 2006, Metal Management acquired substantially all of the assets of a recycling facility in East Chicago, Indiana from OmniSource Corporation. Under the terms of the agreement, Metal Management acquired property, buildings and equipment including a 29 acre yard, an automobile shredder, two balers and a shear. The East Chicago facility contributed to Metal Management's profitability during the final six weeks of the Company's first fiscal quarter.

During the quarter Metal Management entered into a new five-yearcredit agreement with a consortium of lenders led by LaSalle Bank,N.A. The agreement represents a commitment of $300 million that MetalManagement can draw on to pursue capital allocation opportunities thatcould include acquisitions, dividends or share repurchases. Mr. Dienstnoted, "As a relatively young company, we will evaluate all capitalallocation opportunities against stringent criteria, relative returnsand franchise enhancing characteristics."

Mr. Dienst concluded, "After generating positive pre-tax incomefor 18 consecutive quarters, Metal Management has an outstandingtrack-record and we are confident that we can continue to build on oursuccess. Once again, a note of gratitude to our employees across thecountry is appropriate. With the most talented employees in ourindustry, we are confident that Metal Management can operateprofitably and create value for shareholders in even the most dynamicand unpredictable of markets."

Investor Conference Call

Metal Management will host its First Quarter Results ConferenceCall and Webcast at 11:00 am ET (10:00 am CT) on August 3, 2006. Theconference call can be accessed by dialing 866-510-0712 passcode78381659. International callers can dial 617-597-5380 passcode78381659. The conference will also be accessible via the web atwww.mtlm.com. A replay of the call will be available by dialing888-286-8010 passcode 18734229 through August 10, 2006. Internationalcallers can dial 617-801-6888 passcode 18734229 for the replay.

About Metal Management, Inc.

Metal Management is one of the largest full service metalrecyclers in the United States, with approximately 50 recyclingfacilities in 16 states. For more information about Metal Management,Inc., visit the Company's website at www.mtlm.com.

Forward Looking Statements

All of the statements in this release, other than historicalfacts, are forward-looking statements made in reliance upon the SafeHarbor Provisions of the Private Securities Litigation Reform Act of1995. As such, they involve risks and uncertainties and are subject tochange at any time. These statements reflect our current expectationsregarding the future profitability of the Company and itssubsidiaries. As discussed in our annual report on Form 10-K for thefiscal year ended March 31, 2006, and in other periodic filings filedby the Company with the U.S. Securities and Exchange Commission, someof the factors that could affect our performance include, among otherthings: cyclicality and competitiveness of the metals recyclingindustry, commodity price fluctuations, debt covenants that restrictour ability to engage in certain transactions, compliance withenvironmental, health, safety and other regulatory requirementsapplicable to the Company, potential environmental liability, risk ofdeterioration of relations with labor unions, dependence on keymanagement, dependence on suppliers of scrap metal, concentration ofcustomer risk and exposure to credit risk, impact of export and othermarket conditions on the business, availability of scrap alternatives,under funded defined benefit pension plans, and the implementation ofa significant IT consolidation in fiscal 2007 and 2008.

(1) EBITDA is defined by the Company to be earnings beforeinterest, taxes, depreciation, amortization, severance and othercharges, gain (loss) on sale of fixed assets, income from jointventures, other income (expense), gain on sale of joint ventureinterest, and stock-based compensation expense. EBITDA is presentedbecause management believes it provides additional information withrespect to the performance of its fundamental business activities.Management also believes that debt holders and investors commonly useEBITDA to analyze Company performance and to compare that performanceto the performance of other companies that may have different capitalstructures. A reconciliation of EBITDA to GAAP net income is includedin the table attached to this release. EBITDA is a measure typicallyused by many investors, but is not a measure of earnings as definedunder Generally Accepted Accounting Principles, and may be defineddifferently by others.
METAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)

Three months ended
----------------------
June 30, June 30,
2006 2005
---------- ----------

Net sales $495,912 $381,634

Operating expenses:
Cost of sales (excluding depreciation) 422,921 350,379
General and administrative 20,872 19,746
Depreciation and amortization 6,847 4,614
Severance and other charges 442 0
---------- ----------
Operating income 44,830 6,895

Income from joint ventures 1,860 2,051
Interest expense (322) (376)
Interest and other income, net 431 472
Gain on sale of joint venture interest 26,362 0
---------- ----------

Income before income taxes 73,161 9,042
Provision for income taxes 28,272 3,596
---------- ----------
Net income $44,889 $5,446
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Earnings per share:
Basic $1.76 $0.22
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Diluted $1.70 $0.22
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Cash dividends declared per share $0.075 $0.075
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Weighted average common shares outstanding:
Basic 25,576 24,354
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Diluted 26,393 25,300
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METAL MANAGEMENT, INC.
EBITDA (AS DEFINED)
RECONCILIATION TO GAAP FINANCIAL MEASURES
(unaudited, in thousands)

Three months ended
--------------------
June 30, June 30,
2006 2005
--------- ---------

Net income $44,889 $5,446

Add Back:
Depreciation and amortization 6,847 4,614
Tax provision 28,272 3,596
Stock-based compensation expense 1,178 1,498
Income from joint ventures (1,860) (2,051)
Gain on sale of joint venture interest (26,362) 0
Interest expense 322 376
Interest and other income, net (431) (472)
Severance and other charges 442 0
(Gain) loss on sale of fixed assets 310 (16)
--------- ---------

EBITDA (AS DEFINED) $53,607 $12,991
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