IMCO Reports Financials for Q2

IMCO Recycling Inc., Irving, Texas, has reported second quarter 2004 net earnings of $288,000 or $.02 per common diluted share.  As previously announced, the company's second quarter results include severance and associated costs of $2.3 million ($3.7 million before tax) or $.15 per share related to the April retirement of its former chairman and chief executive officer.  Excluding those costs, IMCO's earnings in the period would have been $2.6 million or $.17 per share.

The company's net earnings in the second quarter of 2003 were $2.5 million
or $.17 per share.

Richard L. Kerr, president and chief executive officer, says, "IMCO's
total processing volume was 9 percent higher in 2004's second quarter than
in the same period last year.  Overall segment income of our domestic
aluminum, international aluminum and zinc businesses also was greater than in
the second quarter of 2003, but this improvement was offset by higher interest
expense and an increase in selling, general and administrative (SG & A)
expense which included severance costs."

Kerr says the recovery in U.S. industrial activity and a stronger overall aluminum market raised the operating rates of IMCO's domestic aluminum recycling plants in the second quarter.  Income of that segment increased by 73 percent compared with the same period of 2003, and its processing volume rose by 6 percent.

Second quarter 2004 processing volume of the international aluminum
segment was 18 percent higher than in the comparable 2003 period because
volume increased at the company's facilities in both Europe and Latin America.
The profitability of the Latin American plants which are located in Mexico and
Brazil rose significantly in 2004's second quarter.  Total income of the
international segment declined by 21 percent to $5.0 million from
$6.3 million, however, as margins in Europe decreased from those of 2003's
second quarter.

Kerr says that VAW-IMCO of Germany, a consolidated subsidiary which is
a major supplier of specialty alloys to the European auto industry, "is
continuing to experience strong demand for its products and services that is
being met through an expansion of its capacity which was completed last year."

The zinc segment's second quarter processing volume about equaled that of
the same period of 2003 but its income increased to $2.9 million from
$1.4 million because of a rise in the zinc price which resulted from that
industry's better supply/demand balance.

Commenting on the company's third quarter outlook, Kerr says, "We
expect our processing volume to improve from the year-ago level even though
our domestic specialty alloys plants and VAW-IMCO will be affected in the
period by the traditional shutdown of auto manufacturing facilities for model
changeovers.  Partially because of the anticipated higher volume, which is to
some extent dependent upon continued strength in U.S. industrial activity, we
believe our net earnings in the third quarter of 2004 will be in the range of
$.11 to $.13 per share.  This estimate includes a nonrecurring gain in Brazil
of about $600,000 net of tax or $.04 per share from settlement of a
contractual obligation related to a supply agreement.  In last year's third
quarter IMCO had a net loss of $.02 per share due mainly to weak volume in the domestic aluminum segment and an unrealized mark-to-market aluminum hedge loss at VAW-IMCO."

SG & A expense increased in the second quarter of 2004 because of severance costs, costs related to the company's proposed merger with Commonwealth Industries, Inc. (Nasdaq: CMIN) that was announced on June 17, and a rise in legal fees.  SG & A expense was higher in the first half of 2004 for those reasons and because of the consolidation of VAW-IMCO's operations.

The company's net earnings in the first half of 2004 were $3.0 million or
$.20 per share compared with $3.8 million or $.26 per share in the first six
months of 2003.  Excluding the severance and associated costs recorded in the
second quarter, IMCO's net earnings in the first half of 2004 would have been
$5.3 million or $.35 per share.

Total aluminum and zinc processing volume in 2004's second quarter was
840.1 million pounds, nine percent above volume of 768.2 million pounds in the
same period of 2003.

Revenues in the second quarter were $292.4 million, up 22 percent from
revenues of $239.5 million in the 2003 quarter.  Revenues rose more than
volume because of higher metal prices and because the majority of VAW-IMCO's volume is based on product sales that include the cost of metal purchased, processed and sold.

Processing volume in the first six months of 2004 increased 17 percent to
1.70 billion pounds from volume of 1.43 billion pounds in the same period of
2003. Revenues in the first half rose 31 percent to $570.9 million from revenues of $434.5 million in the first six months of 2003.

With regard to the company's proposed merger with Commonwealth Industries, IMCO Recycling has filed a Form S-4 with the Securities and Exchange Commission and pre-merger notifications under the Hart-Scott-Rodino Antitrust Improvement Act.  Several teams of employees from both companies are engaged in integration planning to provide efficient operation of the combined company the day after the merger is completed.  The teams are also analyzing courses of action designed to achieve estimated annual synergy savings of $25 million within 18 to 24 months following the close of the merger.  Expected principal synergies are in the areas of procurement, integration of complementary operations, reductions in SG & A costs and the application of best practices in plant operations.  The company anticipates completion of the merger in the fourth quarter.  Completion of the merger is conditioned on stockholder approval for both companies, regulatory consents and approvals, obtaining adequate assurances of refinancing certain debt of the two companies and other customary closing conditions.