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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VlHMBJce/KLGW4mTIkVj4yCXGKGVIwpXpln+KKRBCN0J6j187VVRG1cJkO19MjZG 6NJfXI0a41b8FuNda4SuDQ== 0000084278-02-000002.txt : 20020413 0000084278-02-000002.hdr.sgml : 20020413 ACCESSION NUMBER: 0000084278-02-000002 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011031 FILED AS OF DATE: 20020123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROANOKE ELECTRIC STEEL CORP CENTRAL INDEX KEY: 0000084278 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 540585263 STATE OF INCORPORATION: VA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-02389 FILM NUMBER: 02514613 BUSINESS ADDRESS: STREET 1: 102 WESTSIDE BLVD N W STREET 2: P O BOX 13948 CITY: ROANOKE STATE: VA ZIP: 24038 BUSINESS PHONE: 5403421831 MAIL ADDRESS: STREET 1: 102 WESTSIDE BLVD N W CITY: ROANOKE STATE: VA ZIP: 24017 10-K 1 r10k01.htm FORM 10-K FOR FISCAL YEAR ENDED 10-31-01 Body

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 2001

( ) 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 0-2389

ROANOKE ELECTRIC STEEL CORPORATION
(Exact name of Registrant as specified in its charter)

Virginia 54-0585263

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

P.O. Box 13948, Roanoke, Virginia 24038-3948

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (540) 342-1831

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, No Par Value
(Title of class)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (x)

State the aggregate market value of the voting stock held by nonaffiliates of the Registrant.

Aggregate market value at December 31, 2001: $137,783,105

Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of
December 31, 2001.
10,912,188 Shares outstanding

Portions of the following documents are incorporated by reference:

(1) 2001 Annual Report to Stockholders in Parts II and IV.

(2) Proxy Statement dated December 26, 2001 in Part III.

PART I

ITEM 1. BUSINESS

      (a) General Development of Business.

            During the fiscal year ended October 31, 2001, the Registrant continued for the most part to operate its business as it has the past four years by manufacturing merchant steel bar products, fabricating open-web steel joists and concrete reinforcing steel, and extracting scrap steel and other materials from junked automobiles. Roanoke Technical Treatment & Services, Inc., a Roanoke, Virginia subsidiary, was formed in 1990 to license a process for the treatment of electric arc furnace dust, but the opportunity never materialized. During fiscal year 1994, the Registrant's auto shredding subsidiary, Shredded Products Corporation, completed construction of a modern facility in Rocky Mount, Virginia, and in November 1994 began operations at this locality, at a total investment in excess of $8,000,000 for plant and equipment. This facility, with its own landfill, is providing considerable savings in waste disposal costs. In addition, cost savings and better metal recoveries are being achieved through the use of the more technologically advanced equipment.
           During the later part of 1996, the Registrant, at its main plant, completed the installation of a new ladle refining furnace and the upgrade of an electric arc furnace, for approximately $17,000,000. With this new state-of-the-art equipment in operation, the Registrant has increased raw steel production, improved quality, reduced production costs and improved operating efficiencies. In January 1996, Socar, Incorporated , a South Carolina subsidiary, sold its long-time idle plant in Bucyrus, Ohio to the unaffiliated manufacturer who had been leasing the facility for several years under a lease-purchase agreement, for a final settlement price of $130,000.
           On December 16, 1998, the Registrant acquired all of the outstanding common shares of Steel of West Virginia, Inc. ("SWVA"), a Huntington, West Virginia steel manufacturer, upon completion of its cash tender offer. The consideration given was approximately $117.1 million, including the assumption of approximately $52.3 million of indebtedness, which translates into $10.75 net per SWVA share, for approximately 6,028,000 shares on a fully-diluted basis. Upon merger, SWVA became a wholly-owned subsidiary of Roanoke Electric Steel Corporation, and each share of SWVA common stock not purchased in the offer (approximately 3.6% of SWVA's outstanding shares) was converted, subject to appraisal rights, into the right to receive $10.75 in cash, without interest. On the date of acquisition the Registrant closed on $180,000,000 of secured credit facilities with a syndicate of four banks. The facilities were comprised of a $150,000,000 seven year term loan and a $30,000,000 five year revolver. The term loan was used to purchase all of the outstanding capital stock of SWVA, and refinance both the existing term debt of the Registrant and most of SWVA's bank debt assumed through the merger. SWVA operates a mini-mill in Huntington, West Virginia, and steel fabrication facilities in Huntington and Memphis, Tennessee, while custom designing and manufacturing special steel products principally for use in the construction of truck trailers, industrial lift

PART I
(con'd.)

trucks, off-highway construction equipment (such as bulldozers and graders), manufactured housing, guardrail posts and mining equipment. The Registrant and SWVA do not generally compete as regards customers and products. The acquisition was accounted for as a purchase. Accordingly, the results of operations and cash flows were reflected in the consolidated financial statements from the date of acquisition, and the acquired assets and liabilities were included in the 1999 consolidated balance sheet at values based on a purchase price allocation, rendered through appraisals and other evaluations.
The other subsidiaries of the Registrant, John W. Hancock, Jr., Inc. and RESCO Steel Products Corporation, have had no material changes in operations or in the mode of conducting their business for the past five years. John W. Hancock, Jr. founded both the Hancock joist subsidiary and its parent, Roanoke Electric Steel Corporation, and served on the Registrant's Board of Directors as Chairman of the Executive Committee until his death in March 1994.

(b) Financial Information about Industry Segments.

The Registrant's business consists of one industry segment or line of business, which is the extracting of scrap metal from discarded automobiles and the manufacturing, fabricating and marketing of merchant steel bar products and specialty steel sections, reinforcing bars, open-web steel joists and billets. The industry segment consists of three classes of products - merchant steel products and specialty steel sections, fabricated bar joists and reinforcing bars and billets.

FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS
AND CLASSES OF PRODUCTS OR SERVICES

	2001	2000	1999
Sales to Unaffiliated Customers:
Merchant Steel and Specialty
Steel Sections	$190,631,577	$228,202,644	$210,850,231
Bar Joists and Rebar	101,985,847	122,549,851	125,854,046
Billets	15,057,181	21,975,613	36,258,673
Total Consolidated Sales	$307,674,605	$372,728,108	$372,962,950
Net Earnings from Operations	$1,348,022	$14,061,449	$22,479,179
Identifiable Assets	$316,886,778	$339,678,909	$352,045,812

PART I
(con'd.)

      (c) Narrative Description of Business.

           (1) (i) The Registrant manufactures merchant steel products consisting of Angles, Plain Rounds, Flats, Channels and Reinforcing Bars of various lengths and sizes. The principal markets for the Registrant's products are steel fabricators and steel service centers. The products are distributed directly to customers from orders solicited by a paid sales staff of the Registrant.
           The Registrant's subsidiary, Shredded Products Corporation, is involved in the extraction of scrap iron and steel and other metals from junked automobiles and other waste materials. Almost all of the ferrous material is used by the Parent as raw materials. The non-ferrous metals are sold to unrelated purchasers.
           Two other subsidiaries, John W. Hancock, Jr., Inc. and Socar, Incorporated, are engaged in the manufacturing of long- and short-span steel joists. Joists are open-web steel horizontal supports for floors and roofs, used primarily in the construction of commercial and industrial buildings such as shopping centers, factories, warehouses, hospitals, schools, office buildings, nursing homes, and the like. Joists are cheaper and lighter than structural steel or reinforced concrete. The joists are distributed by these subsidiaries to their customers from orders solicited by manufacturer's representatives and pursuant to successful bids placed directly by the subsidiaries.
           The Registrant's subsidiary, RESCO Steel Products Corporation, fabricates concrete reinforcing steel by cutting and bending rebars to contractors' specifications. The rebars are distributed to contractors from orders solicited by a paid sales staff and pursuant to successful bids placed directly by the subsidiary.
           The Registrant's subsidiary, Steel of West Virginia, Inc., operates both a steel mini-mill which produces specialty steel sections, and fabrication facilities which add finishing operations to create custom-designed products placed directly into customers' assembly lines. The niche markets supplied with these cross-member and sub-frame section of products include truck trailers, industrial lift trucks, guardrail posts, manufactured housing, off-highway construction equipment, and mining equipment. These products are marketed by senior management and in-house sales representatives of SWVA, whose sales efforts cover all of the continental United States, and to a very small degree, certain foreign markets.
           (ii) The Registrant has not in fiscal 2001 introduced a new product or begun to do business in a new industry segment that will require the investment of a material amount of assets or that otherwise is material.

PART I
(con'd.)

           (iii) The Registrant's main raw material, scrap steel, is supplied for the most part by scrap dealers within a 250 mile radius of the mill. This raw material is purchased through the David J. Joseph Company, scrap brokers. The Shredded Products subsidiary supplies 10,000 to 15,000 tons of scrap per month. Although scrap is generally available to the Registrant, the price of scrap steel is highly responsive to changes in demand, including demand in foreign countries as well as in the United States. The ability to maintain satisfactory profit margins in times when scrap is relatively high priced is dependent upon the levels of steel prices, which are determined by market forces. Alloys and other materials needed for the melting process are provided by various domestic and foreign companies.            Shredded Products Corporation often experiences difficulty in purchasing scrap automobiles at a satisfactory level. Competition from an increasing number of shredding operations and reluctance by dealers to sell scrap automobiles due to market conditions are the main causes. High offering prices generally increase the supply; however, the increased cost to produce sometimes is very comparable to the price of similar scrap that can be purchased on the outside.
           Substantially all of John W. Hancock, Jr., Inc.'s steel components are purchased from the Parent, which is located conveniently nearby and, therefore such components are generally available to the subsidiary as needed.
           RESCO Steel Products Corporation purchases most of its steel components from suppliers within its market area, determined mainly by freight cost. Such components would be generally available to the subsidiary, since the Parent could produce and supply this raw material, as needed.
           Socar, Incorporated receives most of its raw steel material from the Parent and other nearby suppliers, the determinant usually being freight cost. The availability of raw materials is not of major concern to the subsidiary, since the Parent could supply most of its needs.
           Steel of West Virginia, Inc., like the Parent, uses scrap steel as its main raw material. Even though the purchase of steel scrap is subject to market conditions largely beyond its control, the subsidiary is located in a scrap surplus region, and therefore typically maintains less than a one month supply of scrap, which keeps inventory costs to a minimum. Although one scrap dealer supplies 25% to 30% of SWVA's requirements, the subsidiary believes that a number of adequate sources of scrap and other raw materials that it uses are readily available. SWVA has historically been successful in passing on scrap cost increases through price increases, however, the effect of market price competition has limited the subsidiary's ability to increase prices.

PART I
(con'd.)

           (iv) The Registrant currently holds no patents, trade marks, licenses, franchises or concessions that are material to its business operations.
           (v) The business of the Registrant is not seasonal.
           (vi) The Registrant does not offer extended payment terms to its customers, nor is it normally required to carry significant amounts of inventory to meet rapid delivery requirements of customers; although, at times market conditions have required the stockpiling of popular bar products for rapid delivery. Working capital practices generally remain constant during the course of business except when the Registrant determines it to be advantageous to stockpile raw materials due to price considerations.
           (vii) During fiscal year 2001, sales (tons) by the Registrant to Steel of West Virginia, Inc., John W. Hancock, Jr., Inc., Socar, Incorporated and RESCO Steel Products Corporation, wholly-owned subsidiaries, were approximately 8%, 10%, 7% and 1% of the Registrant's total sales (tons), respectively. During fiscal year 2001, the largest nonaffiliated customer purchased approximately 5% of total sales (tons) -- 2% of total sales (dollars). During fiscal year 2000, the largest nonaffiliated customer purchased approximately 8% of total sales (tons)--3% of total sales (dollars), significantly down from recent years, as poor market conditions in the steel industry contributed to this customer's worsened financial condition and eventual bankruptcy. The bankruptcy resulted in a charge to bad debts of $2.6 million and contributed to lower billet production levels. Poor market conditions prevented placing the lost tonnage with alternate sources. However, under normal market conditions, we would not expect the loss of either of these customers to have a materially adverse effect on the Registrant and its subsidiaries taken as a whole. In addition, considerably more billet tons were used internally by SWVA, which helped to mitigate the lost billet sales.
           (viii) The Registrant is of the opinion that the amount of its backlog is not generally material to an understanding of the business. All backlog is shipped within the current fiscal year.
           (ix) None of the business of the Registrant is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the Government.
           (x) The Registrant competes with steel-producing mills of similar size operative within its market region and also larger mills producing similar products. The market region in which the Registrant sells its products mainly consists of the majority of states east of the Mississippi River. Price, including transportation cost, is the major determinant in securing business. Even though market conditions and backlogs remained strong for much of 1995, shipments were flat due to customers' inventory reductions, while improved selling prices were attributable to higher raw material costs and rising demand, although by year-end prices fell slightly. Demand and backlogs continued high through 1996, allowing for increased bar product shipments, in

PART I
(con'd.)

spite of increased competition, which forced sharp reductions in selling prices throughout the industry. As competition eased during 1997, bar product shipments increased with higher demand, causing improvements in order levels, backlogs and prices. Strong business conditions kept bar prices up during fiscal 1998, in spite of the temporary drop in merchant bar shipments, caused by excess inventories at steel service centers. On December 16, 1998, the Registrant acquired 100% of the capital stock of Steel of West Virginia, Inc. ("SWVA"), a steel manufacturer, and 1999 results reflect the operations of SWVA from the date of acquisition. The 1998 financial statements were not restated to include SWVA because the acquisition was treated as a purchase for accounting purposes. Consequently, the significant increase in 1999 sales was due, primarily, to the inclusion of SWVA's revenues in consolidated sales. Increased competition from foreign and domestic producers prompted industry-wide list price reductions for bar products at the beginning of fiscal 1999, and prices had not fully recovered by year end. Excess inventories at steel service centers and a shortage of transportation equipment contributed to the slight reduction in tons shipped of bar products as bar markets were generally good throughout the year. Sales for 2000 were flat due, again, to the acquisition of SWVA. Sales for the current year included SWVA's revenues for the entire period, whereas sales for 1999 included only the portion of SWVA's revenues from the date of acquisition. Average selling prices for bar and specialty products increased slightly for 2000, but list prices had fallen sharply by the end of the year as a result of increased foreign and domestic competition. The increased competition and price uncertainty reduced order entry and backlogs and caused decreases in both bar and specialty products shipments. Depressed economic conditions within the steel industry and certain niche markets resulted in the decline of 2001 sales. Selling prices for merchant bar and specialty steel products declined due to heightened foreign and domestic competition. Shipments of specialty products were down, primarily, as a result of depressed economic conditions within major market segments. However, sales were positively affected by an increase in tons shipped of merchant bar products, due to new product offerings and declining inventory levels at steel service centers.
The joist business is highly competitive. Due to similarity of product, relatively small price differences are often determinative in placing business. Ability to meet the customer's time requirements for delivery also is important in securing business. Competing successfully becomes more difficult with the distance to point of delivery due to transportation costs. Reduced competition and increased activity in 1995 led to higher shipment levels within the construction industry, as demand and increased raw material costs forced selling prices higher. Generally strong business conditions within the commercial construction industry continued during 1996 to bring improvements to selling prices for fabricated products, while shipment levels were relatively flat, as weather related construction delays offset otherwise strong demand. Even though market conditions continued

PART I
(con'd.)

to be favorable during 1997, competition within the industry forced lower selling prices for fabricated products, and also kept shipment levels flat. Continued favorable market conditions in the construction industry during fiscal 1998 led to the increased shipments and level selling prices for fabricated products. Competitive conditions within the commercial construction industry generally impact selling prices and shipment levels of fabricated products and were relatively favorable during 1999 as reflected in the higher selling prices. The reduced shipments were caused by minor factors other than competition as business conditions continued strong and backlogs remained high. In 2000, the decline in fabricated products selling prices and shipments was caused by increased competition within the construction industry, even though business conditions continued strong and backlogs were high. The decline in shipments was also affected by shortages of structural steel components. Economic conditions within the construction industry began to slide during 2001, as a result of increased competition, bringing prices lower. Fabricated products shipments decreased as construction activity slowed dramatically during the latter part of the year, as a result of poor business conditions.
Billets are semi-finished products used by the Registrant, and the SWVA subsidiary, in their rolling mill processes to manufacture various merchant bar products and specialty steel sections. Excess billet production is sold to nonaffiliated customers who further fabricate the billets for various end uses. Improved market conditions and increased domestic demand resulted in improved 1995 billet shipments, as export markets remained highly competitive. Higher scrap steel costs, which normally trigger higher prices, and improved product mix together caused billet selling prices to climb. A planned melt shop shutdown during 1996 to install a new ladle furnace and upgrade an electric arc furnace was unexpectedly prolonged due to problems with construction and installation, resulting in a sharp decline in billet production and causing a significant reduction in billet shipments for the year, while the highly competitive export market remained in effect. Billet selling prices declined with a downward trend in scrap prices. Increased billet shipments for 1997 resulted both from increased production, which hampered shipments in 1996, and improved domestic demand, as export markets remained very competitive. Lower scrap prices continued to keep billet prices down. The significant increase in billet shipments for fiscal 1998 was attributable to record raw steel production, coupled with unprecedented demand. Billet prices were flat due to relatively unchanged scrap prices. A dramatic change in our market for billets during 1999 brought diminished demand and a significant decline in tons shipped. Billet selling prices declined with sharp reductions in scrap prices. The dramatic reduction in billet shipments, again in 2000, and the continued drop in market conditions was attributable to the financial condition and eventual bankruptcy of a major customer. Shipments to this customer were purposely curtailed to reduce our exposure to bad debts. Due to market conditions, we were not able to place the lost tonnage with alternate sources, other than the tons used

PART I
(con'd.)

internally by SWVA. Billet selling prices were higher due to increased scrap prices. In 2001, billet shipments declined, due to poor market conditions and the loss of the major customer referred to earlier. Selling prices for billets were lower, mostly attributable to falling scrap steel costs.
           (xi) During the last three fiscal years, the Registrant was not involved in any material research and development activities.
           (xii) The Parent, Shredded Products and SWVA are subject to federal, state and local environmental laws and regulations concerning, among other matters, wastewater discharge, air emissions, furnace dust disposal and disposal of auto fluff and other wastes. As with similar mills in the industry, the Parent's, and SWVA's, furnaces are classified as generating hazardous waste because they produce certain types of dust containing lead, zinc and cadmium. Near the end of fiscal year 1996, the Parent began treating a portion of its electric arc furnace dust, a hazardous substance, utilizing its own stabilization process. Significant savings are being realized as this process replaces off-site and more expensive treatment methods that had been used through a contract with an approved waste disposal firm. SWVA currently collects and handles its furnace waste through contracts with a company which reclaims, from the waste dust, certain materials and recycles or disposes of the remainder. Shredded Products operates an approved landfill for use in disposal of its waste products associated with its auto shredding operations. The Registrant believes it is in substantial compliance with applicable federal, state and local regulations. However, future changes in regulations may require expenditures which could adversely affect earnings in subsequent years.
           The Registrant has constructed over the years pollution control equipment at a net aggregate cost of over $9,900,000. Annual operating expenses and depreciation of all pollution control equipment and waste disposal costs are in excess of $3,000,000 in the aggregate. The Registrant is expected to spend approximately $10,000,000 for additional pollution control and waste disposal equipment and facilities during subsequent fiscal years. Adoption of the Clean Air Act Amendments of 1990, or any other environmental concerns, is not anticipated to have a materially adverse effect on the Registrant's operations, capital resources or liquidity, nor should any incremental increase in capital expenditures occur due to the Act.
           See Note 8, "Commitments and Contingent Liabilities", in Notes to Consolidated Financial Statements contained in the Registrant's 2001 Annual Report to Stockholders, filed as an Exhibit to this Form 10-K.
           (xiii) At October 31, 2001, the Registrant employed 493 persons at its Roanoke plant, with no employment at its Salem division, idle since mid-1991. The Registrant's subsidiaries, Steel of West Virginia, Inc., John W. Hancock, Jr., Inc., Socar, Incorporated, Shredded Products Corporation and RESCO Steel Products Corporation employed 424, 287, 266, 59 and 44 persons, respectively.

PART I
(con'd.)

(d) Financial Information about Foreign and Domestic Operations and Export Sales.

When the Registrant's billet production exceeds its required needs, this semi-finished product is offered for sale. During past years, a portion of the excess billets has been sold to brokers who represent foreign purchasers. During fiscal years 1999, 2000 and 2001, the Registrant did not make any foreign sales of excess billets. However, the SWVA subsidiary sold a small percentage of its products to foreign markets during these years. The information required by this paragraph by geographical area, as to foreign and domestic operations, is not provided since it is identical to the table in paragraph (b) with virtually all information pertaining to the United States.

ITEM 2. PROPERTIES

                The Registrant owns 72 acres situated in the City of Roanoke, Virginia, which comprises its main plant, of which 25 acres are used to provide 364,500 square feet of manufacturing space with an annual billet capacity of approximately 650,000 tons and rolling mill capacity of 400,000 tons. A 30 acre site is owned in Salem, Virginia, of which 10 acres were used to provide 51,355 square feet of manufacturing space, until March 1991, when the plant was idled. The Registrant acquired in 1991 a 447 acre tract of land in Franklin County, Virginia, 100 acres of which were transferred to Shredded Products Corporation in a move of shredding operations from its Montvale location. Part of this new Shredded Products property is being used as an approved industrial landfill. The remaining 347 acres of this land, 130 acres of which were sold in 1995, 1997, 1998, 1999 and 2001, is being marketed as an industrial park for Franklin County.
                Shredded Products Corporation operates in both Montvale and Rocky Mount, Virginia. The Montvale plant is situated on a 75 acre site owned by the Registrant, approximately 20 acres of which are regularly used in its scrap processing operation, with an annual production capacity of approximately 24,000 tons. The Rocky Mount facility is located on a 100 acre site owned by Shredded Products Corporation, partially consisting of a 25 acre industrial landfill used for the disposal of its auto fluff, and another 25 acres of which are regularly used in its shredding operation, with an annual production capacity of approximately 150,000 tons.
                John W. Hancock, Jr., Inc. is located in Roanoke County near Salem, Virginia. The plant is situated on a 37 acre site owned by Hancock, Inc., 17 acres of which are regularly used in its operations. Buildings on the site contain 131,614 square feet of floor space.
                Socar, Incorporated and its subsidiary are located in Florence, South Carolina, and in Continental, Ohio. The Florence facility is located on a 28 acre site owned by Socar, Incorporated, 16 acres of which are regularly used in its operations. Buildings on the site contain 93,359 square feet of floor space. The plant located on a 32 acre site in Continental, Ohio, owned by Socar, Incorporated, has 86,400 square feet of floor space in manufacturing buildings, situated on 8 acres regularly used in its operations.

PART I
(con'd.)

                RESCO Steel Products Corporation operates from a building containing 43,340 square feet of floor space, located in Salem, Virginia, on a 7 acre site owned by RESCO.
                Steel of West Virginia, Inc. and its subsidiary are located in Huntington, West Virginia and in Memphis, Tennessee. The Huntington facility is located on a 42 acre site owned by SWVA, most of which are regularly used in its operations. Buildings on the site contain 558,175 square feet of manufacturing space with an annual billet capacity of approximately 280,000 tons and rolling mill capacity of 300,000 tons. The plant located in Memphis, Tennessee owned by SWVA operates in 41,000 square feet of manufacturing space on approximately 4 acres.
                The various buildings are of modern design, well-maintained, and suitable and adequate for the requirements of the business.

ITEM 3. LEGAL PROCEEDINGS

None.

See Note 8, "Commitments and Contingent Liabilities", in Notes to Consolidated Financial Statements contained in the Registrant's 2001 Annual Report to Stockholders, filed as an Exhibit to this Form 10-K.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of stockholders during the fourth quarter of the fiscal year covered.

EXECUTIVE OFFICERS OF THE REGISTRANT

                Pursuant to General Instruction G(3) of Form 10-K, the following list is included as an unnumbered Item in Part I of this report in lieu of being included in the Proxy Statement for the Annual Meeting of Shareholders to be held on February 19, 2002.
                The names, ages and positions of all of the executive officers of the Registrant as of October 31, 2001 are listed below with their business experience with the Registrant for the past five years. Officers are elected annually by the Board of Directors at the first meeting of directors following the annual meeting of shareholders. There are no family relationships among these officers, nor any agreement or understanding between any officer and any other person pursuant to which the officer was selected.
                Thomas J. Crawford, 46, has served as Secretary of the Registrant since January 1985 and as Vice President-Administration since February 1998; prior thereto, he had served as Assistant Vice President since January 1993, as Manager of Inside Sales since 1984 and as a Sales Representative since 1977. He has 24 years of service with the Registrant.

PART I
(con'd.)

                Timothy R. Duke, 50, has served as President and Chief Executive Officer of Steel of West Virginia, Inc. ("SWVA"), a wholly-owned subsidiary of the Registrant, since July 1997; prior thereto, he had served as President and Chief Operating Officer of SWVA since October 1996 and as Vice President, Treasurer and Chief Financial Officer of SWVA since February 1988. He has 14 years of service with SWVA.
                Donald R. Higgins, 56, has served as Vice President - Sales of the Registrant since January 1986; prior thereto, he had served as General Sales Manager since 1984 and Assistant Sales Manager since 1978. He has 36 years of service with the Registrant.
                John E. Morris, 60, has served as Vice President - Finance of the Registrant since October 1988 and as Assistant Treasurer since 1985; prior thereto, he had served as Controller since 1971. He has 30 years of service with the Registrant.
                Donald G. Smith, 66, has served as Chairman of the Board of the Registrant since February 1989, as Chief Executive Officer since November 1986, as President and Treasurer since January 1985 and as Director of the Registrant since April 1984; prior thereto, he had served as Vice President - Administration since September 1980 and as Secretary since January 1967. He has 44 years of service with the Registrant.

FORWARD-LOOKING STATEMENTS

From time to time, the Registrant may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Registrant notes that a variety of factors could cause the Registrant's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Registrant's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of the Registrant's business include economic and industry conditions, availability and prices of supplies, prices of steel products, domestic and foreign competition, governmental regulations, interest rates, inflation, labor relations, environmental concerns, and others.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

The specific information required by this item is incorporated by reference to the information under the heading "Stock Activity" in the 2001 Annual Report to Stockholders. The Registrant did not, during fiscal year 2001, make any sale of securities not registered under the Securities Act of 1933.

ITEM 6. SELECTED FINANCIAL DATA

The specific information required by this item is incorporated by reference to the information under the heading "Selected Financial Data" in the 2001 Annual Report to Stockholders.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The specific information required by this item is incorporated by reference to the information under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2001 Annual Report to Stockholders.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The specific information required by this item is incorporated by reference to the information under the headings "Notes to Consolidated Financial Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2001 Annual Report to Stockholders.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The specific information required by this item is incorporated by reference to the information under the headings "Independent Auditors' Report", "Consolidated Financial Statements" and "Notes to Consolidated Financial Statements" in the 2001 Annual Report to Stockholders.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The specific information required by this item is incorporated by reference to the information under the heading "Information Concerning Directors and Nominees" in the Proxy Statement dated December 26, 2001, as filed with the Securities and Exchange Commission (the "Commission"), or is included under the heading "Executive Officers of the Registrant" in Part I of this filing on Form 10-K. The disclosure required by Item 405 of Regulation S-K is not applicable.

ITEM 11. EXECUTIVE COMPENSATION

The specific information required by this item is incorporated by reference to the information under the headings "Executive Compensation", "Compensation and Stock Option Committee Report on Executive Compensation", "Performance Graph" and "Board of Directors and Committees -- Director Compensation" in the Proxy Statement dated December 26, 2001, as filed with the Commission.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The specific information required by this item is incorporated by reference to the information under the headings "Security Ownership of Certain Beneficial Owners" and "Security Ownership of Management" in the Proxy Statement dated December 26, 2001, as filed with the Commission.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following documents are filed as a part of this report:

(1) The following financial statements filed as part of the 2001 Annual Report to Stockholders are incorporated herein by reference:

(a) Consolidated Balance Sheets

(b) Consolidated Statements of Stockholders' Equity and Comprehensive Earnings (Loss)

(d) Consolidated Statements of Cash Flows

(e) Notes to Consolidated Financial Statements

(f) Independent Auditors' Report

Individual financial statements of the Registrant are not being filed because the Registrant is primarily an operating company and its subsidiaries do not have minority equity interests and/or long-term indebtedness (including current portions) to any person outside the consolidated group (excluding long-term indebtedness which is collateralized by the Registrant by guarantee, pledge, assignment or otherwise), in amounts which together exceed 5 percent of the total consolidated assets.

PART IV
(con'd.)

(2) Pursuant to Regulation S-K, the following Exhibit Index is added immediately preceding the exhibits filed as part of the subject Form 10-K:

                                                                        EXHIBIT INDEX

EXHIBIT NO. EXHIBIT PAGE

(3) (a) Articles of Incorporation, as amended 20

Incorporated by reference

(b) By-Laws, as amended 21

(4)   Instruments Defining the Rights of Security Holders 22

(10)   *(a) Executive Officer Incentive Arrangement 23

Incorporated by reference

*(b) Roanoke Electric Steel Corporation

Employees' Stock Option Plan 23

Incorporated by reference

*(c) Roanoke Electric Steel Corporation

Non- Employee Directors' Stock Option Plan 23

Incorporated by reference

*(d) Roanoke Electric Steel Corporation Severance Agreements 23

Incorporated by reference

*(e) SWVA Collective Bargaining Agreement 23

Incorporated by reference

*(f) SWVA Employee Agreement with Timothy R. Duke 23

Incorporated by reference

(13)
2001 Annual Report to Stockholders
24

(21) Subsidiaries of the Registrant 25

(23) Independent Auditor's Consent 26

(b) Reports on Form 8-K.

There were no reports on Form 8-K filed by the Registrant during the last quarter of the fiscal period covered by the Annual Report.

* Management contract, or compensatory plan or agreement, required to be filed as an Exhibit to this
Form 10-K pursuant to Item 14 (c).

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

ROANOKE ELECTRIC STEEL CORPORATION

                                Registrant

   By:        Donald G. Smith

          Donald G. Smith, Chairman, President,

          Treasurer and Chief Executive Officer

          (Principal Executive Officer, Principal

          Financial Officer and Director)

Date: January 15, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

     Name and Title       Date

Donald G. Smith January 15, 2002

Donald G. Smith, Chairman, President,

Treasurer and Chief Executive Officer

(Principal Executive Officer, Principal

Financial Officer and Director)

John E. Morris January 15, 2002

John E. Morris, Vice President - Finance

and Assistant Treasurer (Principal

Accounting Officer)

George B. Cartledge, Jr. January 15, 2002

George B. Cartledge, Jr.      Director

Thomas L. Robertson January 15, 2002

Thomas L. Robertson          Director

Charles I. Lunsford, II January 15, 2002

Charles I. Lunsford, II         Director

Paul E. Torgersen January 15, 2002

Paul E. Torgersen                Director

EXHIBIT NO. 3 (a)

ARTICLES OF INCORPORATION, AS AMENDED

Incorporated by reference to the previously filed Form 10-K for October 31, 1996 on file in the Commission office.

EXHIBIT NO. 3 (b)

BY-LAWS, AS AMENDED

BY-LAWS
OF
ROANOKE ELECTRIC STEEL CORPORATION

ARTICLE I

Offices

The principal office and place of business of the Corporation shall be in the County of Roanoke, State of Virginia, and the post office address of the Corporation shall be in the City of Roanoke, State of Virginia.

ARTICLE II

Stockholders

Section 1 - Annual Meeting - The annual meeting of the Stockholders of the Corporation shall be held on the third Monday in January of each year.

Section 2 - Special Meetings - Special meetings of the Stockholders may be called by the President and shall be called by the President or Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing by Stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote.

Section 3 - Notice and Place of Meetings - The Secretary shall cause written notice of the time and place of the holding of each annual or special meeting to be mailed, at least ten (10) days prior to such meeting, to each Stockholder entitled to vote, to the post office address of record with the Corporation. Notice of special meetings of the Stockholders shall state the purpose or purposes of such meetings. Meetings shall be held at such place in the City or County of Roanoke as may be designated in the notice.

Section 4 - Quorum - At any meeting of the Stockholders, the holders of a majority of the shares of the capital stock of the Corporation, issued and outstanding and entitled to vote, present in person or represented by proxy, shall represent a quorum of the Stockholders for all purposes.

If the holders of the amount of stock necessary to constitute a quorum shall fail to attend, in person or by proxy, at the time and place of meeting, the Chairman of the meeting may adjourn such meeting from time to time without notice, other than by announcement at the meeting, until holders of the amount of stock requisite to constitute a quorum shall attend. At any such adjourned meeting, at which a quorum be present, any business may be transacted which might have been transacted at the meeting as originally called.

Section 5 - Organization - The President, and in his absence, the Vice-President, shall call all of the meetings of the Stockholders to order and shall act as Chairman of such meetings. In the absence of the President and Vice-President, the Board of Directors shall appoint any stockholder to act as Chairman of such meeting. The Secretary of the Corporation shall act as Secretary of all meetings of the Stockholders, and in the absence of the Secretary, the presiding officer may appoint any person to act in such capacity.

Section 6 - Voting - At each meeting of the Stockholders, every Stockholder shall be entitled to vote in person or by proxy appointed by an instrument in writing, subscribed by such Stockholder, or by his duly authorized attorney, and delivered to the Secretary at the meeting, and he shall have one vote for each share of stock entitled to vote and registered in his name at the time of taking the list of Stockholders for such meeting. No share of stock shall be voted at any election which shall have been transferred on the books of the Corporation within twenty (20) days next preceding such election. Upon the demand of any Stockholder, the vote upon any question before the meeting shall be by ballot.

It shall be the duty of the Secretary to prepare, at least ten (10) days before every meeting, a complete list of the Stockholders entitled to vote, arranged in alphabetical order and indicating the number of shares held by each. Such list shall be open for inspection by any Stockholder at the principal place of business of the Corporation during business hours for the ten (10) days preceding the meeting.

Section 7 - Inspectors - At each meeting of the Stockholders, one (1) or more inspectors of election may be appointed by the presiding officer. It shall be the duty of the inspectors of election to count and certify to the Secretary the results of all votes at such meeting. In the absence of the appointment of such inspector or inspectors, the Secretary shall perform such duties.

Section 8 - Order of Business - At meetings of the Stockholders, the order of business shall be:

(1) Calling of roll.

(2) Proof of due notice of meeting or of waiver of notice.

(3) Reading and disposal of unapproved minutes.

(4) Reports of officers and committees.

(5) Election of Directors.

(6) Unfinished business.

(7) New business.

(8) Adjournment.

ARTICLE III
Board of Directors

Section 1 - Number and Term of Office - The business and property of the Corporation shall be managed and controlled by a Board of not less than five, nor more than nine Directors. The Directors shall be elected by ballot, by a majority of the Stockholders present and voting in person or by proxy, at each annual meeting of the Stockholders, and shall be elected to serve for a term of one (l) year and until their successors shall be elected and shall qualify.

Section 2 - Vacancies - In case of any vacancy in the Board of Directors through death, resignation, disqualification or other cause, the remaining Directors, by an affirmative vote of the majority thereof, may elect a successor to hold office for the unexpired portion of the term.

Section 3 - Annual Meetings - The annual meeting of the Board of Directors of the Corporation shall be held on the second Tuesday following the annual meeting of the Stockholders of the Corporation.

Section 4 - Special Meetings - Special meetings of the Board of Directors shall be held whenever called by the direction of its Chairman or the President, or by one-third in number of the Directors then in office.

Section 5 - Time, Place and Notice of Meetings - The Secretary shall cause written notice of the time and place of the holding of each annual or special meeting to be mailed, at least ten (10) days prior to the date of such meeting, to each Director to the post office address of record with the Corporation.

Section 6 - Quorum - A majority of the Board of Directors shall constitute a quorum for the transaction of business, but if at any meeting of the Board, there be less than a quorum present, a majority of those present shall adjourn the meeting from time to time.

Section 7 - Election and Salaries of Officers - The Directors shall elect the officers of the Corporation and fix their salaries.

Section 8 - Order of Business - At meetings of the Board of Directors, the order of business shall be:

(1) Calling of roll.

(2) Proof of due notice of meeting or of waiver of notice.

(3) Reading and disposal of any unapproved minutes.

(4) Reports of officers and committees.

(5) Election of officers.

(6) Unfinished business.

(7) New business.

(8) Adjournment.

ARTICLE IV

Section 1 - Officers - The officers of the Corporation shall be a Chairman of the Board of Directors, a President, a Vice-President, a Secretary and a Treasurer. Any two or more of such offices, other than those of President and Secretary, may be held by one person. The Board of Directors may, in its discretion, elect more than one Vice-President, and an Assistant Secretary and Assistant Treasurer. The officers shall be elected at each annual meeting of the Board of Directors and shall be elected to serve for a term of one (1) year or until removed by a majority vote of the entire Board of Directors.

Section 2 - Powers and Duties of Officers

(a) The Chairman of the Board of Directors shall preside at all meetings of the Board of Directors.

(b) President - The President shall be elected from the Board of Directors and shall preside at all meetings of the Stockholders, and, in the absence of the Chairman of the Board of Directors, at all meetings of the Directors. He shall have power to sign certificates of stock, to sign and execute all contracts, deeds, leases and other documents, and to sign checks, drafts, notes and orders for the payment of money, and to appoint, discharge and fix the salaries of agents and employees. He shall have general and active management of the business of the Corporation and shall perform all of the duties incident to the office of President.

(c) Vice-President - The Vice-President, or Vice-Presidents, shall have such powers and perform such duties as may be delegated to him or them by the Board of Directors. In the absence or disability of the President, the senior Vice-President may perform the duties and exercise the powers of the President.

(d) Treasurer and Assistant Treasurer - The Treasurer shall have custody of all funds and securities of the Corporation and shall keep a full and accurate account of all monies received and paid by him on account of the Corporation. He shall have power to sign all checks, drafts, notes and orders for the payment of money and shall perform all acts incident to the position of Treasurer, subject to the control of the Board of Directors. The Assistant Treasurer shall have such powers and duties as may be delegated to him by the Board of Directors and, in the absence or disability of the Treasurer, may perform the duties and exercise the powers of the Treasurer.

(e) Secretary and Assistant Secretary - The Secretary shall keep the minutes of all meetings of the Board of Directors and Stockholders, and shall give and serve all notices. The Secretary shall attest and countersign all contracts, deeds, leases and other documents where necessary, and shall have charge and custody of the seal, and of the stock certificate books, transfer books and stock ledgers of the Corporation, and shall, in general, perform all duties usually incident to the office of Secretary. The Assistant Secretary shall have such powers and duties as may be delegated to him by the Board of Directors and, in the absence or disability of the Secretary, may perform the duties and exercise the powers of the Secretary.

ARTICLE V
Capital Stock, Dividends and Seal

Section 1 - Certificates of Shares - The certificates for the shares of the capital stock of the Corporation shall be in such form as may be approved by the Board of Directors. The certificates shall be signed by the President and the Secretary or Treasurer of the Corporation and shall be consecutively numbered. The name of the person owning the shares represented by each certificate, with the number of such shares and the date of issue, shall be entered on the Corporation's books. The Corporation may treat the holder of record of any share or shares of stock as the holder-in-fact thereof, and shall not be bound to recognize any claim to or interest in any such share on the part of any other person.

Section 2 - Transfer of Shares - Shares of the capital stock of the Corporation shall be transferable by the holder thereof in person, or by his duly authorized attorney, upon surrender and cancellation of certificates for a like number of shares properly endorsed.

Section 3 - Regulations - The Board of Directors shall have power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration of certificates for the shares of stock of the Corporation.

Section 4 - Dividends - The Board of Directors may declare dividends from the surplus of the Corporation or from the net profits from the operation of its business at such times and in such amounts as the Board, in its sole discretion, may determine. Before the payment of any dividend or the distribution of any profits, there may be set aside out of the surplus or net profits arising out of the operation of the business of the Corporation, such sum or sums as the Directors from time to time think proper, either as working capital, a reserve fund to meet contingencies, for the repair and maintenance of the property of the Corporation, or for such other purposes as the Directors shall think conducive to the interests of the Corporation.

Section 5 - Corporate Seal - The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization, and the words "Corporate Seal" and "Virginia".

Section 6 - Fiscal Year and Financial Statements - The fiscal year of the Corporation shall begin on the first day of November and terminate on the 31st day of October in each year. The Board of Directors shall publish and submit to the Stockholders, along with the notice of the time and place of the annual meeting, an operating statement of the Corporation for the preceding fiscal year and a consolidated balance sheet showing the assets and liabilities of the Corporation at the end of the preceding fiscal year.

ARTICLE VI
Amendment of By-Laws

The By-Laws of the Corporation may be amended at any annual or special meeting of the Corporation by a vote of the holders of a majority of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote, present in person or represented by proxy.

John W. Hancock, Jr.
President

ATTEST:

Elizabeth B. Hancock
Secretary

WAIVER OF NOTICE

We, the undersigned, being all of the members of the Board of Directors of Roanoke Electric Steel Corporation, hereby waive notice of the first meeting of the Board of Directors to be held at the offices of Roanoke Iron and Bridge Works in the City of Roanoke, Virginia at 4 p.m. o'clock on the 27th day of April, 1955, and consent to the transaction of all business that may properly come before such meeting.

DATED at Roanoke, Virginia this 27th day of April, 1955.

John W. Hancock, Jr.
O.D. Oakey, Jr.
S. Colston Sneed, Jr.
B.W. Morris
Charles P. Lunsford
A. Blair Antrim
John M. Donalson

ARTICLES OF AMENDMENT
TO BY-LAWS
OF ROANOKE ELECTRIC STEEL CORPORATION

Pursuant to Section 13.1 - 3(n), Code of Virginia, 1950, as amended, Roanoke Electric Steel Corporation executes Articles of Amendment to its By-Laws as follows:

(a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION.

(b) The amendment so adopted amends Article VI of the By-Laws to read as follows:

"The Corporation shall indemnify each director and officer of the Corporation, his heirs, executors, administrators and personal representatives, against any and all liabilities, judgments, fines, penalties and claims (including amounts paid in settlement) imposed upon or asserted against him by reason of his being or having been an officer or director of the Corporation or of any other corporation in which he served or serves as a director or officer pursuant to the written request of the Corporation (whether or not he continues to be an officer or director at the time of such imposition or assertion), and against all expenses (including counsel fees) reasonably incurred by him in connection therewith, except in respect of matters as to which he shall have been finally adjudged to be liable by reason of having been guilty of negligence or misconduct in the performance of his duty as such director or officer. In the event of any other judgment against such officer or director or in the event of a settlement, the indemnification shall be made only if the Corporation shall be advised (a) by the Board of Directors, in case none of the persons involved shall then be a director of the Corporation, or (b) by independent counsel appointed by the Board of Directors, in case any of the persons involved shall then be a director of the Corporation, that in its or his opinion, as the case may be, such director or officer was not guilty of negligence or misconduct in the performance of his duty, and, in the event of a settlement, that such settlement was, or, if still to be made, would be, in the best interests of the Corporation. If the determination is to be made by the Board of Directors, it may rely, as to all questions of law, upon the advice of independent counsel. The foregoing right of indemnification shall not be exclusive of other rights to which any director or officer may be entitled as a matter of law or otherwise."

(c) The meeting of the Board of Directors at which the amendment was found to be in the best interests of the Corporation and directed to be submitted to a vote at a meeting of stockholders was held on the 18th day of October, 1967. Notice was given to each stockholder of record entitled to vote on the 15th day of December, 1967, such notice being given more than twenty-five and less than fifty days before the date of the meeting and was given in the manner provided in this Act, and was accompanied by a copy of the proposed amendment; the date of the adoption of the amendment by the stockholders was the 15th day of January, 1968.

                (d) The number of shares outstanding and the number of shares entitled to vote on the amendment was 560,000 shares; all shares being common stock of no par value, there was no class entitled to vote thereon as a class.

(e) The number of shares present in person or by proxy voted for the amendment was 441,265 shares and none against such amendment.

(f) Such amendment does not effect a change in the amount of stated capital.

(g) Such amendment does not effect a restatement of the Articles of Incorporation.

Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 20th day of January, 1968.

ROANOKE ELECTRIC STEEL CORPORATION

BY William M. Meador
President

ATTEST:

Donald G. Smith
Secretary

STATE OF VIRGINIA )
) To-Wit:
COUNTY OF ROANOKE )

I, Paul D. Sturgill, a Notary Public in and for the County of Roanoke, State of Virginia, do hereby certify that William M. Meador, and Donald G. Smith, President and Secretary respectively of Roanoke Electric Steel Corporation, have this day personally appeared before me and executed the foregoing Articles of Amendment, and made oath that the matters therein stated are true and correct.

Given under my hand this 20th day of January, 1968. My commission expires April 4, 1968.

Paul D. Sturgill
Notary Public

ARTICLES OF AMENDMENT

TO BY-LAWS

OF ROANOKE ELECTRIC STEEL CORPORATION

Pursuant to Section 13.1 - 24, Code of Virginia, 1950, as amended, Roanoke Electric Steel Corporation executes Articles of Amendment to its By-Laws as follows:

(a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION.

(b) The amendment so adopted adds a new by-law, which would be new Article VII, to read as follows:

"The power to alter, amend or repeal the By-laws or adopt new by-laws shall be vested in the Board of Directors. But by-laws made by the Board of Directors may be repealed or changed, and new by-laws made, by the stockholders and the stockholders may prescribe that any by-law made by them shall not be altered, amended or repealed by the Directors."

(e) The number of shares present in person or by proxy voted for the amendment was 441,265 shares and none against such amendment.

(f) Such amendment does not effect a change in the amount of stated capital.

(g) Such amendment does not effect a restatement of the Articles of Incorporation.

Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 20th day of January, 1968.

ROANOKE ELECTRIC STEEL CORPORATION

BY William M. Meador
President

ATTEST:

Donald G. Smith
Secretary

STATE OF VIRGINIA )
) To-Wit:
COUNTY OF ROANOKE )

I, Paul D. Sturgill, a Notary Public in and for the County of Roanoke, State of Virginia, do hereby certify that William M.Meador, and Donald G. Smith, President and Secretary respectively of Roanoke Electric Steel Corporation, have this day personally appeared before me and executed the foregoing Articles of Amendment, and made oath that the matters therein stated are true and correct.

Given under my hand this 20th day of January, 1968. My commission expires April 4, 1968.

Paul D. Sturgill
Notary Public

ARTICLES OF AMENDMENT

TO BY-LAWS

OF ROANOKE ELECTRIC STEEL CORPORATION

Pursuant to Section 13.1-24 of the Code of Virginia and Article VII of the By-Laws of Roanoke Electric Steel Corporation, The Board of Directors of Roanoke Electric Steel Corporation hereby amends the By-Laws of the Corporation as follows:

(a) Section 2 of Article V is amended by inserting "(subject to such restrictions as may be placed upon the transfer of shares under the terms of the following section)" between "transferable" and "by".

(b) Section 3 of Article V is amended by adding to the end of such section the following sentence: "The Board of Directors may place such restrictions upon the transferability of all or part of the shares of the capital stock of the Corporation as may be necessary in the opinion of the Board to insure that any issue of stock by the Corporation will comply with applicable federal and state securities laws and with the terms of any agreement of merger or other corporate reorganization duly approved by the Board."

(c) The meeting of the Board of Directors at which the amendment was found to be in the best interest of the Corporation was held on the 19th day of August, 1975.

Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 19th day of August, 1975.

                                                                ROANOKE ELECTRIC STEEL CORPORATION

                                                                By William M. Meador
                                                                           President

ATTEST:

Donald G. Smith
Secretary

ARTICLES OF AMENDMENT

TO BY-LAWS

OF ROANOKE ELECTRIC STEEL CORPORATION

Pursuant to Section 13.1-24 of the Code of Virginia and Article VII of the By-Laws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its By-Laws as follows:

(a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION.

(b) The amendment so adopted amends Section 1 of Article III to read as follows:

"The business and property of the Corporation shall be managed and controlled by a Board of not less than five, nor more than ten Directors. The Directors shall be elected by ballot, by a majority of the Stockholders present and voting in person or by proxy, at each annual meeting of the Stockholders, and shall be elected to serve for a term of one (1) year and until their successors shall be elected and shall qualify."

(c) The meeting of the Board of Directors at which the amendment was found to be in the best interest of the Corporation was held on the 16th day of September, 1975.

Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 16th day of September, 1975.

ROANOKE ELECTRIC STEEL CORPORATION

By William M. Meador
President

ATTEST:

Donald G. Smith
Secretary

ARTICLES OF AMENDMENT

TO BY-LAWS

OF ROANOKE ELECTRIC STEEL CORPORATION

(a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION.

(b) The amendment so adopted amends Section 1 of Article III to read as follows:

"The business and property of the Corporation shall be managed and controlled by a Board of not less than five, nor more than eleven Directors. The Directors shall be elected by ballot, by a majority of the Stockholders present and voting in person or by proxy, at each annual meeting of the Stockholders, and shall be elected to serve for a term of one (1) year and until their successors shall be elected and shall qualify."

(c) The meeting of the Board of Directors at which the amendment was found to be in the best interest of the Corporation was held on the 17th day of April 1984.

Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 17th day of April 1984.

ROANOKE ELECTRIC STEEL CORPORATION

By William M. Meador
President

ATTEST:

Donald G. Smith
Secretary

ARTICLES OF AMENDMENT TO BYLAWS OF
ROANOKE ELECTRIC STEEL CORPORATION

Pursuant to Section 13.1-24 of the Code of Virginia and Article VII of the Bylaws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation hereby executes and approves these Articles of Amendment to its Bylaws as follows:

(a) Article III, "Board of Directors", is hereby amended by the addition of Section 9 as follows:

Section 9 - Executive Committee and Other Committees

The Board of Directors of the Corporation, by resolution adopted by a majority of the Directors in office, may designate an Executive Committee and/or such other committees as from time to time shall be deemed necessary and appropriate. The Executive Committee shall be composed of two or more Directors of the Corporation, appointed by the Board of Directors, and, to the extent provided in such resolution, shall have and exercise all of the authority of the Board of Directors except to approve an amendment of the Articles of Incorporation, a plan of merger or consolidation, a plan of exchange under which the Corporation would be acquired, the sale, lease or exchange, or the mortgage or pledge of for a consideration other than money, of all or substantially all of the property and assets of the Corporation otherwise than in the ordinary and regular course of business, the voluntary dissolution of the Corporation, or revocation of voluntary dissolution proceedings. Other committees consisting of two or more Directors, appointed by the Board of Directors, may be designated by resolution adopted by a majority of the Directors present at a meeting at which a quorum is present. Upon designation of any committee, including the Executive Committee, the Board of Directors shall appoint a chairman thereof.

(b) A meeting of the Board of Directors at which this Amendment was found to be in the best interest of the Corporation was held January 29, 1985. A majority of the Board of Directors then in office voted in favor of the Amendment.

WITNESS the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary of, this 29th day of January, 1985.

ROANOKE ELECTRIC STEEL CORPORATION

By Donald G. Smith

Attest: Thomas J. Crawford
Secretary

ARTICLES OF AMENDMENT TO BYLAWS OF
ROANOKE ELECTRIC STEEL CORPORATION

Pursuant to Section 13.1-714 of the Code of Virginia, 1950, as amended, and Article VII of the Bylaws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation hereby executes and approves these Articles of Amendment to its Bylaws as follows:

(a) Article IV, Section 1 is hereby amended to read as follows:

Section 1 - Officers - The officers of the Corporation shall be a Chairman of the Board of Directors, a President, a Vice President, an Assistant Vice President, a Secretary and a Treasurer. The Board of Directors may, in its discretion, elect more than one Vice President, more than one Assistant Vice President, and an Assistant Secretary and Assistant Treasurer. The same individual may simultaneously hold more than one office in the Corporation. The officers shall be elected at each annual meeting of the Board of Directors for a term of one (1) year or until removed by a majority vote of the entire Board of Directors.

(b) Article IV, Section 2 (c) is hereby amended to read as follows:

(c) Vice President and Assistant Vice President - The Vice President(s) and Assistant Vice President(s) shall have the powers and perform such duties as may be delegated to him or them by the Board of Directors. In the absence or disability of the President, the senior Vice President may perform the duties and exercise the powers of the President.

(c) The meeting of the Board of Directors at which these Amendments were found to be in the best interest of the Corporation was held October 18, 1988. The majority of the Board of Directors then in office voted in favor of the Amendments. The Amendments were ratified by a majority of the Board of Directors at its meeting on November 15, 1988.

WITNESS the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 15th day of November, 1988.

                                                                ROANOKE ELECTRIC STEEL CORPORATION
                                                                By Donald G. Smith
                                                                           President

ATTEST:

Thomas J. Crawford
Secretary

ARTICLES OF AMENDMENT TO BYLAWS
OF
ROANOKE ELECTRIC STEEL CORPORATION

(a) Section 1 of Article IV of the Bylaws is hereby amended in its entirety to read as follows:

"Section 1 - Officers - The officers of the Corporation shall be a Chairman of the Board of Directors, a President, a Vice President, an Assistant Vice President, a Secretary and a Treasurer and such other officers as the Board may by resolution appoint. The same individual may simultaneously hold more than one office in the Corporation. The Board of Directors may, in its discretion, elect more than one Vice President, more than one Assistant Vice President, and an Assistant Secretary and Assistant Treasurer. The officers shall be elected at each annual meeting of the Board of Directors and shall be elected to serve for a term of one (1) year or until removed by a majority vote of the entire Board of Directors."

(b) The meeting of the Board of Directors at which this Amendment was found to be in the best interests of the Corporation was held on November 16, 1993. The majority of the members of the Board of Directors then in office voted in favor of the Amendment.

WITNESS the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 16th day of November, 1993.

ROANOKE ELECTRIC STEEL CORPORATION

By: Donald G. Smith
President

ATTEST:

Thomas J. Crawford
Secretary

ARTICLES OF AMENDMENT

TO BY-LAWS

OF ROANOKE ELECTRIC STEEL CORPORATION

Pursuant to Section 13.1-714 of the Code of Virginia and Article VII of the By-Laws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its By-Laws as follows:

(a) The name of the Corporation is Roanoke Electric Steel Corporation.

(b) The amendment so adopted (the "Amendment") amends Section 1 of Article II to read as follows:

"Section 1 - Annual Meeting - The annual meeting of the Stockholders of the Corporation shall be held on the third Tuesday in February of each year, or on such other date as the Board of Directors may determine."

"Section 3 - Annual Meeting - The annual meeting of the Board of Directors of the Corporation shall be held immediately following the annual meeting of Stockholders, or at such other time as the Board of Directors may determine."

(d) The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 19th day of September, 1995.

Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 19th day of September, 1995.

ROANOKE ELECTRIC STEEL CORPORATION

By Donald G. Smith
President

ATTEST:

Thomas J. Crawford
Secretary

ARTICLES OF AMENDMENT

TO BY-LAWS

OF ROANOKE ELECTRIC STEEL CORPORATION

A. The name of the Corporation is Roanoke Electric Steel Corporation.

B. The Amendment so adopted (the "Amendment") amends Section 1 of Article III to read as follows:

"Section 1 - Number and Term of Office. The number of directors of the Corporation shall be nine. The directors shall be divided into three classes (A, B and C) as nearly equal in number as possible. The initial term of office for members of Class A shall expire at the annual meeting of stockholders in 1997; the initial term of office for members of Class B shall expire at the annual meeting of stockholders in 1998; and the initial term of office for members of Class C shall expire at the annual meeting of stockholders in 1999. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire after their election and shall continue to hold office until their respective successors are elected and qualify."

C. The Amendment also amends Section 2 of Article III to read as follows:

"Section 2 - Vacancies. Newly-created directorships resulting from an increase in the number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office, or other cause shall be filled by the affirmative vote of a majority of the directors then in office, whether or not a quorum. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. A director may be removed from office only for cause."

D. The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 15 day of October, 1996.

WITNESS the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 15 day of October, 1996.

ROANOKE ELECTRIC STEEL CORPORATION

By Donald G. Smith
President

Attest:

Thomas J. Crawford
Secretary

ARTICLES OF AMENDMENT

TO BY-LAWS

OF ROANOKE ELECTRIC STEEL CORPORATION

A. The name of the Corporation is Roanoke Electric Steel Corporation.

B. The Amendment so adopted (the "Amendment") amends Section 1 of Article III to read as follows:

"Section 1 - Number and Term of Office. The number of directors of the Corporation shall be ten. The directors shall be divided into three classes (A, B, and C) as nearly equal in number as possible. The initial term of office for members of Class A shall expire at the annual meeting of stockholders in 1997; the initial term of office for members of Class B shall expire at the annual meeting of stockholders in 1998; and the initial term of office for members of Class C shall expire at the annual meeting of stockholders in 1999. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire after their election shall continue to hold office until their respective successors are elected and qualify."

C. The meeting of the Board of Directors at which the Amendmentwas found to be in the best interest of the Corporation was held on the 15 day of April, 1997.

Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 15 day of April, 1997.

ROANOKE ELECTRIC STEEL CORPORATION

By Donald G. Smith
President

ATTEST:

Thomas J. Crawford
Secretary

ARTICLES OF AMENDMENT

TO BY-LAWS

OF ROANOKE ELECTRIC STEEL CORPORATION

A. The name of the Corporation is Roanoke Electric Steel Corporation.

B. The Amendment so adopted (the "Amendment") amends Section 1 of Article III to read as follows:

"Section 1 - Number and Term of Office. The number of directors of the Corporation shall be eight. The directors shall be divided into three classes (A, B, and C) as nearly equal in number as possible. The initial term of office for members of Class A shall expire at the annual meeting of stockholders in 1997; the initial term of office for members of Class B shall expire at the annual meeting of stockholders in 1998; and the initial term of office for members of Class C shall expire at the annual meeting of stockholders in 1999. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire after their election shall continue to hold office until their respective successors are elected and qualify."

C. The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 17 day of March, 1998.

Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 17 day of March, 1998.

ROANOKE ELECTRIC STEEL CORPORATION

By Donald G. Smith
President

ATTEST:

Thomas J. Crawford
Secretary

ARTICLES OF AMENDMENT

TO BYLAWS OF

ROANOKE ELECTRIC STEEL CORPORATION

Pursuant to Section 13.1-714 of the Code of Virginia and Article VII of the Bylaws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its Bylaws as follows:

A. The name of the Corporation is Roanoke Electric Steel Corporation.

B. The Amendment so adopted (the "Amendment") adds a new Section 9 to Article II of the Bylaws, which reads as follows:

Section 9 - Stockholder Proposals or Nominations

C. The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 15 day of December, 1998.

WITNESS the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 15 day of December, 1998.

ROANOKE ELECTRIC STEEL CORPORATION

By Donald G. Smith
President

Attest:

Thomas J. Crawford
Secretary

ARTICLES OF AMENDMENT

TO BYLAWS

OF ROANOKE ELECTRIC STEEL CORPORATION

A. The name of the Corporation is Roanoke Electric Steel Corporation.

B. The Amendment so adopted (the "Amendment") amends Section 1 of Article III to read as follows:

"Section 1 - Number and Term of Office. The number of directors of the Corporation shall be nine. The directors shall be divided into three classes (A, B and C) as nearly equal in number as possible. The initial term of office for members of Class A shall expire at the annual meeting of stockholders in 1997; the initial term of office for members of Class B shall expire at the annual meeting of stockholders in 1998; and the initial term of office for members of Class C shall expire at the annual meeting of stockholders in 1999. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire after their election shall continue to hold office until their respective successors are elected and qualify."

C. The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 19 day of January, 1999.

Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 19 day of January, 1999.

ROANOKE ELECTRIC STEEL CORPORATION

By Donald G. Smith
President

ATTEST:

Thomas J. Crawford
Secretary

ARTICLES OF AMENDMENT

TO BYLAWS

OF ROANOKE ELECTRIC STEEL CORPORATION

A. The name of the Corporation is Roanoke Electric Steel Corporation.

B. The Amendment so adopted (the "Amendment") amends Section 1 of Article III to read as follows:

"Section 1 - Number and Term of Office. The number of directors of the Corporation shall be eight. The directors shall be divided into three classes (A, B and C) as nearly equal in number as possible. The initial term of office for members of Class A shall expire at the annual meeting of stockholders in 1997; the initial term of office for members of Class B shall expire at the annual meeting of stockholders in 1998; and the initial term of office for members of Class C shall expire at the annual meeting of stockholders in 1999. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire after their election shall continue to hold office until their respective successors are elected and qualified."

C. The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 18 day of December, 2001.

Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 18 day of December, 2001.

ROANOKE ELECTRIC STEEL CORPORATION

By Donald G. Smith
President

ATTEST:

Thomas J. Crawford
Secretary

EXHIBIT NO. 4

INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS

Pursuant to Item 601(b) (4) (iii) of Regulation S-K, the Registrant hereby undertakes to furnish to the Commission, upon request, copies of the instruments defining the rights of holders of the long-term debt of Roanoke Electric Steel Corporation and its subsidiaries described in its 2001 Annual Report to Stockholders and Form 10-K.

EXHIBIT NO. 10

* (a)

EXECUTIVE OFFICER INCENTIVE ARRANGEMENT

Incorporated by reference to the previously filed Form 10-K for October 31, 1999 on file in the Commission office.

* (b)

ROANOKE ELECTRIC STEEL CORPORATION
EMPLOYEES' STOCK OPTION PLAN

Incorporated by reference to the previously filed Form 10-K for October 31, 1998 on file in the Commission office.

* (c)

ROANOKE ELECTRIC STEEL CORPORATION
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

Incorporated by reference to the previously filed Form 10-K for October 31, 1997 on file in the Commission office.

* (d)

ROANOKE ELECTRIC STEEL CORPORATION SEVERANCE AGREEMENTS

Incorporated by reference to the previously filed Form 10-K for October 31, 1996 on file in the Commission office.

* (e)

SWVA COLLECTIVE BARGAINING AGREEMENT

Incorporated by reference to the previously filed Form 10-Q for July 31, 1999 on file in the Commission office.

* (f)

SWVA EMPLOYMENT AGREEMENT WITH TIMOTHY R. DUKE

Incorporated by reference to the previously filed Form 10-Q for January 31, 1999 on file in the Commission office.

* Management contract, or compensatory plan or agreement, required to be filed as an Exhibit to this Form 10-K pursuant to Item 14 (c).

EXHIBIT NO. 13

2001 ANNUAL REPORT TO STOCKHOLDERS

EXHIBIT NO. 21

SUBSIDIARIES OF THE REGISTRANT

Registrant: Roanoke Electric Steel Corporation

Subsidiary of Registrant Organized Under Jurisdiction of

Shredded Products Corporation Virginia

John W. Hancock, Jr., Inc. Virginia

Socar, Incorporated South Carolina

RESCO Steel Products Corporation Virginia

Roanoke Technical Treatment and Services, Inc. Virginia

Steel of West Virginia, Inc. Delaware

EXHIBIT NO. 23

INDEPENDENT AUDITORS' CONSENT

Roanoke Electric Steel Corporation:

We consent to the incorporation by reference in Registration Statement Nos. 33-27359, 33-35243, 333-25299 and 333-49525 of Roanoke Electric Steel Corporation on Form S-8 of our report dated November 16, 2001, incorporated by reference in the Annual Report on Form 10-K of Roanoke Electric Steel Corporation for the year ended October 31, 2001.

Deloitte & Touche LLP

Raleigh, North Carolina
January 18, 2002

EX-13 3 anlrpt-01.txt ANNUAL REPORT - RESC 2001 Roanoke Electric Steel Corporation Annual Report 2001 [GRAPHIC] Making It In America Roanoke Electric Steel Corporation and its wholly-owned subsidiaries are engaged in the manufacturing,fabricating and marketing of merchant steel products,specialty steel sections, billets,open-web steel joists and reinforcing bars. Each subsidiary is either a supplier to the parent company or a purchaser of its finished product and billets. The main plant of Roanoke Electric Steel Corporation is a state-of-the-art steel mini-mill located in Roanoke,Virginia. This facility melts scrap steel in electric furnaces and continuously casts the molten steel into billets. These billets are rolled into merchant steel products consisting of angles,plain rounds, flats,channels and reinforcing bars of various lengths and sizes. [GRAPHIC] Excess steel billet production is sold to mills without melting facilities. Roanoke Electric Steel Corporation markets its products to steel service centers and fabricators in 22 states east of the Mississippi River. [GRAPHIC] Like the main plant,Steel of West Virginia,Inc., is a steel mini-mill operating in Huntington, West Virginia. A steel fabricating subsidiary,Marshall Steel,Inc.,is located in Memphis,Tennessee. These locations produce specialty steel sections and custom-finished products and serve niche markets throughout the continental United States. Shredded Products Corporation, a subsidiary with operations in Rocky Mount and Montvale,Virginia, extracts scrap steel and other metals from junked automobiles and other waste materials. [GRAPHIC] These facilities supply the main plant with a substantial amount of its raw materials. Nonferrous metals generated in the process are sold to unrelated customers. [GRAPHIC] John W. Hancock,Jr.,Inc. and Socar,Inc. are steel fabrication subsidiaries located in Salem,Virginia,Florence, South Carolina and Continental,Ohio. All three operations purchase rounds and angles from the main plant to fabricate long- and short-span open-web steel joists. These joists are used as horizontal supports for floors and roofs in commercial and industrial buildings. [GRAPHIC] RESCO Steel Products Corporation,a Salem, Virginia based subsidiary, fabricates concrete reinforcing steel by cutting and bending it to contractor specifications. [GRAPHIC] To Our Shareholders 2001 Results Earning a profit for 2001 was quite an accomplishment. Many steel producers are reporting operating losses, and more than 20 have filed for bankruptcy. Foreign and domestic competition, poor business conditions in some of our niche markets, slowing construction activity and the economy near recession combined to make 2001 one of the most difficult years in our history. Our profit was $1,348,022 on sales of $307,674,605. That compares to $14,061,449 on sales of $372,728,108 for 2000. Earnings per share were $.12 ($.12 diluted), compared with $1.28 ($1.28 diluted) last year. Our fiscal year was a continuation of what began last year with selling prices and margins plummeting. Average prices for merchant bar products fell 15%, after declining 20% last year. Specialty steel prices were off 9% for the year, after falling 10% in 2000, and fabricated products prices fell 3%, on average, as selling values began to soften in the latter part of the year. Shipment volumes were lower for all product classes except merchant bars, which grew to record levels. That accomplishment is due to a broader range of products and the introduction of new products manufactured by our subsidiary, Steel of West Virginia, Inc. The strong contributions to earnings by our fabricating subsidiaries, John W. Hancock, Jr., Inc. and Socar, Inc., made the profitable year possible. They absorb a large portion of the Parent's production and add additional value with incremental profits. Capital Expenditures And Depreciation ($Millions) [CHART] 1997 7,532,580 9,456,201 1998 12,339,553 9,216,133 1999 13,070,524 14,627,553 2000 16,315,186 16,332,341 2001 5,330,622 16,755,708 Stockholders' Equity ($Millions) [CHART] 1997 107,336,437 1998 120,233,217 1999 137,158,131 2000 144,721,829 2001 138,606,521 Financial Condition We made a number of improvements to our financial condition during the year. Cash and investments increased over $10,000,000 to $38,584,438. Cash flows from operating activities were a strong $35,897,870 of which $13,759,893 was attributable to reductions in inventories. The current and quick ratios improved to 3.2 to 1 and 1.8 to 1, respectively. Working capital declined to $104,919,632, but remained at a very good level. We curtailed debt by $15,036,469, and long-term debt as a percentage of total capital declined to 40.4% from 42.9% last year. After subtracting from long-term debt, cash and investments of $38,584,438, net long-term debt as a percentage of total capital was 28.5% - below our desired level of 30%. In addition, the ratio of debt to equity remained the same at 1.3 to 1. Stockholders' equity declined to $138,606,184. However, much of the decline was due to the recognition of $3,198,092 for unrealized losses on hedging financial instruments, which have no affect on cash flow. Our $30,000,000 revolving credit facility was unused at October 31, 2001. We believe this facility, combined with cash flows from operations and the cash and investments mentioned above, should provide the liquidity and capital resources necessary to remain competitive, fund operations and future growth, and meet required debt retirement over the coming year. Shareholder Value With many steel stocks trading at record lows and the sector out of favor, we are most pleased with our share performance. Our share price increased 19% during the year to 93.7% of book value. The appreciation in stock value, coupled with the dividend yield, Capitalization ($Millions) [CHART] 1997 32,791,667 107,336,437 1998 28,541,667 120,233,217 1999 138,944,689 137,158,131 2000 123,910,990 144,721,829 2001 108,874,521 138,606,521 Working Capital ($Millions) [CHART] 1997 68,928,961 1998 75,703,207 1999 117,241,158 2000 111,444,079 2001 104,919,632 brought our total yield for the year to more than 22%. During the year, our shares were added to the Russell 3000 Index, which we feel had a positive effect on our trading volume and share value. In October, 2001, the Board of Directors declared the 172nd (43 years) consecutive quarterly dividend in the amount of 10 cents per share, payable November 23, 2001. This brought the total dividend for the year to $.40 per share, which equated to a 3.4% yield at year-end and annual dividends paid to shareholders of $4,363,575. Future Outlook Prospects are not bright for a recovery early in 2002. List prices for merchant bar products have moved lower and business conditions have not improved. Prices for scrap steel, our main raw material, are declining, providing some help for deteriorating margins. Our priorities are to maintain profitability and preserve our strong financial condition. Capital expenditures will be held to a minimum to preserve cash. We will seek other ways to improve cash flows. We strongly support recent efforts seeking relief from steel imports at unfair or subsidized pricing. The International Trade Commission has determined that imports of merchant bar and rebar have damaged the domestic steel industry. We are hopeful that the remedies to be proposed in the near future will restore prices and margins to more normal levels. We are grateful to our employees for their sacrifice and dedication during these difficult days. We thank our loyal customers for their patronage and help in achieving record merchant bar shipments. We appreciate the guidance of our Board of Directors and the support of our shareholders. Sincerely, /s/ Donald G.Smith Chairman of the Board and Chief Executive Officer Selected Financial Data

Per share information has been adjusted for a three-for-two stock split effective March 25, 1998. 9 Consolidated Financial Statements Consolidated Statements Of Earnings

See notes to consolidated financial statements. 10 Consolidated Balance Sheets

See notes to consolidated financial statements. 11 Consolidated Statements Of Cash Flows

See notes to consolidated financial statements. 12 Notes To Consolidated Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - The consolidated financial statements include the accounts of Roanoke Electric Steel Corporation and its wholly-owned subsidiaries, Shredded Products Corporation, John W. Hancock, Jr., Inc., Socar, Inc., RESCO Steel Products Corporation, Roanoke Technical Treatment & Services, Inc. and Steel of West Virginia, Inc. (the "Company"). All significant intercompany accounts and transactions have been eliminated. Steel of West Virginia, Inc. was acquired in December 1998 (see Note 15). The Company operates in a single business segment. Inventories - Inventories of the Company are valued at cost on a first-in, first-out method or market, if lower (see Note 2). Property, Plant and Equipment - These assets are stated at cost. Depreciation expense is computed by straight-line and declining-balance methods. Maintenance and repairs are charged against operations as incurred. Major items of renewals and betterments are capitalized and depreciated over their estimated useful lives. Upon retirement or other disposition of plant and equipment, the cost and related accumulated depreciation are removed from the property and allowance accounts, and the resulting gain or loss is reflected in earnings (see Notes 1 and 3). Income Taxes - The Company applies the provisions of Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes". Under SFAS No. 109, deferred income taxes are provided by the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities (see Note 5). Cash and Cash Equivalents - The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Investments - Investments consist primarily of debt securities which mature between 2001 and 2033. The Company complies with SFAS No.115, "Accounting for Certain Investments in Debt and Equity Securities". In accordance with the provisions of SFAS No. 115, management has classified its entire debt securities portfolio as "available for sale." Under SFAS No. 115, "available for sale" securities are reported at fair value with unrealized gains and losses reported as other comprehensive income. These investments are carried on the balance sheets at fair value, which approximates amortized cost. Accordingly, there were no adjustments to other comprehensive income at October 31, 2001, 2000 and 1999. Revenue Recognition - Revenues from sales are recognized when products are shipped to customers, except for fabrication products which are recognized by the percentage-of-completion method in accordance with industry practice. There were no sales to an unaffiliated customer in excess of 10% of consolidated sales for 2001, 2000 or 1999. Goodwill - The excess of cost over fair value of net assets of acquired subsidiary has been amortized using the straight-line method over the estimated benefit period of 20 years. At October 31, 2001, accumulated amortization is $2,328,313. The carrying value of goodwill is periodically reviewed based upon an assessment of operations of the acquired entity (see Note 1). Concentration of Credit Risk - The Company sells to a large customer base of steel fabricators, steel service centers and construction contractors, most all of which deal primarily on 30-day credit terms. The Company believes its concentration of credit risk to be minimal in any one geographic area or market segment. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. Credit losses have not been significant in the past, with the exception of fiscal year 2000, and are generally within management's expectations. Fair Value of Financial Instruments - At October 31, 2001, the fair value of the Company's cash and cash equivalents, accounts receivable, investments and long-term debt approximated amounts recorded in the accompanying consolidated financial statements (see Notes 1 and 6). Stock Options - SFAS No. 123, "Accounting for Stock-Based Compensation", adopts a "fair value based method" of accounting for employee stock option plans or similar stock-based compensation plans. Under the fair value based method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service or vesting period. The statement does allow entities to continue to measure compensation using the "intrinsic value based method" of Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees", provided that they make pro forma disclosures on net earnings and earnings per common share as if the fair value based method of accounting had been applied. The Company has elected to continue to follow APB No. 25 (see Note 12). Use of Estimates in the Preparation of Financial Statements - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported 13 amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Derivative Instruments - In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", was issued, establishing standards for accounting and reporting derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives), and for hedging activities. Effective November 1, 2000, the Company adopted the policy of accounting and reporting the fair value of derivatives used as cash flow hedging activities, as referred to in SFAS No. 133, through other comprehensive income (see Note 7). Recent Accounting Pronouncements - In June 2001, SFAS No. 141, "Business Combinations", was issued, establishing accounting and reporting standards for all business combinations initiated after June 30, 2001 and establishing specific criteria for the recognition of intangible assets separately from goodwill. SFAS No. 141 eliminates the pooling-of-interest method of accounting and requires all acquisitions consummated subsequent to June 30, 2001 to be accounted for under the purchase method. The Company's previous acquisitions have been accounted for under the purchase method and therefore the adoption of SFAS No. 141 will not have a material impact on the results of operations and financial condition. In June 2001, SFAS No. 142, "Goodwill and Other Intangible Assets", was issued, addressing financial accounting and reporting for acquired goodwill and other intangible assets. SFAS No. 142 eliminates amortization of goodwill and other intangible assets that are determined to have an indefinite useful life and instead requires an impairment only approach. At adoption, any goodwill impairment loss will be recognized as the cumulative effect of a change in accounting principle. Subsequently, any impairment losses will be recognized as a component of income from operations. As of October 31, 2001, the Company has net goodwill of $13,868,647 and has incurred $809,848 in goodwill amortization in the statement of earnings for the year then ended. The adoption of SFAS No. 142 will result in the discontinuation of goodwill amortization. The Company will be required to test goodwill using an impairment method under the new standard at adoption and at least annually thereafter, which could have an adverse effect on the future results of operations if an impairment occurs. The provisions of SFAS No. 142 will be effective for fiscal years beginning after December 15, 2001; however, the Company has elected to early adopt the provisions effective November 1, 2001, and is in the process of reviewing the impact this standard may have on its operations and financial position. In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", was issued, establishing an accounting model for long-lived assets to be disposed of by sale, whether previously held and used or newly acquired, and broadening the presentation of discontinued operations to include more disposal transactions. Adoption of this statement is required for fiscal years beginning after December 15, 2001. The Company is in the process of reviewing the impact this standard may have on its operations and financial position. Reclassifications - Certain amounts included in the consolidated financial statements for prior years have been reclassified from their original presentation to conform with the current year presentation. NOTE 2 - INVENTORIES Inventories include the following major classifications: October 31, ------------------------------------------- 2001 2000 1999 ------------------------------------------- Scrap steel.................... $ 4,162,011 $ 5,721,583 $ 5,090,322 Melt supplies.................. 2,908,676 3,318,385 3,520,825 Billets........................ 6,927,793 17,266,805 14,477,006 Mill supplies.................. 4,083,757 3,485,332 4,274,660 Work-in-process................ 5,576,565 6,877,954 4,234,402 Finished steel................. 39,030,517 39,779,153 32,928,404 ----------- ----------- ----------- Total inventories.............. $62,689,319 $76,449,212 $64,525,619 =========== =========== =========== NOTE 3 - PROPERTIES AND DEPRECIATION Depreciation expense for the years ended October 31, 2001, 2000 and 1999 amounted to $16,755,708, $16,332,341 and $14,627,553, respectively. Generally, the rates of depreciation range from 3.3% to 20% for buildings and improvements and 5% to 33% for machinery and equipment. Property additions in 1999 included $193,052 of interest capitalized. NOTE 4 - SHORT-TERM DEBT On December 15, 1998, the Company replaced its existing credit facility with a new syndicated loan facility, part of which provides a five-year $30,000,000 revolver, as explained in Note 6. There also exists a $5,000,000 line of credit to be used to cover overdrafts in a demand deposit account. These lines of credit were unused at October 31, 2001 and 2000. 14 NOTE 5 - INCOME TAXES The Company files a consolidated federal income tax return. The Company is currently under review by the Internal Revenue Service on its most recent filings. The following is a reconciliation of income tax expense per consolidated statements of earnings to that computed by using the federal statutory tax rate of 34% for 2001 and 35% for 2000 and 1999:

The components of income tax expense are as follows:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. There are no valuation allowances. The deferred tax liabilities and assets are as follows:

NOTE 6 - LONG-TERM DEBT Long-term debt consisted of the following:

In December 1998, the Company entered into a $30,000,000 revolving credit agreement with a group of banks that extends through December 15, 2003. Under the revolving credit agreement, interest is payable at October 31, 2001 and 2000, at the LIBOR rate of 2.60% plus 1.75% and the LIBOR rate of 6.815% plus .40%, respectively. The agreement requires the Company to pay a facility fee at an annual rate of .35% and .25% for 2001 and 2000, respectively. 15 The Company does not use derivatives for trading purposes. Interest rate swaps, a form of derivative, are used to manage interest costs. On June 25, 1999, the Company did a reverse swap, converting $40,000,000 of term debt to a variable interest rate from a fixed rate. A fee of $1,300,000 was received and is being recorded in income ratably over the 6 1/2 years which remained to maturity of the term loan. Currently, the Company maintains an interest rate swap agreement resulting in a fixed rate of 8.06% on the notional amount of $77,750,000 through January 3, 2006. The difference between fixed rate and floating rate interest is recognized as an adjustment to interest expense in the period incurred. The remaining $31,000,000 of variable rate term debt is subject to the risk of fluctuations in short-term interest rates; however, cash and investments at October 31, 2001 provided a hedge against rising interest rates. The fair value of the current swap is estimated based on current settlement prices and was approximately $4,460,000, in favor of the Lender at October 31, 2001. Under the loan agreements, the Company must maintain consolidated current assets of not less than 1.5 times consolidated current liabilities and maintain consolidated funded debt of not greater than .50 times consolidated total capitalization. In addition, consolidated funded debt cannot be greater than 5 times consolidated EBITDA, and the ratio of EBITDA to the sum of current maturities of long-term debt and consolidated interest expense must equal at least 1.0. The Company was in compliance with the loan agreements as of October 31, 2001 and 2000. Annual aggregate long-term debt maturities are approximately $15,000,000 for each of the next five years. NOTE 7 - DERIVATIVE INSTRUMENTS Effective November 1, 2000, the Company adopted SFAS No. 133. In the 2001 first quarter, in accordance with the transition provisions of SFAS No. 133, the Company recorded a cumulative effect earnings adjustment, after applicable taxes, of $1,663,516 in other comprehensive income to recognize the fair value of all derivatives designated as cash-flow hedging instruments. For certain hedging relationships, SFAS No. 133 eliminates special accounting formerly provided by U.S. GAAP. The Company has traditionally entered into interest rate swap and similar instruments to manage its exposure to movements in interest rates paid on corporate debt. Such instruments are matched with underlying borrowings. SFAS No. 133 eliminates special hedge accounting if the swap agreements do not meet certain criteria, thus requiring the Company to reflect all changes in their fair value in its current earnings. Since the Company's current swap agreements meet the required criteria necessary to use special hedge accounting, the Company recorded a $4,339,218 after-tax loss adjustment, for the year ended October 31, 2001, through other comprehensive income, as a result of the change in the fair value of these swap instruments. Due to fluctuations in interest rates and volatility in market expectations, the fair market value of interest rate swap instruments can be expected to appreciate or depreciate over time. The Company plans to continue its practice of economically hedging various components of its debt. However, as a result of SFAS No. 133, such swap instruments may now create volatility in future reported earnings or other comprehensive income. In the 2001 third quarter, the Company entered into a one-year derivative financial instrument to minimize the exposure of price risk related to certain natural gas purchases used in the manufacturing process. The contracts used to mitigate the price risk related to natural gas purchases are designated as effective cash flow hedges for a portion of the natural gas usage over the period in the agreement. Unrealized gains and losses associated with marking the contracts to market are recorded as a component of other comprehensive income and included in the stockholders' equity section of the balance sheet as part of accumulated comprehensive income (loss). These gains and losses are recognized in earnings in the month in which the related natural gas is used, or in the month a hedge is determined to be ineffective. For the year ended October 31, 2001, the Company recorded a $522,390 after-tax loss adjustment, through other comprehensive income, related to future transactions, which are expected to be recognized in earnings within the one-year contract term. There were no ineffective hedges for the year ended October 31, 2001. NOTE 8 - COMMITMENTS AND CONTINGENT LIABILITIES At October 31, 2001, the Company was committed for $650,000 for purchases of equipment and production facilities. The Company is not involved in any legal proceedings or environmental matters outside the ordinary course of business. In the opinion of management, amounts accrued for potential awards or assessments in connection with these matters at this time are adequate, and the outcome of such environmental and legal concerns currently pending will not have a material effect on the Company's consolidated financial position, results of operations, or cash flows. The Company reassesses these matters as new facts and cases are brought to management's attention. NOTE 9 - COMMON STOCK AND EARNINGS PER SHARE Outstanding common stock consists of 560,000 shares, issued prior to October 31, 1967, at no stated value; 750,656 shares issued subsequent to October 31, 1967, at a stated value of $.50 per share; 1,310,656 shares issued in 1981 at no stated value; 1,310,656 shares, less the equivalent of 42 fractional shares, issued in 1986 at no stated value; 1,965,963 shares, less the equivalent of 151 fractional shares, issued in 1988 at no stated value; 800 shares issued in 1989 at no stated value; 3,000 shares issued in 1992 at no stated value; 1,200 shares issued in 1993 at no stated value; 44,000 shares issued in 1994 at no stated value; 3,023,804 shares, less the equivalent of 152 fractional shares, issued in 1995 at no stated value; 23,750 shares issued in 1996 at no stated value; 35,950 shares issued in 1997 at no stated value; 4,572,870 shares, less the equivalent of 158 fractional shares, issued in 1998 at no stated value, less 1,253,800 treasury (repurchased) shares retired during 1998; 75,900 shares issued in 1999 at no stated value, less 126,000 treasury (repurchased) shares retired during 1999; 30,275 shares issued in 2000 at no stated value, 16 less 155,000 treasury (repurchased) shares retired during 2000 and 10,500 shares issued in 2001 at no stated value. During the years ended October 31, 1986 and October 31, 1996, the Company increased authorized common stock from 4,000,000 shares to 10,000,000 shares, and from 10,000,000 shares to 20,000,000 shares, respectively. The Company retired in 1998, 1999 and 2000 all of its treasury stock applicable to the shares acquired through its common stock repurchase plans. SFAS No. 128, "Earnings per Share", requires the presentation of "basic" earnings per share and "diluted" earnings per share on the face of the statement of earnings. Basic earnings per share is computed by dividing the net income available to common stockholders by the weighted average shares of outstanding common stock. The calculation of diluted earnings per share is similar to basic earnings per share except that the denominator includes dilutive common stock equivalents such as stock options and warrants. Basic earnings per share have been computed based on the weighted average number of shares outstanding of 10,908,584 for 2001, 10,952,529 for 2000 and 11,065,531 for 1999. The average number of shares outstanding was weighted after giving effect to stock options exercised and/or repurchased common stock during 2001, 2000 and 1999. Diluted earnings per share have been computed based on the weighted average number of shares outstanding (including outstanding and exercisable stock options) of 10,950,723 for 2001, 10,990,032 for 2000 and 11,134,118 for 1999. NOTE 10 - PROFIT SHARING PLANS The Company, including Shredded Products Corporation, RESCO Steel Products Corporation, Socar, Inc. and Steel of West Virginia, Inc. ("SWVA"), has qualified profit sharing plans which cover substantially all employees. John W. Hancock, Jr., Inc. has an unqualified plan. Socar, Inc.'s annual contribution is discretionary while the other plans', except SWVA, annual contribution cannot exceed 20% of their combined earnings before income taxes. SWVA's annual contribution cannot exceed 17% of its pretax profit for bargaining unit employees, with comparable amounts contributed ratably to the nonbargaining group. Total contributions of all Companies shall not exceed the maximum amount deductible for such year under the Internal Revenue Code and amounted to $822,609 for 2001, $5,093,651 for 2000 and $7,887,891 for 1999. NOTE 11 - INTEREST EXPENSE Interest expense is stated net of interest income of $1,518,196 in 2001, $2,028,208 in 2000 and $1,923,754 in 1999. NOTE 12 - STOCK OPTIONS Under a nonqualified stock option plan approved by the stockholders in 1989, the Company may issue 112,500 shares of unissued common stock to employees of the Company each plan year. Under a non-statutory stock option plan approved by the Board in 1997, the Company may issue 25,000 shares of unissued common stock to directors of the Company over the life of the plan. Options for 112,500 shares were granted for 2001, 112,500 shares for 2000,112,500 shares for 1999, 84,000 shares for 1998, 82,000 shares for 1997, 75,000 shares for 1996, 41,500 shares for 1995, 36,000 shares for 1992 and 32,500 shares for 1990. Three-for-two stock splits in 1998 and 1995 increased these grants an additional 117,275 and 32,300 shares, respectively. These options are exercisable for a term of 5 years for employees and 10 years for directors from the date of grant, and a summary follows: Weighted Average Exercise Price Per Share Shares ----------- ------- Balance, November 1, 1998.............................. $11.31 297,225 Granted................................................ 13.77 112,500 Exercised.............................................. 9.43 (75,900) Expired or terminated.................................. - - ------- Balance, October 31, 1999.............................. 12.57 333,825 Granted................................................ 14.45 112,500 Exercised.............................................. 7.56 (30,275) Expired or terminated.................................. - - ------- Balance, October 31, 2000.............................. 13.44 416,050 Granted................................................ 9.61 112,500 Exercised.............................................. 7.93 (10,500) Expired or terminated.................................. 7.93 (16,500) ------- Balance, October 31, 2001.............................. 12.88 501,550 ======= Shares available for grant at year-end None ======= The Company applies APB No. 25 and related Interpretations in accounting for the nonqualified stock option plans. Accordingly, compensation cost of $191,250, $286,875 and $272,813 for the years ended October 31, 2001, 2000 and 1999, respectively, was recognized for the difference between the exercise price and the fair value of the stock price at the grant date. Had compensation cost been determined based on the fair value at the grant dates consistent with the method of SFAS No. 123, the Company's net earnings and earnings per share would have been reduced to the pro forma amounts indicated below: 17

The fair value of options granted during the years ended October 31, 2001, 2000 and 1999 was $3.99, $6.89 and $7.22, respectively. The following table summarizes information about stock options outstanding and exercisable at October 31, 2001: Number Remaining Exercise Outstanding and Contractual Life Prices Exercisable In Years -------- --------------- --------------- $ 8.93 38,750 .33 9.61 112,500 4.25 10.50 10,000 5.33 13.71 103,000 2.21 14.45 112,500 3.25 14.56 7,500 2.79 14.88 103,800 1.25 17.50 13,500 6.25 --------- 501,550 ========= The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants in 2001, 2000 and 1999, respectively: dividend yield of 3.02%, 2.59% and 2.42%; expected volatility of 37.19%, 41.41% and 47.81%; risk-free interest rates of 4.87%, 5.81% and 5.93%; and an expected life of 5 years. NOTE 13 - HEALTH BENEFITS AND POSTRETIREMENT COSTS The Company currently provides certain health care benefits for terminated employees who have completed 10 years of continuous service after age 45, and SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions", requires the Company to accrue the estimated cost of such benefit payments during the years the employee provides services. The Company previously expensed the cost of these benefits as claims were incurred. SFAS No. 106 allows recognition of the cumulative effect of the liability in the year of adoption or the amortization of the obligation over a period of up to 20 years. The Company has elected to recognize this obligation of approximately $1,381,000 over a period of 20 years. Cash flows are not affected by implementation of SFAS No.106, but implementation decreased net earnings from continuing operations for 2001, 2000 and 1999 by $142,062, $195,442 and $199,447, respectively. The Company's postretirement benefit plan is not funded. The accrued postretirement benefit cost recognized in the balance sheets at October 31 is as follows:

18 The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was 8.5% for 1999, decreasing linearly each successive year until it reaches 5.16% in 2006, after which it remains constant. A one-percentage-point increase in the assumed health care cost trend rate for each year would increase the accumulated postretirement benefit obligation by $139,265 and the net postretirement benefit cost by $38,786. The assumed discount rate used in determining the accumulated postretirement benefit obligation was 7.00% and 7.75% for the years ended October 31, 2001 and 2000, respectively. NOTE 14 - UNAUDITED QUARTERLY FINANCIAL DATA Summarized unaudited quarterly financial data for 2001 follows:

Summarized unaudited quarterly financial data for 2000 follows:

NOTE 15 - ACQUISITION On December 16, 1998, the Company acquired all of the outstanding common shares of Steel of West Virginia, Inc. ("SWVA"), a Huntington, West Virginia steel manufacturer, upon completion of its cash tender offer. The consideration given was approximately $117.1 million, including the assumption of approximately $52.3 million of indebtedness, which translates into $10.75 net per SWVA share, for approximately 6,028,000 shares on a fully-diluted basis. Upon merger, SWVA became a wholly-owned subsidiary of Roanoke Electric Steel Corporation, and each share of SWVA common stock not purchased in the offer (approximately 3.6% of SWVA's outstanding shares) was converted, subject to appraisal rights, into the right to receive $10.75 in cash, without interest. Funding for the acquisition was provided by a syndicate of four banks, including First Union National Bank, Agent. SWVA operates a mini-mill in Huntington, West Virginia, and steel fabrication facilities in Huntington and Memphis, Tennessee, while custom designing and manufacturing special steel products principally for use in the construction of truck trailers, industrial lift trucks, off-highway construction equipment (such as bulldozers and graders), manufactured housing, guardrail posts and mining equipment. The acquisition has been accounted for as a purchase. Accordingly, the results of operations and cash flows are reflected in the consolidated financial statements from the date of acquisition, and the acquired assets and liabilities were included in the 1999 consolidated balance sheet at values based on a purchase price allocation, rendered through appraisals and other evaluations. The purchase price allocation is summarized below: December 16, 1998 ----------------- Accounts and other receivables........................ $17,811,730 Inventories........................................... 35,089,765 Prepaid expenses and other current assets............. 1,848,853 Property, plant and equipment......................... 79,914,154 Goodwill.............................................. 16,196,961 Other assets.......................................... 304,356 Accounts and other payables........................... (9,596,233) Accrued expenses and other current liabilities........ (7,194,079) Long-term debt........................................ (52,804,120) Other liabilities..................................... (13,650,314) ----------- Net purchase price.................................... $67,921,073 =========== 19 Unaudited pro forma consolidated results of operations for the year ended October 31, 1999, assuming the SWVA acquisition had occurred at the beginning of the period, are as follows: (Unaudited) Year Ended October 31, 1999 ---------------- Sales................................................. $385,122,061 ============ Net earnings.......................................... $ 21,258,387 ============ Net earnings per share: Basic.............................................. $ 1.92 ============ Diluted............................................ $ 1.91 ============ The pro forma consolidated results of operations include adjustments to give effect to amortization of goodwill, interest expense on acquisition debt and certain other adjustments, together with related income tax effects. The unaudited pro forma information is not necessarily indicative of the results of operations that would have occurred had the purchase been made at the beginning of the period presented or the future results of the combined operations. NOTE 16 - SUPPLEMENTAL CASH FLOW INFORMATION

NOTE 17 - DEFERRED COMPENSATION PLAN The Company maintains a nonqualified deferred compensation plan (the "Executive Deferred Compensation Plan"). The purpose of the Executive Deferred Compensation Plan is to provide to certain eligible employees of the Company the opportunity to: (1) defer elements of their compensation (including any investment income thereon) which might not otherwise be deferrable under the current plans; and (2) receive the benefit of additions to their deferral comparable to those obtainable under the current plans in the absence of certain restrictions and limitations in the Internal Revenue Code. Amounts deferred are paid into a trust owned by the Company and are included in other assets. The Company's liability and trust asset under the Executive Deferred Compensation Plan as of October 31, 2001 and 2000 was $523,496 and $541,553, respectively. NOTE 18 - ENTERPRISE-WIDE INFORMATION The Company's business consists of one industry segment, which is the extracting of scrap metal from discarded automobiles and the manufacturing, fabricating and marketing of merchant steel bar products and specialty steel sections, reinforcing bars, open-web steel joists and billets. The industry segment consists of three classes of products - merchant steel products and specialty steel sections, fabricated bar joists and reinforcing bars and billets.

Information relating to geographic areas indicates that significantly all of the consolidated sales are domestic, as foreign revenues are not material. 20 Independent Auditors'Report To the Stockholders and Board of Directors of Roanoke Electric Steel Corporation: We have audited the accompanying consolidated balance sheets of Roanoke Electric Steel Corporation and its wholly-owned subsidiaries as of October 31, 2001 and 2000, and the related consolidated statements of earnings, stockholders' equity and comprehensive earnings (loss), and cash flows for each of the three years in the period ended October 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Roanoke Electric Steel Corporation and its wholly-owned subsidiaries at October 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended October 31, 2001 in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 7 to the consolidated financial statements, effective November 1, 2000, the Company changed its method for accounting and reporting derivative instruments. /s/ Deloitte & Touche LLP Raleigh, North Carolina November 16, 2001 Stock Activity The Common Stock of Roanoke Electric Steel Corporation is traded on the Nasdaq National Market using the symbol RESC. At year-end, there were approximately 675 shareholders of record. 2001 2000 Stock Prices Stock Prices Cash Dividends - -------------------------------------------------------------------------------- High Low High Low 2001 2000 - -------------------------------------------------------------------------------- First Quarter................... 12.31 9.81 17.13 14.94 $.10 $.10 Second Quarter.................. 16.00 10.50 17.31 15.13 .10 .10 Third Quarter................... 17.50 13.50 17.38 11.63 .10 .10 Fourth Quarter.................. 17.70 11.01 12.63 9.75 .10 .10 21 Management's Discussion And Analysis Of Financial Condition And Results Of Operations Results of Operations Sales On December 16, 1998, the company acquired 100% of the capital stock of Steel of West Virginia, Inc. ("SWVA"), a steel manufacturer, and 1999 results reflect the operations of SWVA from the date of acquisition. Financial statements for 1998 and prior years were not restated to include SWVA because the acquisition was treated as a purchase for accounting purposes. Consequently, sales increased 26.3% in 1999 due, primarily, to the inclusion of SWVA's revenues in consolidated sales. Higher selling prices for fabricated products also had a favorable impact on sales. However, sales were negatively affected by significant declines in selling prices for both merchant bar products and billets, together with reductions in tons shipped of bar products, fabricated products and billets, with the latter down substantially. Increased competition from foreign and domestic producers prompted industry-wide list price reductions for bar products at the beginning of the year, and prices had not fully recovered by year's end. Excess inventories at steel service centers and a shortage of transportation equipment contributed to the slight reduction in tons shipped of bar products as bar markets were generally good throughout the year. A dramatic change in our market for billets brought diminished demand and a 25.6% decline in tons shipped. Billet selling prices declined with sharp reductions in scrap prices, which normally trigger changes in billet prices. Competitive conditions within the commercial construction industry generally impact selling prices and shipment levels of fabricated products and were relatively favorable during the year as reflected in the higher selling prices. The reduced shipments were caused by minor factors other than competition as business conditions continued strong and backlogs remained high. Sales for 2000 were flat due, again, to the acquisition of SWVA. Sales for the year included SWVA's revenues for the entire period, whereas sales for 1999 included only the portion of SWVA's revenues from the date of acquisition. Improved selling prices for billets and bar products favorably impacted sales, also. However, sales were negatively affected by a 46% decrease in billet shipments, reduced bar and fabricated products shipments and lower selling prices for fabricated products. The dramatic reduction in billet shipments and changed billet market conditions the past two years was attributable to the financial condition and eventual bankruptcy of a major customer. Shipments to this customer were purposely curtailed to reduce the exposure to bad debts. The Company was not able to place the lost tonnage with alternate sources, other than the tons used internally by SWVA. Billet selling prices were higher due to increased scrap prices. Average selling prices for bar products increased 1.2% for the year, but list prices had fallen sharply by the end of the year as a result of increased foreign and domestic competition. The increased competition and price uncertainty reduced order entry and backlogs and caused a 2.3% decrease in bar products shipments. The decline in fabricated products selling prices and shipments was caused by increased competition within the construction industry, even though business conditions continued strong and backlogs were high. The decline in fabricated products shipments was also affected by shortages of structural steel components. In 2001, sales declined 17.5% as a result of depressed economic conditions within the steel industry, construction industry and certain niche markets. Selling prices for merchant bar products, fabricated products and specialty products declined 15%, 3% and 9%, respectively, due to heightened foreign and domestic competition. Selling prices for billets were 6.1% lower, mostly attributable to falling scrap steel costs. Shipment volumes were, also, negatively affected by poor business conditions. Shipments of specialty products were down 15.5%, primarily, as a result of depressed 22 economic conditions within major market segments. Fabricated products shipments decreased 16% as construction activity slowed dramatically during the latter part of the year. Billet shipments declined 27% due to poor market conditions and the loss of the major customer referred to earlier. However, sales were positively affected by a 9% increase in tons shipped of merchant bar products due to new product offerings and declining inventory levels at steel service centers. Cost of Sales and Gross Margins Cost of sales increased significantly in 1999 due, principally, to the inclusion of SWVA's costs in the consolidated statements, in spite of the decreased shipments for all products classes, and the drop in the cost of scrap steel, our main raw material. In 2000, cost of sales increased, mainly, as a result of the impact of SWVA's costs and a significant increase in the cost of scrap steel. Cost of sales declined in 2001 due, primarily, to the decreased tons shipped of billets, fabricated products and specialty products, together with the lower scrap costs. Gross earnings as a percentage of sales increased in 1999 from 19.5% to 20.2%, primarily, as a result of the impact of substantially reduced lower-margin billet shipments. In addition, lower scrap prices and higher selling prices for fabricated products were negatively affected by the lower selling prices for bar products and billets and the effects of lower production levels on costs. In 2000, the percentage of gross earnings to sales dropped substantially to 16.8% due, primarily, to a 20% increase in the average cost of scrap steel and lower selling prices for specialty steel sections and fabricated products. Gross earnings as a percentage of sales fell further in 2001 to 11.5%, mostly, as a result of the declines in selling prices for all product classes, in spite of the lower scrap costs. For 1999, the consolidation of SWVA was, mainly, responsible for the increased gross earnings, together with the improved margins for fabricated products. Net earnings improved in spite of higher administrative, interest and profit sharing expenses. Reduced margins for all product classes and significantly lower billet shipments were, mainly, responsible for the lower gross and net earnings in 2000. Further reductions in margins and reduced volumes for most product classes accounted for the lower gross and net earnings in 2001. Administrative Expenses In 1999, administrative expenses increased due, mostly, to the inclusion of SWVA's expenses in the current financial statements. Executive and management compensation increased with the improved earnings in accordance with various incentive arrangements. In addition, other expenses such as insurance increased. Administrative expenses as a percentage of sales increased to 6.8%. A charge to bad debts of $2.5 million due to the bankruptcy of a major billet customer accounted for most of the increase in administrative expenses in 2000. The inclusion of SWVA's expenses in 2000 covering a longer period than in 1999 also contributed to the increase, combined with higher professional fees and insurance expense. A number of expenses declined, including executive and management compensation, contributions and advertising. Administrative expenses as a percentage of 2000 sales rose to 7.7%, however, without the charge for bad debts, the percentage would have increased to only 7.0%. In 2001, administrative expenses declined due to reduced bad debts and executive and other management compensation. Other expenses such as insurance and professional fees were higher. Administrative expenses as a percentage of sales increased to 8.3%, resulting from the significant decline in sales. Interest Expense Interest expense increased significantly in 1999 due to substantially higher borrowings, related to the SWVA acquisition, and slightly higher interest rates, in spite of increased interest income of $1,923,754 and higher capitalized interest of $193,052. In 2000, interest expense increased only slightly, in spite of lower average borrowings and increased interest income of $2,028,208, as a result of higher interest rates and no reduction for capitalized interest. Interest expense was, again, slightly higher in 2001 due to higher interest rates and lower interest income of $1,518,196, which more than offset reduced average borrowings. 23 Profit Sharing Expense and Income Taxes Contributions to various profit sharing plans are determined as a proportion of earnings before income taxes and should normally increase and decrease with earnings. In 1999,income tax expense as a percentage of pretax income increased as a result of nondeductible amortization of the excess investment in SWVA and higher West Virginia income tax rates. The effective rate declined in 2000 due to the over accrual of prior years' state income taxes, which offset the effects of increased nondeductible amortization and lower recycling credits. In 2001,the effective rate increased due to the effect of nondeductible amortization and other expenses on the lower book income. Financial Condition, Liquidity and Capital Resources At year-end, working capital was $104,919,632, cash and investments were $38,584,438, the current ratio was 3.2 to 1 and the quick ratio was 1.8 to 1. All are sound indicators of ample liquidity and a healthy financial condition. Current debt maturities are $15,000,000 annually, which will affect future liquidity and working capital. Our unused $30,000,000 revolving credit facility, combined with internally generated funds and the cash and investments mentioned above should provide the liquidity and capital resources necessary to remain competitive, fund operations and future growth and meet required debt retirement. At October 31, 2001, there were commitments for the purchase of property, plant and equipment of approximately $650,000. These commitments will also affect working capital and future liquidity and will be financed from internally generated funds, the revolving credit facility and existing cash reserves. In 2001, depreciation and amortization, alone, provided over $17,500,000 of cash flows for the replacement and modernization of our facilities. During the year, borrowings decreased to $108,874,521, and the ratio of debt to equity remained the same at 1.3 to 1. The percentage of long-term debt to total capitalization decreased from 42.9% to 40.4% at year-end. However, net long-term debt, after deducting cash and investments, as a percentage of total capitalization was only 28.5%, much more respectable and below our desired level of 30%. With debt comprising a higher percentage of our capital structure and much tighter credit markets, the availability of capital resources could be more limited than in the past. The Company successfully completed its efforts to ensure Year 2000 readiness for all of its critical computer systems. As a result, the Company experienced no interruption of its operations during the transition to the Year 2000. The cost of the Company's Year 2000 efforts was approximately $590,000. Management is of the opinion that adoption of the Clean Air Act Amendments or any other environmental concerns will not have a materially adverse effect on the Company's operations, capital resources or liquidity (see Note 8). Additional future capital expenditures are presently estimated to be less than $10,000,000. Forward-Looking Statements From time to time, the Company may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of the Company's business include economic and industry conditions, availability and prices of supplies, prices of steel products, competition, governmental regulations, interest rates, inflation, labor relations, environmental concerns and others. 24 Officers Donald G. Smith, 66 Chairman, President, Treasurer and Chief Executive Officer 44 years of service J. Kenneth Charles, III, 48 President, Socar, Inc. 24 years of service Timothy R. Duke, 50 President and Chief Executive Officer, Steel of West Virginia, Inc. 14 years of service James F. Garlow, 65 President, John W. Hancock, Jr., Inc. 40 years of service H. James Akers, Jr., 62 Vice President, Melt Operations 45 years of service Daniel L. Board, 64 Vice President, Purchasing 41 years of service Thomas J. Crawford, 46 Vice President Administration and Secretary 24 years of service Donald R. Higgins, 56 Vice President-Sales 36 years of service John E. Morris, 60 Vice President-Finance and Assistant Treasurer 30 years of service Board Of Directors Frank A.Boxley President, Southwest Construction, Inc. George B. Cartledge, Jr. Chairman, Grand Home Furnishings, Inc. Timothy R. Duke President and Chief Executive Officer, Steel of West Virginia, Inc. George W. Logan Chairman, Valley Financial Corporation Charles I. Lunsford, II Retired Chairman, Charles Lunsford Sons & Associates Thomas L. Robertson Chairman, Carilion Biomedical Institute Donald G. Smith Chairman, President, Treasurer and Chief Executive Officer, Roanoke Electric Steel Corporation Paul E. Torgersen Retired President, Virginia Polytechnic Institute and State University John D. Wilson Retired President, Washington & Lee University Committees Of The Board Executive: D.G. Smith, Chairman; T.L. Robertson, P.E. Torgersen, G.B. Cartledge,Jr. Audit: T.L. Robertson, Chairman; G.W. Logan, P.E. Torgersen Profit Sharing: C.I. Lunsford,II, Chairman; D.G. Smith, J.E. Morris Compensation and Stock Option: G.B. Cartledge, Jr., Chairman; F.A. Boxley, C.I. Lunsford,II, J.D.Wilson Corporate Information Annual Meeting The 2002 Annual Meeting of Shareholders will be held at 10:00 a.m. on Tuesday, February 19, 2002 at the American Electric Power Company Building, 40 Franklin Road, S.W., Roanoke, Virginia. General Counsel Woods, Rogers & Hazlegrove P.L.C. Roanoke, Virginia Independent Auditors Deloitte & Touche LLP Raleigh, North Carolina Transfer Agent Shareholder Inquires: EquiServe P.O. Box 43012 Providence, RI 02940-3012 1-800-633-4236 www.equiserve.com Registered and overnight mail: EquiServe 150 Royall Street Canton, MA 02021 Dividend Reinvestment Plan Roanoke Electric Steel offers its shareholders a dividend reinvestment plan through its transfer agent. For more information, please contact the transfer agent or Thomas J. Crawford, Vice President Administration and Secretary. Stock Listing Nasdaq National Market Symbol: RESC Financial Information Analysts,investors and others seeking financial information are requested to contact: John E. Morris, Vice President-Finance or Thomas J. Crawford, Vice President Administration and Secretary. Copies of the Corporation's Annual Report or Form 10-K may be obtained without charge by writing to Mr. Crawford at the address below. Corporate Office 102 Westside Boulevard P.O. Box 13948 Roanoke, Virginia 24038-3948 540-342-1831 Roanoke Electric Steel Corporation Steel Mini-mills Parent: Roanoke Electric Steel Corporation 102 Westside Boulevard NW P. O. Box 13948 Roanoke, Virginia 24038-3948 Telephone: 540-342-1831 Sales: 800-753-3532 Fax: 540-342-6610 Web site: www.roanokesteel.com E-mail: sales@roanokesteel.com Subsidiary: Steel of West Virginia, Inc. 17th Street & 2nd Avenue P. O. Box 2547 Huntington, West Virginia 25726-2547 Telephone: 304-696-8200 Sales: 800-624-3492 Fax: 304-529-1479 Web site: www.swvainc.com E-mail: steel@swvainc.com or sales@swvainc.com Steel Fabricators Subsidiaries: John W. Hancock, Jr., Inc. 2535 Diuguids Lane P. O. Box 3400 Salem, Virginia 24153 Telephone: 540-389-0211 Sales: 800-336-5773 Fax: 540-389-0378 Web site: www.hancockjoist.com E-mail: jwhmail@hancockjoist.com Marshall Steel, Inc. 1555 Harbor Avenue P. O. Box 13463 Memphis, Tennessee 38113-0463 Telephone: 901-946-1124 Fax: 901-946-5676 Web site: www.swvainc.com E-mail: marshallsteel@aol.com RESCO Steel Products Corporation 438 Kessler Mill Road Salem, Virginia 24153 P.O. Box 13948 Roanoke, Virginia 24038-3948 Telephone: 540-387-0284 Sales: 800-868-0628 Fax: 540-389-4971 E-mail: jimcarr@rescosteel.com Socar, Inc. 2527 East National Cemetery Road P. O. Box 671 Florence, South Carolina 29503 Telephone: 843-669-5183 Sales: 800-669-5183 Fax: 843-669-0675 Web site: www.socarinc.com E-mail: llm@socarinc.com Socar of Ohio, Inc. 21739 Road E 16 P. O. Box 219 Continental, Ohio 45831 Telephone: 419-596-3100 Fax: 419-596-3120 Web site: www.socarinc.com E-mail: socaroh@socarinc.com Scrap Steel Processor Subsidiary: Shredded Products Corporation 700 Commerce Road Rocky Mount, Virginia 24151 Telephone: 540-489-7599 Fax: 540-489-8431 1144 Fluff Road P. O. Box 159 Montvale, Virginia 24122 Telephone: 540-947-2225 Toll free: 877-668-8253 Fax: 540-947-5173 -----END PRIVACY-ENHANCED MESSAGE-----

	Virginia	54-0585263
	(State or other jurisdiction of	(I.R.S. Employer
	incorporation or organization)	Identification No.)

	P.O. Box 13948, Roanoke, Virginia	24038-3948
	(Address of principal executive offices)	(Zip Code)

EXHIBIT NO.	EXHIBIT	PAGE

(3)	(a) Articles of Incorporation, as amended	20
		Incorporated by reference

	(b) By-Laws, as amended	21


(4)	Instruments Defining the Rights of Security Holders	22

(10)	*(a) Executive Officer Incentive Arrangement	23
		Incorporated by reference

	*(b) Roanoke Electric Steel Corporation
	Employees' Stock Option Plan	23
		Incorporated by reference
	*(c) Roanoke Electric Steel Corporation
	Non- Employee Directors' Stock Option Plan	23
		Incorporated by reference

	*(d) Roanoke Electric Steel Corporation Severance Agreements	23
		Incorporated by reference

	*(e) SWVA Collective Bargaining Agreement	23
		Incorporated by reference

	*(f) SWVA Employee Agreement with Timothy R. Duke	23
		Incorporated by reference

(13)	2001 Annual Report to Stockholders	24

(21)	Subsidiaries of the Registrant	25

(23)	Independent Auditor's Consent	26

	ROANOKE ELECTRIC STEEL CORPORATION
	Registrant

	By: Donald G. Smith
	Donald G. Smith, Chairman, President,
	Treasurer and Chief Executive Officer
	(Principal Executive Officer, Principal
	Financial Officer and Director)

	Name and Title	Date

	Donald G. Smith	January 15, 2002
	Donald G. Smith, Chairman, President,
	Treasurer and Chief Executive Officer
	(Principal Executive Officer, Principal
	Financial Officer and Director)

	John E. Morris	January 15, 2002
	John E. Morris, Vice President - Finance
	and Assistant Treasurer (Principal
	Accounting Officer)

	George B. Cartledge, Jr.	January 15, 2002
	George B. Cartledge, Jr. Director

	Thomas L. Robertson	January 15, 2002
	Thomas L. Robertson Director

	Charles I. Lunsford, II	January 15, 2002
	Charles I. Lunsford, II Director

	Paul E. Torgersen	January 15, 2002
	Paul E. Torgersen Director

	Registrant:	Roanoke Electric Steel Corporation

	Subsidiary of Registrant	Organized Under Jurisdiction of

	Shredded Products Corporation	Virginia

	John W. Hancock, Jr., Inc.	Virginia

	Socar, Incorporated	South Carolina

	RESCO Steel Products Corporation	Virginia

	Roanoke Technical Treatment and Services, Inc.	Virginia

	Steel of West Virginia, Inc.	Delaware