Gerdau Ameristeel Announces Results

Gerdau Ameristeel Corp. reported net income of $87.4 million on net sales of $1.1 billion for the three months ended March 31, 2006, compared to net income of $78.6 million on net sales of $1.0 billion for the same time last year. EBITDA for the first quarter was $171.2 million, compared to EBITDA for the first quarter of last year of $151.5 million.

During the quarter the company completed two acquisitions – the acquisition of Fargo Iron and Metal Co., a scrap dealer with about 50,000 tons of scrap generating capacity; and the completion of the rebar fabricating assets of Callaway Building Products, Inc. with approximately 10,000 tons per year of capacity.

The company also announced that its U.S. operating subsidiary, Gerdau Ameristeel US Inc., entered into a definitive agreement to acquire all of the outstanding shares of Sheffield Steel Corp., a mini-mill producer of long steel products, primarily rebar and merchant bars with annual shipments of about 550,000 tons of finished steel products. Sheffield operates a melt shop and rolling mill in Sand Springs, Oklahoma, a smaller rolling mill in Joliet, Illinois, and three downstream steel fabricating facilities in Kansas City and Sand Springs. The transaction is expected to close in the second quarter of this year.

Excluding joint ventures, the company shipped 1.6 million tons of finished steel in the three months ended March 31, 2006, an increase of 2.5 percent over the first quarter of 2005. Average mill prices increased $19 per ton, or 3.6 percent, compared to the first quarter in 2005.

Scrap raw material costs decreased $10 per ton, or 5.0 percent, compared to the first quarter of 2005. Metal spread, the difference between mill selling prices and scrap raw material cost, increased $29 per ton, or 8.4 percent, compared to the first quarter of last year. Mill manufacturing costs were $245 per ton in the first quarter of 2006 compared to $238 per ton in the first quarter of 2005, primarily as a result of higher energy costs, increased raw material prices other than scrap, and the stronger Canadian dollar. Fabricated steel prices increased $28 per ton compared to the first quarter of the prior year.