Oregon Steel Mills Reports for Quarter, Year

Oregon Steel Mills, Inc. announced a fourth quarter 2003 net loss of $44.0 million, compared to net income of $3.3 million for the fourth quarter of 2002. During the fourth quarter, the company recorded a pretax charge of $31.1 million related to the previously announced tentative agreement to settle the labor dispute at the company's majority-owned subsidiary Rocky Mountain Steel Mills. Also in the fourth quarter, the company increased its environmental and workers' compensation reserves by $2.1 million. Net loss for the fourth quarter of 2003, before the charge related to the settlement of the labor dispute, was $12.8 million.

Product sales for the quarter were $160.8 million. This compares to 2002 fourth quarter product sales of $225.7 million. Average product sales price per ton in the fourth quarter of 2003 was $422 compared to $515 in the fourth quarter of 2002. The decrease in revenues and average sales price was primarily due to lower average selling prices for plate, coil and welded pipe products and reduced shipments of welded pipe and rail products partially offset by higher average selling prices for rail and rod products. In general, welded pipe products have the highest average selling price of all of the company's steel products.

Overall shipments for the fourth quarter of 2003 were 381,400 tons compared to 2002 fourth quarter shipments of 438,700 tons. Reduced shipments are primarily due to lower welded pipe and rail shipments partially offset by higher plate, coil and rod shipments.

During the fourth quarter, the company shipped 142,700 tons of welded pipe and 95,400 tons of rail compared to 39,600 tons of welded pipe and 83,800 tons of rail in the fourth quarter of 2003.

Jim Declusin, OS’s president and CEO, stated, "Throughout much of 2003 our company had to absorb sharply higher scrap, slab and energy costs with no relief on finished product sales price. As a result, we experienced the worst financial performance in the company's history. The announced price increases are an attempt to address the sharp and unprecedented increases in scrap and slab costs that began in earnest in the fourth quarter of 2003 and that continue today. In addition, we continue to incur the same high energy costs today that we experienced throughout 2003."

Mr. Declusin continued, "With the improved pricing environment and the continued realignment of our production and manning levels to improve our cost structure and quality, we expect our financial performance to be materially better in 2004 than the performance recorded in 2003. Furthermore, based on the financial results for the months of January and February of 2004, the Company anticipates that it will record an after-tax profit in the first quarter of 2004."

For 2004, Oregon Steel expects to ship about 1.7 million tons of product. In the Oregon Steel Division the product mix is expected to consist of 600,000 tons of plate and coil, 230,000 tons of welded pipe and 50,000 tons of structural tubing. At these shipment levels the company expects its combination mill to run at approximately 75 percent of its rated capacity and its welded pipe mills to run at approximately 35 percent of their rated capacities. The company's RMSM Division expects to ship approximately 370,000 tons and 470,000 tons of rail and rod products, respectively. At these shipment levels the rail and rod mills would be at 90 percent and 95 percent, respectively, of their rated capacities. Seamless pipe shipments will be dependent on market conditions in the drilling industry.