Oregon Steel Swings to Profit for Quarter

Oregon Steel Mills reported fourth quarter net income of $44.8 million, compared to a net loss of $44.0 million  for the fourth quarter of 2003. During the quarter Oregon Steel recorded a pretax charge of $2.0 million related to the previously disclosed early retirement option at its majority-owned subsidiary, Rocky Mountain Steel Mills.

Sales for the quarter were $302.0 million. This compares to 2003 fourth quarter sales of $168.9 million. Average sales price per ton in the fourth quarter of 2004 was $840 compared to $443 in the fourth quarter of 2003. Overall shipments for the fourth quarter of 2004 were 359,400 tons, compared to 2003 fourth quarter shipments of 381,400 tons. This decrease in shipments is primarily due to decreased shipments of rod and bar, large diameter pipe and seamless pipe products partially offset by higher shipments of plate, rail and structural tubing products. The increases in sales and average sales price per ton were primarily due to higher average selling prices for plate, coil, welded pipe, rail and rod and bar products partially offset by the decreased shipments noted above.

Operating income in the fourth quarter of 2004 was $55.4 million. Operating income for the fourth quarter of 2004 before the Early Retirement Charge of $2 million was $57.4 million. This compares to an operating loss for the fourth quarter of 2003 of $38.4 million.

For 2005, the Company expects to ship approximately 1.7 million tons of product. In the Oregon Steel Division, the product mix is expected to consist of approximately 560,000 tons of plate and coil, 200,000 tons of welded pipe and 67,000 tons of structural tubing.

At these shipment levels, the company expects its Portland mill to run at approximately 75 percent of its rated capacity and its welded pipe mills to run at approximately 60 percent of their rated capacities.

The company's RMSM Division expects to ship about 390,000 tons and 480,000 tons of rail and rod and bar products, respectively. At these shipment levels the rail and rod mills would be at approximately 90 percent and 95 percent, respectively, of their rated capacities.

First quarter 2005 shipments to customers are expected to be about 355,000 tons. In the Oregon Steel Division the product mix is expected to consist of about 120,000 tons of plate and coil, 25,000 tons of welded pipe and 15,000 tons of structural tubing.

The company's RMSM Division expects to ship about 110,000 tons of rail and 85,000 tons of rod and bar products. During the first quarter, the company expects its Portland mill will ship about 68,000 tons of plate for conversion into large-diameter line pipe to the company's majority-owned Camrose pipe mill.