Slater Steel Realigning Stainless Bar Operations

Slater Steel Inc. announced that it expects to report a net loss in the range of $44 to $50 million for the three months ended June 30, 2003. The loss is primarily related to the stainless steel segment. The second quarter financial results were negatively impacted by several factors, including restructuring and financing related fees and expenses; the ongoing weak demand for stainless steel bar products and soft product pricing; and high input costs (including natural gas, nickel, scrap and electricity). In addition, the last two factors gave rise to a significant provision for inventories in the stainless steel segment which have manufactured costs in excess of net realizable values.

As a result of the sizeable losses incurred in the first half of the year, liquidity constraints and the challenging outlook for the stainless bar market, Slater is announcing a significant restructuring of its stainless bar operations.

The stainless steel bar market has been negatively impacted by weak demand, particularly in the capital goods sector. High import penetration levels and aggressive competition for market share have contributed to a steep erosion in stainless bar selling prices in the first half of 2003. For some stainless bar products, the sharp decline in selling prices accelerated in the second quarter. At the same time, input costs have been rising steadily.

To improve the economics of its stainless bar business, the Slater will downsize its stainless bar operations to what it believes is a competitively -- and financially -- viable market position. To protect its core business, the Company will concentrate sales and production on 2.5-inch to 8-inch diameter rounds on an interim basis. As a result of this initiative, a number of assets will be temporarily shutdown.

Several operations will be temporarily shut down at Fort Wayne Specialty Alloys in Fort Wayne, Indiana. The entire Atlas Specialty Steels' facility, in Welland, Ontario, will be temporarily closed.

Slater added that while the exact timing of the various shutdowns will be finalized over the coming weeks, it expects that they will be implemented over the third and fourth quarter of 2003. The duration of the shutdowns is contingent on the restructuring process.