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California Steel Industries
Reports 2003 Results

Jan. 28, 2004 — California Steel Industries, Inc. reported net income of $4.5 million on sales of $763.6 million for 2003, with fourth quarter net income of $3.1 million on sales of $191.9 million.

Fourth Quarter Results — Net income, $3.1 million, compares to $9.9 million for the fourth quarter of 2002. Sales, at $191.9 million, compare to $212.5 million in the fourth quarter of 2002. CSI shipped 488,000 tons of steel products during the fourth quarter, and EBITDA for the quarter totaled $15.2 million.

Full Year Results — Net income, $4.5 million, compares to $35 million in 2002. Sales, at $763.6 million, compare to $754 million in 2002. Shipments totaled 1.885 million tons, the second-highest level in the company's history. EBITDA totaled $48.7 million.

"After a breakeven second quarter and losses in third quarter, we are very pleased with the turnaround to positive results in fourth quarter of 2003," said Vicente Wright, President and CEO. "This is the result of a tremendous amount of effort from our employees and the cooperation of our slab suppliers as we worked together to ensure a steady operation and flow of quality product to our customers," he noted.

For the year, prices were up just 8% over 2002.

Average slab consumption costs (including FOB slab price, quality extras, insurance, ocean freight, unloading charges, duties and rail freight from the Port of Los Angeles to CSI's Fontana works) rose 2% in fourth quarter 2003 over 2002, but were up 26% for the year.

"CSI has done an outstanding job this year in controlling costs. We hedged natural gas costs downward, as well as reducing most of the costs related to our production facilities," Wright commented. "Unfortunately, electricity costs continue to hinder the California economic picture, and CSI is no different," he continued.

Safety continues its leading presence at CSI, as the company's employees achieved a record-breaking total injury rate in 2003.

Liquidity continues to remain strong, as the balance under the company's Revolving Credit Agreement remains at zero as of December 31, 2003, with availability of more than $100 million and a cash balance of $42.6 million. Capital spending for 2003 totaled $16.5 million.

Wright concluded, "Everyone who is part of CSI's success stood together during these very difficult times to return CSI to profitable operations, where we belong. I can't speak highly enough of our customers, who continue to support our company with a high degree of loyalty, while recognizing that we work towards the continued success of everyone involved."

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