Aug. 3, 2006 — Gerdau Ameristeel Corp. reported net income of $125.9 million on net sales of $1.2 billion for the quarter and net income of $213.3 million on net sales of $2.3 billion for the six months ended June 30, 2006.

Second Quarter Results—The $125.9 million net income ($0.41 per share fully diluted) compares to net income of $74.3 million ($0.24 per share fully diluted) for the quarter ended June 30, 2005. Net sales of $1.2 billion compare to net sales of $961.1 million for the quarter ended June 30, 2005. EBITDA was $219.5 million, which compares to EBITDA for the June quarter of last year of $159.2 million.

Included in selling and administrative expense is non-cash pretax expense of $5.7 million to mark to market outstanding stock appreciation rights and for expenses associated with other executive compensation agreements compared to a non-cash pretax expense reversal of $6.5 million for the quarter ended June 30, 2005.

The company also realized gains of $4.4 million during the quarter related to the sale of certain non-core land and buildings. The company recorded an expense of $7.7 million to increase the provision for environmental remediation and outstanding claims. Included in this expense is an additional $5.65 million being reserved in connection with a claim related to a Superfund Site in Pelham, Ga. The company had previously reserved $1.6 million in respect of this claim and has approved a tentative settlement with the Environmental Protection Agency, which is expected to be finalized during the third or fourth quarter, for a total of $7.25 million.

Second Quarter Operating Results—Excluding joint ventures, the company shipped 1.8 million tons of finished steel in the second quarter, an increase of 13.0% over the second quarter of 2005. Average mill prices increased $50 per ton (9.8%) compared to the second quarter in 2005. Scrap raw material costs increased $31 per ton (18.1%) compared to the second quarter of 2005. Metal spread, the difference between mill selling prices and scrap raw material cost, increased $19 per ton (5.6%) compared to the second quarter of last year. Mill manufacturing costs were $238 per ton, which compares to manufacturing costs of $231 per ton in the second quarter of 2005, with the increase attributed primarily to higher electricity costs, increased raw material prices other than scrap, and the stronger Canadian dollar. Fabricated steel prices increased $40 per ton compared to the second quarter of the prior year.

Six Month Results—The $213.3 million net income ($0.70 per share fully diluted) compares to net income of $152.9 million ($0.50 per share fully diluted) for the six months ended June 30, 2005. Net sales of $2.3 billion compare to net sales of $2.0 billion for the six months ended June 30, 2005. EBITDA was $390.6 million, which compares to EBITDA of $310.7 million for the six months ended June 30, 2005.

Included in selling and administrative expense is non-cash pretax expense of $31.2 million to mark to market outstanding stock appreciation rights and for expenses associated with other executive compensation agreements compared to a non-cash pretax expense reversal of $7.5 million for the six months ended June 30, 2005. The company also realized gains of $8.9 million related to the sale of certain non-core land and buildings.

Six Month Operating Results—Excluding joint ventures, the company shipped 3.4 million tons of finished steel in the first half of 2006, an increase of 7.8% over the six months ended June 30, 30 2005. Average mill prices increased $35 per ton (6.6%) compared to the six months ended June 30, 2005. Scrap raw material costs increased $11 per ton (6.1%) compared to the six months ended June 30, 2005. Metal spread, the difference between mill selling prices and scrap raw material cost, increased $24 per ton (6.9%) compared to the six months ended June 30, 2005. Mill manufacturing costs were $242 per ton, which compare to manufacturing costs of $235 per ton for the six months ended June 30, 2005, with the increase attributed primarily to higher energy costs, increased raw material prices other than scrap, and the stronger Canadian dollar. Fabricated steel prices increased $34 per ton compared to the six months ended June 30, 2005.

Sheffield Steel Acquisition—On June 12, 2006, the company completed its acquisition of all of the outstanding shares of Sheffield Steel Corp. of Sand Springs, Okla., a mini-mill producer of long steel products with annual shipments of approximately 550,000 tons of finished steel products. Consistent with current purchase price accounting requirements, Sheffield Steel’s finished steel inventories, which were purchased at cost, were written up to market value and as are result, no significant profits were recognized during the June 2006 quarter.

At June 30, 2006, the company had cash and short-term investments of approximately $442 million. In July 2006, the company redeemed the outstanding Sheffield Senior Secured Notes for approximately $88 million. In addition, the company intends to redeem its convertible debentures for cash at par plus accrued interest during the third quarter of 2006.

Total Operating Results (With Joint Ventures)—For the second quarter, Gerdau Ameristeel's income from operations was $162.5 million and earnings from joint ventures were $34.0 million. Based on 2.0 million tons of finished steel shipped, the composite operating income was $99 per ton. For the three months ended June 30, 2005, Gerdau Ameristeel's income from operations was $102.8 million and earnings from joint ventures were $23.4 million. Based on 1.7 million tons of finished steel shipped, the composite operating income was $72 per ton for the second quarter of 2005.

For the first six months of 2006, Gerdau Ameristeel's income from operations was $278.2 million and earnings from joint ventures were $63.4 million. Based on 3.8 million tons of finished steel shipped, the composite operating income was $90 per ton. For the six months ended June 30, 2005, Gerdau Ameristeel's income from operations was $197.3 million and earnings from joint ventures were $55.1 million. Based on 3.5 million tons of finished steel shipped, the composite operating income was $72 per ton.

CEO Comments—Mario Longhi, President and CEO of Gerdau Ameristeel, commented: "We anticipate continued steel market strength in the second half of 2006 and look forward to fully meeting our customers' high expectations. We will be concentrating on fully integrating the Sheffield people, assets and customers into the Gerdau Ameristeel organization and look forward to optimizing the accretive nature of our most recent acquisition. We believe we have the opportunity to build on our strong performance from the June quarter and now we must focus on a safe and efficient execution of our strategy."

Gerdau Ameristeel is the second-largest minimill steel producer in North America with annual manufacturing capacity of over 9.0 million tons of mill finished steel products. Through its vertically integrated network of 17 minimills (including one 50%-owned minimill), 17 scrap recycling facilities and 46 downstream operations, Gerdau Ameristeel primarily serves customers in the eastern two-thirds of North America. The company's products are generally sold to steel service centers, steel fabricators, or directly to original equipment manufacturers (OEMs) for use in a variety of industries.

Sheffield Steel Corp. of Sand Springs, Okla., was a mini-mill producer of long steel products, primarily rebar and merchant bars with annual shipments of approximately 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, Ill., and three downstream steel fabricating facilities in Kansas City and Sand Springs.