Nov. 10, 2006 — Gerdau Ameristeel Corp. reported net income of $96.0 million on net sales of $1.2 billion for the third quarter and net income of $309.3 million on net sales of net sales of $3.0 billion for the nine months ended September 30, 2006.

Third Quarter Results — The $96.0 million net income ($0.31 per share fully diluted) compares to net income of $62.2 million ($0.20 per share fully diluted) for the three months ended September 30, 2005. Net sales of $1.2 billion compare to net sales of $999.3 million for the three months ended September 30, 2005. EBITDA was $218.4 million, which compares to EBITDA for the three months ended September 30, 2005 of $152.9 million.

During the three months ended September 30, 2006, the company ceased operations of the meltshop at its Perth Amboy, N.J., wire rod mill. The closure resulted in a $41.8 million charge, most of which (approximately $32.4 million) is a non-cash charge to accelerate the depreciation of buildings and equipment to write-off the mill’s meltshop assets.

Additionally, the company recorded $9.4 million of estimated costs related to the termination of certain take-or-pay contracts, the write-off of certain equipment spares maintained in inventory, severance costs for the affected employees, the estimated costs related to disposal of dust from the baghouse. On an after-tax basis, these items represent a $29 million ($0.10 per share) reduction in net income for the quarter.

Selling and administrative expense included a non-cash pretax expense reversal of $0.6 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 of $9.7 million for the three months ended September 30, 2005.

In July 2006, the outstanding Sheffield Senior Secured Notes were redeemed for approximately $88.5 million. In September 2006, the company redeemed its Cdn $125 million convertible debentures for cash at par plus accrued interest. The company recorded an interest charge of $5.6 million to write off the remaining unamortized fair market value adjustment of these convertible debentures. At September 30, 2006, the company had cash and short-term investments of approximately $290 million.

Nine Month Results — The $309.3 million net income ($1.01 per share fully diluted) compares to a net income of $215.1 million ($0.70 per share fully diluted) for the nine months ended September 30, 2005. Net sales of $3.4 billion compare to net sales of $3.0 billion for the nine months ended September 30, 2005. EBITDA was $609.1 million for the nine months ended September 30, 2006, compared to EBITDA of $463.6 million for the nine months ended September 30, 2005.

Selling and administrative expense included a non-cash pretax expense of $30.6 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 $0.8 million for the nine months ended September 30, 2005.

For other operating expenses in the nine-month period, the company realized gains related to the sale of certain non-core land and buildings of $8.9 million and an expense of $7.7 million to increase the provision for environmental remediation and outstanding environmental claims.

Operating Results — Excluding joint ventures, the company shipped 1.7 million tons of finished steel in the third quarter, a decrease of 1.0% over the three months ended September 30, 2005. Average mill prices increased $90 per ton, or 17.9%, compared to the three months ended September 30, 2005. Scrap raw material costs increased $42 per ton (26.2%) compared to the three months ended September 30, 2005. Metal spread (the difference between mill selling prices and scrap raw material cost) increased $48 per ton (13.9%) compared to the three months ended September 30, 2005. Mill manufacturing costs were $249 per ton for the third quarter compared to $240 per ton for the three months ended September 30, 2005, primarily because of increased yield costs resulting from higher scrap costs. Fabricated steel prices increased $80 per ton compared to the three months ended September 30, 2005.

Excluding joint ventures, the company shipped 5.1 million tons of finished steel in the nine-month period, 2006, an increase of 4.8% over the nine months ended September 30, 2005. Average mill prices increased $53 per ton (10.3%) compared to the nine months ended September 30, 2005. Scrap raw material costs increased $21 per ton (12.0%) compared to the nine months ended September 30, 2005. Metal spread (the difference between mill selling prices and scrap raw material cost) increased $32 per ton (9.4%) compared to the nine months ended September 30, 2005. Mill manufacturing costs were $244 per ton for the first nine months, compared to $236 per ton for the nine months ended September 30, 2005, in line with general inflationary increases. Fabricated steel prices increased $50 per ton compared to the nine months ended September 30, 2005.

For the third quarter, Gerdau Ameristeel's income from operations was $124.4 million and earnings from joint ventures were $39.9 million. Based on 1.9 million tons of finished steel shipped, the composite operating income was $88 per ton for the quarter. For the three months ended September 30, 2005, Gerdau Ameristeel's income from operations was $98.4 million and earnings from joint ventures were $13.1 million. Based on 1.9 million tons of finished steel shipped, the composite operating income was $59 per ton for the three months ended September 30, 2005.

For the nine months ended September 30, 2006, Gerdau Ameristeel's income from operations was $402.7 million and earnings from joint ventures were $103.3 million. Based on 5.7 million tons of finished steel shipped, the composite operating income was $89 per ton for the nine months. For the nine months ended September 30, 2005, Gerdau Ameristeel's income from operations was $295.8 million and earnings from joint ventures were $68.0 million. Based on 5.4 million tons of finished steel shipped, the composite operating income was $67 per ton for the nine months ended September 30, 2005.

CEO Comments — Mario Longhi, President and CEO of Gerdau Ameristeel, commented, "The third quarter was an excellent quarter with record composite long product prices, metal spreads and finished steel production from our 16 long product mills. We are seeing some seasonal shipment slowness across product lines as winter approaches, and inventory levels are on the high side throughout the system. We remain hopeful that better matching of domestic production to demand, and some abatement from the recent spike in steel imports, will normalize inventory levels and create a favorable industry environment for 2007.

“On November 1, we closed on our acquisition of a controlling interest in Pacific Coast Steel (PCS), consisting of four rebar fabrication facilities in California. PCS expands our fabricating footprint to the West Coast and we are excited about the expected profitability and additional growth potential of that business.

“During the fourth quarter, we will continue to focus on ensuring that our mill operations are cost competitive on a global basis, including the integration of the Sheffield operations into the Gerdau Ameristeel business systems, resolving the labor contract issues and the closing of the Perth Amboy meltshop.”

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 joint venture minimill), 17 scrap recycling facilities and 50 downstream operations (including seven joint venture fabrication facilities), Gerdau Ameristeel serves customers throughout North America. The company's products are generally sold to steel service centers, to steel fabricators, or directly to original equipment manufacturers (OEMs) for use in a variety of industries.