Gerdau Ameristeel Corp. reported net income of $62.2 million on net sales of $999.3 million for the quarter and net income of $215.1 million on net sales of $3.0 billion, for the nine months ended September 30, 2005.

Third Quarter Results—The $62.2 million net income ($0.20 per share fully diluted) compares to a net income of $144.3 million ($0.64 per share fully diluted) for the quarter ended September 30, 2004. Net sales of $999.3 million compares with net sales of $807.9 million for the year-ago third quarter.

EBITDA of $152.9 million compares to EBITDA of $168.5 million for the third quarter of last year. Results for 2004 include the recognition of certain net operating losses related to the U.S. operations that resulted in a $45.0 million reduction of tax expense. This provided a contribution to earnings of $0.20 per diluted share.

Included in Selling, General and Administrative expense is non-cash pretax expense of $9.7 million to mark to market outstanding stock appreciation rights and expenses associated with other executive compensation agreements compared to a non-cash pretax expense of $5.9 million for the quarter ended September 30, 2004. Also, a provision of $2.1 million was recorded to write down the value of certain assets of a rebar rolling mill that were acquired by the company and retired during the quarter.

On May 26, 2005, Gerdau Ameristeel ceased operations at its Beaumont, Texas, mill in order to encourage the resolution of a new labor agreement. Costs associated with the labor disruption are $7.0 million. In addition, the estimated damages caused by hurricane Rita to this facility were $0.5 million which was accrued during the 2005 quarter.

Excluding joint ventures, the company shipped 1.7 million tons of finished steel in the quarter, an increase of 29.3% over the third quarter of 2004. Average mill prices decreased $26 per ton (5.0%) compared to the third quarter in 2004. Scrap raw material costs decreased $45 per ton (21.9%) compared to the third quarter of 2004. Metal spread (the difference between mill selling prices and scrap raw material cost) increased $19 per ton (5.7%) compared to the third quarter last year.

Mill manufacturing costs were $240 per ton compared to $217 per ton in the third quarter of 2004. The increase is attributed to increased yield costs due to higher energy and other raw material prices and the stronger Canadian dollar. Fabricated steel prices increased $92 per ton compared to the third quarter of the prior year.

Consolidated operating income was $98.4 million and the operating income of the joint ventures was $13.1 million. Based on 1.9 million tons of finished steel shipped, the composite operating income was $59 per ton. Results compare to consolidated operating income of $124.0 million and joint ventures operating income of $55.0 million. Based on 1.5 million tons of finished steel shipped, the 2004 third quarter composite operating income was $120 per ton.

Nine Month Results—The $215.1 million net income ($0.70 per share fully diluted) compares to a net income of $271.3 million ($1.26 per share fully diluted) for the nine months ended September 30, 2004. Net sales of $3.0 billion compares net sales of $2.2 billion for the nine months ended September 30, 2004.

EBITDA of $463.6 million compares to EBITDA of $396.4 million for the nine months ended September 30, 2004. Results for 2004 include the recognition of certain net operating losses related to the U.S. operations that resulted in a $45.0 million reduction of tax expense. This provided a contribution to earnings of $0.21 per diluted share.

Included in Selling, General and Administrative expense is a non-cash pretax expense reversal of $0.8 million to mark to market outstanding stock appreciation rights and expenses associated with other executive compensation agreements compared to a non-cash pretax expense of $9.6 million for the nine months ended September 30, 2004. Also, a provision of $2.1 million was recorded to write down the value of certain assets of a rebar rolling mill that were acquired by the company and retired during the third quarter.

Costs associated with the labor disruption at the company’s Beaumont, Texas, mill were $9.8 million. In addition, the estimated damages caused by hurricane Rita to this facility were $0.5 million which was accrued during the third quarter.

The company completed a renegotiation of its Senior Secured Credit Facility on October 31, 2005. Significant changes from the existing agreement include an increase of commitments from $350 million to $650 million and an extension of the term to October 31, 2010.

Excluding joint ventures, the company shipped 4.8 million tons of finished steel in YTD 2005, an increase of 23.8% over the nine months ended September 30, 2004. Average mill prices increased $45 per ton (9.6%) compared to the nine months ended September 30, 2004. Scrap raw material costs decreased $4 per ton (2.3%) compared to the nine months ended September 30, 2004. Metal spread (the difference between mill selling prices and scrap raw material cost) increased $49 per ton (16.9%) compared to the nine months ended September 30, 2004.

Mill manufacturing costs were $236 per ton compared to $200 per ton for the nine months ended September 30, 2004. The increase is attributed to increased yield costs due to higher energy and other raw material prices and the stronger Canadian dollar. Fabricated steel prices increased $130 per ton compared to the nine months ended September 30, 2004.

Consolidated operating income was $295.8 million and the operating income of the joint ventures was $68.0 million. Based on 5.4 million tons of finished steel shipped, the composite operating income was $67 per ton. This compares with consolidated operating income of $299.0 million and joint ventures operating income of $102.2 million for the nine months ended September 30, 2004. Based on 4.5 million tons of finished steel shipped, the YTD2004 composite operating income was $90 per ton.

CEO Comments—“Our solid earnings and cash flow performance reflect the continuation of generally favorable steel market demand, pricing and metal spreads. The competitive steel sector has demonstrated an uncharacteristically high degree of earnings discipline in a market environment of volatile raw material scrap prices and inflated energy costs. While we expect the normal seasonal slowdown in the December quarter, we are optimistic that market fundamentals will remain favorable in the upcoming year.

“Near term, we remain focused on attempting to reach labor agreements with our hourly employees at the Beaumont, Texas, St. Paul, Minn., and Wilton, Iowa, facilities. We are also addressing the recovery needs of our employees that were affected by the recent hurricane damage in the Gulf Coast and South Florida.”

Gerdau Ameristeel is the second-largest minimill steel producer in North America with annual manufacturing capacity of over 8.4 million tons of mill finished steel products. Through its vertically integrated network of 15 minimills (including one 50%-owned minimill), 16 scrap recycling facilities and 42 downstream operations, Gerdau Ameristeel primarily serves customers in the eastern two-thirds of North America. Products are generally sold to steel service centers, steel fabricators, or directly to original equipment manufacturers for use in a variety of industries, including construction, automotive, mining, cellular and electrical transmission, metal building manufacturing and equipment manufacturing.