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Ivaco Reports 1st Quarter Results

May 14, 2004 — Ivaco Inc. reported a net loss of $6.3 million on net sales of $220.8 million for the quarter ended March 31, 2004.

The Ontario Superior Court of Justice has extended Ivaco’s period of Court protection under the CCAA until June 18, 2004. Ivaco’s management and Board of Directors are still of the view that the company’s shareholders, including holders of preferred shares, are unlikely to receive any value for their shares under any restructuring scenario. Ivaco continues to operates under the protection of the Companies' Creditors Arrangement Act.

Operating earnings before income taxes, amortization and other items was $6.4 million, which compares with operating earnings before income taxes, amortization and other items of $9.2 million for the same period last year. The stronger Canadian dollar in relation to the US dollar was a significant factor in the reduction of consolidated EBITDA in the first quarter of 2004.

Net sales, $220.8 million, represent a $3.1 million (1.4%) increase over first quarter 2003 net sales of $217.7 million. Demand for steel wire rod and fastener products was strong with total tons shipped higher than the same quarter last year. Tons shipped at the Wire Group were less than last year as total tons shipped in 2003 included sales of Sivaco Georgia, which was shut down in 2003. The impact of the higher value of the Canadian dollar versus the US dollar of approximately 12.7% compared to the same period in 2003, was a significant factor contributing to the lower sales dollars but was more than offset by recently announced scrap surcharges and price increases.

Comments—"Despite the increase in net loss compared to last year, we are pleased with the steady improvements we have made during the first quarter in improving our efficiency and competitiveness, both essential elements for a sustainable return to profitability," said Gordon Silverman, President and CEO of Ivaco. "In the short term, the industry is enjoying a strong year which will benefit the company during 2004. Our efforts at restructuring are continuing and we are on track with the process established by the Court. Our goal remains to emerge from Court protection with a restructured company that is both viable and sustainable over the long term and through all market cycles."

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Ivaco, a Canadian corporation, is a leading North American producer of steel and fabricated steel products. Ivaco's modern steel operations include Canada's largest rod mill, which has a rated production capacity of 900,000 tons of wire rods per annum. In addition, Ivaco's fabricated steel products operations have an annual rated capacity in the area of 350,000 tons of wire, wire products and processed rod, and over 175,000 tons of fastener products.

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