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Ivaco Reports Year-End Results

March 24, 2004 — Ivaco Inc. reported a net loss of $199.8 million on net sales of $775.8 million for the year ended December 31, 2003.

The net loss of $199.8 million compares to net income of $7.6 million in 2002. Increased scrap, labor, energy and transportation costs in addition to U.S. anti-dumping duties on shipments of certain wire rod to the United States were all factors contributing to the operating loss of $73.9 million for 2003.

The 2003 net loss also includes discontinued operations of $22.4 million, which resulted from reclassification of the assets, liabilities, revenues and expenses of IMT Corp. and Docap (1985) Corp. These entities will be disposed of as part of Ivaco’s restructuring plan.

Reorganization items in 2003 represent transactions and events that are directly associated with the U.S. bankruptcy filings and the Canadian proposed restructuring process and include provisions for losses, financing fees, professional fees and claims. Non-recurring items in 2002 includes a gain on the disposal of Dofasco Inc. common shares of $30.2 million, offset by provisions for construction contracts receivable and other claims totaling $9.1 million.

Sales at $775.8 million are $91.0 million lower than 2002. The impact of the higher value of the Canadian dollar versus the US dollar of approximately 11% was the most significant factor contributing to the lower sales versus 2002.

Management Comments—"These results reflect the very difficult circumstances under which we were operating in fiscal year 2003. We are happy to report that in 2004 our productivity is improving, our order books are filled, and the companies have stabilized. We remain committed to a successful restructuring process and working with all affected stakeholders to return the Company to long-term profitability," said Gordon Silverman, President and CEO of Ivaco.

Ivaco is a Canadian corporation and is a leading North American producer of steel, fabricated steel products and precision machined components. 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. Ivaco's fabricated steel products operations have a rated production capacity in the area of 350,000 tons per annum of wire, wire products and processed rod, and over 175,000 tons per annum of fastener products.

Ivaco Inc. and certain of its affiliates filed for protection from creditors under the Companies' Creditors Arrangement Act (CCAA) on September 16, 2003, citing the adverse impact on its business of difficult market conditions for the entire North American steel industry, including the high Canadian dollar, higher scrap, labor, energy and transportation costs and U.S. anti-dumping duty deposits.

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