April 5, 2006 — Novamerican Steel Inc. announced net income of $8.8 million* on sales of $195.7 million for the first quarter ended February 25, 2006. This was the 33rd consecutive profitable quarter for the company.

First Quarter Results—The $8.8 million ($0.87 per share; $0.85 after dilution) net income reflects a 12.4% ($1.3 million) decrease compared to the $10.1 million ($1.03 per share; $0.98 after dilution) net income for the first quarter of 2005. Sales, $195.7 million, reflect a 5.2% ($10.7 million) decrease compared to sales of $206.4 million for the first quarter of 2005.

Tons sold and processed increased by 3,618 (0.8%) to 452,306 tons from 448,688 in the first quarter of 2005. While tons sold for the three months ended February 25, 2006 increased by 10,106 tons (4.9%), tons processed decreased by 6,488 tons (2.7%) compared with the same period in 2005. The gross margin increased to 21.6% from 21.0% for the first quarter of 2005.

Operations—The company's fiscal first quarter volume in terms of tons sold was strong given the seasonal weakness historically experienced in the winter months. CEO D. Bryan Jones commented, "I am pleased with the tons sold in this year's first quarter. This quarter's results were achieved in a stable pricing environment and reflect an increase in output that can be attributed to our Company's organic growth strategy".

Outlook—The company notes that demand continues to be strong from many steel-consuming industries such as non-residential construction, energy, mining, heavy equipment, railcar manufacturing and infrastructure spending. Management believes steel prices will rise in the second quarter and continue to be strong through July. There appears to be less likelihood of a softening in North American steel prices this summer as global steel prices continue to rise. Import offers for third quarter delivery are less plentiful and prices of those offers have risen significantly. Lead times at the North American steel mills have been extended and availability is limited through June.

*All amounts are in U.S. dollars.

Based in Montreal, Canada, Novamerican Steel Inc. has twelve operating locations in Canada and eleven operating locations in the United States. The company processes and distributes carbon steel, stainless steel and aluminum products, including carbon steel tubing for structural and automotive markets.