April 2, 2007 — Novamerican Steel Inc. announced net income of $5.2 million on sales of $187.2 million for the first quarter ended February 24, 2007. (All amounts are in U.S. dollars).

First Quarter Results—The $5.2 million ($0.50 per share) net income reflects a $3.7 million (41.4%) decrease compared to net income of $8.8 million ($0.87 per share, or $0.85 after dilution) for the first quarter of 2006. Sales, $187.2 million, reflect an $8.5 million (4.3%) decrease compared to sales of $195.7 million for the first quarter of 2006.

Tons sold and processed totaled 350,585 tons, a 101,721-ton (22.5%) decrease compared to 452,306 tons in the first quarter of 2006. The gross margin for the first quarter of 2007 decreased to 18.6% from 21.6% for the first quarter of 2006.

Operations—Business conditions were weaker during the company's first quarter than originally anticipated. Demand for steel remained soft due to an ongoing industry-wide inventory correction by the service centers as well as weaker-than-expected end-user demand in several manufacturing sectors. Weak automotive production adversely affected the volume of tons processed.

Outlook—Management is expecting a stronger second quarter, with seasonal factors and inventory replenishment leading to better customer demand. Recent announcements of price increases by the North American steel mills signal an end to the inventory correction and will likely lead to increases in both the company's sales volume and gross margins. The company says that import offers remain unattractively priced and imported steel is unlikely to have any impact on market conditions for the next two quarters.

Based in Montreal, Canada, Novamerican Steel has eleven 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.