Novamerican Steel Inc. reported net income of $23.7 million on sales of $215.2 million for the fourth quarter, and net income of $72.9 million on sales of $768.6 million for the fiscal year ended November 27, 2004. This was the 28th consecutive profitable quarter for the Company. It also reported a record annual profit for fiscal 2004. (All amounts are in U.S. dollars).

Fourth Quarter Results— Net income increased by $16.2 million (217.0%) to $23.7 million ($2.44 per share/$2.37 diluted), compared to $7.5 million ($0.77 per share) for the same period in 2003.

Sales increased by $74.3 million (52.8%) to $215.2 million from $140.8 million for the fourth quarter in 2003. Tons sold and processed increased by 12,062 (2.7%) to 466,356 tons from 454,294 in the fourth quarter of 2003. Gross margin increased to 30.5% from 24.0% for the fourth quarter in 2003.

Full Year Results—Net income increased by $59.8 million (457.4%) to $72.9 million ($7.51 per share/$7.35 diluted), compared to $13.1 million ($1.35 per share) for the year 2003.

Sales increased by $261.6 million (51.6%) to $768.6 million from $507.1 million for the same period in 2003. Tons sold and processed increased by 150,639 tons (9.1%) to 1,814,900 tons from 1,664,261 tons for the same period in 2003. The gross margin increased to 29.3% from 21.0% in 2003.

Operations—The year 2004 results reflect strong performances from all the company's operations. The significant increase in net income reflects the positive effect of higher steel prices, a substantial increase in tons processed and inventory gains.

The move into the company's new manufacturing facility in Montreal was substantially completed in December. Management expects productivity gains and cost savings to be realized with the move, beginning in the second quarter of 2005.

Outlook—Reports of continued strong demand in many manufacturing industries should bode well for steel demand and steel prices in 2005. With North American steel prices now more in line with European and Asian steel prices, management anticipates price stability through the first quarter. There are few import offers for the first quarter, and those that are available are priced at domestic levels.

The decline in the value of the U.S. dollar in 2004 appears to have had a positive effect on the U.S. manufacturing sector, which should lead to higher capital spending in 2005.

Despite cautious forecasts from the automotive industry, the company's automotive order backlog in the first quarter is up considerably from the same period in 2004.

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