Jan. 11, 2006 — Novamerican Steel Inc. announced net income of $13.9 million on sales of $219.2 million for the fourth quarter, and net income of $36.9 million on sales of $834.7 million for the fiscal year ended November 26, 2005. (All amounts are in U.S. dollars). The company achieved record tons sold and tons processed, and as a result reported record annual net sales for 2005.

Fourth Quarter Results — In the fourth quarter, the company achieved its 32nd consecutive profitable quarter. The $13.9 million net income ($1.37 per share, or $1.35 after dilution) reflects a $9.8 million (41.3%) decrease from $23.7 million ($2.44 per share or $2.37 after dilution) for the same period in 2004. Sales of $219.2 million reflect a $4.1 million (1.9%) increase from $215.2 million for the same period in 2004.

Tons sold and processed increased by 63,494 tons (13.6%) to 529,850 tons from 466,356 in the fourth quarter of 2004. The gross margin decreased to 23.0% for the quarter.

Fiscal Year Results — The $36.9 million net income ($3.70 per share, or $3.58 after dilution) reflects a $36.0 million (49.4%) decrease versus $72.9 million ($7.51 per share or $7.35 after dilution) in 2004. Sales of $834.7 million reflect an increase of $66.1 million (8.6%) from $768.6 million in 2004.

Tons sold and processed increased by 107,008 tons (5.9%) to 1,921,908 tons from 1,814,900 tons in 2004 — a new annual record. While tons sold for the year ended November 26, 2005 decreased by 1,217 tons (0.1%), tons processed increased by 108,225 tons (12.0%) compared with the same period in 2004.

The gross margin decreased to 20.4% from 29.3% in 2004.

From an Operations standpoint, fiscal 2005 was a successful year. The company's strong results were achieved despite market-wide declining steel prices and excess inventories that marked the first seven months of the year. Through the year, however, the company was able to reduce inventories significantly. This performance enabled the company to close the year with a strong balance sheet and to be in a sound financial position for any future growth opportunities.

Outlook — The company is expecting steady demand in the first quarter of 2006. Steel-consuming industries such as energy, mining, transportation, heavy equipment, and non-residential construction are forecasting robust demand while the agricultural equipment and automotive sectors are forecasting steady demand early in 2006. Steel prices stabilized in the fourth quarter and it appears they will be stable throughout the first quarter 2006. The company's inventories are well balanced relative to current demand.

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