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Oregon Steel Mills Announces
Fourth Quarter Results

March 16, 2004 — Oregon Steel Mills, Inc. announced a fourth quarter 2003 net loss of $44.0 million on sales of $160.8 million.

Fourth Quarter Results—The $44.0 million net loss ($1.67 loss per diluted share) compares to net income of $3.3 million ($.13 per diluted share) for the fourth quarter of 2002. During the fourth quarter, the company recorded a pretax charge of $31.1 million related to the previously announced tentative agreement to settle the labor dispute at the company's majority-owned subsidiary Rocky Mountain Steel Mills. The company also increased its environmental and workers' compensation reserves by $2.1 million in the fourth quarter. Net loss for the fourth quarter of 2003, before the charge related to the settlement of the labor dispute, was $12.8 million ($.48 loss per diluted share).

Product sales, $160.8 million, compare to 2002 fourth quarter product sales of $225.7 million. Average product sales price per ton was $422 compared to $515 in the fourth quarter of 2002. The decreased revenues and average sales prices were primarily due to lower average selling prices for plate, coil and welded pipe products and reduced shipments of welded pipe and rail products, partially offset by higher average selling prices for rail and rod products. In general, welded pipe products have the highest average selling price of all of the company's steel products.

Overall shipments were 381,400 tons compared to 2002 fourth quarter shipments of 438,700 tons. Reduced shipments are primarily due to lower welded pipe and rail shipments partially offset by higher plate, coil and rod shipments. During the fourth quarter of 2002, the company shipped 142,700 tons of welded pipe and 95,400 tons of rail, compared to 39,600 tons of welded pipe and 83,800 tons of rail in the fourth quarter of 2003.

Operating loss was $38.4 million, including the $31.1 million charge related to the tentative labor dispute settlement agreement. Operating loss before the charge related to the settlement of the labor dispute was $7.4 million. This compares to operating income of $15.1 million in the fourth quarter of 2002 and an operating loss of $12.9 million for the third quarter of 2003. Earnings before interest, taxes, depreciation and amortization (EBITDA) were a negative $25.4 million, including the $31.1 million charge related to the settlement of the labor dispute, compared to a positive $25.3 million in the fourth quarter of 2002 and a negative $2.5 million in the third quarter of 2003.

Reduced operating income and EBITDA compared to the fourth quarter of 2002 reflect reduced revenues, higher slab and manufacturing costs at the Oregon Steel Division, higher energy and scrap costs at the Rocky Mountain Steel Division (RMSM) and the charge related to settlement of the labor dispute.

During the fourth quarter, Oregon Steel implemented price increases for its plate, coil and rod and bar products of $40, $50 and $60 per ton, respectively. The company has also announced and is implementing further price increases for its plate, coil, structural tubing, rod and bar, welded pipe and rail products for the first quarter of 2004.

Management Comments—Jim Declusin, Oregon Steel Mills President and CEO, stated, "Throughout much of 2003 our company had to absorb sharply higher scrap, slab and energy costs with no relief on finished product sales price. As a result, we experienced the worst financial performance in the Company's history. The announced price increases are an attempt to address the sharp and unprecedented increases in scrap and slab costs that began in earnest in the fourth quarter of 2003 and that continue today. In addition, we continue to incur the same high energy costs today that we experienced throughout 2003."

Mr. Declusin continued, "With the improved pricing environment and the continued realignment of our production and manning levels to improve our cost structure and quality, we expect our financial performance to be materially better in 2004 than the performance recorded in 2003. Furthermore, based on the financial results for the months of January and February of 2004, the company anticipates that it will record an after-tax profit in the first quarter of 2004."

Liquidity—At December 31, 2003, the company maintained a $65 million revolving credit facility of which $5.0 million was restricted, an additional $16.1 million was restricted under outstanding letters of credit and $43.9 million was available for use. There were no amounts outstanding on the revolving credit facility as of December 31, 2003. Total debt outstanding, net of cash of $5.8 million, was $296 million compared to $268.4 million at December 31, 2002. During the fourth quarter of 2003, the company incurred capital expenditures of $4.3 million; depreciation and amortization was $9.7 million.

Outlook—For 2004, Oregon Steel Mills expects to ship approximately 1.7 million tons of product. In the Oregon Steel Division, the product mix is expected to consist of 600,000 tons of plate and coil, 230,000 tons of welded pipe and 50,000 tons of structural tubing. At these shipment levels the company expects its combination mill to run at approximately 75% of its rated capacity and its welded pipe mills to run at approximately 35% of their rated capacities. The company's RMSM Division expects to ship approximately 370,000 tons and 470,000 tons of rail and rod products, respectively. At these shipment levels the rail and rod mills would be at 90 percent and 95 percent, respectively, of their rated capacities. Seamless pipe shipments will be dependent on market conditions in the drilling industry.

Oregon Steel Mills, Inc. is organized into two divisions. The Oregon Steel Division produces steel plate, coil, welded pipe and structural tubing from plants located in Portland, Ore., Napa, Calif., and Camrose, Alta., Canada. The Rocky Mountain Steel Mills Division, located in Pueblo, Colo., produces steel rail, rod, bar, and tubular products.

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