April 28, 2006 — Oregon Steel Mills, Inc. reported net income of $33.4 million on sales of $355.3 million for the first quarter of 2006.

The $33.4 million net income ($.93 per diluted share on 35.9 million shares) compares to a net income of $28.4 million ($.79 per diluted share on 35.7 million shares) for the first quarter of 2005. The $355.3 million sales, which was a new quarterly company record, compares to 2005 first quarter sales of $296 million. Average sales price per ton was $889, also a quarterly record, compared to $856 in the first quarter of 2005.

Overall shipments were 399,500 tons compared to 2005 first quarter shipments of 345,700 tons. Oregon Steel says the increase is primarily due to increased shipments of plate, welded and seamless pipe and structural tubing products partially offset by lower shipments of rail and rod and bar products. The company's seamless pipe mill, which was idled in November of 2003, was restarted in December of 2005 and shipped 14,000 tons of seamless casing during the first quarter of 2006. The increases in sales and average sales price were primarily due to higher shipments of plate and welded and seamless pipe products (the company's highest value products) and higher average selling prices for rail products, partially offset by lower average selling prices for plate, ERW pipe and structural tubing products.

Operating income was $58.7 million (an average of $147 per ton), which compares to operating income for the first quarter of 2005 of $54.6 million (an average of $158 per ton). Earnings before interest, taxes, depreciation and amortization (EBITDA) was $70.3 million, which compares to EBITDA for the first quarter of 2005 of $62.7 million. The company says that increased operating income and EBITDA compared to the year-ago first quarter reflects the higher shipments and lower average semi-finished steel and scrap costs, partially offset by lower average selling prices for plate, ERW pipe and structural tubing products. Operating margin as a percentage of sales declined from 18.4% in the first quarter of 2005 to 16.5% in the first quarter of 2006. This change was due in part to a decline in margins for plate and ERW pipe products, primarily as a result of lower average selling prices.

Liquidity—At March 31, 2006, the company had $201.7 million of cash, cash equivalents and short-term investments. Total debt outstanding, net of cash, cash equivalents and short-term investments was $108.3 million at March 31, 2006 compared to $132.1 million at December 31, 2005. During the first quarter of 2006, the company incurred capital expenditures of $20 million and depreciation and amortization of $10.9 million. For all of 2006, the company anticipates that capital expenditures and depreciation and amortization will be approximately $89 million and $46 million, respectively.

At March 31, 2006, inventories were $260.8 million. This compares to $301.5 million at December 31, 2005. The decrease in inventory is primarily due to reductions of semi-finished inventory at the company's Oregon Steel Division and scrap inventory at the company's Rocky Mountain Steel (RMSM) Division both in terms of quantities and average cost per ton.

2006 Outlook—For 2006, the company expects to ship approximately 1.8 million tons of products and generate approximately $1.57 billion in sales. In the Oregon Steel Division the product mix is expected to consist of approximately 545,000 tons of plate and coil, 340,000 tons of welded pipe and 82,000 tons of structural tubing. The RMSM Division expects to ship approximately 400,000 tons of rail, 330,000 tons of rod and bar products and 85,000 tons of seamless pipe.

The company says its operating income in the second quarter of 2006 will be negatively impacted by a $3.6 million charge ($.06 per diluted share) related to cancellation and buyout costs of a contract to supply oxygen to the now-closed Portland meltshop. Annual costs associated with this take-or-pay contract, which extended into the year 2011, were approximately $1.8 million per year.

Jim Declusin, the company's President and CEO stated, "Despite the charge related to the oxygen contract buyout, due to continued strength in most of our product lines, we expect operating income in the second quarter of 2006 to be higher than the first quarter of 2006. Looking into the second half of the year, we see our product mix shifting to higher-priced, higher-margin products, more heavily weighted to the energy markets. As a result of this change in product mix and continued expected demand for our non-energy related products, we anticipate that we will ship approximately one million tons in the second half of 2006 and that our operating income will be up significantly from that realized in the first half of 2006."

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