Nov. 7, 2006 — WCI Steel, Inc. announced net income of $11.8 million on revenues of $237.2 million for the quarter ending September 30, 2006.

EBITDA was $27.3 million ($85 per ton) significantly exceeding the company's prior guidance. Shipments were 321,000 tons. Operating income was $22.6 million ($70 per ton).

Revenues of $237.2 million reflect a 39% increase compared to the same period last year for the Old WCI. Revenues from product sales were $232.2 million, or $723 per ton. The company reported diluted earnings per share of $1.15 for the quarter and $1.57 per share for the five months since May 1.

Comments—Patrick G. Tatom, President and CEO, said the quarterly results demonstrated that WCI Steel has successfully reorganized and is well-positioned as a strong custom flat-rolled producer. "We are very pleased with our performance to date and appreciate the contributions of our employees and the support of our customers," Tatom said.

"Our shipments for the quarter were in line with the prior guidance; however, our EBITDA of $85 per ton substantially exceeded the prior forecasted range of $50 to $60 per ton."

Tatom added, "The quarter benefited by good demand in our key markets, a higher-value mix, generally robust prices and solid operations. Our results also reflected the benefits of operational efficiency and cost reduction made possible by the new work systems under our new collective bargaining agreement."

Cynthia B. Bezik, Chief Financial Officer, noted, "Our liquidity remains strong. At the end of September, we had $5.8 million of cash on hand and $19.8 million borrowed under the $150 million revolving credit facility. Our borrowings under the revolving credit facility increased by only $4.3 million since June 30, reflecting the seasonal build-up of raw materials. We anticipate that our borrowing under the credit facility will increase to about $45 million at year-end, primarily due to our planned capital spending program and the continuation of normal seasonal build-up of iron ore pellets for the winter."

Capital Expenditures—WCI Steel is investing $66 million in two major capital projects, a walking beam slab reheat furnace at the hot strip mill, which will be operational early in 2008, and a baghouse system to meet new federal air quality standards to be operational in April 2007. During the quarter, WCI Steel spent $7.8 million in capital, primarily related to these two projects.

On November 27, WCI Steel will decommission one of the three pusher-style furnaces in the hot strip mill to allow construction to commence on the new walking beam furnace early in 2007. Capital spending in the final quarter of the year is currently forecasted at about $15 million.

Outlook—"Distributor inventory positions that reached 3.8 months-on-hand in September, high import levels in recent months and downward adjustments to automotive build schedules will impact our markets throughout the fourth quarter," Tatom said. As a result, WCI Steel currently plans to ship approximately 260,000 tons in the final quarter of 2006, a decrease of 50,000 tons (about 16%) compared with earlier expectations.

Calendar year 2006 shipments are anticipated to total 1,269,000 tons. By comparison, Old WCI shipped 1,194,000 tons in calendar year 2005 and 1,108,000 tons in calendar year 2004.

In response to the slowing market, Tatom noted that WCI Steel is cutting front-end production to match the order book, and is currently considering potential outages in finishing operations in November and December. The company will also accelerate planned maintenance programs, emphasize ongoing training efforts related to the new work systems, reduce overtime within operations, and implement additional spending controls.

As a result of lower shipments, reduced pricing and additional planned maintenance, WCI currently expects that EBITDA per ton shipped for the fourth quarter will be between $40 and $50 per ton.

WCI's preliminary estimate of its steel shipments for 2007 remains at 1,250,000 tons, slightly less than the projected 2006 calendar year level due to production outages related to the capital program. Once the walking beam furnace is operational in 2008, shipments are expected to approach 1.4 million tons.

"With a solid financial position, a focus on niche markets and improved efficiencies from our new work systems, WCI Steel is well-positioned to grow and build shareholder value," Tatom said.

WCI Steel is an integrated producer of value-added, custom steel products serving niche markets, emphasizing customer and technical service. WCI Steel currently produces 185 grades of flat-rolled custom and commodity steel products at its Warren, Ohio facility. WCI Steel focuses on a wide range of custom flat-rolled steel products, including high carbon, alloy, ultra high strength, and heavy-gauge galvanized steel and on developing closer, more responsive relationships with customers. Major customers are steel converters, processors, service centers, construction product companies, and to a lesser extent, automobile manufacturers.