Aug. 11, 2006 — WCI Steel, Inc. announced net income of $4.3 million on revenues of $159.9 million for the two-month period ending June 30, 2006.

Two-Month Results—Net income of $4.3 million equates to $19 per ton and diluted earnings per share of $.43. Revenues totaled almost $160 million, which is 25% higher than in the same period last year for Old WCI. Revenues from product sales were $156.6 million, or $674 per ton.

WCI also reported shipments of 232,000 tons in May and June, EBITDA of $11.9 million ($51 per ton), and operating income of $9.0 million ($39 per ton).

Over this period, WCI also implemented new industry-pattern work systems, reducing job classes from 34 to six and significantly reducing headcount.

Management Comments—Patrick G. Tatom, President and CEO, said: "We are off to a great start as the new WCI Steel. We are pleased with our performance to date and appreciate the efforts of our employees. Good demand in our key markets, strong shipments and generally robust prices contributed to our solid performance for the first two months of the new company."

"The operational efficiency and cost reduction made possible by the new work systems is the centerpiece of the company's new collective bargaining agreement with the United Steel Workers. Achievement of these efficiencies requires substantial training of the workforce, and the company is working its way through that process," Tatom said.

At the end of July, 209 hourly employees had elected to leave the company through the Transitional Assistance Program (TAP). This represents more than a 17% decrease in the number of hourly employees. Another 35 employees are projected to leave before the end of the year through the TAP process; however, they are currently being retained for training and operational support.

Cynthia B. Bezik, Chief Financial Officer, added: "Our liquidity is strong. At the end of June, we had $7.8 million of cash on hand and only $15.5 million borrowed under the $150 million revolving credit facility. We anticipate that our borrowing under the credit facility will increase over the balance of the year due to our planned capital spending program and the normal seasonal build-up of raw materials for the winter."

Capital Expenditures—WCI Steel had previously announced plans to invest $66 million in two major capital projects, including $36.7 million for a new walking beam slab reheat furnace at the hot strip mill. The new walking beam furnace, which is expected to be completed in January 2008, will replace three pusher-style furnaces. One of the three pusher-style furnaces will be decommissioned in November to facilitate construction of the new walking beam furnace. The new furnace is a key step in WCI Steel's strategic plan to grow its custom product business, increase coil size and enhance the operating cost structure by improving energy efficiency, increasing material yields and lowering maintenance costs.

WCI Steel will also invest $29.3 million for a new baghouse system at the basic oxygen furnace to reduce emissions and meet new federal air quality standards. The new baghouse is set to be operational in April, 2007.

During the two months ended June 30, WCI Steel spent $4.1 million in capital, primarily related to these two projects. Capital spending in the second half of the year is currently forecasted at about $30 million. "We expect to invest more than $125 million in the 2006 to 2009 time frame in capital to improve the operating efficiencies and capabilities of our facilities," Tatom said.

Outlook—"We are focused on continuous improvement within our operations while targeting profitable growth areas that capitalize on our core competencies in customer service, technical service and providing custom products serving niche markets," Tatom noted. He added that the appointment of Thomas J. Gentile on May 1 to the newly created position of Vice President of Business Development signaled the company's focus on building its strategic position for the future.

WCI Steel currently plans to ship approximately 320,000 tons in the quarter ending Sept. 30, 2006 and about 310,000 tons in the final quarter of the year. Combined with the 232,000 tons shipped in the May-to-June period, and the 456,000 tons shipped by Old WCI in the January-through-April time period, calendar year shipments are anticipated to total 1,318,000 tons.

Projected shipments of 630,000 tons in the second half of the calendar year are below the combined 688,000 tons shipped in the first half of the calendar year by WCI Steel and Old WCI. The company says this reflects seasonal factors, inventory levels and scheduled production outages.

Second half results are forecasted to benefit from continued favorable market conditions and pricing, along with lower employment levels. WCI Steel expects that market positives will be partially offset by operational inefficiencies due to workforce retraining and disruptions associated with the capital program. The company says that energy costs also remain a concern. As a result, the company currently expects that EBITDA per ton shipped for the second half will range between $50 to $60 per ton as compared to the $51 per ton achieved in the May-to-June period.

WCI's preliminary estimate of steel shipments for 2007 is 1,250,000 tons, slightly below the projected 2006 calendar year level due to production outages related to the capital program.

WCI Steel is a niche-oriented integrated producer of value-added, custom steel products, with an emphasis on customer and technical service. WCI Steel focuses on smaller orders of 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. WCI Steel currently produces 185 grades of flat-rolled custom and commodity steel products at its Warren, Ohio, facility. Major customers are steel converters, processors, service centers, construction product companies, and to a lesser extent, automobile manufacturers.