Gerdau Ameristeel Announces 2008 Fourth Quarter and Year End Results



    TAMPA, FL, Feb. 19 /CNW/ - Gerdau Ameristeel Corporation (NYSE:   GNA; TSX:
GNA) today reported a net loss of $1.3 billion ($2.97 per share fully diluted)
for the three months ended December 31, 2008, in comparison to net income of
$141.4 million ($0.37 per share fully diluted) for the three months ended
December 31, 2007. The net loss for the three months ended December 31, 2008
includes a non-cash goodwill impairment charge of $1.2 billion.
    Excluding the goodwill impairment charge and the charge to write down the
carrying value of investments as described below, the Non-GAAP Adjusted Net
Loss was $70.8 million ($0.16 per share fully diluted) and the Non-GAAP
Adjusted Net Income was $718.0 million ($1.67 per share fully diluted) for the
three months and year ended December 31, 2008, respectively. This compares to
Non-GAAP Adjusted Net Income of $150.3 million ($0.39 per share fully diluted)
and $546.7 million ($1.68 per share fully diluted) for the three months and
year ended December 31, 2007, respectively.
    Based on a combination of factors, including the current economic
environment and a decline in the Company's market capitalization, there were
sufficient indicators to require the Company to perform a goodwill impairment
analysis as required under U.S. Generally Accepted Accounting Principles. As
of the date of this filing the Company has not completed this analysis due to
the complexities involved in determining the implied fair value of the
goodwill in each reporting unit. However, based on the work performed to date,
the Company has concluded that an impairment charge is probable and can be
reasonably estimated to be between $800 million and $1.6 billion. Accordingly,
the Company has recorded a non-cash goodwill impairment charge of $1.2 billion
representing its best estimate of the impairment charge. The impact to
earnings per share of the impairment charge for the three months and year
ended December 31, 2008 was $2.78 per share. The final amount of the charge
may be adjusted once the analysis has been completed. No associated tax
benefit was recorded for the impairment charge. The Company's availability
under its senior secured credit facilities is not affected by the non-cash
goodwill impairment charge.
    Also included in the results for the three months ended December 31, 2008
is a pre-tax charge of $38.7 million to write-down the value of certain of the
Company's inventory to its current market value. In addition, the Company's
joint venture Gallatin Steel recorded a pre-tax charge of approximately $50
million to write its inventory down to market value. The results for the three
months and year ended December 31, 2008 include the Company's 50% portion of
the writedown.
    As a result of the global liquidity crisis which resulted in the rapid
weakening of global economic stability, demand for our products decreased
significantly in the three months ended December 31, 2008. In response, the
Company reduced production to meet lower demand. Operating rates in the fourth
quarter were approximately 40% of the operating rates experienced in the first
nine months of the year.
    In prior years, the Company purchased investments that are comprised of
variable rate debt obligations, known as auction rate securities. During the
three months and year ended December 31, 2008, the Company recorded a $13.3
million and $60.0 million charge, respectively, to write down the carrying
value of these investments to their fair market value of $33.2 million. The
original investment in these securities was $104.2 million. The impact to
earnings per share of this writedown for the three months and year ended
December 31, 2008 was $0.03 and $0.14 per share, respectively. No associated
tax benefit was recorded for the writedown.
    Including the charges described above, for the year ended December 31,
2008, the net loss was $542.0 million ($1.25 per share fully diluted) compared
to net income of $537.9 million ($1.65 per share fully diluted) for the year
ended December 31, 2007.
    EBITDA was $19.4 million for the three months ended December 31, 2008 and
$1.5 billion for the year ended December 31, 2008, compared to EBITDA of
$313.8 million for the three months ended December 31, 2007 and $1.0 billion
for the year ended December 31, 2007. The $1.5 billion of EBITDA generated in
2008 represents a 50.0% increase over 2007 results and a record amount for the
Company.
    Net sales for the three months ended December 31, 2008 decreased 17.6% to
$1.4 billion from $1.7 billion for the three months ended December 31, 2007.
For the three months ended December 31, 2008, finished steel shipments
decreased to 1.3 million tons, a decrease of 829 thousand tons from the three
months ended December 31, 2007, primarily as a result of the current global
economic conditions. Average mill finished steel selling prices for the three
months ended December 31, 2008 increased 31.1% over the level in this same
period in 2007.
    Net sales for the year ended December 31, 2008 increased 46.6% to $8.5
billion from $5.8 billion for the year ended December 31, 2007. For the year
ended December 31, 2008, finished steel shipments increased to 8.3 million
tons, an increase of 769 thousand tons from the year ended December 31, 2007,
primarily as a result of the full year inclusion of the Chaparral Steel
operations which were acquired in September 2007. Additionally, average mill
finished steel selling prices for the year ended December 31, 2008 increased
36.4% over those in 2007.
    For the three months ended December 31, 2008, metal spread, the
difference between mill selling prices and scrap raw material costs, was $636
per ton, an increase of $180 per ton from the same period in 2007. Metal
spreads increased significantly during the first nine months of 2008 in
response to significant raw material price inflation and to strong global
demand for long steel products, before retracting slightly in the fourth
quarter of 2008. For the year ended December 31, 2008, metal spread was $544
per ton, an increase of $123 per ton from 2007.
    At December 31, 2008, the Company had $688.4 million of cash and
short-term investments. In addition, the Company had approximately $759.6
million available under secured credit facilities which resulted in a total
liquidity position of approximately $1.4 billion at December 31, 2008.
    During the three months ended December 31, 2008, the Company completed
the acquisitions of two scrap processors - Metro Recycling in Ontario, Canada
and Sand Springs Metal Processors in Oklahoma.
    On February 18, 2009, the Board of Directors approved a quarterly cash
dividend of $0.02 per common share, payable March 20, 2009 to shareholders of
record at the close of business on March 5, 2009.

    CEO Comments

    Mario Longhi, President and CEO of Gerdau Ameristeel, commented:
    "We faced two very different periods during 2008. During the first nine
months of the year we delivered EBITDA of $1.5 billion, while in the
challenging slowdown of the world economy during the last quarter of the year,
EBITDA decreased to $19.4 million. During this difficult time, we took
decisive action to position ourselves for the current environment which
included aggressive cost reductions. During the fourth quarter, our shipment
rates exceeded our production rates which resulted in us reducing our
investment in working capital and in the generation of $345 million of cash
during this period, to end the year with good liquidity and a strong balance
sheet.
    The outlook for 2009 still remains very uncertain, however we remain
focused on our core businesses, servicing our customers, enhancing our
productivity and adjusting our cost basis as we strive to deliver returns to
our shareholders during these difficult times."

    Forward Looking Statements

    In this press release, "Gerdau Ameristeel" and "Company" refer to Gerdau
Ameristeel Corporation and its subsidiaries and 50%-owned joint ventures.
Certain statements in this press release, including, without limitation, the
section entitled "CEO Comments" constitute forward-looking statements. Such
statements describe the Company's assumptions, beliefs and expectations with
respect to its operations, future financial results, business strategies and
growth and expansion plans can often be identified by the words "anticipates,"
"believes," "estimates," "expects," "intends," "plans," and other words and
terms of similar meaning. The Company cautions readers that forward-looking
statements involve risks and uncertainties that could cause actual results to
differ materially from those currently projected by the Company. In addition
to those noted in the statements themselves, any number of factors could
affect actual results, including, without limitation:
    Excess global steel industry capacity and the availability of competitive
substitute materials; the cyclical nature of the steel industry and the
industries served by the Company and economic conditions in North America and
worldwide; increases in the cost of steel scrap, energy and other raw
materials; steel imports and trade regulations; a change in China's
steelmaking capacity or slowdown in China's steel consumption; the Company's
participation in the consolidation of the steel industry; the substantial
capital investment and similar expenditures required in the Company's
business; unexpected equipment failures and plant interruptions or outages;
the Company's level of indebtedness; the cost of compliance with environmental
and occupational health and safety laws; the enactment of laws intended to
reduce greenhouse gases and other air emissions; the Company's ability to fund
its pension plans; the ability to renegotiate collective bargaining agreements
and avoid labor disruptions; currency exchange rate fluctuations; actions or
potential actions taken by the Company's principal stockholder, Gerdau S.A.,
the liquidity of the Company's long-term investments, including investments in
auction rate securities, and the Company's reliance on its 50%-owned joint
ventures that it does not control.
    Any forward-looking statements in this press release are based on current
information as of the date of this press release and the Company does not
undertake any obligation to update any forward-looking statements to reflect
new information, future developments or events, except as required by law.

    Notice of Conference Call

    Gerdau Ameristeel invites you to listen to a live broadcast of its fourth
quarter conference call on Thursday, February 19, 2009, at 2:30 pm EST. The
call will be hosted by Mario Longhi, President and CEO, and Barbara Smith, VP
and CFO, and can be accessed via our Web site at www.gerdauameristeel.com. Web
cast attendees are welcome to listen to the conference in real-time or
on-demand at your convenience.

    About Gerdau Ameristeel

    Gerdau Ameristeel is the second largest mini-mill steel producer in North
America with annual manufacturing capacity of approximately 12 million tons of
mill finished steel products. Through its vertically integrated network of 19
mini-mills (including one 50% owned joint venture mini-mill), 23 scrap
recycling facilities and 60 downstream operations, Gerdau Ameristeel serves
customers throughout the United States and Canada. The Company's products are
generally sold to steel service centers, steel producers, or directly to
original equipment manufacturers ("OEMs") for use in a variety of industries,
including non-residential, infrastructure, commercial, industrial and
residential construction, metal building, manufacturing, automotive, mining,
cellular and electrical transmission and equipment manufacturing. Gerdau
Ameristeel's majority shareholder is the Gerdau Group, a 100+ year old steel
company, the largest producer of long steel products in the Americas and the
world leader in specialty long steel for the automotive industry. Gerdau
Ameristeel's common shares are traded on the New York Stock Exchange, and the
Toronto Stock Exchange under the ticker symbol GNA.


    
    GERDAU AMERISTEEL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF EARNINGS
    (US$ in thousands, except earnings per share data)
    (Unaudited)

                             Three Months Ended           Year Ended
                          December 31, December 31, December 31, December 31,
                              2008         2007         2008         2007
                          ------------ ------------ ------------ ------------

    NET SALES             $ 1,436,596  $ 1,734,603  $ 8,528,480  $ 5,806,593

    OPERATING EXPENSES
      Cost of sales
       (exclusive of
       depreciation and
       amortization)        1,340,029    1,375,393    6,799,427    4,623,380
      Selling and
       administrative          65,840       53,554      253,222      198,032
      Depreciation             60,090       51,331      219,667      143,284
      Amortization of
       intangibles             26,283       22,326      102,959       26,151
      Impairment of
       goodwill             1,200,000            -    1,200,000            -
      Other operating
       expense (income),
       net                     11,347        1,897        8,293       (1,587)
                          ------------ ------------ ------------ ------------
                            2,703,589    1,504,501    8,583,568    4,989,260

    (LOSS) INCOME FROM
     OPERATIONS            (1,266,993)     230,102      (55,088)     817,333

    (LOSS) INCOME FROM
     50% OWNED JOINT
     VENTURES                 (39,162)      11,862       45,005       54,079
                          ------------ ------------ ------------ ------------

    (LOSS) INCOME BEFORE
     OTHER EXPENSES
     AND INCOME TAXES      (1,306,155)     241,964      (10,083)     871,412

    OTHER EXPENSES
      Interest expense         40,180       63,985      165,607      107,738
      Interest income          (2,764)      (6,462)     (14,921)     (17,977)
      Foreign exchange
       (gain) loss, net       (13,226)     (25,467)     (21,682)     (33,321)
      Amortization of
       deferred financing
       costs                    2,790        6,106       10,951        9,282
      Writedown of
       investments             13,276        8,879       59,977        8,879
      Minority interest         2,329        8,246       11,952       23,080
                          ------------ ------------ ------------ ------------
                               42,585       55,287      211,884       97,681

    (LOSS) INCOME BEFORE
     INCOME TAXES          (1,348,740)     186,677     (221,967)     773,731

    INCOME TAX (BENEFIT)
     EXPENSE                  (64,700)      45,285      320,060      235,862
                          ------------ ------------ ------------ ------------

    NET (LOSS) INCOME     $(1,284,040) $   141,392  $  (542,027) $   537,869
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    (LOSS) EARNINGS PER
     COMMON SHARE -
     BASIC                $     (2.97) $      0.37  $     (1.25) $      1.66
    (LOSS) EARNINGS PER
     COMMON SHARE -
     DILUTED              $     (2.97) $      0.37  $     (1.25) $      1.65



    GERDAU AMERISTEEL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (US$ in thousands, except earnings per share data)

                                                    December 31, December 31,
                                                           2008         2007
                                                    ------------ ------------
    ASSETS

    Current Assets
      Cash and cash equivalents                     $   482,535  $   547,362
      Short-term investments                            205,817       94,591
      Accounts receivable, net                          677,569      705,929
      Inventories                                     1,267,768    1,203,107
      Deferred tax assets                                31,414       21,779
      Costs and estimated earnings in excess of
       billings on uncompleted contracts                 14,771        3,844
      Income taxes receivable                            28,455       23,986
      Other current assets                               22,936       25,880
                                                    ------------ ------------
        Total Current Assets                          2,731,265    2,626,478

    Investments in 50% Owned Joint Ventures             161,901      161,168
    Long-Term Investments                                33,189            -
    Property, Plant and Equipment, net                1,808,478    1,908,617
    Goodwill                                          2,030,011    3,050,906
    Intangibles                                         515,736      598,528
    Deferred Financing Costs                             35,170       44,544
    Deferred Tax Assets                                       -       12,433
    Other Assets                                         32,305       25,846
                                                    ------------ ------------

    TOTAL ASSETS                                    $ 7,348,055  $ 8,428,520
                                                    ------------ ------------
                                                    ------------ ------------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current Liabilities
      Accounts payable and accrued liabilities      $   182,697  $   376,634
      Accrued salaries, wages and employee benefits     148,244      169,658
      Accrued interest                                   54,480       40,631
      Income taxes payable                                2,983       28,143
      Accrued sales, use and property taxes              13,902       11,970
      Current portion of long-term environmental
       reserve                                            7,599        3,704
       Billings in excess of costs and estimated
        earnings on uncompleted contracts                45,687       17,448
      Other current liabilities                          20,932       25,901
      Current portion of long-term borrowings             1,893       15,589
                                                    ------------ ------------
        Total Current Liabilities                       478,417      689,678

    Long-term Borrowings, Less Current Portion        3,067,994    3,055,431
    Accrued Benefit Obligations                         339,055      252,422
    Long-term Environmental Reserve, Less Current
     Portion                                             11,151       11,830
    Other Liabilities                                   116,092       78,401
    Deferred Tax Liabilities                            356,474      433,822
    Minority Interest                                    36,618       42,321
                                                    ------------ ------------

    TOTAL LIABILITIES                                 4,405,801    4,563,905
                                                    ------------ ------------

    Contingencies, Commitments and Guarantees

    Shareholders' Equity
      Capital stock                                   2,552,323    2,547,123
      Retained earnings                                 568,567    1,253,196
      Accumulated other comprehensive (loss) income    (178,636)      64,296
                                                    ------------ ------------

    TOTAL SHAREHOLDERS' EQUITY                        2,942,254    3,864,615
                                                    ------------ ------------
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY      $ 7,348,055  $ 8,428,520
                                                    ------------ ------------
                                                    ------------ ------------



    GERDAU AMERISTEEL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (US$ in thousands, except earnings per share data)
    (Unaudited)

                              Three Months Ended           Year Ended
                          December 31, December 31, December 31, December 31,
                              2008         2007         2008         2007
                          ------------ ------------ ------------ ------------

    OPERATING ACTIVITIES
    Net (loss) income     $(1,284,040) $   141,392  $  (542,027) $   537,869
    Adjustment to reconcile
     net (loss) income to
     net cash provided
     by operating
     activities:
      Minority interest         2,329        8,246       11,952       23,080
      Depreciation             60,090       51,331      219,667      143,284
      Impairment of
       goodwill             1,200,000            -    1,200,000            -
      Amortization of
       intangibles             26,283       22,326      102,959       26,151
      Amortization of
       deferred financing
       costs                    2,790        6,106       10,951        9,282
      Deferred income taxes    16,134       21,979       (2,939)      20,988
      Loss on disposition
       of property, plant
       and equipment            3,284          388        3,322        3,295
      (Loss) income from
       50% owned joint
       ventures                39,162      (11,862)     (45,005)     (54,079)
      Distributions from
       50% owned joint
       ventures                     -       10,000       41,829       62,078
      Compensation cost
       from share-based
       awards                  (3,513)       6,663        2,464       21,522
      Excess tax benefits
       from share-based
       payment arrangements       (29)         (35)      (1,200)      (1,159)
      Writedown of
       investments             13,276        8,879       59,977        8,879
      Facilities closure
       expenses                 6,702        3,178        7,807        3,178
      Writedown of inventory   38,734            -       48,116            -

    Changes in operating
     assets and liabilities,
     net of acquisitions:
      Accounts receivable     421,239      119,210      101,941      (30,037)
      Inventories             382,558       13,544     (147,544)      (9,710)
      Other assets             13,708      (19,541)      11,020      (26,937)
      Liabilities            (441,659)    (133,553)    (315,298)     (82,387)
                          ------------ ------------ ------------ ------------
    NET CASH PROVIDED BY
     OPERATING ACTIVITIES     497,048      248,251      767,992      655,297

    INVESTING ACTIVITIES
      Purchases of property,
       plant and equipment    (55,068)     (40,136)    (168,117)    (173,786)
      Proceeds from
       disposition of
       property, plant and
       equipment                1,381           84        3,261        1,371
      Acquisitions            (69,903)       8,115     (287,560)  (4,245,647)
      Opening cash from
       acquisitions             2,249          157        2,249      528,980
      Change in restricted
       cash                         -            -            -          498
      Purchases of
       investments           (207,516)           -     (207,516)    (592,239)
      Proceeds from sales
       of investments             725          749        1,425      612,199
                          ------------ ------------ ------------ ------------
    NET CASH USED IN
     INVESTING ACTIVITIES    (328,132)     (31,031)    (656,258)  (3,868,624)

    FINANCING ACTIVITIES
      Proceeds from
       issuance of debt           577       16,689        1,076    4,087,410
      Payments on term
       borrowings                (106)  (1,300,038)      (4,394)  (1,450,264)
      Payments of deferred
       financing costs             51       (1,399)      (1,635)     (40,725)
      Retirement of bonds           -         (115)           -     (341,759)
      Cash dividends           (8,646)      (8,640)    (142,602)    (109,366)
      Distributions to
       subsidiary's minority
       shareholder                  -         (783)      (3,065)      (8,340)
      Proceeds from exercise
       of employee stock
       options                     51           42        1,195        1,258
      Proceeds from issuance
       of common stock, net         -    1,526,785            -    1,526,785
      Excess tax benefits
       from share-based
       payment arrangements        29           35        1,200        1,159
                          ------------ ------------ ------------ ------------
    NET CASH (USED IN)
     PROVIDED BY FINANCING
     ACTIVITIES                (8,044)     232,576     (148,225)   3,666,158

    Effect of exchange rate
     changes on cash and
     cash equivalents         (21,538)     (16,278)     (28,336)     (14,705)

    INCREASE (DECREASE) IN
     CASH AND CASH
     EQUIVALENTS              139,334      433,518      (64,827)     438,126

    CASH AND CASH
     EQUIVALENTS AT
     BEGINNING OF PERIOD      343,201      113,844      547,362      109,236
                          ------------ ------------ ------------ ------------

    CASH AND CASH
     EQUIVALENTS AT END
     OF PERIOD            $   482,535  $   547,362  $   482,535  $   547,362
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    Supplemental
     Information:

      Cash payments for
       income taxes       $     6,763  $    42,973  $   338,659  $   201,455
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

      Cash payments for
       interest           $     2,160  $    52,409  $   154,236  $    95,861
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------


    Non-GAAP Financial Measures

    Non-GAAP Adjusted Net (Loss) Income and (loss) earnings per share, which
excludes the impact of the impairment of goodwill and the writedown of
investments is a non-GAAP financial measure. Management believes that it is
useful as a supplemental measure in assessing the operating performance of the
business. The measure is used by the Company to evaluate business results. The
Company excludes the impairment of goodwill and the writedown of investments
because it believes they are not representative of the ongoing results of
operations of the Company's business. Below is a reconciliation of this
Non-GAAP measure to net (loss) income for the periods indicated, excluding the
impairment of goodwill and writedown of investments.


                             For the Three Months      For the Three Months
                               Ended - Unaudited         Ended - Unaudited
                             December     Diluted      December     Diluted
                             31, 2008       EPS        31, 2007       EPS
                          ------------ ------------ ------------ ------------
    ($000s)
    Reconciliation of net
     (loss) income to
     Non-GAAP Adjusted
     Net (Loss) Income:

      Net (loss) income   $(1,284,040) $     (2.97) $   141,392  $      0.37

      Adjustment for
       impairment of
       goodwill             1,200,000         2.78            -            -

      Adjustment for
       writedown of
       investments             13,276         0.03        8,879         0.02
                          ------------ ------------ ------------ ------------
      Non-GAAP Adjusted
       Net (Loss) Income
       and earnings
       (loss) per share   $   (70,764) $     (0.16) $   150,271  $      0.39
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------



                              For the Year Ended        For the Year Ended
                                 - Unaudited               - Unaudited
                             December     Diluted      December     Diluted
                             31, 2008       EPS        31, 2007       EPS
                          ------------ ------------ ------------ ------------
    ($000s)
    Reconciliation of net
     (loss) income to
     Non-GAAP Adjusted
     Net Income:

      Net (loss) income   $  (542,027) $     (1.25) $   537,869  $      1.65

      Adjustment for
       impairment of
       goodwill             1,200,000         2.78            -            -

      Adjustment for
       writedown of
       investments             59,977         0.14        8,879         0.03
                          ------------ ------------ ------------ ------------
      Non-GAAP Adjusted
       Net Income and
       earnings per
       share              $   717,950  $      1.67  $   546,748  $      1.68
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    

    EBITDA (EBITDA is calculated by adding earnings before interest and other
expense on debt, taxes, depreciation and amortization, writedown of
investments, minority interest, cash distributions from 50% owned joint
ventures, impairment of goodwill, and foreign exchange gain/loss, net; and
deducting interest income and earnings from 50% owned joint ventures) is a
non-GAAP measure that management believes is a useful supplemental measure of
cash available prior to debt service, capital expenditures and income tax.
Investors are cautioned that EBITDA should not be construed as an alternative
to net income determined in accordance with GAAP as an indicator of the
Company's performance or to cash flows from operations as a measure of
liquidity and cash flows. EBITDA does not have a standardized meaning
prescribed by GAAP. The Company's method of calculating EBITDA may differ from
the methods used by other companies and, accordingly, it may not be comparable
to similarly titled measures used by other companies. Reconciliation of EBITDA
to net income is shown below:

    
                                                       For the Three Months
                                                         Ended - Unaudited
                                                    -------------------------
                                                    December 31, December 31,
                                                           2008         2007
                                                    ------------ ------------
    ($000s)
      Net (loss) income                             $(1,284,040) $   141,392
      Income tax (benefit) expense                      (64,700)      45,285
      Interest and other expense on debt                 40,180       63,986
      Interest income                                    (2,764)      (6,463)
      Depreciation                                       60,090       51,330
      Amortization of intangibles                        26,283       22,327
      Impairment of goodwill                          1,200,000            -
      Amortization of deferred financing costs            2,790        6,106
      Loss (income) from 50% owned joint ventures        39,162      (11,862)
      Cash distribution from 50% owned joint ventures         -       10,000
      Foreign exchange (gain) loss, net                 (13,226)     (25,467)
      Writedown of investments                           13,276        8,879
      Minority interest                                   2,329        8,246
                                                    ------------ ------------

    EBITDA                                          $    19,380  $   313,759
                                                    ------------ ------------
                                                    ------------ ------------


                                                        For the Year Ended
                                                           - Unaudited
                                                    -------------------------
                                                    December 31, December 31,
                                                           2008         2007
                                                    ------------ ------------
    ($000s)
      Net (loss) income                             $  (542,027) $   537,869
      Income tax expense                                320,060      235,862
      Interest and other expense on debt                165,607      107,738
      Interest income                                   (14,921)     (17,977)
      Depreciation                                      219,667      143,284
      Amortization of intangibles                       102,959       26,151
      Impairment of goodwill                          1,200,000            -
      Amortization of deferred financing costs           10,951        9,282
      Income from 50% owned joint ventures              (45,005)     (54,079)
      Cash distribution from 50% owned joint ventures    41,829       62,078
      Foreign exchange (gain) loss, net                 (21,682)     (33,321)
      Writedown of investments                           59,977        8,879
      Minority interest                                  11,952       23,080
                                                    ------------ ------------

    EBITDA                                          $ 1,509,367  $ 1,048,846
                                                    ------------ ------------
                                                    ------------ ------------


    SUPPLEMENTAL OPERATING AND FINANCIAL INFORMATION - UNAUDITED

       THE INFORMATION IN THIS TABLE EXCLUDES 50% OWNED JOINT VENTURES

                                      For the Three Months Ended
                              December 31, 2008         December 31, 2007
                          ------------------------- -------------------------

                              Tons                      Tons
                          ------------              ------------
    Production
      Melt Shops            1,032,715                 2,231,690
      Rolling Mills           971,335                 2,129,814


                              Tons           %          Tons           %
                          ------------ ------------ ------------ ------------
    Finished Steel
     Shipments
      Rebar                   213,371          16%      419,271          19%
      Merchant/Special
       Sections/Structurals   734,560          55%    1,242,898          57%
      Rod                      82,742           6%      172,068           8%
      Fabricated Steel        312,558          23%      338,170          16%
                          ------------ ------------ ------------ ------------
        Total Shipments     1,343,231         100%    2,172,407         100%


                             $/Ton                     $/Ton
                          ------------              ------------
    Selling Prices
      Mill external
       shipments          $       901               $       687
      Fabricated steel
       shipments                1,280                       929

    Scrap Charged                 265                       231

    Metal Spread (Selling
     price less scrap)
      Mill external
       shipments                  636                       456
      Fabricated steel
       shipments                1,015                       698

    Mill manufacturing cost       489                       294



                                           For the Year Ended
                              December 31, 2008         December 31, 2007
                          ------------------------- -------------------------

                              Tons                      Tons
                          ------------              ------------
    Production
      Melt Shops            8,359,903                 7,525,318
      Rolling Mills         7,948,527                 7,377,855


                              Tons           %          Tons           %
                          ------------ ------------ ------------ ------------
    Finished Steel
     Shipments
      Rebar                 1,564,045          19%    1,680,617          22%
      Merchant/Special
       Sections/
       Structurals          4,710,754          57%    3,730,125          49%
      Rod                     620,927           7%      733,322          10%
      Fabricated Steel      1,424,128          17%    1,407,164          19%
                          ------------ ------------ ------------ ------------
        Total Shipments     8,319,854         100%    7,551,228         100%


                             $/Ton                     $/Ton
                          ------------              ------------
    Selling Prices
      Mill external
       shipments          $       884               $       648
      Fabricated steel
       shipments                1,150                       889

    Scrap Charged                 340                       227

    Metal Spread (Selling
     price less scrap)
      Mill external
       shipments                  544                       421
      Fabricated steel
       shipments                  810                       662

    Mill manufacturing
     cost                         348                       272


    50% Owned Joint Venture Results

    The following table summarizes the results of the Company's portion of its
50% owned joint ventures, primarily Gallatin Steel, a flat rolled mill joint
venture.

                              Three Months Ended           Year Ended
                                - Unaudited               - Unaudited
                          December 31, December 31, December 31, December 31,
                              2008         2007         2008         2007
                          ------------ ------------ ------------ ------------

    Tons Shipped              105,962      199,359      709,685      802,068

    Operating (Loss)
     Income               $   (38,673) $    11,879  $    46,303  $    55,383
    Net (Loss) Income         (39,162)      11,862       45,005       54,079
    EBITDA                    (34,667)      14,968       58,731       66,938


                                $/Ton        $/Ton        $/Ton        $/Ton
                                -----        -----        -----        -----

    Average Selling
     Price                $       686  $       540  $       815  $       538
    Scrap Charged                 444          275          454          266

    Metal Spread                  242          265          361          272

    Operating (Loss) Income      (365)          60           65           69
    EBITDA                       (327)          75           83           83
    

    %SEDAR: 00000593E




For further information:

For further information: Mario Longhi, President and Chief Executive
Officer, Gerdau Ameristeel, (813) 207-2346, mlonghi@gerdauameristeel.com;
Barbara R. Smith, Vice President and Chief Financial Officer, Gerdau
Ameristeel, (813) 319-4324, basmith@gerdauameristeel.com

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GERDAU AMERISTEEL CORPORATION

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