Gerdau Ameristeel Announces 2009 Third Quarter Results

TAMPA, FL, Nov. 5 /CNW/ - Gerdau Ameristeel Corporation (NYSE: GNA; TSX: GNA) today reported a net loss of $25.4 million ($0.06 per share fully diluted) for the three months ended September 30, 2009, in comparison to net income of $316.9 million ($0.73 per share fully diluted) for the three months ended September 30, 2008. Included in these results is a $78.5 million pre-tax charge related to actions announced earlier this year to stop production at certain of the Company's steel mills and a pre-tax charge of $11.9 million related to the early extinguishment of certain debt obligations. Excluding these charges, the Non-GAAP Adjusted Net Income was $33.5 million ($0.08 per share fully diluted).

For the nine months ended September 30, 2009, the Company incurred a net loss of $115.6 million ($0.27 per share fully diluted) compared to net income of $742.0 million ($1.71 per share fully diluted) for the nine months ended September 30, 2008. The Non-GAAP Adjusted Net Loss for the nine months ended September 30, 2009, excluding the charges described above, was $30.0 million ($0.07 per share fully diluted).

During the third quarter of 2009, net sales were $1.1 billion, an increase of $110.2 million in comparison to the three months ended June 30, 2009, but a decrease of 56% from the $2.5 billion for the three months ended September 30, 2008. Weighted average mill selling price remained flat in comparison to the three months ended June 30, 2009 but represented a decrease of 41% or $437 per ton in comparison to the third quarter of 2008. Finished steel shipments were 1.5 million tons for the three months ended September 30, 2009, an increase of 12% in comparison to the second quarter of 2009 but a decrease of 29% from the three months ended September 30, 2008.

Net sales for the nine months ended September 30, 2009 were $3.2 billion compared to net sales of $7.1 billion for the same period in 2008. Weighted average mill selling prices for the nine months ended September 30, 2009 decreased 26% or $233 per ton compared to the same period in 2008 while finished steel shipments decreased 43% to 4.0 million tons for the nine months ended September 30, 2009 compared to 7.0 million tons for the same period in 2008.

For the three months ended September 30, 2009, metal spread, the difference between mill selling prices and scrap raw material costs, was $405 per ton, a decrease of $257 per ton from the same period in 2008. In comparison to the three months ended June 30, 2009, metal spreads decreased by $35 per ton due primarily to an increase in scrap raw material costs. Scrap raw material cost used in production for the three months ended September 30, 2009 was $213 per ton, a decrease of $180 per ton compared to the three months ended September 30, 2008. For the nine months ended September 30, 2009, metal spread was $452 per ton and decreased $78 per ton in comparison to the same period in the prior year.

EBITDA was $163.0 million for the three months ended September 30, 2009, compared to EBITDA of $581.4 million for the three months ended September 30, 2008. Despite the reduction in metal spread outlined above, EBITDA improved 152% from the $64.8 million for the three months ended June 30, 2009. For the nine months ended September 30, 2009, EBITDA was $276.4 million compared to EBITDA of $1.5 billion for the nine months ended September 30, 2008.

During the three and nine months ended September 30, 2009, the Company incurred a foreign exchange loss of $18.8 million and $30.5 million, respectively, as the Canadian dollar strengthened approximately 7% and 12% in comparison to the US dollar. This charge arose from the revaluation of US dollar investments held by the Company's Canadian entities.

During the second quarter of 2009, as a result of the significant downturn in the economy and declining demand for its products, the Company announced its plans to stop production at certain facilities. The Company stopped production at its Perth Amboy, New Jersey and Sand Springs, Oklahoma facilities during the third quarter of 2009. The Company recorded a $78.5 million and $115.0 million pre-tax charge for the three and nine months ended September 30, 2009, respectively, related to these actions.

On August 31, 2009, the Company completed the previously announced redemption of its $405 million 10 3/8% Senior Notes due in 2011 (the "Notes") at a redemption price in the amount of $412.3 million representing 101.792% of the outstanding principal amount (the "Redemption Price"). The Redemption Price was paid entirely with cash and the Notes were paid in full and are no longer outstanding. For the three and nine months ended September 30, 2009, the Company recorded a charge of $11.9 million related to this redemption.

At September 30, 2009, the Company had $821.1 million of cash and short-term investments, an increase of $132.7 million from the levels at December 31, 2008. Excluding the above noted redemption of Notes, the Company has generated $545.0 million in cash and short-term investments in 2009. In addition, the Company had approximately $570.3 million of availability under secured credit facilities which resulted in a total liquidity position of approximately $1.4 billion at September 30, 2009.

CEO Comments

Mario Longhi, President and CEO of Gerdau Ameristeel, commented:

"We have continued to make progress in a number of areas during the past quarter which has resulted in the third successive quarterly growth in EBITDA. This is a testament of our ability to quickly respond to market conditions and has resulted in the generation of $276.4 million of EBITDA for the nine months ended September 30, 2009. Destocking of inventory by our customers seems to have been completed and resulted in a 12% quarter over quarter increase in our shipment levels. To keep pace, the capacity utilization levels of our mills improved as production increased approximately 24% in comparison to the second quarter and manufacturing costs continued their downward trend as our employees continue to seek more efficient ways of producing steel.

We have substantially completed the activities related to the previously announced actions at our Sand Springs and Perth Amboy locations. As a result of leveraging our extensive network of steel producing facilities, we have been able to meet all of our customers' needs during this process. Our ability to continue providing superior service to our customers has been critical in the growth of our order rate. This focus on developing long-term service relationships is also being applied to our export customers as we expect this market will continue to provide opportunities for us in the future.

We expect normal seasonal market softness during the fourth quarter of 2009 and production will be adjusted to meet demand. However, we are confident that the actions we have taken are sustainable and will provide for attractive returns for our shareholders as conditions improve."

IFRS Conversion

In 2008, the Canadian Accounting Standards Board confirmed that Canadian publicly accountable enterprises will be required to adopt International Financial Reporting Standards ("IFRS") for interim and annual financial statements related to fiscal years beginning on or after January 1, 2011. The Canadian securities regulatory authorities have granted approval for the Company to early adopt IFRS for its financial statements for periods beginning on or after January 1, 2009. The Company had previously announced that it would report under IFRS for the first time during 2009, however, the Company is currently contemplating deferring the first time adoption of IFRS until 2010. The Company has substantially completed the process to transition from US GAAP to IFRS and has met the objectives of its comprehensive IFRS conversion plan.

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 third quarter conference call on Thursday, November 5, 2009, at 1:30 pm EST. The call will be hosted by Mario Longhi, President and CEO, and Barbara Smith, VP and CFO, and can be accessed via the Company's 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 mini-mills, scrap recycling facilities and downstream operations, Gerdau Ameristeel serves customers throughout the United States and Canada. The Company's products are generally sold to steel service centers, steel fabricators, 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 leading company in the production of long steel in the Americas and one of the major specialty long steel suppliers in the world. 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
    CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
    (US$ in thousands, except earnings per share data)
    (Unaudited)

                                Three Months Ended       Nine Months Ended
                                   September 30,           September 30,
                              ----------------------- -----------------------
                                 2009        2008        2009        2008
                              ----------- ----------- ----------- -----------

    NET SALES                 $1,146,134  $2,514,412  $3,219,797  $7,091,884

    OPERATING EXPENSES
      Cost of sales
       (exclusive of
       depreciation and
       amortization)             932,822   1,878,579   2,770,156   5,459,398
      Selling and
       administrative             53,705      57,977     172,549     187,382
      Depreciation                52,557      55,073     157,650     159,577
      Amortization of
       intangibles                16,476      26,256      49,574      76,676
      Facility closure costs      78,488           -     115,033           -
      Other operating expense
       (income), net              (1,954)     (2,164)      2,471      (3,054)
                              ----------- ----------- ----------- -----------
                               1,132,094   2,015,721   3,267,433   5,879,979

    INCOME (LOSS) FROM
     OPERATIONS                   14,040     498,691     (47,636)  1,211,905

    INCOME (LOSS) FROM 50%
     OWNED JOINT VENTURES          3,652      24,060     (11,848)     84,167
                              ----------- ----------- ----------- -----------

    INCOME (LOSS) BEFORE OTHER
     EXPENSES AND INCOME TAXES    17,692     522,751     (59,484)  1,296,072

    OTHER EXPENSES
      Interest expense            31,010      38,024     105,741     125,427
      Interest income             (1,147)     (2,856)     (4,310)    (12,157)
      Amortization of deferred
       financing costs             3,384       2,779       9,191       8,161
      Loss on extinquishment
       of debt                    11,877           -      11,877           -
      Foreign exchange loss
       (gain), net                18,788      (4,127)     30,543      (8,456)
      Writedown of investments         -       7,030           -      46,701
                              ----------- ----------- ----------- -----------
                                  63,912      40,850     153,042     159,676

    (LOSS) INCOME BEFORE
     INCOME TAXES                (46,220)    481,901    (212,526)  1,136,396

    INCOME TAX (BENEFIT)
     EXPENSE                     (20,968)    163,318     (95,847)    384,760
                              ----------- ----------- ----------- -----------

    NET (LOSS) INCOME            (25,252)    318,583    (116,679)    751,636

    Less: Net income (loss)
     attributable to
     non-controlling interest        114       1,685      (1,061)      9,623

                              ----------- ----------- ----------- -----------
    NET (LOSS) INCOME
     ATTRIBUTABLE TO GERDAU
     AMERISTEEL &
     SUBSIDIARIES             $  (25,366) $  316,898  $ (115,618) $  742,013
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------

    EARNINGS PER SHARE
     ATTRIBUTABLE TO GERDAU
     AMERISTEEL & SUBSIDIARIES
      (Loss) earnings per
       common share - basic   $    (0.06) $     0.73  $    (0.27) $     1.72
      (Loss) earnings per
       common share - diluted $    (0.06) $     0.73  $    (0.27) $     1.71



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

                                                       September    December
                                                        30, 2009    31, 2008
                                                      ----------- -----------
    ASSETS

    Current Assets
      Cash and cash equivalents                       $  684,557  $  482,535
      Restricted cash                                      2,570           -
      Short-term investments                             136,527     205,817
      Accounts receivable, net                           551,824     677,569
      Inventories                                        893,391   1,267,768
      Deferred tax assets                                 30,231      31,414
      Costs and estimated earnings in excess of
       billings on uncompleted contracts                  10,144      14,771
      Income taxes receivable                             50,827      28,455
      Other current assets                                25,363      22,936
                                                      ----------- -----------
        Total Current Assets                           2,385,434   2,731,265

    Investments in 50% Owned Joint Ventures              151,123     161,901
    Long-term Investments                                 32,414      33,189
    Property, Plant and Equipment, net                 1,660,405   1,808,478
    Goodwill                                           1,961,289   1,952,011
    Intangibles                                          466,162     515,736
    Deferred Financing Costs                              35,430      35,170
    Deferred Tax Assets                                   18,221           -
    Other Assets                                          27,735      32,305
                                                      ----------- -----------

    TOTAL ASSETS                                      $6,738,213  $7,270,055
                                                      ----------- -----------
                                                      ----------- -----------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current Liabilities
      Accounts payable and accrued liabilities        $  271,959  $  182,697
      Accrued salaries, wages and employee benefits      103,764     148,244
      Accrued interest                                     3,694      54,480
      Income taxes payable                                   570       2,983
      Accrued sales, use and property taxes               16,724      13,902
      Current portion of long-term environmental
       reserve                                             6,463       7,599
      Billings in excess of costs and estimated
       earnings on uncompleted contracts                  26,446      45,687
      Other current liabilities                           22,117      20,932
      Current portion of long-term borrowings              3,191       1,893
                                                      ----------- -----------
        Total Current Liabilities                        454,928     478,417

    Long-term Borrowings, Less Current Portion         2,657,619   3,067,994
    Accrued Benefit Obligations                          318,176     339,055
    Long-term Environmental Reserve,
     Less Current Portion                                 11,957      11,151
    Other Liabilities                                     87,818     116,092
    Deferred Tax Liabilities                             298,132     323,854
                                                      ----------- -----------

    TOTAL LIABILITIES                                  3,828,630   4,336,563
                                                      ----------- -----------

    Contingencies, Commitments and Guarantees

    Shareholders' Equity
      Capital stock                                    2,553,648   2,552,323
      Retained earnings                                  398,923     523,187
      Accumulated other comprehensive (loss) income      (74,382)   (178,636)
                                                      ----------- -----------

        Total Gerdau Ameristeel & Subsidiaries
         Shareholders' equity                          2,878,189   2,896,874

      Non-controlling interest                            31,394      36,618
                                                      ----------- -----------

    TOTAL SHAREHOLDERS' EQUITY                         2,909,583   2,933,492
                                                      ----------- -----------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        $6,738,213  $7,270,055
                                                      ----------- -----------
                                                      ----------- -----------



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

                                Three Months Ended       Nine Months Ended
                                   September 30,           September 30,
                              ----------------------- -----------------------
                                 2009        2008        2009        2008
                              ----------- ----------- ----------- -----------
    OPERATING ACTIVITIES
    Net (loss) income         $  (25,252) $  318,583  $ (116,679) $  751,636
    Adjustment to reconcile
     net (loss) income to net
     cash provided by
     operating activities:
      Depreciation                52,557      55,073     157,650     159,577
      Amortization of
       intangibles                16,476      26,256      49,574      76,676
      Amortization of deferred
       financing costs             3,384       2,779       9,191       8,161
      Deferred income taxes        1,315      (3,105)     (7,138)    (19,073)
      Loss on disposition of
       property, plant and
       equipment                     308         307       1,775          38
      (Income) loss from 50%
       owned joint ventures       (3,652)    (24,060)     11,848     (84,167)
      Distributions from 50%
       owned joint ventures        1,423       1,425       1,828      41,829
      Compensation cost
       (benefit) from share-
       based awards                  323      (9,822)      4,292       5,977
      Excess tax benefits from
       share-based payment
       arrangements                  (17)        (38)       (129)     (1,171)
      Realized loss on
       writedown of investments        -       7,030           -      46,701
      Facility closure costs      78,488         115     115,033       1,105
      Loss on extinguishment
       of debt                    11,877           -      11,877           -
      Writedown of inventory           -           -      33,044       2,937

    Changes in operating
     assets and liabilities,
     net of acquisitions:
      Accounts receivable        (13,378)     38,393     134,065    (319,298)
      Inventories                (32,549)   (248,762)    350,627    (523,657)
      Other assets                 5,817         397       7,685      (2,688)
      Liabilities                    693     (56,615)   (149,531)    126,361
                              ----------- ----------- ----------- -----------
    NET CASH PROVIDED BY
     OPERATING ACTIVITIES         97,813     107,956     615,012     270,944

    INVESTING ACTIVITIES
      Purchases of property,
       plant and equipment       (11,894)    (47,339)    (70,994)   (113,049)
      Proceeds from
       disposition of property,
       plant and equipment           114         266       1,527       1,880
      Acquisitions                     -     (14,157)          -    (217,657)
      Change in restricted cash   (2,570)          -      (2,570)          -
      Purchases of investments  (129,332)          -    (617,189)          -
      Proceeds from sales
       of investments            258,971           -     695,150         700
                              ----------- ----------- ----------- -----------
    NET CASH PROVIDED BY (USED
     IN) INVESTING ACTIVITIES    115,289     (61,230)      5,924    (328,126)

    FINANCING ACTIVITIES
      Proceeds from issuance
       of debt                         -           -           -         499
      Payments on term
       borrowings               (413,825)        (29)   (417,472)     (4,288)
      Payments of deferred
       financing costs                 -      (1,578)    (13,231)     (1,686)
      Cash dividends                   -      (8,646)     (8,646)   (133,956)
      Distributions to
       subsidiary's
       noncontrolling interest      (570)          -      (4,163)     (3,065)
      Proceeds from exercise
       of employee stock
       options                        31          20         212       1,144
      Excess tax benefits from
       share-based payment
       arrangements                   17          38         129       1,171
                              ----------- ----------- ----------- -----------
    NET CASH USED IN
     FINANCING ACTIVITIES       (414,347)    (10,195)   (443,171)   (140,181)

    Effect of exchange rate
     changes on cash and
     cash equivalents             12,212      (5,070)     24,257      (6,798)
                              ----------- ----------- ----------- -----------

    (DECREASE) INCREASE IN
     CASH AND CASH EQUIVALENTS  (189,033)     31,461     202,022    (204,161)

    CASH AND CASH EQUIVALENTS
     AT BEGINNING OF PERIOD      873,590     311,740     482,535     547,362
                              ----------- ----------- ----------- -----------

    CASH AND CASH EQUIVALENTS
     AT END OF PERIOD         $  684,557  $  343,201  $  684,557  $  343,201
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------

    SUPPLEMENTAL INFORMATION

      Cash (refunds) payments
       for income taxes       $     (668) $  136,851  $  (19,977) $  331,896
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------

      Cash payments for
       interest               $   75,346  $   73,963  $  156,923  $  152,076
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
    

Non-GAAP Financial Measures

Non-GAAP Adjusted Net Income (Loss) and earnings (loss) per share, which excludes the impact of facility closure costs, loss on extinguishment of debt 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 facility closure costs, loss on extinguishment of debt 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:

    
                               For the Three Months     For the Three Months
                                 Ended - Unaudited       Ended - Unaudited
                             September 30,   Diluted  September 30,  Diluted
                                  2009         EPS        2008         EPS
    ($000s)                  ------------ ----------- ----------- -----------
    Reconciliation of net
     (loss) income to Non-GAAP
     Adjusted Net (Loss)
     Income:

      Net (loss) income
       attributable to Gerdau
       Ameristeel &
       Subsidiaries           $  (25,366) $    (0.06) $  316,898  $     0.73

      Adjustment for facility
       closure costs              78,488        0.18           -           -

      Adjustment for income
       tax on facility
       closure costs             (27,019)      (0.06)          -           -

      Adjustment for loss on
       extinguishment of debt     11,877        0.03           -           -

      Adjustment for income
       tax on loss on
       extinguishment of debt     (4,528)      (0.01)          -           -

      Adjustment for writedown
       of investments                  -           -       7,030        0.02
                             ------------ ----------- ----------- -----------
      Non-GAAP Adjusted Net
       (Loss) Income and
        earnings (loss)
        per share             $   33,452  $     0.08  $  323,928  $     0.75
                             ------------ ----------- ----------- -----------
                             ------------ ----------- ----------- -----------



                                For the Nine Months     For the Nine Months
                                 Ended - Unaudited       Ended - Unaudited
                             September 30,   Diluted  September 30,  Diluted
                                  2009         EPS        2008         EPS
    ($000s)                  ------------ ----------- ----------- -----------
    Reconciliation of net
     (loss) income to Non-GAAP
     Adjusted Net Income:

      Net (loss) income
       attributable to Gerdau
       Ameristeel &
       Subsidiaries           $ (115,618) $    (0.27) $  742,013  $     1.71

      Adjustment for facility
       closure costs             115,033        0.26           -           -

      Adjustment for income
       tax on facility
       closure costs             (36,723)      (0.08)          -           -

      Adjustment for loss on
       extinguishment of debt     11,877        0.03           -           -

      Adjustment for income
       tax on loss on
       extinguishment of debt     (4,528)      (0.01)          -           -

      Adjustment for writedown
       of investments                  -           -      46,701        0.11
                             ------------ ----------- ----------- -----------
      Non-GAAP Adjusted Net
       (Loss) Income and
       (loss) earnings per
       share                  $  (29,959) $    (0.07) $  788,714  $     1.82
                             ------------ ----------- ----------- -----------
                             ------------ ----------- ----------- -----------
    

EBITDA (EBITDA is calculated by adding (loss) earnings before interest and other expense on debt, taxes, depreciation and amortization, writedown of investments, cash distributions from 50% owned joint ventures, facility closure costs, loss on extinguishment of debt and foreign exchange gain/loss, net; and deducting interest income and (loss) income 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 (loss) income is shown below:

    
                                                       For the Three Months
                                                         Ended - Unaudited
                                                    -------------------------
                                                       September   September
                                                        30, 2009    30, 2008
                                                     ------------ -----------
    ($000s)
      Net (loss) income                               $  (25,252) $  318,583
      Income tax (benefit) expense                       (20,968)    163,318
      Interest and other expense on debt                  31,010      38,024
      Interest income                                     (1,147)     (2,856)
      Depreciation                                        52,557      55,073
      Amortization of intangibles                         16,476      26,256
      Facility closure costs                              78,488           -
      Amortization of deferred financing costs             3,384       2,779
      Loss on extinguishment of debt                      11,877           -
      (Income) from 50% owned joint ventures              (3,652)    (24,060)
      Cash distribution from 50% owned joint ventures      1,423       1,425
      Foreign exchange (gain) loss, net                   18,788      (4,127)
      Writedown of investments                                 -       7,030
                                                     ------------ -----------

    EBITDA                                            $  162,984  $  581,445
                                                     ------------ -----------
                                                     ------------ -----------


                                                        For the Nine Months
                                                         Ended - Unaudited
                                                    -------------------------
                                                       September   September
                                                        30, 2009    30, 2008
                                                     ------------ -----------
    ($000s)
      Net (loss) income                               $ (116,679) $  751,636
      Income tax (benefit) expense                       (95,847)    384,760
      Interest and other expense on debt                 105,741     125,427
      Interest income                                     (4,310)    (12,157)
      Depreciation                                       157,650     159,577
      Amortization of intangibles                         49,574      76,676
      Facility closure costs                             115,033           -
      Amortization of deferred financing costs             9,191       8,161
      Loss on extinguishment of debt                      11,877           -
      Loss (income) from 50% owned joint ventures         11,848     (84,167)
      Cash distribution from 50% owned joint ventures      1,828      41,829
      Foreign exchange (gain) loss, net                   30,543      (8,456)
      Writedown of investments                                 -      46,701
                                                     ------------ -----------

    EBITDA                                            $  276,449  $1,489,987
                                                     ------------ -----------
                                                     ------------ -----------



    SUPPLEMENTAL OPERATING AND FINANCIAL INFORMATION - UNAUDITED

       THE INFORMATION IN THIS TABLE EXCLUDES 50% OWNED JOINT VENTURES

                                        For the Three Months Ended
                                 September 30, 2009     September 30, 2008
                             ------------------------ -----------------------

                                  Tons                    Tons
                              -----------             -----------
    Production
      Melt Shops               1,646,180               2,395,926
      Rolling Mills            1,528,939               2,268,206

                                  Tons           %        Tons           %
                              ----------- ----------- ----------- -----------
    Finished Steel Shipments
      Rebar                      269,739         18%     355,733         17%
      Merchant/Special
       Sections/Structurals      799,028         53%   1,201,069         57%
      Rod                        141,850         10%     145,458          7%
      Fabricated Steel           288,095         19%     395,674         19%
                              ----------- ----------- ----------- -----------
        Total Shipments        1,498,712        100%   2,097,934        100%


                                 $/Ton                   $/Ton
                              -----------             -----------
    Selling Prices
      Mill external
       shipments              $      618              $    1,055
      Fabricated steel
       shipments                     888                   1,254

    Scrap Charged                    213                     393

    Metal Spread (Selling
     price less scrap)
      Mill external shipments        405                     662
      Fabricated steel shipments     675                     861

    Mill manufacturing cost          275                     350



    SUPPLEMENTAL OPERATING AND FINANCIAL INFORMATION - UNAUDITED

       THE INFORMATION IN THIS TABLE EXCLUDES 50% OWNED JOINT VENTURES

                                          For the Nine Months Ended
                                 September 30, 2009     September 30, 2008
                             ------------------------ -----------------------

                                  Tons                    Tons
                              -----------             -----------
    Production
      Melt Shops               4,138,141               7,327,188
      Rolling Mills            3,950,608               6,977,192

                                  Tons           %        Tons           %
                              ----------- ----------- ----------- -----------
    Finished Steel Shipments
      Rebar                      728,408         18%   1,350,674         19%
      Merchant/Special
       Sections/Structurals    2,053,463         51%   3,976,194         57%
      Rod                        382,518         10%     538,185          8%
      Fabricated Steel           860,562         21%   1,111,570         16%
                              ----------- ----------- ----------- -----------
        Total Shipments        4,024,951        100%   6,976,623        100%


                                 $/Ton                   $/Ton
                              -----------             -----------
    Selling Prices
      Mill external
       shipments              $      648              $      881
      Fabricated steel
       shipments                     971                   1,114

    Scrap Charged                    196                     351

    Metal Spread (Selling
     price less scrap)
      Mill external shipments        452                     530
      Fabricated steel
       shipments                     775                     763

    Mill manufacturing cost          311                     329
    

SOURCE GERDAU AMERISTEEL CORPORATION

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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