Gerdau Ameristeel Announces Second Quarter 2007 Results



    TAMPA, FL, Aug. 8 /CNW/ - Gerdau Ameristeel Corporation (NYSE:   GNA; TSX:
GNA.TO) today reported net income of $139.1 million, or $0.45 per share fully
diluted, on net sales of $1.3 billion for the three months ended June 30,
2007, compared to net income of $127.6 million, or $0.42 per share fully
diluted, on net sales of $1.2 billion for the three months ended June 30,
2006. For the six months ended June 30, 2007, Gerdau Ameristeel reported net
income of $272.7 million, or $0.89 per share fully diluted, on net sales of
$2.7 billion, compared to net income of $216.5 million, or $0.71 per share
fully diluted, on net sales of $2.3 billion for the six months ended June 30,
2006. EBITDA was $244.3 million for the three months ended June 30, 2007 and
$489.1 million for the six months ended June 30, 2007, compared to EBITDA of
$222.1 million for the three months ended June 30, 2006 and $395.5 million for
the six months ended June 30, 2006.
    Included in selling and administrative expense for the three and six
months ended June 30, 2007 is a non-cash pretax expense of $9.2 million and
$18.0 million, respectively, to mark to market outstanding stock appreciation
rights and expenses associated with other executive compensation agreements
compared to a non-cash pretax expense of $5.7 million and $32.1 million,
respectively for the three and six months ended June 30, 2006.
    On June 17, 2007, Pacific Coast Steel ("PCS"), a majority owned joint
venture of the Company completed the acquisition of the assets of Valley
Placers, Inc. ("VPI"), a reinforcing steel contractor in Las Vegas, Nevada. In
addition to contracting activities, VPI operates a steel fabrication facility
and retail construction supply business in Las Vegas. VPI currently employs
more than 110 field ironworkers and specializes in smaller commercial, retail
and public works projects.
    On July 10, 2007, the Company announced that it signed a definitive
merger agreement to acquire Chaparral Steel Company ("Chaparral"), for
approximately $4.2 billion in cash. Chaparral is the second largest producer
of structural steel products in North America and also a major producer of
steel bar products. It operates two mini-mills, one located in Midlothian,
Texas, and the other located in Dinwiddie County, Virginia. Chaparral has
approximately 1,400 employees and an annual installed capacity of 2.6 million
tons. The transaction, which is subject to customary closing conditions
including the approval of Chaparral's shareholders and regulatory approvals,
is expected to close before the end of the year. The Company has secured
financing commitments of $4.6 billion to complete the transaction.
    The Company reached an agreement with the United Steelworkers Union at
the Joliet, Illinois mill. The contract is effective July 22, 2007 and expires
July 22, 2011.
    On August 7, 2007, the Board of Directors approved a quarterly dividend
of $0.02 (two US$ cents) per common share, payable September 7, 2007 to
shareholders of record at the close of business on August 22, 2007.
    Effective January 1, 2007, the Company adopted Financial Accounting
Standards Board ("FASB") Staff Position No. AUG-AIR-1, "Accounting for Planned
Major Maintenance Activities". This guidance specifically precludes the use of
the previously acceptable "accrue in advance" method of accounting for these
activities. In compliance with this new guidance, the Company has
retroactively adjusted the Condensed Consolidated Statements of Earnings for
the three months and six months ended June 30, 2006 resulting in an increase
in net income of $1.7 million and $3.2 million, respectively. Additionally,
the Company also adjusted the Condensed Consolidated Balance Sheet and
Condensed Consolidated Statement of Changes in Shareholders' Equity for the
year ended December 31, 2006 resulting in an increase in shareholders' equity
of $1.3 million.
    The following table summarizes Gerdau Ameristeel's results for the three
months ended June 30, 2007 compared to the results for the three months ended
June 30, 2006. All financial results are presented in accordance with accepted
accounting principles generally in the United States of America (GAAP), except
EBITDA which is reconciled below.

    
                                                      For the Three Months
                                                       Ended - Unaudited
                                                    ------------------------

                                                     June 30,     June 30,
                                                        2007         2006

                                                                 As Adjusted
                                                    -----------  -----------
    Income Statement ($000's except EPS)
    ----------------
      Net sales                                     $ 1,331,818  $ 1,205,790
      Income from operations                            199,819      165,149
      Net income                                        139,128      127,633
      EBITDA                                            244,323      222,106
      EPS - Basic                                   $      0.46  $      0.42
      EPS - Diluted                                 $      0.45  $      0.42
      Average shares outstanding (000's)                305,349      304,609


                                                     June 30,    December 31,
                                                        2007         2006

                                                      Unaudited  As Adjusted
                                                    -----------  -----------
    Balance Sheet ($000's except share price)
    -------------
      Working capital                               $ 1,276,444  $ 1,072,948
      Total debt                                        455,092      431,655
      Shareholders' equity                            2,067,832    1,853,458
      Market capitalization                           4,471,453    2,723,959
      Share price (note 1)                          $     14.63  $      8.92

    Note (1): Share price is the closing price on the New York Stock Exchange
              on June 30, 2007, and December 31, 2006, respectively.
    

    Excluding 50% owned joint ventures, the Company shipped 1.7 million tons
of finished steel in the three months ended June 30, 2007, a decrease of 4.4%
over the three months ended June 30, 2006. The Company believes its customers
had high levels of inventory at March 31, 2007 due to these customers buying
steel in advance of the price increases that were announced during the three
months ended March 31, 2007, which prompted a reduction in shipments for the
three months ended June 30, 2007 as customers reduced their inventory to more
normal levels. Average mill prices for the three months ended June 30, 2007
increased $82 per ton, or 14.6%, compared to the three months ended June 30,
2006. Average fabricated steel prices for the three months ended June 30, 2007
increased $130 per ton, or 17.3%, compared to the three months ended June 30,
2006. This comparative increase in average prices was the effect of the
Company's acquisition of PCS in November 2006. PCS derives a significant
portion of its revenue from the installation of reinforcing steel, which
generates a higher average net selling price on a per ton basis. Scrap raw
material cost used in production for the three months ended June 30, 2007
increased $29 per ton, or 14.2%, compared to the three months ended June 30,
2006. Metal spread, the difference between mill selling prices and scrap raw
material cost, increased $53 per ton, or 14.7% for the three months ended
June 30, 2007, compared to the three months ended June 30, 2006. Mill
manufacturing costs were $255 per ton for the three months ended June 30, 2007
compared to $238 per ton for the three months ended June 30, 2006; primarily
as a result of the reduced production at some of the mills to ensure
production remained in line with demand.
    The following table summarizes Gerdau Ameristeel's results for the six
months ended June 30, 2007 compared to the results for the six months ended
June 30, 2006. All financial results are presented in accordance with accepted
accounting principles generally in the United States of America (GAAP), except
EBITDA which is reconciled below.

    
                                                       For the Six Months
                                                       Ended - Unaudited
                                                    ------------------------

                                                     June 30,     June 30,
                                                        2007         2006

                                                                 As Adjusted
                                                    -----------  -----------
    Income Statement ($000's except EPS)
    ----------------
      Net sales                                     $ 2,674,814  $ 2,265,020
      Income from operations                            395,484      283,122
      Net income                                        272,663      216,478
      EBITDA                                            489,119      395,539
      EPS - Basic                                   $      0.89  $      0.71
      EPS - Diluted                                 $      0.89  $      0.71
      Average shares outstanding (000's)                305,278      304,465
    

    Excluding 50% owned joint ventures, the Company shipped 3.6 million tons
of finished steel in the six months ended June 30, 2007, an increase of 5.5%
over the six months ended June 30, 2006. This increase resulted from the
incremental tons shipped from the Sheffield Steel Corporation and Pacific
Coast Steel (PCS) operations which were acquired in June and November 2006,
respectively. Average mill prices for the six months ended June 30, 2007
increased $56 per ton, or 10.1%, compared to the six months ended June 30,
2006. Average fabricated steel prices for the six months ended June 30, 2007
increased $126 per ton, or 16.9%, compared to the six months ended June 30,
2006. This comparative increase in average prices was a result of the
Company's acquisition of PCS in November 2006. Scrap raw material cost used in
production for the six months ended June 30, 2007 increased $30 per ton, or
15.5%, compared to the six months ended June 30, 2006. Metal spread, the
difference between mill selling prices and scrap raw material cost, for the
six months ended June 30, 2007 increased $26 per ton, or 7.2%, compared to the
six months ended June 30, 2006. Mill manufacturing costs were $253 per ton for
the six months ended June 30, 2007 compared to $242 per ton for the six months
ended June 30, 2006.

    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 with Dofasco Inc.

    
                              Three Months Ended -        Six Months Ended -
                                    Unaudited                 Unaudited

                           June 30,     June 30,     June 30,     June 30,
                              2007         2006         2007         2006
                          -----------  -----------  -----------  -----------

    Tons Shipped              200,817      208,288      400,802      410,132

    ($000s)
      Income from
       Operations         $    14,981      $33,973  $    33,101  $    63,349
      Net Income               14,334       34,048       32,029       63,377
      EBITDA                   17,458       36,375       38,279       68,153


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

    Average Selling Price      553.84       589.06       542.16       577.08
    Scrap Charged              273.27       244.83       261.33       236.25

    Metal Spread               280.57       344.23       280.83       340.83
                          -----------  -----------  -----------  -----------

    Income from Operations      74.60       163.11        82.59       154.46
    EBITDA                      86.93       174.64        95.51       166.17
    

    For the three months ended June 30, 2007, Gerdau Ameristeel's income from
operations was $199.8 million and our share of the income from operations of
the 50% owned joint ventures was $15.0 million. Based on 1.9 million tons of
finished steel shipped, the composite income from operations was $113 per ton
for the three months ended June 30, 2007. For the three months ended June 30,
2006, Gerdau Ameristeel's income from operations was $165.1 million and our
share of the income from operations of the 50% owned joint ventures was
$34.0 million. Based on 2.0 million tons of finished steel shipped, the
composite income from operations was $100 per ton for the three months ended
June 30, 2006.
    For the six months ended June 30, 2007, Gerdau Ameristeel's income from
operations was $395.5 million and our share of the income from operations of
the 50% owned joint ventures was $33.1 million. Based on 4.0 million tons of
finished steel shipped, the composite income from operations was $108 per ton
for the six months ended June 30, 2007. For the six months ended June 30,
2006, Gerdau Ameristeel's income from operations was $283.1 million and our
share of the income from operations of the 50% owned joint ventures was
$63.3 million. Based on 3.8 million tons of finished steel shipped, the
composite income from operations was $91 per ton for the six months ended June
30, 2006.

    CEO Comments

    Mario Longhi, President and CEO of Gerdau Ameristeel, commented:
    "We are very pleased with the results for the first six months of 2007
and we are optimistic that the markets can remain solid for the balance of the
year. Metal spreads in the second quarter were at all time record highs and we
believe we are well positioned to continue to generate good cash flows from
our operations.
    We are excited about the strategic impact of our recently announced
acquisition of Chaparral Steel. The acquisition further expands our geographic
footprint and solidifies our position as a leader in the North American long
products sector, offering a full range of rebar, merchant, and structural
products. We welcome the employees of Chaparral Steel to the Gerdau Ameristeel
team and look forward to developing and effectively executing our integration
plan, to share best practices, and realize all synergy opportunities.
    We also applaud the US International Trade Commission's recent ruling to
continue anti-dumping duty orders on rebar imports from seven countries
including China. A significant portion of the US rebar market is serviced by
imports - the decision from the ITC ensures that the market will not be
injured by illegally dumped rebar from these countries."

    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:
    The highly competitive nature of the global steel industry and the
availability of competitive substitute materials; the cyclical nature of the
steel industry and the industries served by the Company; economic conditions
in North America and worldwide steel imports and trade regulations; the
substantial capital investment and maintenance expenditures required in the
Company's business; unexpected equipment failures, transportation disruptions
or production curtailments or shutdowns; increases in the cost of steel scrap,
energy and other raw materials; the ability to renegotiate collective
bargaining agreements and avoid labor disruptions; the cost of compliance with
environmental laws and regulations; the Company's costs relative to
competitors who have sought bankruptcy protection; the Company's ability to
fund its pension plans; the deviation of actual results from estimates made by
the Company in the preparation of its financial statements; the loss of key
employees; the Company's reliance on joint ventures that it does not control;
the effects of the consolidation of operations or of the steel industry, and
the ability to integrate newly-acquired businesses and achieve synergies.
    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 second
quarter conference call on Wednesday, August 8, 2007, at 3 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 minimill steel producer in North
America with annual manufacturing capacity of over 9.0 million tons of mill
finished steel products. Through its vertically integrated network of 17
minimills (including one 50%-owned joint venture minimill), 17 scrap recycling
facilities and 52 downstream operations (including seven joint venture
fabrication facilities), Gerdau Ameristeel serves customers throughout North
America. The Company's products are generally sold to steel service centers,
to steel fabricators, or directly to original equipment manufacturers ("OEMs")
for use in a variety of industries, including construction, automotive,
mining, cellular and electrical transmission, metal building manufacturing and
equipment manufacturing. Gerdau Ameristeel's common shares are traded on the
Toronto Stock Exchange under the symbol GNA.TO and on the New York Stock
Exchange under the symbol GNA. For additional financial and investor
information, visit www.gerdauameristeel.com.

    EBITDA (earnings before interest, taxes, depreciation and amortization)
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
                                                    ------------------------

                                                     June 30,     June 30,
                                                        2007         2006
                                                                 As Adjusted
                                                    -----------  -----------
    ($000s)
      Net income                                    $   139,128  $   127,633
      Income tax expense                                 67,051       60,253
      Interest and other expense on debt                  5,961        9,771
      Depreciation and amortization                      29,993       27,747
      Earnings from joint ventures                      (14,334)     (34,048)
      Cash distribution from 50% owned joint ventures    11,250       30,750
      Minority interest                                   5,274            -
                                                    -----------  -----------

      EBITDA                                        $   244,323  $   222,106
                                                    -----------  -----------
                                                    -----------  -----------


                                                       For the Six Months
                                                       Ended - Unaudited
                                                    ------------------------

                                                     June 30,     June 30,
                                                        2007         2006
                                                                 As Adjusted
                                                    -----------  -----------
    ($000s)
      Net income                                    $   272,663  $   216,478
      Income tax expense                                133,805      106,273
      Interest and other expense on debt                 13,912       20,433
      Depreciation and amortization                      59,228       54,579
      Earnings from joint ventures                      (32,029)     (63,377)
      Cash distribution from 50% owned joint
       ventures                                          31,654       61,153
      Minority interest                                   9,886            -
                                                    -----------  -----------

      EBITDA                                        $   489,119  $   395,539
                                                    -----------  -----------
                                                    -----------  -----------



    SUPPLEMENTAL OPERATING AND FINANCIAL INFORMATION - UNAUDITED

       THE INFORMATION IN THIS TABLE EXCLUDES 50% OWNED JOINT VENTURES

                                       For the Three Months Ended
                               June 30, 2007             June 30, 2006
                          ------------------------- -------------------------

                              Tons                      Tons
                          ------------              ------------
    Production
      Melt Shops            1,799,841                 1,759,786
      Rolling Mills         1,749,515                 1,653,001

                              Tons           %          Tons           %
                          ------------ ------------ ------------ ------------
    Finished Steel Shipments
      Rebar                   396,770          23%      407,783          23%
      Merchant/Special
       Sections               754,135          45%      842,722          48%
      Rod                     181,832          11%      216,569          12%
      Fabricated Steel        362,275          21%      306,498          17%
                          ------------ ------------ ------------ ------------
        Total Shipments     1,695,012         100%    1,773,572         100%


                                                       $/Ton
                              $/Ton                  As Adjusted
                          ------------              ------------
    Selling Prices
      Mill external
       shipments               648.28                    565.93
      Fabricated steel
       shipments               877.56                    747.85

    Scrap Charged              231.81                    202.90

    Metal Spread (Selling
     price less scrap)
      Mill external
       shipments               416.47                    363.03
      Fabricated steel
       shipments               645.75                    544.95

    Mill manufacturing cost    254.70                    238.15


    Income from Operations     117.89                     93.12

    EBITDA                     144.14                    125.23



    SUPPLEMENTAL OPERATING AND FINANCIAL INFORMATION - UNAUDITED

    THE INFORMATION IN THIS TABLE EXCLUDES 50% OWNED JOINT VENTURES

                                       For the Six Months Ended
                               June 30, 2007             June 30, 2006
                          ------------------------- -------------------------

                              Tons                      Tons
                          ------------              ------------
    Production
      Melt Shops            3,526,961                 3,402,287
      Rolling Mills         3,482,856                 3,200,838

                              Tons           %          Tons           %
                          ------------ ------------ ------------ ------------
    Finished Steel Shipments
      Rebar                   873,453          24%      771,400          23%
      Merchant/Special
       Sections             1,630,467          45%    1,673,279          49%
      Rod                     378,595          11%      378,179          11%
      Fabricated Steel        702,912          20%      576,994          17%
                          ------------ ------------ ------------ ------------
        Total Shipments     3,585,427         100%    3,399,852         100%


                                                       $/Ton
                              $/Ton                  As Adjusted
                          ------------              ------------
    Selling Prices
      Mill external
       shipments               617.25                    560.86
      Fabricated steel
       shipments               869.57                    743.81

    Scrap Charged              224.17                    194.05

    Metal Spread (Selling
     price less scrap)
      Mill external
       shipments               393.08                    366.81
      Fabricated steel
       shipments               645.40                    549.76

    Mill manufacturing
     cost                      252.72                    241.62


    Income from Operations     110.30                     83.27

    EBITDA                     136.42                    116.34



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

                             Three Months Ended         Six Months Ended
                            June 30,     June 30,     June 30,     June 30,
                              2007         2006         2007         2006
                                        As Adjusted              As Adjusted
                          ------------ ------------ ------------ ------------

    NET SALES             $ 1,331,818  $ 1,205,790  $ 2,674,814  $ 2,265,020

    OPERATING EXPENSES
      Cost of sales
       (exclusive of
       depreciation and
       amortization)        1,051,191      970,785    2,120,063    1,832,947
      Selling and
       administrative          52,148       41,413      102,811       96,859
      Depreciation and
       amortization            29,233       26,940       57,712       53,075
      Other operating
       (income) expense,
       net                       (573)       1,503       (1,256)        (983)
                          ------------ ------------ ------------ ------------
                            1,131,999    1,040,641    2,279,330    1,981,898

    INCOME FROM OPERATIONS    199,819      165,149      395,484      283,122

    INCOME FROM 50% OWNED
     JOINT VENTURES            14,334       34,048       32,029       63,377
                          ------------ ------------ ------------ ------------

    INCOME BEFORE OTHER
     EXPENSES AND INCOME
     TAXES                    214,153      199,197      427,513      346,499

    OTHER EXPENSES
      Interest, net             5,961        9,771       13,912       20,433
      Foreign exchange
       (gain) loss, net        (4,021)         733       (4,269)       1,811
      Amortization of
       deferred financing
       costs                      760          807        1,516        1,504
      Minority interest         5,274            -        9,886            -
                          ------------ ------------ ------------ ------------
                                7,974       11,311       21,045       23,748

    INCOME BEFORE INCOME
     TAXES                    206,179      187,886      406,468      322,751

    INCOME TAX EXPENSE         67,051       60,253      133,805      106,273
                          ------------ ------------ ------------ ------------

    NET INCOME            $   139,128  $   127,633  $   272,663  $   216,478
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    EARNINGS PER COMMON
     SHARE - BASIC        $      0.46  $      0.42  $      0.89  $      0.71
    EARNINGS PER COMMON
     SHARE - DILUTED      $      0.45  $      0.42  $      0.89  $      0.71



    GERDAU AMERISTEEL CORPORATION AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (US$ in thousands)
    (Unaudited)

                                                      June 30,   December 31,
                                                       2007         2006
                                                                 As Adjusted
                                                    ------------ ------------
    ASSETS

    Current Assets
      Cash and cash equivalents                     $   129,605  $   109,236
      Restricted cash                                       504          498
      Short-term investments                            127,458      123,430
      Accounts receivable, net                          638,485      460,828
      Inventories                                       849,296      820,485
      Deferred tax assets                                38,319       38,538
      Costs and estimated earnings in excess of
       billings on uncompleted contracts                  2,908        2,977
      Income taxes receivable                                 -       23,623
      Other current assets                               20,932       17,428
                                                    ------------ ------------
        Total Current Assets                          1,807,507    1,597,043

    Investments in 50% Owned Joint Ventures             168,760      167,466
    Property, Plant and Equipment, net                1,182,864    1,119,458
    Goodwill                                            255,202      252,599
    Deferred Financing Costs                             11,214       12,029
    Deferred Tax Assets                                   5,106       12,948
    Other Assets                                         17,502       14,845
                                                    ------------ ------------

    TOTAL ASSETS                                    $ 3,448,155  $ 3,176,388
                                                    ------------ ------------
                                                    ------------ ------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
      Accounts payable and accrued liabilities      $   337,162  $   317,425
      Accrued salaries, wages and employee benefits     109,184      110,237
      Accrued interest                                   20,802       20,909
      Income taxes payable                               11,951       19,478
      Accrued sales, use and property taxes              11,261        8,024
      Current portion of long-term environmental
       reserve                                            2,621       12,238
      Billings in excess of costs and estimated
       earnings on uncompleted contracts                 17,230       15,443
      Other current liabilities                          20,225       19,629
      Current portion of long-term borrowings               123          214
                                                    ------------ ------------
        Total Current Liabilities                       530,559      523,597

    Long-term Borrowings, Less Current Portion          454,969      431,441
    Accrued Benefit Obligations                         245,657      238,503
    Long-term Environmental Reserve, Less Current
     Portion                                             11,078        9,993
    Other Liabilities                                    56,266       38,082
    Deferred Tax Liabilities                             49,492       53,733
    Minority Interest                                    32,302       27,581
                                                    ------------ ------------

    TOTAL LIABILITIES                                 1,380,323    1,322,930
                                                    ------------ ------------

    Contingencies, commitments and guarantees

    Shareholders' Equity
      Capital stock                                   1,017,839    1,016,287
      Retained earnings                               1,007,044      828,998
      Accumulated other comprehensive income             42,949        8,173
                                                    ------------ ------------

    TOTAL SHAREHOLDERS' EQUITY                        2,067,832    1,853,458
                                                    ------------ ------------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY      $ 3,448,155  $ 3,176,388
                                                    ------------ ------------
                                                    ------------ ------------



    GERDAU AMERISTEEL CORPORATION AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (US$  in thousands)
    (Unaudited)

                             Three Months Ended         Six Months Ended
                            June 30,     June 30,     June 30,     June 30,
                              2007         2006         2007         2006
                                        As Adjusted              As Adjusted
                          ------------ ------------ ------------ ------------
    OPERATING ACTIVITIES
    Net income            $   139,128  $   127,633  $   272,663  $   216,478
    Adjustment to
     reconcile net income
     to net cash provided by
     operating activities:
      Minority interest         5,274            -        9,886            -
      Depreciation and
       amortization            29,233       26,940       57,712       53,075
      Amortization of
       deferred financing
       costs                      760          807        1,516        1,504
      Deferred income taxes     3,583        6,219       10,256        9,321
      (Gain) loss on
       disposition of
       property, plant and
       equipment                  (13)      (4,354)         291       (8,914)
      Income from 50% owned
       joint ventures         (14,334)     (34,048)     (32,029)     (63,377)
      Distributions from
       50% owned joint
       ventures                11,250       30,750       31,654       61,153
      Compensation cost from
       share-based awards       8,223        5,748       17,005       32,124
      Excess tax benefits
       from share-based
       payment arrangements      (463)        (435)        (989)      (1,141)

    Changes in operating
     assets and liabilities,
     net of acquisitions:
      Accounts receivable       6,427      (48,628)    (164,268)    (130,916)
      Inventories             (31,484)      17,137       (9,322)      50,749
      Other assets             (1,363)         676       22,843         (995)
      Liabilities             (88,045)      38,389      (17,427)      55,605
                          ------------ ------------ ------------ ------------
    NET CASH PROVIDED BY
     OPERATING ACTIVITIES      68,176      166,834      199,791      274,666

    INVESTING ACTIVITIES
      Additions to property,
       plant and equipment    (38,672)     (47,074)     (92,786)     (87,953)
      Proceeds received from
       the disposition of
       property, plant and
       equipment                  409        8,905        1,165       14,110
      Acquisitions             (4,988)    (107,145)      (4,988)    (114,837)
      Opening cash from
       acquisitions                 -       22,371            -       22,371
      Purchases of short-
       term investments      (243,969)    (564,145)    (461,658)    (890,545)
      Sales of short-term
       investments            257,835      501,480      457,630      650,030
                          ------------ ------------ ------------ ------------
    NET CASH USED IN
     INVESTING ACTIVITIES     (29,385)    (185,608)    (100,637)    (406,824)

    FINANCING ACTIVITIES
      Proceeds from issuance
       of new debt             19,508            -       19,508            -
      Payments on term loans      (92)      (3,252)        (154)      (3,570)
      Additions to deferred
       financing costs           (521)           -         (521)        (404)
      Cash dividends           (6,106)      (6,095)     (94,617)     (79,187)
      Distributions to
       subsidiary's minority
       shareholder             (3,944)           -       (5,165)           -
      Proceeds from issuance
       of employee stock
       purchases                  322          360          617          837
      Excess tax benefits from
       share-based payment
       arrangements               463          435          989        1,141
      Change in restricted
       cash                         -          (14)          (6)         (14)
                          ------------ ------------ ------------ ------------
    NET CASH PROVIDED BY (USED
     IN) FINANCING ACTIVITIES   9,630       (8,566)     (79,349)     (81,197)

    Effect of exchange rate
     changes on cash and cash
     equivalents                  533          312          564          305
                          ------------ ------------ ------------ ------------
    INCREASE (DECREASE) IN
     CASH AND CASH
     EQUIVALENTS               48,954      (27,028)      20,369     (213,050)

    CASH AND CASH EQUIVALENTS
     AT BEGINNING OF PERIOD    80,651      228,237      109,236      414,259
                          ------------ ------------ ------------ ------------
    CASH AND CASH
     EQUIVALENTS AT END OF
     PERIOD               $   129,605  $   201,209  $   129,605  $   201,209
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    

    %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

Organization Profile

GERDAU AMERISTEEL CORPORATION

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