Gerdau AmeriSteel Corp. (GNA)

[eastunder]

Gerdau Ameristeel Reports Profit For First Quarter of 2010

Press Release Source: Gerdau Ameristeel Corporation On Thursday May 6, 2010, 8:30 am EDT

TAMPA, FL, May 6 /PRNewswire-FirstCall/ - Gerdau Ameristeel Corporation (NYSE: GNA; TSX: GNA) today reported net income of $25.2 million ($0.06 per share diluted) for the three months ended March 31, 2010, in comparison to a net loss of $31.5 million ($0.07 per share) for the three months ended March 31, 2009 and a net loss of $32.8 million ($0.08 per share) for the three months ended December 31, 2009. The Company has adopted International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board, as of January 1, 2010 and, as such, the comparative periods for fiscal year 2009 have been restated under IFRS.

Net sales for the three months ended March 31, 2010 increased 10% to $1.1 billion from $1.0 billion reported for each of the three months ended March 31, 2009 and December 31, 2009. For the three months ended March 31, 2010 weighted average mill selling price decreased 12% or $86 per ton in comparison to the three months ended March 31, 2009, but increased 6% or $37 per ton in comparison to the three months ended December 31, 2009. Finished steel shipments were 1.5 million tons for the three months ended March 31, 2010, an increase of 25% in comparison to the three months ended March 31, 2009 and an increase of 15% from the three months ended December 31, 2009.

EBITDA, as adjusted (see EBITDA section herein for an explanation of the EBITDA calculation), was $116.7 million for the three months ended March 31, 2010, compared to EBITDA of $41.8 million for the three months ended March 31, 2009 and $60.5 million for the three months ended December 31, 2009. The improvement in EBITDA from each comparative period was primarily due to the cost reduction initiatives undertaken by the Company in 2009. Increased shipment volumes were also a factor in the improvement of EBITDA. Scrap raw material cost used in production during the three months ended March 31, 2010 was $266 per ton compared to $200 per ton for the three months ended March 31, 2009 and $217 per ton for the three months ended December 31, 2009.

At March 31, 2010, the Company had $594.7 million of cash and short-term investments, a decrease of $61.6 million from December 31, 2009 as the Company's investment in working capital increased as a result of rising scrap costs and the increase in production and shipment levels. In addition to its cash and short-term investments, the Company had approximately $497.9 million available under secured credit facilities which resulted in a total liquidity position of approximately $1.1 billion at March 31, 2010.

As of March 31, 2010, the Company had 433,492,864 common shares outstanding.

CEO Comments

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

"I'm pleased to say that we reported a profitable first quarter. After a challenging 2009, where we intensely addressed everything under our control, we were able to benefit from a generally better than expected demand for our products during the quarter. We believe our customers are beginning to feel more confident in the U.S. economic recovery and this is translating into better activity in our end-markets.

First quarter performance certainly improved as a result of the numerous actions we undertook during the last 18 months to increase cost efficiency and lower our breakeven point. Those actions, along with increased production, led to the lowest manufacturing cost per ton we have experienced since 2007. Our improved operational effectiveness is a confirmation of our flexible business model.

Looking ahead, we believe that demand will continue to slowly improve during the second quarter as confidence in the recovery gradually grows and we continue to feel the effects of normal seasonality."

IFRS Conversion

As previously mentioned, the Company's Consolidated Financial Statements have been prepared under IFRS. The Company previously prepared its Consolidated Financial Statements under generally accepted accounting principles in the United States ("US GAAP"). In accordance with IFRS 1, First-Time Adoption of International Financial Reporting Standards, the Company's IFRS transition date was January 1, 2009 and the Company prepared its opening IFRS balance sheet as of that date. The Company has restated its comparative periods under IFRS and the Company's quarterly and annual filings will contain reconciliations between IFRS and previously reported amounts under US GAAP for 2009.

Financials contiued at:
http://finance.yahoo.com/news/Gerdau-Ameristeel-Reports-prnews-3328986114.html?x=0&.v=11