AGY Holding Corp. Announces 2008 Fourth Quarter and Year-End Results and Bondholder and Investor Conference Call

AIKEN, S.C.--(Business Wire)--
AGY Holding Corp. ("AGY" or the "Company") reports its 2008 fourth quarter and
year-end results.

* Fourth quarter 2008 revenue of $53.3 million reflects a 7.5% increase over the
fourth quarter of 2007. Full year revenue for 2008 was 28.3% higher than 2007.
* Income from operations for the fourth quarter of 2008 was $5.7 million,
compared to $4.5 million for the same quarter last year. Full year income from
operations for 2008 increased 28.4% over 2007 results.
* Adjusted EBITDA of $13.3 million for the fourth quarter of 2008 increased
30.4% when compared to the fourth quarter of 2007, due to higher aerospace and
defense shipments and a continued focus on key strategic initiatives. These
gains were partially offset by lower volumes in several market segments caused
by the downturn in the global economy. For the full year of 2008, Adjusted
EBITDA increased 24.5% to $51.8 million and set a record for profitability for
AGY Holding Corp.

Summary Financial Performance

($ in millions)

Quarter Ended December 31, Year Ended December 31,
2008 2007 2008 2007
Net sales $ 53.3 $ 49.6 $ 236.5 $ 184.4
Income from operations 5.7 4.5 24.4 19.0
Net income (loss) (0.3 ) (0.3 ) 0.2 (0.6 )

Non-GAAP measures:
EBITDA(1) 8.7 7.6 37.2 31.8
Adjusted EBITDA (1) 13.3 10.2 51.8 41.6
Adjusted EBITDA margin (2) 25.0 % 20.6 % 21.9 % 22.6 %

See Appendix D where EBITDA and Adjusted EBITDA are defined and reconciled from
net income (loss) determined under GAAP.

(1) Management uses EBITDA and Adjusted EBITDA, which are non-GAAP financial
measures, to measure operating performance.

(2) Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by net
sales.

Net sales in the fourth quarter of 2008 were $53.3 million, which reflects an
increase of $3.7 million, or 7.5%, when compared to the fourth quarter of 2007.
This increase was the result of continued gains in several key markets, the
incremental impact of the CFM acquisition completed during the fourth quarter of
2007, and selected price increases. Revenues in the defense market increased
over 119% for the fourth quarter of 2008 when compared to the fourth quarter of
2007, primarily due to higher sales of S-2 glass® fiber in support of key
programs including Mine Resistant Ambush Protected (MRAP) vehicles and
associated Explosively Formed Penetrator (EFP) protection kits. Aerospace market
sales were almost 22% higher in the fourth quarter of 2008 when compared to the
fourth quarter of 2007, as a result of increased OEM and retrofit requirements
for lighter weight, composite materials. Demand in the electronics, construction
and industrial segments all experienced decreases in the fourth quarter of 2008,
when compared to 2007. Net sales for the year ended 2008 were $236.5 million,
representing an increase of 28% over the comparable period of 2007. Continued
strength in the defense and aerospace markets, selected price increases, as well
as the impact of the CFM acquisition favorably impacted year-to-date 2008
revenues.

Income from operations for the fourth quarter of 2008 was $5.7 million, or 10.7%
of net sales, compared to $4.5 million, or 9.1% of net sales, reported in the
fourth quarter of 2007. AGY reported a net loss of $0.3 million for the fourth
quarter of 2008 and 2007. Adjusted EBITDA, a measurement management uses to
measure operating results, was $13.3 million, or 25.0% of net sales for the
fourth quarter of 2008, compared to $10.2 million, or 20.6% of net sales,
reported in 2007. The results in 2008 were impacted by a more favorable product
mix associated with higher shipments of advanced materials, selected price
increases and improved manufacturing efficiencies supported by the favorable
leveraging of overhead costs. However, these gains were partially offset by
higher alloy lease costs, increased labor expenses, and inflationary pressures
in energy and raw materials.

Income from operations for the year ended December 31, 2008 was $24.4 million,
or 10.3% of net sales, compared to $19.0 million, or 10.3% of net sales,
reported for the comparable period of 2007. Net income for the year ended
December 31, 2008 was $0.2 million, compared to a net loss of $0.6 million
reported during 2007. Adjusted EBITDA was $51.8 million for the year ended
December 31, 2008, representing an increase of approximately 25% over the
comparable period of 2007. Increased volumes in several markets, a more
favorable product mix, selected price increases and our ability to leverage
overhead costs on higher production levels added to profitability in 2008. These
year-to-date gains were partially offset by costs associated with strategic
initiatives necessary to support market demand, non-recurring expenses due to a
furnace disruption earlier in the year, and inflationary pressures in several
areas of manufacturing.

The Company`s cash balance as of December 31, 2008 was $4.8 million and our
total liquidity as of that date was $27.9 million. Cash provided by operating
activities was $22.6 million for the year ended December 31, 2008, compared to
$26.0 million for the comparable period of 2007. Investing activities for the
full year of 2008 used $38.1 million, including the purchase of $28.7 million of
alloy metals necessary to support the production increase associated with higher
defense volumes. Cash borrowings under the Company`s revolving credit facility
were $16.4 million as of December 31, 2008.

On March 18, 2009 the Company announced that it had entered into a Sale and
Purchase Agreement (SPA) with Grace THW Holding Limited to acquire a 70%
controlling interest in Shanghai Grace Technology Company Limited, a producer of
E-glass yarns, with the option and intent to purchase the remaining outstanding
shares in the near future. The acquisition, which is expected to be finalized in
the second quarter of 2009, will expand AGY`s geographic manufacturing footprint
and enable it to service its growing Asia-Pacific customer base. The
Asia-Pacific region represents a large market for AGY`s products and technology
due to its diverse manufacturing base and continued economic growth. This will
be an AGY-managed facility and is a world-class, state-of-the-art operation with
a current annual production capacity in excess of 18,000 MT of glass fiber and
expansion opportunities.

"2008 was a transitional year for AGY, as we successfully expanded capacity to
meet defense demand requirements, implemented a lean manufacturing culture
focused on continuous improvement initiatives and efficiency gains, introduced a
suite of next-generation products that will facilitate long-term growth, and
have signed a definitive agreement to acquire a controlling interest in Shanghai
Grace Technology Company Limited. This acquisition will expand our geographic
footprint, allow us to further penetrate the Asian markets, and provide
additional, low cost production capabilities in a state-of-the-art facility,"
remarked Doug Mattscheck, Chief Executive Officer. "In the fourth quarter of
2008, we experienced softer demand in many of our markets and 2009 could be a
challenging year in several market sectors. However, AGY has a flexible and
scaleable manufacturing platform and we have aligned our cost structure and
manufacturing capacity with market demand. We continue to focus on free cash
flow generation to ensure adequate liquidity in 2009," commented Doug
Mattscheck.

AGY is a leading global producer of fiberglass yarns and high-strength
fiberglass reinforcements used in a variety of composites applications. AGY
serves a diverse range of markets including aerospace and defense, electronics,
construction and industrial. Headquartered in Aiken, South Carolina, AGY has a
European office in Lyon, France and manufacturing facilities in the U.S. in
Aiken, South Carolina and Huntingdon, Pennsylvania. Additional information and a
copy of this press release may be found at the Investor Relations section of the
Company's website, www.agy.com or by email at info@agy.com.

Certain statements contained in this release are forward-looking and involve
risks and uncertainties that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements. Among these
risks and uncertainties are general economic and business conditions; the
Company's substantial debt and ability to generate cash flows to service its
debt; the Company's compliance with the financial covenants contained in its
various debt agreements; changes in market conditions or product demand
(including whether or not the Company is awarded certain new defense contracts
that it has sought to obtain); the level of cost reduction achieved through
restructuring and capital expenditure programs; changes in energy and raw
material costs and availability; downward selling price movements; currency and
interest rate fluctuations; increases in the Company's leverage; the Company's
ability to effectively integrate acquisitions; changes in the Company's business
strategy or development plans; the timing and cost of plant closures; the
success of new technology; and increases in the cost of compliance with laws and
regulations. Factors that could cause actual results to differ materially from
these forward-looking statements include but are not limited to those risk
factors listed from time to time in the reports that the Company furnishes to
its indenture trustee and holders of its 11% senior second lien notes and the
Company's filings with the US Securities and Exchange Commission. AGY does not
undertake to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.

The Company will hold a conference call to discuss the fourth quarter and full
year 2008 results and respond to questions. The details for the call are as
follows:

Date: March 23, 2009

Time: 1:00pm EST

Dial-in number: 866-939-3921

International: 678-302-3550

Conference ID: N/A (Operator Assisted)

Please dial in 10-15 minutes prior to the start time. An operator will request
your name and organization and ask you to wait until the call begins.

Rebroadcast of this conference will be available two hours after it is complete.
Parties who are interested in listening to the rebroadcast may dial 866-939-0581
or 678-302-3540 and when prompted enter pin - 4804300#. At system prompt dial
`4` to listen to a previously recorded conference. When prompted, enter
confirmation number - 2009031349817#. The rebroadcast will be available through
5/22/09.

Appendix A.

AGY Holding Corp. and Subsidiaries

Consolidated Balance Sheets

(Dollars in thousands except share and per share data)

Assets December 31, 2008 December 31, 2007
(1) (1)
Current assets:
Cash $ 4,760 $ 5,204
Restricted cash 1,239 1,217
Trade accounts receivables, less allowances of $3,604 and $3,842 at December 31, 2008 and December 31, 2007, respectively 14,023 16,717
Inventories, net 39,992 32,427
Deferred tax assets 6,708 11,392
Other current assets 2,115 2,435
Total current assets 68,837 69,392
Property, plant and equipment, and alloy metals, net 178,880 163,054
Intangible assets, net 21,453 24,034
Goodwill 84,992 85,457
Other assets 1,325 213
TOTAL $ 355,487 $ 342,150
Liabilities and Shareholder`s Equity
Current liabilities:
Accounts payable $ 9,494 $ 10,939
Accrued liabilities 17,662 17,468
Current portion of long-term debt and capital lease obligations - 1,246
Total current liabilities 27,156 29,653
Long-term debt 191,400 175,000
Pension and other employee benefit plans 10,917 11,250
Deferred tax liabilities 27,709 30,207
Total liabilities 257,182 246,110
Commitments and contingencies
Shareholder`s equity:
Common stock, $.0001 par value per share; 5,000,000 shares authorized; 1,291,667 shares issued and outstanding - -
Additional paid-in capital 101,729 100,102
Accumulated deficit (4,047 ) (4,217 )
Accumulated other comprehensive income 623 155
Total shareholder`s equity 98,305 96,040
TOTAL $ 355,487 $ 342,150
(1) Derived from audited financial statements.

Appendix B.

AGY Holding Corp. and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, unless otherwise noted)

Three Months Ended Year Ended
December 31, December 31,
(1) (1)
2008 2007 2008 2007
Net sales $ 53,310 $ 49,625 $ 236,487 $ 184,371
Cost of goods sold 41,169 39,929 190,154 146,468
Gross profit 12,141 9,696 46,333 37,903
Selling, general and administrative expenses 5,879 4,814 20,237 17,439
Amortization of intangible assets 464 419 1,858 1,676
Other operating (expense) income, net (111 ) 9 208 204
Income from operations 5,687 4,472 24,446 18,992
Other (expense) income:
Interest expense (5,228 ) (4,962 ) (23,086 ) (20,119 )
Other non operating income 97 59 79 151
Income (loss) before income tax benefit 556 (431 ) 1,439 (976 )
Income tax (expense) benefit (823 ) 139 (1,269 ) 334
Net income (loss) $ (267 ) $ (292 ) $ 170 $ (642 )

(1) Derived from audited financial statements.

Appendix C.

AGY Holding Corp. and Subsidiaries

Consolidated Statements of Cash Flows

(Dollars in thousands, unless otherwise noted)

Year Ended
December 31,
2008 2007
(1)
Cash flows from operating activities:
Net income (loss) $ 170 $ (642 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation 10,844 10,958
Alloy metals depletion, net 12,373 6,960
Amortization of debt issuance costs 723 665
Amortization of intangibles with definite lives 1,858 1,676
Gain on sale or disposal of assets (635 ) (109 )
Stock compensation 1,627 1,300
Deferred income tax expense (benefit) 1,997 (438 )
Changes in assets and liabilities (net of assets acquired):
Trade accounts receivable 2,694 (444 )
Inventories (7,565 ) 31
Other assets 406 865
Accounts payable (2,226 ) 4,702
Accrued liabilities 194 1,718
Pension and other employee benefit plans 115 (1,278 )
Net cash provided by operating activities 22,575 25,964
Cash flows from investing activities:
Purchases of property and equipment and alloy metals (40,598 ) (14,356 )
Reimbursement of (payment for) acquisition of Continuous Filament Mat ("CFM") business 2,300 (7,280 )
Proceeds from the sale of assets 1,326 264
Increase in restricted cash (22 ) (60 )
Other investing activities (1,098 ) 85
Net cash used in investing activities (38,092 ) (21,347 )
Cash flows from financing activities:
Payments on capital leases (1,246 ) (944 )
Proceeds from Revolving Credit Facility borrowings 94,200 11,000
Repayments of Revolving Credit Facility borrowings (77,800 ) (11,000 )
Debt issuance costs and other (100 ) (44 )
Net cash provided by (used in) financing activities 15,054 (988 )
Effect of exchange rate changes on cash 19 (5 )
Net (decrease) increase in cash (444 ) 3,624
Cash, beginning of period 5,204 1,580
Cash, end of period $ 4,760 $ 5,204
(1) Derived from audited financial statements.

Appendix D.

AGY Holding Corp. and Subsidiaries

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

The Company`s management uses EBITDA and Adjusted EBITDA, which are non-GAAP
financial measures, to measure operating performance. The most directly
comparable financial measure determined under GAAP is net income (loss), the
calculation of which for the three months and the years ended December 31, 2008
and 2007 is set forth on Appendix B.

EBITDA and Adjusted EBITDA (which are defined below) are reconciled from net
income (loss) determined under GAAP as follows (dollars in millions):

Three Months Ended Year Ended
December 31, December 31,
2008 2007 2008 2007
Statement of operations data:
Net income (loss) $ (0.3 ) $ (0.3 ) $ 0.2 $ (0.6 )
Interest expense 5.2 5.0 23.1 20.1
Income tax benefit (expense) 0.8 (0.1 ) 1.2 (0.3 )
Depreciation and amortization 3.0 3.0 12.7 12.6
EBITDA $ 8.7 $ 7.6 $ 37.2 $ 31.8

Three Months Year

Ended
Ended

December 31,
December 31,
2008 2007 2008 2007

EBITDA $ 8.7 $ 7.6 $ 37.2 $ 31.8
Adjustments to EBITDA:
Alloy depletion charge, net 3.4 1.5 12.4 7.1
Non-cash compensation charges 0.8 0.3 1.6 1.3
Management fees 0.2 0.2 0.8 0.8
Disposition of assets (gain) loss 0.1 - (0.8 ) (0.2 )
Anderson facility one-time exit costs - - 0.6 -
Non-cash purchase accounting inventory adjustment associated with the CFM acquisition - 0.6 - 0.6
Union signing bonus and others 0.1 - - 0.2
Adjusted EBITDA $ 13.3 $ 10.2 $ 51.8 $ 41.6

EBITDA is defined as earnings before interest, taxes, depreciation and
amortization. EBITDA is a non-GAAP financial measure used by management to
measure operating performance. EBITDA is not a recognized term under GAAP and
does not purport to be an alternative to net income as a measure of operating
performance or to cash flows from operating activities as a measure of
liquidity. Additionally, EBITDA is not intended to be a measure of free cash
flow available for management`s discretionary use, as it does not consider
certain cash requirements such as interest payments, tax payments and debt
service requirements. Management believes EBITDA is helpful in highlighting
trends because EBITDA excludes the result of decisions that are outside the
control of operating management and can differ significantly from company to
company depending on long-term strategic decisions regarding capital structure,
the tax jurisdictions in which companies operate and capital investments. In
addition, management believes EBITDA provides more comparability between AGY's
historical results and results that reflect purchase accounting and changes in
AGY's capital structure. Management compensates for the limitations of using
non-GAAP financial measures by using them to supplement GAAP results to provide
a more complete understanding of the factors and trends affecting the business
than GAAP results alone. Because not all companies use identical calculations,
these presentations of EBITDA may not be comparable to other similarly titled
measures of other companies.

Adjusted EBITDA is a non-GAAP financial measure which is defined as EBITDA
further adjusted to exclude unusual items and other adjustments permitted in
calculating covenant compliance and calculated in the same manner as
consolidated cash flow under the indenture governing the Company's senior second
lien notes, which is used in calculating its Fixed Charge Coverage Ratio under
the indenture.

AGY Holding Corp.
Wayne T. Byrne, 803-643-1257; wayne.byrne@agy.com

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