Barzel Industries Inc. Announces First Fiscal Quarter 2009 Results

NORWOOD, Mass.--(Business Wire)--
Barzel Industries Inc. ("Barzel" or the "Company") (NASDAQ: TPUT, TPUTW) today
announced financial and operating results for the first fiscal quarter ended
February 28, 2009. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company`s Annual Report on Form
10-K for the year ended November 29, 2008, and the Company`s Quarterly Report on
Form 10-Q for the quarter ended February 28, 2009, that was filed April 20, 2009
with the Securities and Exchange Commission.

First Fiscal Quarter Financial Position and Cash Flow Highlights

• Net cash provided by
operating activities was
$22.5 million, driven
primarily from cash
provided by lower working
capital requirements in the
quarter for inventory and
accounts receivables.

• Net cash provided by
investing activities was
$14.0 million, driven by
proceeds from asset sales
of $19.3 million offset by
$5.3 million in capital
expenditures, including
$2.9 million for the
substantial completion of
our Morrisville,
Pennsylvania structural
tubing facility expansion,
$1.6 million for real
property in Baie D`Urfe,
Quebec, on which our
existing tubular products
facility is situated, and
$0.8 million for various
tooling and equipment for
enhancing automotive tubing
facilities with structural
tubing capabilities.

• On February 28, 2009, debt
was $315.0 million
(representing $315.0
million of senior notes and
$0.0 drawn on the ABL
Credit Facility) and cash
and cash equivalents were
$27.4 million (or a net
debt of approximately
$287.6 million).

• The ABL Credit Facility
remains undrawn and we are
in compliance with all
covenants of our debt
facilities.

First Fiscal Quarter Operating Summary

• Net sales for the first
fiscal quarter of 2009
decreased by $147.6 million
to $48.0 million from
$195.6 million for the
first fiscal quarter of
2008. Excluding the impact
of changes in the exchange
rate of the Canadian dollar
on net sales of $21.9
million, net sales for the
first fiscal quarter of
2009 would have decreased
by $125.7 million, or
64.2%, as compared to the
prior year quarter.

• Our sales were negatively
affected by our purposeful
exit of certain market
segments where terms of
sale were not consistent
with our business model.
This is most notable in the
automotive segment that
historically represented
about 30% of our revenue.
Net sales were also down
due to weaker economic
conditions, resulting in
continued weakened demand
of about 43% and weakened
pricing for steel and our
products of about 18%, when
compared to the prior year
quarter.

• Adjusted EBITDA for the
quarter totalled a loss of
$26.1 million, compared to
earnings of $8.1 million in
the prior year quarter. The
loss was primarily driven
by lower demand and the
persistent decline in steel
prices over the last seven
months and its cumulative
negative impact on our
gross margin contribution.

• During February, we
affected further
rationalizations of certain
of our U.S. distribution
facilities and processing
centers in Quebec,
including the sale of non
-strategic and redundant
assets. These actions will
result in additional
annualized cost savings of
$15 million in 2009 as
compared to 2008, the
results of which are being
fully realized in March
2009.

Barzel`s CEO, Mr. De Gasperis, commented, "The challenging global economic
climate has negatively affected our first quarter results and delayed the sales
growth anticipated from the implementation of our business strategy. We have
initiated aggressive efforts to reduce operating costs and to maximize our
liquidity and will take additional actions as market conditions warrant."

Further Actions to Reduce Operating Expenses and Improve Liquidity

In light of the severity and the rapid onset of the recession, further actions
have been initiated to improve our liquidity. We have initiated additional
actions to further reduce our operating expenses, including further reductions
in labor expense through reduced work hours, layoffs, additional severances and
salary reductions, with our most senior executives taking the largest
reductions. We have contained and are reducing further our spending for
consumables and other plant expenses. We have also deferred certain non-critical
projects and have identified for sale certain other surplus assets. We believe
these actions will contribute an additional $15.0 million in cash savings,
primarily from a reduction in annual operating expenses, the substantial
majority of which will begin in May 2009. We are taking these actions because
the decline in demand and steel prices over the last three months, coupled with
what we believe were the appropriate and necessary actions to exit certain
unprofitable segments, like automotive, exceed any precedent.

As of February 28, 2009, under the ABL Credit Facility, the aggregate eligible
assets in our borrowing base totalled $31.6 million (representing the sum of the
U.S. borrowing base and the Canadian borrowing base) that is subject to a $15.0
million availability block, of which $0.9 million was utilized for letter of
credit obligations. As of the date of this release, there are no borrowings
outstanding under the ABL Credit Facility. We also remain in compliance with all
covenants of our debt facilities. In addition, we are in constructive
discussions with the holders of the Senior Secured Notes to restructure the
payment obligations under the Senior Secured Notes and regarding other capital
structure alternatives.

Outlook

We expect our volumes in the second fiscal quarter of 2009 to be higher than the
first fiscal quarter of 2009, as a result of our sales efforts, particularly in
our distribution and structural tubing businesses. Overall, our second fiscal
quarter of 2009 is expected to result in flat revenue, lower cost of sales, and
lower operating expenses when compared to our first fiscal quarter of 2009.
Revenue is expected to be flat despite an increase in volume, primarily as a
result of continued declining prices for steel and for our products. Operating
expenses are expected to be lower because of actions taken in February 2009,
resulting in an annual reduction of approximately $15.0 million. The additional
actions discussed above to reduce operating expenses further will begin
contributing the substantial majority of an additional $15 million in cash
savings, primarily form a reduction in annual operating expenses, in May 2009.

Mr. De Gasperis commented, "We have seen improved profitability in our March
gross profit results when compared to February, primarily from our cost
management efforts and our significantly lower cost inventory position. We are
also now seeing increases in shipments and revenues in April, especially in
distribution and tubular products. Going forward, we anticipate sales growth
with significantly higher throughput contributions as our lower cost materials
are shipped into higher value product segments."

Conference Call Details

Barzel`s conference call with investors and analysts will be held on Tuesday,
April 21, 2009 at 10:00 a.m. Eastern Standard Time.

The dial-in telephone numbers for the investor and analysts call are:

North American Toll Free Dial-In Number: 1-866-544-4625
International Dial-In Number: 1-416-849-2726

A digital recording of the conference call will be available for replay four
hours after the call`s completion. The date range for playback availability is
listed below.

Website: http://recording.vestavideo.com/barzel.htm
Availability: April 21, 2009 - May 31, 2009

More About Barzel Industries Inc.

Headquartered in Norwood, Massachusetts, with operational hubs in Mississauga,
Ontario and Montreal, Quebec, we operate a network of 16 manufacturing,
processing and distribution facilities in the United States and Canada. Through
an innovative management system that includes close statistical monitoring and
analysis of our plant capabilities, we service our customers with speed, quality
and reliability. With a long tradition of quality service, we offer a wide range
of metal processing solutions to a variety of industries, from construction and
industrial manufacturing to finished commercial racking products. Our systemic
approach has enabled us to become a well-diversified, multi-process provider of
value-added services. We believe we are one of only two independent continuous
process picklers in Canada. For additional information on Barzel, visit its
website at http://www.barzel.com.

Forward-Looking Statements

This press release and any related calls or discussions may contain
forward-looking statements. All statements, other than statements of historical
facts, are forward-looking statements. Forward-looking statements include
statements about matters such as: future prices and sales of and demand for our
products and our customers` products; future changes in production capacity in
our operations and our customers` operations; future costs of materials and
production and future overhead costs; productivity, business process and
operational initiatives, and their impact on us; industry market conditions and
anticipated changes in our position in markets we serve; future employment and
contributions of personnel; employee relations and collective bargaining
agreements; tax rates; capital expenditures and their impact on us; nature and
timing of restructuring charges and the impact thereof; interest rate and
exchange rate management activities; deleveraging activities; rationalization,
restructuring, strategic alliance, raw material and supply chain, investment,
acquisition, consulting, operational, tax, financial and capital projects; legal
proceedings and contingencies; environmental compliance; offerings, sales and
other actions regarding debt or equity securities; debt restructuring activities
and the need therefor and impact thereof; and future asset sales, costs, working
capital, revenues, business opportunities, debt levels, cash flows, cost savings
and reductions, margins, earnings and growth. The words "believe," "expect,"
"anticipate," "estimate," "project," "plan," "should," "intend," "may," "will,"
"would," "potential" and similar expressions identify forward-looking
statements, but are not the exclusive means of doing so.

These statements are based on assumptions and assessments made by our management
in light of their experience and their perception of historical and current
trends, current conditions, possible future developments and other factors they
believe to be appropriate. Forward-looking statements are not guarantees,
representations or warranties and are subject to risks and uncertainties that
could cause actual results, developments and business decisions to differ
materially from those contemplated by such forward-looking statements. Some of
those risks and uncertainties include the risk factors set forth in our SEC
filings and the following: the current global economic downturn and capital
market weakness; the current weakness in the automotive, transportation,
manufacturing and construction industries in the United States and Canada; our
substantial indebtedness and the impact such indebtedness may have on the way we
operate our business; the possibility that the recession, our operating
performance and operating prospects, and capital market conditions will limit
our ability to timely meet our debt service obligations, comply with debt
covenants, obtain necessary financing or refinancing or restructure indebtedness
or our debt service obligations on acceptable terms or at all; potential
inability to continue to comply with government regulations; adoption of or
changes in legislation or regulations adversely affecting our businesses;
changes in the United States or other monetary or fiscal policies or regulations
in response to the recent capital markets and economic crises; changes in the
financial stability of our major customers or in demand for our products and
services; interruptions in our production capabilities due to unexpected
equipment failures; fluctuation of prices for steel and other raw materials;
changes in generally accepted accounting principles; geopolitical events;
competition; industry consolidation; potential inability to implement our
business strategies; currency risks; potential inability to grow revenues
organically; potential inability to attract and retain key sales, marketing and
operations management professionals; interruptions in supply of critical raw
materials due to credit or other limitations imposed by suppliers; assertion of
claims, lawsuits and proceedings against us; potential inability to maintain an
effective system of internal controls over financial reporting; potential
inability or failure to timely file periodic reports with the SEC or to continue
listing of our securities on Nasdaq; geographic concentration; work stoppages or
potential inability to renegotiate labor contracts when they expire; and
outsourcing by our customers to overseas facilities. Occurrence of such events
or circumstances could have a material adverse effect on our business, financial
condition, results of operations or cash flows or the market price of our
securities. All subsequent written and oral forward-looking statements by or
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by these factors. We undertake no obligation to publicly update
or revise any forward-looking statement.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
BARZEL INDUSTRIES INC. AND SUBSIDIARIES
(Dollars in Millions)

The following tables set forth a reconciliation of certain non-GAAP financial
measures to the comparable GAAP financial measures. Such GAAP measures are derived
from the consolidated financial statements of Novamerican Steel Inc. and
subsidiaries included in the quarterly report on Form 10-Q for the quarter ended
February 28, 2009 filed by Barzel Industries Inc., which should be considered in
connection with any consideration of such non-GAAP measures.

Net Debt Reconciliation
(Dollars in Millions)
(Unaudited)
February 28, November 29,
2009 2008
ABL credit facility $ - $ 33.8
Senior secured notes 315.0 315.0
Long-term debt $ 315.0 $ 348.8

Less:
Cash and cash equivalents 27.4 25.3
Net debt $ 287.6 $ 323.5

NOTE ON NET DEBT RECONCILIATION: Net debt is a non-GAAP financial measure that
the Company calculates according to the schedule above, using GAAP amounts from
the Consolidated Financial Statements. The Company believes that net debt is
generally accepted as providing useful information regarding a company's
indebtedness and that net debt provides meaningful information to investors to
assist them to analyze leverage. Management uses net debt as well as other
financial measures in connection with its decision making activities. Net debt
should not be considered in isolation or as a substitute for total debt or total
debt and other long term obligations calculated in accordance with GAAP. The
Company`s method for calculating net debt may not be comparable to methods used
by other companies.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
BARZEL INDUSTRIES INC. AND SUBSIDIARIES
(Dollars in Millions)
(Unaudited)

Adjusted EBITDA Reconciliation
(Dollars in Millions)
(Unaudited)

Q1 2009 Q1 2008 Notes
Net loss, as reported $ (30.8 ) $ (7.9 )

Add back:

Interest expense 9.6 10.6
Depreciation and amortization 4.6 5.2 (1 )
Purchase price allocation to inventory - 6.7 (2 )
Restructuring (0.6 ) -
Impairment loss 3.3
Income taxes (12.2 ) (6.5 )
Adjusted EBITDA $ (26.1 ) $ 8.1

Note 1: Depreciation and amortization excludes the amortization of deferred financing charges
which are included in interest expense.
Note 2: Purchase price allocation to inventory is included in cost of sales in the consolidated
financial statements.

NOTE ON ADJUSTED EBITDA RECONCILIATION: Adjusted EBITDA is a non-GAAP financial
measure that the Company currently calculates according to the schedule above,
using GAAP amounts from the consolidated financial statements. The Company
believes that such non-GAAP financial measures are generally accepted as
providing useful information regarding a company`s credit facilities and certain
financial-based covenants and, accordingly, its ability to incur debt and
maintain adequate liquidity. Such non-GAAP financial measures should not be
considered in isolation or as a substitute for net income (loss), cash flows
from continuing operations or other consolidated income or cash flow data
prepared in accordance with GAAP. The Company`s method for calculating such
non-GAAP financial measures may not be comparable to methods used by other
companies and is not the same as the method for calculating EBITDA under its
senior secured revolving credit facility or its senior secured notes.

Barzel Industries Inc.
Karen G. Narwold, Esq., 781-619-1450
Vice President, Strategic Counsel
Cell: 917-207-7924

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