Construction/Building — February 8, 2010

Lakeside Steel announces third quarter results and issues stock options

WELLAND, ON, Feb. 8 /CNW/ - Lakeside Steel Inc. (TSX-V: LS) ("Lakeside Steel" or the "Company") today reported results for the third quarter ended December 31, 2009. For the three months ended December 31, 2009, the Company's revenue was $27,039,774, which is a decline of $38,318,352 or 58.6% compared to revenue of $65,358,126 for the three months ended December 31, 2008. The Company's net loss for the three months ended December 31, 2009 was $3,757,057, a decline of $8,607,337 from net income of $4,850,280 for the three months ended December 31, 2008. The Company had a loss per share of $0.06 for the third quarter ended December 31, 2009, compared to earnings per share of $0.08 for the third quarter in the prior year.

The Company's EBITDA was ($6,059,397) for the three months ended December 31, 2009, a decline of $11,393,759 from EBITDA of $5,334,362 for the three months ended December 31, 2008. Despite these losses, the Company has been able to maintain positive cash flows of $1,757,945 in the three months ended December 31, 2009 and $6,012,879 for the nine months ended December 31, 2009 by selling its surplus inventory.

Demand in the oil and gas sector for the Oil Country Tubular Goods manufactured by Lakeside Steel Corporation ("Lakeside"), Lakeside Steel's wholly-owned subsidiary, has experienced a positive increase in the third quarter. Management believes that this trend will continue into the fourth quarter of fiscal 2010 and the first quarter of fiscal 2011. Lakeside's current order book provides a full production load in both of its mills until May 2010. Lakeside continues to develop its distribution network, currently supplying to over 300 yards and warehouses throughout North America.

Ron Bedard, President and CEO, commented that "Lakeside has weathered the economic storm that the industry as a whole faced in 2009. Lakeside will continue to drive cost improvements and enhance revenue and margin. We expect to see a significant improvement in Q4 as a result of increased load and further cost reductions and therefore we anticipate revenue of approximately $40 million for Q4."

The Company also announced that, subject to receipt of required regulatory approvals, it granted stock options under its 10 per cent rolling Stock Option Plan to a director, and certain officers and employees of the Company and Lakeside to purchase in the aggregate up to 900,000 common shares (the "Stock Options") in the capital of the Company. The exercise price of the Stock Options is $0.33 per share, the closing price of the common shares on February 5, 2010. The Stock Options expire February 7, 2020. Ten percent of the Stock Options vest immediately with the balance vesting as to fifteen percent each every six months from the date of grant, subject to the terms and conditions of the Company's Stock Option Plan.

About Lakeside Steel Inc.

Lakeside Steel is a 2010 TSX Venture Exchange 50 company and the parent company of Lakeside. Lakeside, located in Welland, Ontario, is a diversified steel pipe and tubing manufacturer. Lakeside's list of customers includes large oil and gas, mining, automotive and commercial and industrial supply companies. In addition to supplying its products in these industries, Lakeside manufactures pipe and mechanical tubing for the resale market, which is sold to distributors in Eastern Canada and the Northeastern United States. Lakeside manufactures a variety of products for these industries including oil well tubing and casing, mechanical tubing, pressure tubing, automotive tubing, hollows for redraw, line pipe, heating and plumbing pipe, drill rod and specialty tubing. Lakeside serves customers worldwide, either directly or indirectly, in Canada and the United States.

This press release may contain forward-looking statements with respect to the Company, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward looking words such as "may", "will", "expect", "estimate", "anticipate", intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of the Company discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under "Risk Factors" in the Management's Discussion and Analysis and Filing Statement of the Company which are available at www.sedar.com. The cautionary statements qualify all forward-looking statements attributable to the Company and persons acting on their behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and the Company has no obligation to update such statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Lakeside Steel was recognized as a TSX Venture 50(R) company in 2010. TSX Venture 50 is a trade-mark of TSX Inc. and is used under license.

%SEDAR: 00023559E

For further information: Ron Bedard, President & Chief Operating Officer, Lakeside Steel Inc., (905) 735-7473 ext. 7294, Fax: (905) 735-8896, e-mail: ron.bedard@lakesidesteelcorp.ca; Ken Hunter, Chief Financial Officer, Lakeside Steel Inc., (905) 735-7473 ext 7218, Fax: (905) 735-9069, e-mail: ken.hunter@lakesidesteelcorp.ca

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