CHARTER SPECIALTY STEEL CHARTER STEEL & CHARTER SPECIALTY STEEL AWPA Annual Meeting February 27, 2002 Thanks to the AWPA for this time to present a little about Charter. Thanks to the members for listening to our story. While some of you are familiar with Charter Steel, suspect most of you are not.

Getting To Know Us Better Some Background Information We’ll review some background information on Charter and review some improvements made on the mill over the past few years… You may have read some reports in the American Metal Market or Newsteel about Charter investing and expanding in this domestic carbon steel and stainless steel industry of ours. These articles typically prompt questions from friends, colleagues, and co-workers. We’ve decided to share the most frequently asked question around the office of Charter mgmt regarding investing in the steel business …

FAQ “Which analyst do you want? Tax, stock, or psycho?” We’ll try to answer in the next couple slides…

There Is A Better Way Numerous Chapter 11 Bankruptcy Proceedings in the past 24 months. At Charter Steel, We Completed a $186 million Expansion and Improvement phase and have Embarked on the Next Phase that will Exceed $130 million Over the Next 3 Yrs. We will do this primarily with earnings, not debt. We will continue to Invest in people, technologies, and facilities that provide the lowest cost, highest quality and highest level of service to our customers. We are investing in a lean, flexible, capability that can be married to a customer’s manufacturing process. One entity, one process, one inventory. Obviously, the domestic industry has been devastated by market forces. Charter has been fortunate to be able to spend $186 million on recent expansion and improvements and another $130 million is slated for the next three years. Charter feels it imperative to continually invest in it’s people and it’s facilities to provide the lowest cost and the highest quality product to it’s customers. We like to marry our manufacturing process to that of our customer’s.

We Want to be Different Redefine the Customer - Supplier Relationship in Steel Privately Held, Family Owned, Non-Union, Investing The Luxury of the Longer View This is A Service Business. The Key is Distribution One Stop Shop, From Start to Finish Focused. Smaller, Faster, Smarter We Can’t Be All Things to All People 85% is Cold Headed or Cold Formed Approach the Market as A Supply Chain Manager One Entity, One Inventory Building Strategic Relationships The Timken Company We are very lucky in that the company is privately held by the Mellowes family. John Mellowes treats the employees like family and has been able to keep the unions out. Without quarterly bogies to hit, as in some public companies, Charter has the luxury of making decisions based on looking at the long-term. Another point is We have built a strategic relationship with Timken for bearing steels and more. We expect we will continue to build more of these types of relationships in the future. John tells us we are not in the steel business, we’re in the distribution business…the product happens to be steel. And the steel products we try to sell tend to be value added. The next slide lists the food chain as we see it.

“Up the Ladder “ More Specialty Grades, Properties and Value Bearing Stainless Steels Specialty Spring High Formability CHQ Cold Heading Quality Special Quality Cold Finishing Industrial 85% of our output is cold heading. Charter’s desire is to move up from there.

Financial Strength New Investment Is the Key to Lower Cost Net Sales Ended 2001 at $272 million Average of 10% per year Growth (internal) for Last 5 Yrs. 36 Consecutive Profitable Quarters Through 12-31-01 Net Worth up 138% in six years. Leverage (Liabilities/Net Worth) .66 at the end of 2001 Capital Expenditures: $186.2 M In Last 5 Yrs $134.4 million planned for next three years D&B Rating of 5A2 Operating with these types of philosophies has given Charter a strong financial foundation. *Net Sales for 2001 $272 million *36 consecutive profitable quarters through 12-31-2001 *Net worth up 138% in six years *Total Liabilities to net worth at the end of 2001 was .66 *and a Strong credit rating This is Charter’s response to the cartoon question. Now for some nuts and bolts.

Corporate Structure Charter Manufacturing Charter Wire :Profiled Steel Shapes Milwaukee Wire Products :Tier 1 Auto Charter Steel :Carbon producer Charter Specialty Steel :Stainless rod/processed. Charter Steel is one of 4 divisions of Charter MFG. The other 3 are Charter Wire, a profiled shape producer. Milwaukee Wire Products a Tier 1 automotive supplier. And the newest division, Charter Specialty Steel, a stainless rod supplierr.

Charter Steel Facilities Saukville, Wisconsin Carbon and Alloy Steel Manufacture and Distribution Melt, Hot Roll Clean, Anneal, Draw, Coat Distribute Rising Sun, Ohio Full Service Processing and Distribution Facility Charter Steel facilities include the melting, rolling, processing, and distribution of carbon and alloy rod in Saukville WI. A processing plant in Rising Sun, OH

Charter Steel Steel Manufacturing, Coil Processing and Distribution Saukville, Wisconsin Melt Shop Rolling Mill This is the Saukville campus located in the middle of WI farm land. Coil Processing

100 Ton DC Electric Arc Furnace / VAD Carbon and Alloy Chemistries The melt shop has a 100 ton DC electric arc furnace with a VAD.

4-Strand Continuous Casting 5 4-Strand Continuous Casting 5.5 inch Square Billet, Surface Quality is Born Here The caster mfg bt Concast is 4-strand and casts 5 ½” square billets. We melt 10 hundred series as well as numerous alloy grades.

Danielli Re-Heat Furnace High Efficiency, Walking Beam Design for Superior Surface In the world class rolling mill the reheat furnace was manufactured by Danielli. Commisioned in ’98, it is a walking beam furnace which maintains a superior billet surface quality.

Danielli-Morgardshammer Rolling Mill Highly Automated, No-Twist, Orbis (dia.) and Eddy Current (surface) The rolling mill is a highly automated, no-twist, single strand facility. Capable of tight diameter tolerances which our customers have come to expect.

Rolling Mill: Stelmor Laying Deck Controlled Cooling to Optimize Metallurgical Structure The 300 foot Stelmor laying deck has 7 cooling zones to optimize metallurgical structure. This photo shows the first set of hoods open followed by a series of closed hoods.

Rolling Mill: Sizes From 7/32 to 1-1/32 4,400 lbs. Coils, Sizes to 1 Rolling Mill: Sizes From 7/32 to 1-1/32 4,400 lbs. Coils, Sizes to 1.4375 inches Diameter by March, 2002 The size range is 7/32 – 1 1/32 with 4400 pound master coils. In just a couple weeks we’ll turn on our new bar outlet.

Bar Mill Y Split The bar mill will divert steel after the number 10 intermediate stand.

Bar Sizing Mill A kocks mill is in place to provide tight tolerances while providing flexibility in final sizes.

Carbon and Alloy Coil Processing (4 Lines) Chemical Cleaning: Hydrochloric and Sulfuric and Coating: Polymers, Phosphorus, Lube and Lime Our cleaning and coating facilities have both hydrochloric and sulphuric acid tanks. Charter can provide polymer, phophate, lube, and lime coatings.

Carbon and Alloy Coil Processing Mechanical Cleaning: Shot Blasting Unit A shot blaster in Rising Sun gives us that capability as well.

Carbon and Alloy Coil Processing Endothermic Annealing: 2 Salem-Daido Continuous Furnaces In terms of annealing, here are two 300 foot, 14 zone Salem-Daido continuous furnaces which produce zero de-carb coils. Each furnace has a capacity of 40,000 ton per year.

Carbon and Alloy Coil Processing Endothermic Annealing: 3 Salem-Daido STC, and 22 Box Furnaces We also have 3 Salem Daido STC or Short time cycle furnaces and 22 box furnaces.

Coil Processing Expansion Indoor Coil Storage This is a new coil storage facility in Saukville.

Charter Specialty Steel Fond du Lac, Wisconsin Stainless Steel Coil Processing Clean, Anneal, Coat Distribute Steve Beason, General Manager of Charter Specialty Steel will review these facilities.

Danielli-Morgardshammer Rolling Mill Highly Automated, No-Twist, Orbis (dia.) and Eddy Current (surface)

Stainless Steel Cleaning / Coating Line Ecopic cleaning line, totally closed, no open baths. For fume extraction. Hcl, Nitric, and Hydroflouric are three acids, fully automated, Apex coating.

New Stainless Annealing Furnaces 4 Techint single coil annealing furnaces, w/quench capabilty,

Stainless Coil Quench

Charter Specialty Steel (P5)

Conclusion Charter Steel is a Different Kind of Steel Supplier A Service Organization First Privately Held, Family Owned Financially Sound and Investing In the Business A Supply Chain Manager / Partner We Are Better Today than We Were One Year Ago and One Year From Now We will Better Than We Are Today

Questions ?