form10k_1336338.htm

10-K 1 form10k_1336338.htm FORM 10K form10k_1336338.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

___________________________________

FORM 10-K

(Mark One)

x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: November 29, 2008

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from --- to ---

Commission File Number: 001-33342

Barzel Industries Inc.

(Exact name of registrant as specified in its charter)

___________________________________

Delaware	20-4790836
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

320 Norwood Park South – 2nd Floor, Norwood, MA 02062	(781) 762-0123
(Address of principal executive offices)	(Registrant's telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class	Name of each exchange on which registered
Common stock, par value $0.001 per share	The Nasdaq Stock Market LLC
Warrants	The Nasdaq Stock Market LLC

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨ No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act

Large accelerated filer o	Accelerated filer o
Non-accelerated filer x (Do not check if a smaller reporting company)	Smaller reporting company o

The aggregate market value of our outstanding common stock held by non-affiliates, computed by reference to the closing price of our common stock on May 28, 2008, was approximately $51,856,726. On January 31, 2009, 26,564,607 shares of our common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The information required under Part III is incorporated by reference from Barzel Industries Inc.'s Proxy Statement for the Annual Meeting of Stockholders to be held on May 12, 2009, which will be filed on or about March 30, 2009.

TABLE OF CONTENTS

		Page
PRELIMINARY NOTES		1

PART I
ITEM 1.	Business	4

ITEM 1A.	Risk Factors	11

ITEM 1B.	Unresolved Staff Comments	23

ITEM 2.	Property	23

ITEM 3.	Legal Proceedings	25

ITEM 4.	Submission of Matters to a Vote of Shareholders	26

PART II

ITEM 5.	Market for Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	26

ITEM 6.	Selected Financial Data	28

ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29

ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	51

ITEM 8.	Consolidated Financial Statements	52

ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	53

ITEM 9A(T).	Controls and Procedures	53

ITEM 9B.	Other Information	54

PART III

ITEM 10.	Directors, Executive Officers and Control Persons; Compliance with Section 16(A) of the Exchange Act	54

ITEM 11.	Executive Compensation	54

ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	54

ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	54

ITEM 14.	Principal Accountant Fees and Services	54

ITEM 15.	Exhibits	54

SIGNATURES		58

PRELIMINARY NOTES

Important Terms and Information

“Acquisition” refers to the acquisition of Acquired Company under an arrangement agreement pursuant to which (i) Symmetry acquired all of the outstanding common shares of Acquired Company and (ii) certain of Acquired Company’s wholly owned Canadian subsidiaries were wound-up, amalgamated or otherwise combined with Acquired Company to form Barzel Canada, in each case in accordance with the terms of a court-approved statutory plan of arrangement under the Canada Business Corporations Act.

“Acquired Company” refers to Novamerican Steel Inc., a corporation incorporated under the laws of Canada, and its subsidiaries before consummation of the Acquisition. Upon consummation of the Acquisition, Acquired Company became an indirect, wholly owned subsidiary of Barzel. On December 5, 2007, Acquired Company changed its name to Novamerican Steel Canada Inc. On February 13, 2009, Acquired Company changed its name to Barzel Industries Canada Inc.

“Barzel” refers to Barzel Industries Inc., formerly Novamerican Steel Inc., and before that Symmetry, a corporation incorporated under the laws of Delaware, and its subsidiaries after consummation of the Acquisition. Barzel is the public parent company of Barzel Finco and Barzel Holdings. Barzel guarantees the 11.5% Senior Secured Notes due November 15, 2015 issued by Barzel Finco in private placements in November 2007 (the “Notes”). On December 5, 2007, Symmetry changed its name to Novamerican Steel Inc. On February 13, 2009, Novamerican Steel Inc. changed its name to Barzel Industries Inc.

“Barzel Canada” refers to Barzel Industries Canada Inc. only and not to any of its subsidiaries after the Acquisition. Barzel Canada is a direct wholly owned subsidiary of Barzel Finco and the entity through which we conduct all of our Canadian operations. A portion of the proceeds from the Notes was loaned by Barzel Finco to a subsidiary that was amalgamated into Barzel Canada in exchange for intercompany demand promissory notes, secured by substantially all of the assets of Barzel Canada. Barzel Canada is a borrower under that certain $175.0 million, five year, asset based revolving credit facility entered into on November 15, 2007 (the “ABL Credit Facility”).

“Barzel Finco” or the “issuer” refers to Barzel Finco Inc. only and not to any of its subsidiaries. Barzel Finco is a Delaware corporation and a direct wholly owned subsidiary of Barzel Holdings, and the direct holding company for all of our operating subsidiaries. Barzel Finco issued the Notes and is a borrower under the ABL Credit Facility. On February 13, 2009, Novamerican Steel Finco Inc. changed its name to Barzel Finco Inc.

“Barzel Holdings” refers to Barzel Holdings Inc. only and not to any of its subsidiaries. Barzel Holdings is a Delaware corporation, a direct wholly owned subsidiary of Barzel and the parent company of the issuer. Barzel Holdings guarantees the Notes. On February 13, 2009, Novamerican Steel Holdings Inc. changed its name to Barzel Holdings Inc.

“Barzel U.S.” refers to Barzel Industries U.S. Inc. only and not to any of its subsidiaries. Barzel U.S. is a Delaware corporation, a direct wholly owned subsidiary of Barzel Finco and a parent company of certain of our U.S. operating subsidiaries. Barzel U.S. guarantees the Notes. On December 21, 2007, Barzel U.S. changed its name from Integrated Steel Industries, Inc. to Novamerican Steel U.S. Inc. On February 13, 2009, Novamerican Steel U.S. Inc. changed its name to Barzel Industries U.S. Inc.

“Symmetry” refers to Symmetry Holdings Inc., a corporation incorporated in Delaware. On December 5, 2007, Symmetry changed its name to Novamerican Steel Inc. On February 13, 2009, Novamerican Steel Inc. changed its name to Barzel Industries Inc.

“We,” “us,” “our” and the “Company” refer collectively to Barzel and its subsidiaries after the consummation of the Acquisition and to Acquired Company before the consummation of the Acquisition, unless the context otherwise requires. Unless otherwise noted, when we refer to "dollars" or "$," we mean U.S. dollars.

Financial presentation

As a result of the consummation of the Acquisition ten days before the end of Acquired Company’s fiscal year end, this report contains audited and unaudited financial information for Barzel as well as certain historical financial information for Acquired Company. Specifically, this report includes:

•	Audited financial statements for:
	•	Barzel for the year ended November 29, 2008 (“fiscal year 2008”);
	•	Acquired Company for the period from November 26, 2006 to November 14, 2007

		(“Acquired Company fiscal year 2007”);
	•	Acquired Company for the year ended November 25, 2006 (“Acquired Company fiscal year 2006”); and
•	Unaudited pro forma condensed financial information that combines the historical statements of operations of Acquired Company for the period from November 26, 2006 to November 24, 2007 and Barzel for the period from January 1, 2007 to November 24, 2007, giving effect to the Acquisition as if it had occurred on January 1, 2007.

This report also includes other selected 2008 unaudited financial and other information of Barzel, including sales, market and employee data.

Industry and Market Data

We obtained the industry, market and competitive position data used throughout this report from our own internal estimates and research as well as from industry publications and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these publications, studies and surveys is reliable, we have not independently verified industry, market and competitive position data from third-party sources. While we believe our internal business research is reliable and the market definitions are appropriate, neither such research nor these definitions have been verified by any independent source. None of the sources mentioned above has consented to the disclosure or use of data in this report. Our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under "Forward-Looking Statements" and "Risk Factors" in this report.

Forward-Looking Statements

This report contains forward-looking statements. All statements, other than statements of historical facts, included in this report, are forward-looking statements. In addition, we or our representatives have made or may make forward-looking statements on telephone or conference calls, by webcasts or e-mails, in person, in presentations or written materials, or otherwise. Forward-looking statements include statements about matters such as: growth rates for, future prices and sales of, and demand for our products and our customers’ products; production capacity in our operations and our customers' operations; costs of materials and production; productivity, business process and operational initiatives, and their impact on us; industry market conditions and our position in markets we serve; 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 management activities; currency rate management activities; deleveraging activities; rationalization, restructuring, realignment, strategic alliance, raw material and supply chain, investment, acquisition, venture, consulting, operational, tax, financial and capital projects; legal proceedings, contingencies, and environmental compliance; potential offerings, sales and other actions regarding debt or equity securities of us or our subsidiaries; 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 trends, current conditions, future developments and other factors they believe to be appropriate. Forward-looking statements are not guarantees of our future performance 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 discussed under the heading "Risk Factors" and the following:

the current global economic downturn;

the current weakness in the automotive, transportation, manufacturing and construction industries in the United States and Canada;

our substantial indebtedness;

our ability to service our outstanding indebtedness and the impact such indebtedness may have on the way we operate our business;

the possibility that challenging conditions in capital markets will limit our ability to obtain financing or refinancing on acceptable terms, or not at all;

our ability 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 crisis;

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 or a shortage of supply;

changes in generally accepted accounting principles;

geopolitical events;

competition in the industry;

industry consolidation;

our ability to implement our business strategies;

currency risks;

our ability to meet our objective of growing revenues organically;

our ability to attract and retain key sales, marketing and operations management professionals;

successful consummation and integration of acquisitions;

assertion of claims, lawsuits and proceedings against us;

our ability to maintain an effective system of internal controls over financial reporting;

geographic concentration of our business;

work stoppages or our inability to renegotiate labor contracts when they expire; and

outsourcing by our customers to overseas facilities.

Occurrence of any of the events or circumstances described above 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.

All forward-looking statements in this report are based upon information available to us on the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise.

Trademarks

The Decalogue™ is a trademark of Dr. Domenico Lepore, our President, and is licensed to us pursuant to an agreement dated September 15, 2006. All other trademarks or service marks used herein are trademarks or service marks of the companies that use them.

PART I

ITEM 1.

BUSINESS

The Company

In 2006, a group of organizational scientists and industrialists decided to elevate their work of implementing the Decalogue methodology, a systemic management methodology. They embarked on a radical idea – one that would see them acquire Acquired Company with the aim of fully implementing the Decalogue methodology, thereby transforming Acquired Company from one that operated with a traditional business model in an ultra-conservative, slower paced industry to one that is a bastion for quality, speed and the diversity of people and ideas. The Company was incorporated as Symmetry Holdings Inc. in Delaware on April 26, 2006 as a development stage company formed for the purpose of acquiring one or more operating businesses. On March 12, 2007, our initial public offering of 18,750,000 units was consummated, generating aggregate gross proceeds of $150.0 million. Each unit consisted of one share of common stock and one warrant. Each warrant entitles the holder to purchase from us one share of our common stock at an exercise price of $5.50. Our common stock and warrants started trading separately as of April 4, 2007. On June 21, 2007, Symmetry and a wholly owned subsidiary entered into an arrangement agreement pursuant to which the wholly owned subsidiary acquired all of Acquired Company’s outstanding stock on November 15, 2007, as described in “The Acquisition” below. In connection with the Acquisition, Barzel Finco issued the Notes.

On December 5, 2007, Symmetry changed its name to Novamerican Steel Inc. On February 13, 2009, the Company changed its name to Barzel Industries Inc. Archaeologists consider ancient civilizations that could forge metals “advanced” or “highly evolved.” The Industrial Revolution took this long-established art form and turned it into a mass-market industry. We see our efforts to implement the Decalogue methodology in this industry as the next step of evolution for organizations and their relationship with metals. Therefore, we chose a name that honors the ancient roots of our industry. “Barzel” means “steel” in many variations and languages. Its origins stem from the iron meteorites smelted by Sumerian artisans and the word migrated to fursil through ancient Akkadian and Semitic languages. Similar sounding words are also found in modern Latin (ferrous), Arabic and Indian-derivative languages, representing various metals and the art of metalworking.

Our new logo, a steel ribbon in the form of a Möbius strip, pays homage to a basic building block of human understanding – mathematics. A Möbius strip is a mathematical curiosity that has no beginning or end and no “correct” orientation (i.e., there is no “right side up”). It represents our organizational model, which is a fully interdependent system, meaningful only in its entirety, and where no hierarchy exists. The logo also reflects our capabilities in shaping and forging metals.

Today, 30 years after the birth of our business, we are shedding the final vestiges of its out-dated past and marking the start of a new journey. It is a journey to show the industry that reliability and quality of goods does not necessarily come at the expense of speed of delivery. It is a journey to show the industry that traditional management models are incomplete at best. It is a journey to show that the decisions of our sophisticated employee network have a collective and positive impact on our industry.

The Acquisition

On November 15, 2007, Barzel completed the Acquisition. The Acquisition had been approved by Barzel’s stockholders on October 25, 2007 and by Acquired Company’s shareholders on October 31, 2007. The Acquisition was carried out pursuant to an arrangement agreement, pursuant to which (i) Barzel indirectly acquired all of the outstanding stock of Acquired Company and (ii) certain of Acquired Company’s wholly-owned Canadian subsidiaries were wound-up, amalgamated or otherwise combined with Acquired Company to form Barzel Canada, in each case in accordance with the terms of a court-approved statutory plan of arrangement under the Canada Business Corporations Act. Barzel’s stockholders who properly exercised their conversion rights received $7.84 in cash per share. A total of 3,860,196 shares were converted for an aggregate of $30.3 million in cash. Under the terms of the arrangement agreement, the shareholders of Acquired Company received $56.00 in cash per share ($585.2 million in cash in the aggregate) for all of the outstanding shares of Acquired Company.

Funding for the Acquisition purchase price and related expenses was provided by (i) debt financing, including borrowings under the ABL Credit Facility and proceeds from the sale in private placements of $315.0 million aggregate principal amount of the Notes, (ii) the sale in a private placement of 1,875,000 units of Barzel for $15.0 million, or $8.00 per unit, to certain of the Company’s affiliates, with each unit consisting of one share of common stock and one warrant to purchase one share of common stock at a price of $5.50, exercisable from March 7, 2008 until expiration on November 15, 2011, and (iii) approximately $112.0 million of cash held in trust by Barzel that was raised in its initial public offering in March 2007. Of the gross proceeds from the issuance of the Notes, $125.0 million was loaned by Barzel Finco to Barzel Canada in accordance with

the plan of arrangement, in exchange for intercompany demand promissory notes totaling $125.0 million. Such intercompany notes were pledged, subject to certain limitations, as first-priority collateral to the trustee for the Notes for the benefit of the holders of the Notes (“Noteholders”).

Business Overview

Headquartered in Norwood, Massachusetts, with an operational hub in Ontario, Canada, we operate a network of 18 metal processing, manufacturing and distribution facilities throughout the provinces of Ontario and Québec and in the Northeastern, Mid-Atlantic and Mid-Western United States. We operate these strategically located facilities as one integrated system. 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.

We are a well-diversified, multi-process provider of value-added services and offer a wide range of metal processing solutions to a variety of industries, from construction and industrial manufacturing to finished commercial racking products. We believe we are one of only two independent continuous process picklers in Canada. We also believe our in-line temper mill makes us the only provider of this high-precision service in Canada that is not integrated with a primary steel producer.

We process, manufacture and distribute carbon steel, stainless steel and aluminum products and operate as an intermediary between primary metal producers and the manufacturers that require processed metal, often with a short lead time delivery basis. We produce steel tubing in various sizes primarily for the structural markets. We also produce roll formed steel sections and manufacture heavy equipment parts and accessories. Our flat rolled processing capabilities include pickling, slitting, blanking, leveling, temper-rolling and cutting-to-length to precise customer specifications. Additionally, we perform many of these processing services for customers who provide their own steel, referred to in the industry as toll processing. For a detailed description of our steel processing services, see "Business Products and Services."

Business Strategy

Our company operates as one system, governed by the Decalogue methodology:

Our operating methodology, the Decalogue, was developed by our President, Dr. Domenico Lepore, and a member of our Board of Directors, Oded Cohen. The Decalogue methodology brings together the ideas of Dr. W. Edwards Deming's Theory of Profound Knowledge and Dr. Eli Goldratt's Theory of Constraints, and facilitates their application through a set of logical thinking tools and statistical methods. Through these methods, we thoroughly map our processes and identify, measure and address the constraint in our system, which is defined as the process that most hinders the generation of throughput.

Throughput is the speed at which a system can generate cash through sales. In our case, it begins with the speed at which we can move metal through the system, starting from our suppliers’ ability to provide us with the raw materials, to the delivery of the final product to our customer and our receipt of payment for the work done.

As the generation of throughput takes into account supplier capabilities and customer feedback, it is critical that a holistic approach is used to understand our business. To do that, we use a systemic organizational design to replace traditional hierarchical organizational charts. What the Decalogue methodology acknowledges, that other management systems do not, is the systemic nature of an organization, meaning that the effectiveness of the manufacturing processes in the system can be profoundly impacted by other processes, like human resources or marketing. Thus, the same tools that are used to monitor and manage variations in manufacturing are also used to monitor and manage variations in other processes within our system. The aim is to have a totally synchronized system that is moving, in its entirety, towards the same goal.

We have significantly progressed our project plans for implementing the Decalogue operating methodology at the Company. This transformation allows us to operate as one system instead of 18 separate facilities, and has already enabled (a) the system to operate at much faster cycle times, enabling us to maximize the throughput from the sale of our enhanced capacity, (b) a permanent cash inventory reduction of $88.4 million primarily from this faster replenishment and operating cycle, and (c) the implementation of organizational changes, especially in our replenishment, processing, distribution and sales processes, which we believe will result in a reduction of operating expenses of over $20.0 million in 2009 as compared to 2008.

statistical studies, quality, technical services, new product development, marketing, logistics, safety, process engineering, synchronized manufacturing, human development, information services and sales, among others, of which over 30 have post-graduate degrees, including seven PhDs. We are becoming a Decalogue company, that is, a knowledge-based organization.

We intend to accelerate our growth by identifying and pursuing additional market segments in which we can sell our production capacity. We have identified numerous end markets and we intend to incrementally exploit these market segments to fully utilize our existing capacity. For example, we intend to expand our sales end markets to transportation, non-residential construction, energy, aerospace and defense, railroad manufacturing and mining machinery. We have also identified additional opportunities in certain export market segments.

Industry Overview

Steel suppliers typically fall into three categories of business: primary producers, intermediate processors and service centers. Primary producers typically sell in bulk, with intermediate processors and service centers comprising a large part of their customer base. However, high-volume downstream customers will at times purchase from steel companies in each of the three categories. Intermediate processors are typically positioned in the value chain between primary producers and major industrial customers of processed steel, which include furniture and appliance manufacturers, and industrial and construction companies. Our business model includes activities of both the processor and service center categories but we also utilize these capabilities for our own downstream industrial manufacturing facilities producing metal-based components and end products.

Steel processors and service centers play a key role in the industry supply chain, from precision steel and alloy processing to order aggregation, warehousing and distribution of unprocessed metal products. They respond directly to customers' needs to meet precise specifications regarding length, width, shape and surface characteristics on relatively small orders. Specialized equipment is used to perform processing operations such as cutting-to-length, slitting, shearing, roll forming, shape correction, surface improvement, blanking, temper rolling, plate burning and stamping. The consolidation of steel producers and the increasing prevalence of modern supply chain management practices by downstream steel customers have increased the importance in the supply chain of larger scale steel processors and service centers with the operational resources to efficiently perform value added processing and manage large, diverse inventory bases. Downstream steel buyers have increasingly sought to purchase steel on shorter lead times and with more frequent, flexible and reliable deliveries. During 2008, we entered into new supply agreements with our key steel and aluminum suppliers based primarily on their speed and reliability for replenishing our system. This has resulted in a faster, more reliable delivery time for our customers and a significant reduction in the amount of inventory dollars required in our system to achieve this capability.

Carbon steel production in North America has consolidated significantly over the last few years. Steel prices more than doubled during the first half of 2008, as a resurgence of global economic growth led to a sharp increase in demand for steel and the raw materials used to make it. In particular, steel demand in China grew by double-digit growth rates annually between 2003 and 2008, due to the country's increasingly rapid development. Consolidation was also a factor, as increasingly global producers began to exercise better management practices with respect to capacity management, production scheduling and marketing. Steel prices declined dramatically in the latter part of 2008 and into 2009, following an unprecedented spike through August of 2008. Despite the magnitude of the decline, prices have remained elevated relative to the decade preceding 2004. We believe steel prices have stabilized for the foreseeable future at levels higher than those experienced earlier this decade albeit at a much lower than those experienced in the first eight months of 2008. Although we expect global hot-rolled coil prices to remain in the $500-550 per ton range over the medium-to-long term, this assumes continuing growth in per-capita steel consumption rates in developing regions (including China and India), tighter global raw material supply (due in part to a consolidated base of mining companies) and limited greenfield and brownfield development of new steelmaking capacity. Currently, the global economic outlook does not anticipate this type of continued global demand growth, indicating a possibility for continued weakening in steel prices.

Products and Services

Our manufacturing capabilities are primarily operated in five facilities in Quebec. We produce roll formed steel sections, parts and products and manufacture heavy equipment parts and accessories and lighter metal-based products.

Our tubular capabilities are represented by five mills, of which three are located in Canada and two are located in the United States. One of our tube mills, Delta Tube Inc., is a joint venture with ArcelorMittal Tubular Products Montreal Inc. Tubing is a process by which flat rolled coils are slit and formed into circular, oval, square or rectangular shapes and the seams are welded through an electrical resistance process. We produce steel tubing in various sizes for use in the structural, mechanical and, to a lesser extent, the automotive markets. Our tubing operations are presently structured as follows:

a majority of our tube production is hollow structural sections ("HSS") tubing used largely in construction, energy, agricultural, infrastructure, transportation and industrial applications; and

our tube mills in Mississauga, Ontario, and Jeffersonville, Indiana primarily produce high pressure, hydroform quality tubes for the automotive industry and include in-line precision cutting, finishing, testing and packaging capabilities and currently have limited capability for producing HSS tubing.

Our services also include the following traditional service center processes:

slitting: the cutting of steel to specified widths along the length of steel coil;

leveling: a process used to flatten shape deficiencies in steel coil; and

cutting-to-length: cutting steel across the width of steel coil.

Our services also include higher, value-added processes, which process and transform steel to specified lengths, widths and shapes pursuant to specific customer orders, including the following:

roll forming: flat rolled coils can be pre-punched, in-line welded and formed into sophisticated shapes for specific purposes;

blanking: the cutting of steel into specific shapes with close tolerances;

plate burning: the process of cutting steel, typically in excess of one inch thick, into specific shapes and sizes;

temper rolling: an in-line process that improves the surface finish and flatness of cut-to-length sheet and plate and that eliminates coil memory or springback; and

pickling: an in-line process for cleaning hot-rolled steel coils of rust, scale and dirt.

Our distribution business operates out of five facilities in the Northeastern and Mid-Atlantic United States, strategically located in close proximity to our major customers and transportation routes and distributes steel, aluminum and stainless products, including hot and cold rolled carbon, aluminum, stainless, alloys and coated products in sheet, coil, bar, shapes, tubular and plate forms.

Raw Materials

The principal raw material used in our operations is flat rolled carbon steel, which we purchase directly from steel producers. The steel industry as a whole is cyclical. At times, pricing and availability of steel can be volatile due to numerous factors beyond our control, including general, regional and international economic conditions, production levels, competition, import duties and tariffs and currency exchange rates.

During most of 2008 and prior, we maintained our inventory at levels we believed appropriate to satisfy the anticipated needs of customers based upon historical buying practices, contracts with customers and market conditions. By the end of 2008, we began purchasing steel on a system-wide usage-based replenishment model. We place the highest value on the quality, speed and reliability of our steel suppliers. We believe our replenishment model provides highly reliable supply with the shortest possible lead time. The simplification of our steel coil base and the aggregation of inventory at fewer points in our system have also allowed us to significantly decrease the amount of inventory required for meeting customer needs.

We generally purchase steel at prevailing market prices in effect at the time we place our orders. In recent years, our steel suppliers have been significantly impacted by the shortage of raw materials resulting in cost increases affecting scrap, coke, iron ore and energy. This, together with a number of additional factors, including the strength of the general economy, the increased consolidation of North American steel producers and the demands for steel from the Asian markets has affected the availability and prices of flat rolled carbon steel. During periods of rising prices for steel, we may be negatively impacted by delays between the time of increases in the cost of metals to us and increases in the prices that we can charge for our products. In addition, when metal prices decline, customer demand for lower prices could result in lower sale prices for our products and, as we use existing inventory that we purchased at higher metal prices, lower margins. Consequently, during periods in which we use

this existing inventory, the effects of changing metal prices could adversely affect our operating results. Shorter lead times significantly mitigate this effect.

Suppliers

We purchase flat rolled carbon steel for processing from a number of North American steel producers in quantities that we believe are efficient for such producers. We concentrate on developing process-based working relationships with high-quality North American integrated steel mills and mini-mills and on becoming a valued customer of such producers. We are a major customer of flat rolled coil for some of our principal suppliers.

On November 28, 2008, we entered into a Replenishment Agreement (“Replenishment Agreement”) with ArcelorDofasco Mittal Inc. (“Arcelor”), as supplier, providing for the supply to us of certain grades of hot rolled steel coils. The Replenishment Agreement commenced on January 1, 2009 and will remain in effect until terminated pursuant to the provisions of the Replenishment Agreement. Under the Replenishment Agreement, we agreed to purchase, on a weekly basis, an amount of steel based upon the prior week’s actual quantity and type of steel used. We have agreed to purchase a statistically derived minimum quantity of steel per calendar quarter based upon our actual aggregate usage of steel. Arcelor has agreed to deliver the steel coils reliably, every two weeks. The price for each steel coil purchased under the Replenishment Agreement is based on then-current independent, published steel pricing data.

The steel industry has experienced consolidation in recent years. Further consolidation could result in a decrease in the number of major suppliers or a decrease in the number of alternative supply sources available, which could make it more likely that an inability to obtain steel and other metal products from our traditional suppliers would result in a material adverse effect on our business, financial condition or results of operations. Consolidation could also result in price increases for the steel that we purchase. Such price increases could adversely affect our results of operations if we were not able to pass these price increases on to our customers.

We are operating under and/or migrating toward similar replenishment-based agreements with other suppliers for the purchase of other hot rolled steel and cold rolled steel, aluminum and stainless steel products. This enables us to maintain continued sources of supply at what we believe are competitive prices. We believe that our agreements and the resulting predictability of our usage, better process integration and proximity of our facilities to these major steel trading partners represent important factors in our ability to sustain reliable supply.

Sales and Marketing

During 2008, we established new sales, marketing, product development, technical and customer service processes and capabilities. In addition to dedicated Directors for each process, we also hired technical engineers and experienced sales and marketing professionals. As of February 20, 2009, our combined sales force consisted of 32 salaried sales and marketing professionals, 21 dedicated customer service professionals and eight dedicated product development and technical service professionals. In 2008, our sales efforts were focused primarily on direct customer contact. We believe that management selling is essential to our sales and marketing success. Consequently, our managers, including our chief executive officer and president, are active in marketing the development of unique offers for our customers and potential customers and in external sales. We feel that our commitment to quality, service and speed of product development and delivery has enhanced our ability to differentiate our market offerings.

Customers and Distribution

We serve over 3,800 customers in the United States and Canada. Our diversified customer and geographic base serves to reduce our exposure to fluctuations in business and economic cycles in particular industries and regions. In fiscal year 2008, our top 20 customers accounted for less than 27.0% of total net sales and no one customer accounted for more than 10.0% of sales. Our major customers in 2008 included automotive parts manufacturers and stampers, other steel service centers, general fabricators and manufacturers of transportation equipment, material handling equipment, electrical components, appliances, storage tanks, ship building material, construction and heavy equipment and agricultural equipment. During 2008, we also concluded and effectively exited a significant amount of inventory-intensive business in the automotive segment. We do not anticipate that any single customer in 2009 will account for more than 10% of our total net sales.

Our facilities are strategically located to serve our broad customer base, which is largely located in Central Canada and the Northeastern, Mid-Atlantic and Mid-Western United States. Operating these facilities as one system allows us to operate an

efficient delivery system capable of handling short lead-time orders. We transport most of our products directly to customers via our own fleet of trucks and through independent trucking and logistics firms.

The following table sets forth the net sales of Barzel and Acquired Company for the past three fiscal years:

	Barzel		Acquired Company		Acquired Company
	November 29, 2008		November 24, 2007 (pro forma)		November 25, 2006
	(In thousands of U.S. dollars)
Canadian subsidiaries	$	423,671	$	455,518	$	481,278
U.S. subsidiaries		377,387		345,830		359,520
Total	$	801,058	$	801,348	$	840,798

Management Information Systems

We maintain management information systems, including bar coding systems, which monitor inventory throughout our operations. In particular, the inventory system provides information to our sales and management personnel on a real time basis which enables us to offer our wide range of products to our customers on a timely basis without the need for maintaining inventory of the full product line at all locations. Furthermore, our systems generally provide information with respect to the buying patterns of our customers. We are currently enhancing our systems to enable better synchronization of our replenishment and manufacturing operations and enhance our ability to deliver with shorter lead times and respond faster to our customers' needs.

Quality Standards

Our quality system, internally called The Playbook, is a comprehensive quality system defining our processes, procedures, measurements and established controls covering all material aspects of our system. This includes, but is not limited to, the replenishment of our materials, development of new products, manufacturing of existing products, receipt and management of customer orders, logistics, technical services and related transaction processing. We have a Director of Quality and a dedicated team of professionals ensuring quality through the use of statistical methods. We have a Director of Statistical Studies who oversees the integration of all of these processes, the development of the appropriate statistical methods and measurements and operating effectiveness. The Playbook and the related processes effectively support periodic supplier audits, inspection criteria, traceability and certification. From time to time, we have successfully undergone quality audits by certain of our larger customers.

Backlog

Because of the short lead-time nature of our business, we do not believe the information on backlog of orders is material to an understanding of our steel processing, manufacturing and distribution businesses.

Competition

The principal markets we serve are highly competitive. Our industry is highly fragmented, consisting of numerous small and mid-sized companies, as well as a few larger publicly traded companies. We have different competitors for each of our products and within each geographic region. Our core geographic market encompasses the Canadian provinces of Québec and Ontario and the Northeastern, Mid-Atlantic and Mid-Western United States. Within this geographic market, we compete with other regional and national steel service centers, single location service centers and, to a certain degree, primary steel producers and intermediate steel processors on a regional basis. Our manufactured and tubular products can span broader selling markets, including in some cases Western United States and Canada, and in some instances, exports to Europe.

We compete on the basis of quality, speed and timely delivery, product selection and availability, customer service, quality processing capabilities and price. Our competitors may foresee the course of market development more accurately than we do, produce similar products at a lower cost than we can or adapt more quickly to new technologies or industry and customer requirements. In addition, certain of our competitors have financial and operating resources in excess of our financial and operating resources and may have less financial leverage than we do. As a result, these competitors may be better positioned to respond to downward pricing pressures or other adverse economic or industry conditions or to identify and acquire companies or product lines compatible with their business.

In addition, our marketplace, particularly in structural tubing, is becoming increasingly global and lower cost imports may adversely affect our sales and profit margins.

Although we have been able to successfully compete in the past, we may not be able to continue to do so. Increased domestic and foreign competition could harm our net sales and operating results in the future.

Environmental Regulation

Our operations and facilities are subject to comprehensive and frequently changing federal, state, provincial and local laws and regulations in the United States and Canada relating to the protection of the environment, including those related to air emissions, wastewater discharges, treatment, storage and disposal of hazardous substances and other materials and wastes, and in general, the emissions of pollutants into the environment. Our Stoney Creek, Ontario processing facility and our St. Hubert, Quebec manufacturing facility have obtained ISO 14000 certification.

We believe that we are in material compliance with all currently applicable environmental laws and regulations. We do not anticipate any material expenditure to meet environmental requirements and do not believe that continued compliance with such existing laws and regulations will have a material adverse effect on our operations or financial condition. However, we cannot predict the environmental laws or regulations that may be enacted in the future or how existing or future laws and regulations will be administered or interpreted. Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies or stricter interpretations of existing laws and regulations, may require significant additional expenditures by us which could vary substantially from those currently anticipated.

In October 2001, our subsidiary, American Steel and Aluminum Corporation (“ASA”), was named as one of 57 defendants in an action brought in the United States District Court for the District of Rhode Island by two private parties under the Comprehensive Environmental Response Compensation and Liability Act, or CERCLA, to recover costs incurred and to be incurred in connection with a waste disposal facility in Cumberland, Rhode Island which has been categorized as a Superfund site by federal authorities. During 2006, ASA entered into a settlement with the plaintiffs, with the approval of the United States Environmental Protection Agency, or EPA, resolving its alleged liability for all claims for past and future response and oversight costs in connection with the Remedial Investigation/Feasibility Study for the site. The litigation remains pending against the non-settling defendants. The settlement does not address future remediation costs and we do not believe it is currently possible to estimate its share, if any, of such costs should claims for their recovery be pursued against ASA. As part of the rationalization of our distribution facilities, on February 13, 2009, we sold the facility in Cumberland, Rhode Island. The sale of this facility does not relieve us of potential future liability relating to this Superfund site.

Certain of the facilities that we occupy have been in operation for many years and, over such time, we and the prior owners or operators of such properties may have generated and disposed of wastes which are or may be in the future considered hazardous. Although we are not aware of any such sites as to which material outstanding obligations exist, it is possible that the discovery of additional contamination at these or other sites could result in additional environmental liabilities.

Governmental Regulation

In addition to environmental laws and regulations, our operations are governed by many other laws and regulations, including, without limitation, those relating to workplace safety and employee health. For example, our subsidiaries and affiliates own and lease trucks for transporting products at various facilities. The operation and maintenance of these vehicles is governed by various safety regulations. We believe that we are in compliance with these laws and regulations in all material respects and we do not believe that continued compliance with such laws and regulations will have a material adverse effect on our business, results of operations or financial condition.

Hedging

We do not use derivative commodity instruments to hedge our exposure to the impact of price fluctuations on our principal raw materials. We have in the past and may in the future utilize forward contracts, from time to time, to hedge our exposure to exchange rate fluctuations in connection with future sales and purchases denominated in Canadian dollars. Forward contracts are entered into with reputable financial institutions and we do not enter or hold foreign exchange forward contracts for trading purposes. There were no forward foreign exchange contracts entered into during 2008 or outstanding at November 29, 2008.

Employees

As of November 25, 2007 the Company had approximately 954 employees. During fiscal year 2008, 189 employees were terminated, offset by the addition of approximately 82 new employees of substantially different competencies, educational backgrounds and cultural diversities. In the first quarter of 2009, we further simplified the design of the network, including a reduction in U.S. and Canadian workforce, and rationalized our distribution facilities in the U.S. The implementation of the reduction in workforce and rationalization of our distribution facilities in the U.S. resulted in a total reduction of 203 employees in the U.S. and Canada in the first quarter of 2009. It also included the exit of four redundant distribution facilities located in Connecticut, Massachusetts, Rhode Island and New York in the first quarter of 2009. As of February 20, 2009, the Company had approximately 644 employees.

Of the 644 employees, approximately 22.0% of our total employees, representing certain employees at nine of our 18 facilities, are organized by the United Steelworkers, the Teamsters, the Sheet Metal Workers and independent employee associations. We are currently party to nine collective bargaining agreements. Our labor contracts expire on staggered dates beginning in December 2009. Specifically, the labor contract with the Teamsters covering 32 employees at our Harrisburg facility will expire on December 31, 2009. We do not presently anticipate that any work stoppages will occur prior to renegotiation of these contracts. We believe that our relations with our employees are satisfactory. We have not experienced a work stoppage by any of our unions or employee associations in over 20 years.

Seasonality

Due to the impact of seasons and climate in the regions we predominantly serve and the related seasonality of the businesses of our customers, demand for certain of our products fluctuates during the winter months.

ITEM 1A. RISK FACTORS

You should carefully consider all information that has been included in this report. Our business, results of operations and financial condition may be materially adversely affected due to any of the following risks. In that case, the market price of our securities could decline, and you could lose part or all of your investment.

We are affected by international, national and regional economic conditions. Continuation of the current capital markets crisis and economic downturn will materially adversely affect us.

Financial markets in the United States and elsewhere have been experiencing extreme disruption in recent months, including extreme volatility in securities prices, severely diminished liquidity and credit availability, ratings downgrades and declining asset values. The United States and Canadian economies have entered into recessions. There are growing concerns that other economies will enter recessions. Slowing or declining economic growth in the United States, Canada and elsewhere may cause our current or potential customers to delay or reduce purchases which could, in turn, result in reductions in sales of our products, longer sales cycles and increased price competition, materially and adversely affecting our financial position and results of operations.

Our business may be affected by the general economic conditions of the industries that purchase our products. Reduced demand from any one of these industries could result in lower operating results.

Certain of our products are sold to industries, including automotive, transportation and manufacturing that experience significant fluctuations in demand based on general economic conditions, energy prices, seasonality, consumer demand and other factors beyond our control. The automotive, transportation and manufacturing industries are being severely affected by the current economic downturn and delaying purchases, extending seasonal shutdowns, discontinuing operations at certain of their manufacturing facilities and otherwise reducing production levels, which is impacting demand for our products. Due to the widespread nature of the downturn, diverting sales of our products to customers in other industries is challenging. These events are adversely affecting our operating results and cash flows.

Sales of our products for use in the automotive industry accounted for approximately 22% of our net sales for fiscal year 2008. Such sales include sales directly to the automobile manufacturers and to their components and parts suppliers, as well as to manufacturers supplying the automotive “after market” components and parts. Our automotive customers are also subject, from time to time, to labor problems, which may result in reduced demand for our products.

In addition, although we do not generally sell our products directly to customers outside of North America, our financial performance is nonetheless dependent on a healthy economy outside North America. Our customers sell their products abroad and some of our suppliers buy their raw materials outside North America. As a result, our business is affected by general economic conditions and other factors outside North America.

Our substantial indebtedness may adversely affect our cash flow and our ability to operate our business, remain in compliance with debt covenants, and react to changes in the economy or our industry.

We are highly leveraged, particularly in comparison to some of our competitors. As of November 29, 2008, we had total indebtedness of approximately $348.8 million, including $33.8 million of indebtedness under the ABL Credit Facility (excluding approximately $0.9 million of outstanding undrawn letters of credit thereunder) and $315.0 million of Notes. Our expected debt service obligation is approximately $37.8 million in interest payments per annum. The ABL Credit Facility bears interest at variable rates, based on LIBOR, U.S. base rate or Canadian base rate. If interest rates increase, our debt service obligations on such variable rate indebtedness would increase even though the amount borrowed remained the same.

Our substantial indebtedness could have important consequences, including the following:

	•	it limits our ability to dispose of assets or borrow money for working capital, capital expenditures, acquisitions, debt service requirements and general corporate or other purposes;
	•	a substantial portion of our cash flows from operations will be dedicated to the payment of principal and interest on our indebtedness and will not be available for other purposes, including operations, business opportunities and other general corporate purposes;
	•	it may limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
	•	we are more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;
	•	it makes us more vulnerable to downturns in general economic or industry conditions or in our business;
	•	it may restrict us from making strategic acquisitions, making capital improvements, investing in technology infrastructure or exploiting business opportunities; and
	•	our suppliers and customers may react adversely to our significant debt level.

In addition, the ABL Credit Facility is a five-year facility with no amortizing payments prior to the maturity date, but repayments are required if, at any time, amounts outstanding exceed the then applicable borrowing base. The Notes mature in eight years with no amortizing payments prior to the maturity date. Thus, substantial payment obligations could come due prior to, and will come due at, the maturity date, and there can be no assurance that we will be able to fund such payment obligations at that time out of our cash flow or current assets.

If we are unable to meet our debt service obligations, we may need to obtain additional indebtedness, refinance or restructure all or a portion of our indebtedness, sell assets or raise equity. The current global economic downturn and capital markets crisis would make it very difficult to do so on acceptable terms or at all. If we default on our obligations, it would have a material adverse effect on our business, financial condition and results of operations.

Despite our substantial indebtedness, we may still incur significantly more indebtedness, which could further exacerbate the debt- related risks described in this report.

We may be able to incur substantial additional indebtedness in the future. Although covenants under the Indenture relating to the Notes (the “Notes Indenture”) and the credit agreement relating to the ABL Credit Facility (the “ABL Credit Agreement”) limit our ability to incur certain additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. In addition, neither the Notes Indenture nor the ABL Credit Agreement prevents us from incurring obligations that do not constitute indebtedness as

defined in those documents. If new debt is added to our existing debt levels, the risks associated with debt that we currently face, including our possible inability to service our indebtedness would increase.

If we do not generate sufficient cash flow from operations, we may have to take financing, capital-raising or other actions that may not be available to us on acceptable terms or at all.

Our ability to make required payments on or to refinance our indebtedness will depend on our ability to generate cash flow from operations in the future. To a certain extent, our cash flow is subject to general economic, industry, financial, competitive, operating, legislative, regulatory and other factors, many of which are beyond our control.

If we do not generate sufficient cash flow from operations, we may have to take actions, such as obtaining additional indebtedness, refinancing or restructuring our indebtedness, selling assets, reducing or delaying capital expenditures or seeking to raise additional capital. We may not be able to affect any of these actions on acceptable terms or at all. The ABL Credit Agreement and the Notes Indenture restrict our ability to dispose of assets, obtain additional debt or refinance debt and use the proceeds therefrom or from additional capital. Those proceeds may not be adequate to meet our needs. Further, our ability to restructure or refinance our indebtedness, including the ABL Credit Facility and the Notes, or raise additional debt or capital or sell assets will depend on the condition of the capital markets and our financial condition at such time. In addition, our failure to make scheduled payments of interest and principal on our indebtedness would likely result in a reduction of our credit rating, which could harm our ability to take such actions. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants. Accordingly, our inability to generate sufficient cash flow to satisfy our debt service obligations would have a material adverse effect on our financial condition and results of operations.

A default under the covenants contained in the ABL Credit Agreement or Notes Indenture (including on our obligations to pay our indebtedness) that is not cured or waived could have a material adverse effect on our financial condition and results of operations and our securities.

We currently are in compliance with the covenants contained in the ABL Credit Agreement and the Notes Indenture. However, our ability to continue to comply may be affected by events beyond our control. The breach of any of the covenants contained in the ABL Credit Agreement, unless waived by the lenders, would be a default under the ABL Credit Agreement. This would permit, under certain circumstances, the lenders to accelerate the maturity of the ABL Credit Agreement and elect to terminate their commitments thereunder. This would have an immediate material adverse effect on our liquidity. An acceleration of maturity of the ABL Credit Facility would permit, unless our ABL indebtedness is less than $10.0 million, the holders of the Notes to accelerate the maturity of the Notes. A breach of the covenants in the Notes Indenture also will permit, under certain circumstances, the Noteholders to accelerate the maturity of the Notes. Acceleration of maturity of the Notes would permit the lenders to accelerate the maturity of the ABL Credit Facility and elect to terminate their commitments thereunder. If we were unable to repay our debt to the lenders and holders or otherwise obtain a waiver from the lenders and Noteholders, we could be forced to take the actions described in the preceding risk factor and the lenders and Noteholders could proceed against the collateral securing the ABL Credit Facility and the Notes, which are substantially all of our assets, and exercise all other rights available to them. We cannot assure you that we will have sufficient funds to make these accelerated payments and we may not be able to obtain any such waiver on acceptable terms or at all. Any of such actions could adversely affect the market price of our common stock and warrants, and could force us into bankruptcy.

Limits on our borrowing capacity under the ABL Credit Facility may affect our ability to finance our operations.

While the ABL Credit Facility provides for $175.0 million of commitments, our ability to borrow funds thereunder is subject to, among other things, the amount of eligible accounts receivable and eligible inventory in our borrowing base. Our ability to make borrowings under the ABL Credit Facility also is conditioned upon our compliance with other covenants in the ABL Credit Agreement, including a financial covenant that will apply when excess availability – the amount of eligible assets included in our borrowing base minus the amounts outstanding under the ABL Credit Facility (but not deducting the $15.0 million availability block) - is less than $20.0 million. Because of these limitations, we may not be able to borrow the full amount committed in the ABL Credit Facility and as a result may not be able to meet our cash requirements with funds borrowed under the ABL Credit Facility.

Covenants in the ABL Credit Agreement and the Notes Indenture may restrict our ability to pursue our business strategies.

The ABL Credit Agreement and the Notes Indenture contain, and the agreements governing our future indebtedness may contain, restrictive covenants that may adversely affect our ability to finance future operations or capital needs or to engage in other business activities. The ABL Credit Agreement and the Notes Indenture limit our ability, among other things, to:

	•	incur or guarantee additional indebtedness (including preferred stock);
	•	pay dividends and distributions on, or repurchase or redeem, equity interests and make other similar payments;
	•	create or incur liens;
	•	enter into sale leaseback transactions;
	•	make loans, investments, advances or acquisitions;
	•	sell or otherwise dispose of assets;
	•	repay indebtedness;
	•	enter into transactions with affiliates;
	•	permit our subsidiaries to pay dividends or make distributions;
	•	transfer all or substantially all of our assets or enter into merger or consolidation transactions;
	•	engage in hedging; and
	•	change our lines of business.

In addition, the ABL Credit Agreement includes a financial covenant under which we must maintain a 1.0 to 1.0 fixed charge coverage ratio whenever excess availability – the amount of eligible assets included in our borrowing base minus the amounts outstanding under the ABL Credit Facility (but not deducting the $15.0 million availability block) – is less than $20.0 million. Our ability to comply with this ratio may be affected by events beyond our control. In addition, at any time when excess availability under the ABL Credit Facility is less than $20.0 million for five consecutive business days or there is an event of default under the ABL Credit Agreement, the lenders are entitled to sweep cash from certain of our U.S. and Canadian bank accounts to repay or, in the case of outstanding letters of credit, cash collateralize, any credit extensions outstanding under the ABL Credit Facility. Such cash sweep would terminate when excess availability under the ABL Credit Facility is greater than $20.0 million for 30 consecutive days or such event of default has been cured.

The prices we pay for steel and the prices we are able to charge our customers for our products may fluctuate due to a number of factors beyond our control, which could reduce our operating results and weaken our financial condition.

The cost of steel and other raw materials represented 82.6% of our total net sales in fiscal year 2008. During 2008 and prior we maintained our steel inventory at levels that we believed appropriate to satisfy the anticipated needs of our customers based upon historical buying practices, contracts with customers, customer indications and market conditions. Failure to have sufficient steel supplies and inventory would adversely affect our business.

We generally purchase steel at prevailing market prices in effect at the time we place our orders. During periods of rising prices for steel, our margins may be negatively affected by delays between the time of increases in the cost of steel to us and increases in the prices that we charge for our products. In addition, when steel prices decline, customer demand for lower prices could result in lower sale prices for our products and, as we use existing inventory that we purchased at higher prices, lower margins. These impacts on our operating margins may be material.

An interruption in sources of steel supply could have a material adverse effect on our results of operations.

We purchase our raw materials, including flat rolled carbon steel and a variety of other metals, on a frequent basis from a number of North American metals producers. In fiscal year 2008, our top three steel suppliers represented approximately 24% of our total steel purchasing cost. If we are unable to obtain sufficient amounts of steel and other metal products at competitive prices or on a timely basis from our traditional suppliers (including by reason of the termination of one or more of our relationships with our major suppliers), we may not be able to obtain such products from alternative sources at competitive prices to satisfy our customers’ delivery schedules, which could materially adversely affect our business, financial condition, results of operations and cash flow.

The global steel industry has experienced significant consolidation in recent years. Further consolidation could result in a decrease in the number of major suppliers or a decrease in the number of alternative supply sources available to us, which could make it more likely that an inability to obtain steel and other metal products from our traditional suppliers would result in a material adverse effect on our business, financial condition, results of operations and cash flow.

Rapidly growing supply of steel products in China and other developing economies, which may increase faster than increases in demand, may result in additional excess worldwide capacity and falling steel prices.

Over the last several years, steel consumption in China and other developing economies has increased rapidly. Steel companies have responded by developing steel production capabilities in these countries. Steel production, especially in China, has been expanding significantly and China is now the largest worldwide steel producer by a significant margin. Significant Chinese exports of steel exert downward pressure on steel prices in the Canadian and American markets which could materially and adversely affect our business, results of operations, financial condition and cash flow.

We may be subject to product liability and other damage claims with respect to the products we produce.

We are exposed to product liability claims with respect to defects in our products, including claims by consumers of the products made by our customers, such as our customers in the automotive and construction industries. In addition, we may be subject to liability to our customers for damages incurred by them in the event that a defect or other nonconformity in one of our products results in a recall of, or delay or other disruption in the production of, their products. Any such claims or liabilities for which we are ultimately determined to be responsible could materially adversely affect our financial condition and results of operations, and could materially affect our reputation and relationships with our customers.

We extend trade credit to certain of our customers in the ordinary course of business. The current general economic downturn increases the risk that customers may be unable to repay this credit.

We extend trade credit to our customers in the ordinary course of our business, in some cases for large purchases and for extended periods of time. We are therefore exposed to the risk that some of our customers may be unable to repay us. This risk has increased significantly in light of the current general economic downturn. Significant defaults by our customers could adversely affect our business, results of operations, financial condition and cash flow.

We may not be able to grow our business in the future or to manage our growth effectively.

We intend to grow our business internally and through selective acquisitions, and we periodically review acquisition and expansion opportunities. Acquisitions involve risks that the businesses acquired will not perform in accordance with expectations and that business judgments concerning the value, strengths and weaknesses of businesses acquired will prove incorrect. Any new facility or operation or any future acquisitions may adversely affect our operating results by creating operating inefficiencies that could disproportionately increase our operating expenses. In addition, any new facility or operation could adversely affect our results of operations due to start-up costs and the potential for underutilization in the start-up phase. Acquisitions could also result in unforeseen integration difficulties and could result in increased costs and divert a disproportionate amount of management time and attention which could decrease the time that they have to service and attract customers and develop new products and services. We may not be able to retain the management, key employees or significant customers of an acquired business.

Restrictions contained in the ABL Credit Facility and the Notes Indenture limit our ability to make certain investments, including acquisitions and participation in joint ventures. Future acquisitions may result in the incurrence of additional indebtedness and contingent liabilities, an increase in interest expense and impairment charges related to goodwill and other intangible assets as well as significant integration costs.

Our results of operations for any fiscal quarter are not necessarily indicative of our results of operations for a full fiscal year.

Certain of our products are sold to industries that experience significant fluctuations in demand, including fluctuations from quarter to quarter, due to such factors as changes in general economic conditions, energy prices, seasonality and consumer demand. We have experienced, and expect to continue to experience, volatility with respect to demand for and prices of our products. Accordingly, results of operations for any fiscal quarter are not necessarily indicative of the results of operations for a full fiscal year.

Our Canadian operations subject us to currency translation risk which could cause our reported results to fluctuate significantly from period to period.

We receive a material portion of our revenue from our Canadian operations in Canadian dollars. For each reporting period, we translate the results of operations and financial condition from our Canadian operations into U.S. dollars. Therefore, our reported results of operations and financial condition are subject to changes in the exchange relationship between the two currencies. For example, as the Canadian dollar has recently weakened against the U.S. dollar, our revenue, as reported, has been unfavorably affected and, conversely, expenses have been favorably affected. However, if the Canadian dollar strengthens against the U.S. dollar in the future, our revenue, as reported, will be favorably affected and, conversely, expenses will be unfavorably affected. Fluctuations in the relative values of the U.S. dollar and the Canadian dollar could negatively affect our results of operations and assets and liabilities as reported in our financial statements.

We could incur substantial costs in order to comply with, or to address any violations or liabilities under, environmental and occupational health and safety laws, significantly increasing our operating expenses and reducing our operating income.

Our operations and facilities, primarily our processing centers and manufacturing facilities, are subject to comprehensive and frequently changing federal, state, provincial and local laws and regulations in the United States and Canada relating to the protection of the environment, including those related to air emissions, wastewater discharges, treatment, storage and disposal of hazardous substances and other materials and wastes, and, in general, the emissions of pollutants into the environment. We are also subject to occupational health and safety laws and regulations. We have made, and will continue to make, significant expenditures to comply with such laws and regulations. Adoption of more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies or stricter interpretations of existing laws and regulations, may require significant additional expenditures by us which could vary substantially from those currently anticipated.

We also could incur substantial costs, including cleanup costs, fines and civil and criminal sanctions and third-party claims for property damage and personal injury, as a result of violations of or liabilities under environmental laws and regulations. For example, our U.S. subsidiary, ASA, is one of the defendants in an action brought in 2001 by two private parties under the Comprehensive Environmental Response Compensation and Liability Act, or CERCLA, to recover costs incurred and to be incurred in connection with a waste disposal facility in Cumberland, Rhode Island, which has been categorized as a Superfund site by federal authorities. There are a total of 57 defendants. The plaintiffs claim that ASA is liable based upon alleged shipments to the site by it. The plaintiffs have identified over 100 potentially responsible parties, or PRPs, and the Environmental Protection Agency, or EPA, has issued claim notice letters to 63 parties, some of which are defendants in the lawsuit. In 2003, ASA received an EPA claim letter seeking reimbursement of costs incurred and to be incurred at the site. During 2006, American Steel and Aluminum Corporation and approximately 25 other defendants entered into a settlement resolving their alleged liability for all claims for past and future response and oversight costs in connection with the Remedial Investigation/Feasibility Study for the site. The litigation remains pending against the non-settling defendants. The settlement does not address future remediation costs, and we do not believe it is currently possible to estimate our share, if any, of such costs, should claims for their recovery be pursued against us. We believe that we have meritorious defenses against any such claims, and we intend to defend our position vigorously should they be pursued against us. However, we may not prevail in such event, and any significant loss could have an adverse effect on our financial results. As part of the redesign of our distribution facilities, on February 13, 2009 we sold the facility in Cumberland, Rhode Island. The sale of this facility does not relieve us of our potential liability for such environmental claims.

Certain of the facilities that we occupy have been in operation for many years and, over such time, we and the prior owners or operators of such properties may have generated and disposed of wastes which are or may be in the future considered hazardous. Although we are not aware of any such sites as to which material outstanding obligations exist, it is possible that the discovery of contamination at these or other sites could result in future environmental liabilities.

Unexpected equipment failures may lead to production curtailments or shutdowns.

Our manufacturing processes are dependent upon critical pieces of steel processing and manufacturing equipment, such as an in-line temper mill, cut-to-length line, slitting line, pickling line, tube mill and roll forming and stamping equipment, and

this equipment may, on occasion, incur downtime as a result of unanticipated failures. We do not have redundant capabilities with respect to the output of our hydroform tubing lines in Mississauga, Ontario and Jeffersonville, Indiana, or our pickling line in Stoney Creek, Ontario. In addition to periodic equipment failures, our facilities are also subject to the risk of catastrophic loss due to unanticipated events such as fires, explosions or violent weather conditions. Unexpected interruptions in our production would adversely affect our productivity and results of operations. Moreover, any interruption in production capability may require us to make significant capital expenditures to remedy the problem. Our insurance may not cover our losses. In addition, long-term business disruption could harm our reputation and result in a loss of customers, which could adversely affect our business, results of operations and financial condition.

We operate in a highly fragmented and competitive industry and increased competition could reduce our sales and operating results.

The principal markets that we serve are highly competitive. Our industry is highly fragmented, consisting of numerous small and mid-sized companies, as well as a few larger publicly-traded companies. Our geographic market encompasses the Northeastern, Mid-Atlantic and Mid-Western United States and the Canadian provinces of Québec and Ontario. Within this geographic market, we compete with other regional and national steel service centers, single location service centers and, to a certain degree, primary steel producers and intermediate steel processors on a regional basis. We have different competitors for each of our products and within each geographic region.

We compete on the basis of quality, speed and timely delivering, product selection, customer service, quality processing capabilities and price. Our competitors may foresee the course of market development more accurately than we do, produce similar products at a lower cost than we can or adapt more quickly to new technologies or industry and customer requirements. In addition, certain of our competitors have financial and operating resources in excess of our financial and operating resources and may have less financial leverage than we do. As a result, these competitors may be better positioned to respond to downward pricing pressures or other adverse economic or industry conditions or to identify and acquire companies or product lines compatible with their business.

In addition, our marketplace, particularly in structural tubing, is becoming increasingly global, and lower cost imports may adversely affect our sales and operating margins.

Although we have been able to successfully compete in the past, we may not be able to continue to do so. Increased competition could harm our net sales and operating results in the future.

If our customers, which are primarily North American manufacturing and industrial companies, relocate operations or outsource functions overseas, we could lose their business.

Our customer base is located in the United States and Canada and consists primarily of manufacturing and industrial companies. Some of our customers operate in industries that are undergoing consolidation. In addition, some of our customers operate in industries that are considering or have begun relocating production operations overseas or outsourcing particular functions overseas. We do not currently operate facilities outside of North America. To the extent our customers cease North American operations, relocate their production operations or outsource particular functions overseas, we could lose their business. Acquirers of manufacturing and industrial companies may have suppliers of choice that do not include us. These events could have an adverse effect on our results of operations and financial condition.

Our operations may be impacted by future labor negotiations or work stoppages and our inability to renegotiate labor contracts when they expire.

As of February 20, 2009, we employed approximately 644 persons. Of the 644 employees, approximately 22.0% of our total employees as of February 20, 2009, representing certain employees at nine of our 18 facilities, are organized by the United Steelworkers, the Teamsters, and independent employee associations. We are currently party to nine collective bargaining agreements. Our labor contracts expire on staggered dates beginning in December 2009. The labor contract with the Teamsters covering 32 employees at our Harrisburg facility will expire in December 2009. We may not be able to successfully negotiate extensions of these agreements or new labor contracts for these employees without any labor disruption. Work stoppages could have a direct negative impact on our ability to conduct business and continue production and on our results of operations.

We depend on our operating management team and the loss of a number of the members of our management team could prevent us from implementing our operating methodology.

The success of our business is dependent upon the management and leadership of our operating management team. With the consummation of the Acquisition, we have begun to implement the Decalogue operating methodology. The loss of a number of qualified team members or our inability to attract additional qualified personnel could adversely affect our ability to conduct, manage and grow our business.

Failure to successfully implement the Decalogue operating methodology, may impede our plans to increase revenues and cash flow.

Our revenues and cash flows will not increase as planned if we fail to successfully implement the key elements of the Decalogue operating methodology. For example, in that case, we may not be able to achieve and maintain higher operating capacities, faster cycle times and related inventory management objectives and lower fixed operating expenses. Also, if we are unable to identify and pursue new market segments for our products, we may not be able fully utilize our production capacity and increase our sales.

Damage to our information technology infrastructure could harm our business.

The unavailability of any of our management information systems for any significant period of time could have a material adverse effect on our operations. We use management information systems to track inventory information at individual facilities and manage inventory levels successfully, communicate customer information and aggregate daily sales, margin and promotional information. These systems are vulnerable to, among other things, damage or interruption from fire, flood, tornado and other natural disasters, power loss, computer system and network failures, operator negligence, physical and electronic loss of data, or security breaches and computer viruses.

The unaudited pro forma condensed financial statements are not an indication of the combined company’s financial condition or results of operations following the Acquisition.

The unaudited pro forma condensed financial statements contained in this report have been derived from the historical financial statements of Symmetry and Acquired Company to reflect what combined results might have been during those periods, and many adjustments and assumptions have been made regarding the combined company after giving effect to the Acquisition. As a result, the actual future financial condition and results of operations of the Company may not be consistent with, or evident from, the unaudited pro forma condensed financial statements.

The price of our equity securities is subject to fluctuation that may not be related to our performance.

The stock market in general has been highly volatile and has experienced extreme price and volume fluctuations. These broad market movements may adversely affect the market price of our common stock and warrants, and investors in these securities may experience a decrease in the value of their securities, including decreases unrelated to our operating performance or prospects.

If the market price of our common stock does not increase, we may not be able to maintain our listing on the NASDAQ Capital Market (“NASDAQ”), which may impair our financial flexibility and restrict our business significantly.

Our common stock is listed on NASDAQ. We cannot assure you that NASDAQ will continue its suspension of the continued listing requirement relating to minimum bid prices of securities, currently scheduled to expire on April 20, 2009. If NASDAQ discontinues such suspension and our common stock continues to trade at current prices, we cannot assure you that we will meet the criteria for continued listing on NASDAQ and our common stock could become delisted.

If NASDAQ delists our common stock, we could face significant material adverse consequences, including:

	•	a limited availability of market quotations for our securities;
	•	a determination that our common stock is a “penny stock”, which would require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

	•	a reduced amount of news and analyst coverage for us;
	•	a decreased ability to issue additional securities or obtain additional financing in the future; and
	•	a decreased ability of our equity security holders to sell their securities or our warrant holders to exercise their warrants because of state securities law restrictions.

If the common stock is delisted from NASDAQ and we are no longer subject to the reporting requirements of the Securities Exchange Act of 1934, our Notes Indenture requires us to continue making public filings with the SEC, with its attendant costs.

The liquidity of our securities is uncertain. The limited trading volume of our securities may depress the price of such securities or cause it to fluctuate significantly.

Although our common stock and warrants are listed on NASDAQ, there has been a limited public market for such securities and there can be no assurance that an active trading market for such securities will develop. As a result, you may not be able to sell our common stock and warrants in short time periods, or possibly at all. Furthermore, there is no established trading market for the Notes. We do not intend to list the Notes on a national securities exchange or include the Notes in any automated quotation system. If an active trading market for the Notes were to develop, it could be discontinued at any time. Moreover, the Notes could trade at prices that may be higher or lower than their principal amount or purchase price, depending on factors including prevailing interest rates, the market for similar notes and our financial performance. The absence of an active trading market for our securities may cause the price per share of our common stock and the price per warrant to fluctuate significantly and limit the ability of Noteholders to transfer the Notes.

You may not receive a return on investment through dividend payments or stock repurchases or upon the sale of our securities.

We do not anticipate paying any dividends to our stockholders or repurchasing any of our securities in the near term. You also may not realize a return on your investment upon selling our securities.

Provisions in some of our important documents, as well as Section 203 of the Delaware General Corporation Law (the “DGCL”), could make it more difficult for a third party to acquire us, even if doing so might be beneficial to our security holders.

Our amended and restated certificate of incorporation and by-laws contain certain provisions concerning stockholder proposals, voting, issuance of preferred stock, removal of directors and other matters that may make it more difficult or expensive to complete or otherwise discourage a tender offer or a change in control or takeover attempt by a third party, even if such a transaction would be beneficial to our security holders. The existence of these provisions may have a negative impact on the price of our common stock, warrants and Notes and the rights of the holders of our securities. The issuance of preferred stock could be utilized as a method of discouraging, delaying or preventing a change of control. Further, the Notes Indenture and ABL Credit Agreement provide that certain events that would constitute a change of control also would constitute an event of default, and in the case of the Notes Indenture would require us to pay the purchase price of outstanding Notes. We cannot assure you that we will have the financial resources necessary to pay the purchase price of the outstanding Notes or repay any accelerated ABL indebtedness upon the occurrence of such an event of default.

Under Section 203 of the DGCL, Delaware corporations whose securities are listed on a national securities exchange, like NASDAQ, may not engage in business combinations such as mergers or acquisitions with any interested stockholders, defined as an entity or person beneficially owning 15% or more of our outstanding common stock, without obtaining certain prior approvals. As a result, potential acquirers may be discouraged from attempting to effect an acquisition transaction with us, thereby depriving holders of our securities of opportunities to sell or otherwise dispose of the securities at prices above prevailing market prices.

We may not be able to repurchase the Notes upon a change of control as required by the Notes Indenture.

Upon the occurrence of certain specified kinds of change of control events, Noteholders may require Barzel Finco to make an offer to purchase the outstanding Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date. If such event were to occur, we may not have sufficient funds to pay the

purchase price of the outstanding Notes, and we expect that we would require third party financing to do so. We cannot assure you that we would be able to obtain this financing on favorable terms or at all. The ABL Credit Agreement also provides that a change of control event, as defined in such agreement, is an event of default that permits the lenders thereunder to accelerate the maturity of any outstanding borrowings thereunder and to terminate the commitments. If such ABL indebtedness is not paid or a waiver of that event of default is not obtained, the ABL lenders may enforce their security interest in the collateral securing the ABL Credit Facility, thereby limiting our ability to raise cash to purchase the Notes and reducing the practical benefit of the offer-to-purchase provisions to Noteholders. Even if a waiver of the event of default of the ABL Credit Agreement for the change of control were obtained, covenants in the ABL Credit Agreement could restrict Barzel Finco from purchasing the Notes. Barzel Finco’s failure to purchase tendered Notes would result in an event of default under the Notes Indenture and a cross-default under the agreements governing certain of our other indebtedness (including the ABL Credit Agreement), which may result in the acceleration of such indebtedness requiring Barzel Finco to repay that indebtedness immediately. We cannot assure you that we will have sufficient funds to purchase outstanding Notes and repay such accelerated indebtedness on the occurrence of any such event. Any of our future debt may contain similar provisions.

In addition, the change of control provisions in the Notes Indenture may not protect Noteholders from certain important corporate events, such as a leveraged recapitalization (which would increase the level of our indebtedness), reorganization, restructuring or other similar transaction, unless such transaction constitutes a “Change of Control” under the Notes Indenture. If an event occurs that does not constitute a “Change of Control” as defined in the Notes Indenture, we will not be required to make an offer to repurchase the Notes and Noteholders may be required to continue to hold their Notes despite the event.

Because Barzel, Barzel Holdings and Barzel Finco are holding companies, Barzel Finco’s ability to repay its indebtedness is dependent on cash flow generated by its subsidiaries and their ability to make distributions to it, and Noteholders should not place undue reliance on the guarantees provided by Barzel and Barzel Holdings. The Notes are structurally subordinated in right of payment to the indebtedness of most of our subsidiaries that have not guaranteed the Notes, and the intercompany demand promissory notes are structurally subordinated in right of payment to the indebtedness of Barzel Canada’s subsidiaries.

Barzel Finco is a holding company with no significant operations or assets other than the equity interests it holds in its subsidiaries and intercompany demand promissory notes issued by Barzel Canada to Barzel Finco totaling $125.0 million. Its ability to pay principal and interest on its indebtedness (including the Notes) is dependent on the generation of cash flow by its subsidiaries (including its subsidiaries that are not guarantors) and their ability to make such cash available to Barzel Finco, by dividend, debt repayment or otherwise. Unless they are Note guarantors, Barzel Finco’s subsidiaries (other than Barzel Canada, to the extent of the value of the intercompany demand promissory notes) do not have any obligations to pay amounts due on the Notes or to make funds available for that purpose. While we and our existing domestic subsidiaries (other than Barzel Finco) initially guaranteed the Notes on a senior secured basis, such guarantees and the related security interests could be rendered unenforceable, in which case Noteholders would lose their direct claim against the entities holding substantially all of our operating assets. In addition, in the event of insolvency, liquidation, reorganization, dissolution or other winding up of any of Barzel Finco’s subsidiaries who are not guarantors (other than Barzel Canada, to the extent of the value of the intercompany demand promissory notes), all of such subsidiary’s creditors would be entitled to payment in full out of such subsidiary’s assets before Noteholders would be entitled to any payment. Any payments of dividends, distributions, loans or advances to Barzel Finco by its subsidiaries could also be subject to taxes or restrictions on dividends or transfers under applicable local law in the jurisdictions in which its subsidiaries operate. If Barzel Finco does not receive distributions from its subsidiaries, or to the extent that the earnings from (or other available assets of) its subsidiaries are insufficient, Barzel Finco may be unable to make required principal and interest payments on its indebtedness, including the Notes.

Barzel and Barzel Holdings also are holding companies whose entire operating income and cash flow are derived from their subsidiaries and whose only material assets are, in the case of Barzel, the capital stock of Barzel Holdings, and, in the case of Barzel Holdings, the capital stock of Barzel Finco. Therefore, undue reliance should not be placed by Noteholders on the guarantees of the Notes provided by Barzel and Barzel Holdings.

The Notes are structurally subordinated in right of payment to the indebtedness of our subsidiaries that have not guaranteed the Notes (other than Barzel Canada, to the extent of the value of the intercompany demand promissory notes that may be enforced by the Notes trustee, and Barzel Finco), and the intercompany demand promissory notes are structurally subordinated in right of payment to the indebtedness of Barzel Canada’s subsidiaries. Our subsidiaries that are not Note guarantors (other than Barzel Finco) have no obligation to pay any amounts due on the Notes or the related guarantees or to provide Barzel Finco or the Note guarantors with funds for payment obligations with respect to such indebtedness (and Barzel Canada’s subsidiaries have no obligation to pay any amounts due on the intercompany demand promissory notes or to provide Barzel Canada with funds for payment obligations with respect to the intercompany demand promissory notes), whether by dividend, distribution, loan or other payment. In addition, the Notes Indenture, subject to certain limitations, permits the non-guarantor subsidiaries and Barzel

Canada’s subsidiaries to incur additional indebtedness and permits us to make unlimited amounts of investments in the non-guarantor restricted subsidiaries and Barzel Canada to make unlimited amounts of investments in its subsidiaries that are restricted subsidiaries.

Barzel Canada’s obligation to provide Barzel Finco with funds for payment of the Notes will be limited to the value of the intercompany demand promissory notes, and the ability of the Notes trustee to enforce payment due under the intercompany demand promissory notes is limited by the provisions set forth in an intercreditor agreement among us, the Notes trustee and the ABL collateral agent. Other than as provided in the preceding sentence, our Noteholders will not have any claims as creditors against any of the non-guarantor subsidiaries. Indebtedness and other liabilities, including trade payables, whether secured or unsecured, of the non-guarantor subsidiaries (other than Barzel Canada, to the extent of the value of the intercompany demand promissory notes that may be enforced by the Notes trustee) are effectively senior to Noteholders’ claims against those subsidiaries as Noteholders. Neither Barzel Finco nor any Noteholder has any claim as a creditor against any of Barzel Canada’s subsidiaries. Indebtedness and other liabilities, including trade payables, whether secured or unsecured, of Barzel Canada’s subsidiaries is effectively senior to Barzel Finco’s claims against those subsidiaries or Noteholders’ claims against those subsidiaries as Noteholders.

For the fiscal year ended November 29, 2008, our non-guarantor subsidiaries (including Barzel Canada) generated total revenues of $436.3 million and operating loss (including intercompany transactions) of $53.0 million. Our non-guarantor subsidiaries had $54.2 million of total liabilities (including trade payables, but excluding intercompany liabilities) and $214.1 million of total assets as of November 29, 2008.

The pledge to the Notes trustee of the capital stock, intercompany demand promissory notes and other securities securing the Notes automatically will be limited to the extent it would require the filing with the SEC of separate financial statements for any of our subsidiaries.

The Notes Indenture provides that, to the extent that separate financial statements of any of our subsidiaries would be required by SEC rules due to the fact that such subsidiary’s capital stock, intercompany demand promissory notes or other securities secure the Notes, the pledge of such capital stock, intercompany demand promissory notes or other securities of such subsidiary automatically will be limited such that the value of the portion of such capital stock, intercompany demand promissory notes and other securities of such subsidiary pledged to the Notes trustee will, in the aggregate, at no time exceed 19.999% of the aggregate principal amount of the then outstanding Notes.

Statutes may allow courts, under specific circumstances, to void the Notes and the related guarantees, or the intercompany demand promissory notes and security granted in connection with such notes, and require Noteholders or Barzel Finco, as applicable, to return payments received thereon.

The issuance of the Notes and the related guarantees may be subject to review under federal and state fraudulent transfer and conveyance statutes, and the intercompany demand promissory notes may be subject to review under such statutes as well as similar Canadian federal and provincial statutes, if Barzel Finco, Barzel Canada or any guarantor becomes a debtor in a case under any bankruptcy law. A court may void or otherwise decline to enforce the Notes or the related guarantee or the intercompany demand promissory notes, as applicable. A court might do so if it found that when Barzel Finco issued the Notes or the guarantor entered into its guarantee, or when Barzel Canada issued the intercompany demand promissory notes or when payments became due thereunder (or, in some states, when payments became due under the Notes or the related guarantee), the issuer or guarantor received less than reasonably equivalent value or fair consideration and either:

	•	was or was rendered insolvent by reason of such transactions;
	•	was engaged in a business or transaction for which Barzel Finco’s, Barzel Canada’s or such guarantor’s remaining assets constituted unreasonably small capital; or
	•	intended to incur, or believed that it would incur, debts beyond its ability to repay such debts as they matured.

The court also might void the issuance of the Notes or a related guarantee, or the intercompany demand promissory notes, without regard to the above factors, if the court found that the issuer issued the relevant notes or the guarantor entered into its guarantee with actual intent to hinder, delay or defraud its creditors.

Certain provisions of the intercompany demand promissory notes can be changed, and the intercompany demand promissory notes can be prepaid in whole or in part, without the consent of Noteholders. Prepayment would increase the

structural subordination of the Notes. Prepayment or changes in such provisions could reduce or eliminate the ability of Noteholders to seek recovery directly from Barzel Canada upon a default under the Notes.

In general, the intercompany demand promissory notes cannot be changed or, in the case of the intercompany demand promissory notes issued on the Acquisition date, prepaid or otherwise discharged, without the consent of Noteholders. However, without the consent of Noteholders:

	•	the interest rate, interest payment dates, currency of payment of principal and currency in which any intercompany demand promissory note is denominated (subject to certain limitations) can be amended and the payment of interest may be deferred; and
	•	any intercompany demand promissory note can be prepaid or repaid in whole or in part; provided that, in the case of the intercompany demand promissory notes issued on the Acquisition date, the proceeds are applied to an offer to purchase Notes at a purchase price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest, if any, or to redeem the Notes in accordance with the Notes Indenture.

To the extent we change the currency of any intercompany demand promissory notes to Canadian dollars, the principal amount (expressed in U.S. dollars) of such intercompany demand promissory note could increase or decrease at any time due to changes in currency exchange rates. A reduction in the principal amount of any intercompany demand promissory note would decrease the secured debt claim against Barzel Canada and therefore would increase the structural subordination of the Notes, and reduce the ability of Noteholders to realize upon the assets of Barzel Canada upon a default under the Notes Indenture.

Rights of Noteholders in the collateral may be adversely affected by the failure to create or perfect security interests in certain collateral, and rights of Barzel Finco in the intercompany note collateral may be adversely affected by the failure to create or perfect security interests in certain intercompany note collateral.

The collateral securing the Notes consists of assets, both tangible and intangible, whether now owned or acquired or arising in the future, of Barzel Finco and the guarantors. Barzel Finco’s security interests in the intercompany note collateral include assets, both tangible and intangible, whether now owned or acquired or arising in the future, of Barzel Canada. Applicable law requires that certain property and rights acquired after the grant of a general security interest can only be perfected at the time such property and rights are acquired and identified. There can be no assurance that all necessary action will be taken to properly create and perfect the security interest in such after acquired collateral or intercompany note collateral. Such failure may result in the loss of the security interest therein or the priority of the security interest in favor of the Notes or the intercompany demand promissory notes against third parties.

In addition, the Notes Indenture contains exceptions for the creation or perfection of security interests in specific assets. Thus, if security interests are not created or perfected in such assets, Noteholders may be unable to realize thereon in the event of a default.

There may not be sufficient collateral to pay all or any of the Notes or the intercompany demand promissory notes, and our Noteholders will not control certain decisions regarding second-priority collateral.

There may not be sufficient collateral to pay all or any of the amounts due on the Notes or sufficient intercompany note collateral to pay all or any of the amounts due on the intercompany demand promissory notes. Noteholders will not control decisions regarding the second-priority collateral or the intercompany note collateral and may not be able to do so for the first-priority collateral.

Indebtedness outstanding under the ABL Credit Facility, certain interest rate protection and other hedging agreements, certain obligations in respect of cash management services and certain other indebtedness permitted to be incurred by us in the future under the Notes Indenture are (or, in the case of such future indebtedness, may be) secured on a first-priority basis by the second-priority collateral. The second-priority collateral consists of (i) accounts receivable and related records, chattel paper, deposit accounts, cash, checks and other negotiable instruments, funds and other evidences of payment, (ii) inventory, (iii) documents, general intangibles, instruments, investment property and letter of credit rights, in each case to the extent evidencing, governing, securing or otherwise related to the items referred to in clause (i) or (ii) above, (iv) books and records related to the foregoing, (v) collateral security and guarantees given by any person with respect to any of the foregoing, and (vi) proceeds, including insurance proceeds, of any and all of the foregoing, in each case of Barzel Finco and each guarantor, whether owned on the issue date of the Notes or thereafter acquired, and subject to certain exceptions and permitted liens. In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding against Barzel Finco or any guarantor, the

second-priority collateral must be used to pay in full indebtedness incurred under the ABL Credit Facility before any payment may be made on the Notes. In addition, because a portion of the first-priority collateral consists of pledges of 66% of the capital stock of certain of our foreign subsidiaries, the validity of those pledges under local law, if applicable, and the ability of Noteholders to realize upon that collateral under local law, to the extent applicable, may be limited by such local law, which limitations may affect the first-priority liens securing the Notes.

Subject to the first-priority security interest in the Canadian ABL assets securing the Canadian ABL obligations, to the extent other indebtedness has a first-priority security interest in the intercompany note collateral, Noteholders will have to share the value of the assets comprising such collateral with the holders of such other indebtedness on a pari passu basis in the event of bankruptcy, liquidation, dissolution, reorganization or similar proceeding against Barzel Canada. As of November 29, 2008, there was $158.8 million of indebtedness outstanding secured by the Canadian ABL assets on a first-priority basis, including $125.0 million of indebtedness under the intercompany demand promissory notes issued on the Acquisition date and $33.8 million of indebtedness under the ABL Credit Facility (excluding approximately $0.9 million in undrawn outstanding letters of credit issued thereunder).

In addition, the Notes trustee’s right to repossess and dispose of the collateral securing the Notes upon acceleration is likely to be significantly impaired by federal bankruptcy or other insolvency law if such proceedings are commenced by or against us.

A downgrade, suspension or withdrawal of the rating assigned by a rating agency to the Notes, if any, could cause the liquidity or market value of the Notes to decline.

The Notes have been rated by nationally recognized statistical rating agencies. The Notes may in the future be rated by additional rating agencies. We cannot assure you that any rating assigned will remain for any given period of time or that a rating will not be lowered or withdrawn entirely. A rating is not a recommendation to purchase, hold or sell securities. Any lowering or withdrawal of a rating by a rating agency could reduce the liquidity or market value of the Notes.

Noteholders may be required to include certain amounts into income before interest is actually paid on the Notes.

Although not completely clear, we believe the Notes were not issued with original issue discount. If a Noteholder purchases a Note for an amount that is less than its stated redemption price at maturity, the amount of the difference will be treated as "market discount," unless such difference is less than a specified de minimis amount. Under the market discount rules, a Noteholder will be required to treat any principal payment on, or any gain on the sale, exchange, retirement or other disposition of a Note as ordinary income to the extent of any accrued market discount that has not previously been included in income, unless such Noteholder elects to include market discount in income currently as it accrues. A Noteholder may be required to defer a portion of its interest deductions for a taxable year attributable to any indebtedness incurred or continued to purchase or carry a Note purchased with market discount. Any such deferred interest expense would not exceed the market discount that accrues during such taxable year and is, in general, allowed as a deduction not later than the year in which such market discount is includible in income. A Noteholder that elects to include market discount in income currently as it accrues (which election is applicable to all market discount instruments acquired by the Noteholder thereafter and is terminable only with the consent of the Internal Revenue Service) is not subject to the foregoing interest expense deferral rule.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTY

The following chart describes each of our Canadian facilities:

Subsidiary/location	Description of operations and products				Title
Barzel Canada LaSalle, Québec	• • • •	160,000 sq. ft. Temper mill Two cut-to-length lines Two slitting lines	•	Hot-rolled, hot-rolled pickled and oiled and tubing	Leased to November 2019

Delta Tube Inc. LaSalle, Québec (60% Owned)	• •	100,000 sq. ft. HSS tube mill, up to 5" ´ 5" ´ 1¤4"	•	Toll rolling of HSS tubing for Barzel and pipe for ArcelorMittal Tubular Products Montreal Inc.	Owned
Barzel Canada Baie d'Urfé, Québec	• •	47,100 sq. ft. Hot-rolled tube mill up to 3" O.D.	•	Toll rolling of tubing for the structural market	Leased to May 31, 2013
Barzel Canada Mississauga, Ontario	• •	90,000 sq. ft. Cold-rolled tube mill up to 4" O.D.	•	High quality mechanical tubing targeting hydroformed automobile components and other automotive and general manufacturing applications	Leased to April 30, 2012
Barzel Canada Stoney Creek, Ontario	• • •	171,000 sq. ft. Pickling line Two slitting lines	•	Pickling and slitting of coils on a toll rolling basis	Owned
Barzel Canada Dorval, Québec	• • •	75,500 sq. ft. Slitting line Two precision multi-blanking cut-to- length lines	•	Hot-rolled, cold-rolled and galvanized products for general manufacturing applications	Leased to November 30, 2009
Barzel Canada Granby, Québec	• • • •	71,600 sq. ft. 15 roll forming lines Seven punch presses Stamping and manufacturing	•	Variety of sophisticated roll formed sections on customer demand	Owned
	•	In-line welding
Barzel Canada Granby, Québec	• •	72,500 sq. ft. Electrostatic powder coating	•	Pallet racking	Owned
Barzel Canada St. Hubert, Québec	• •	118,300 sq. ft. Manufacturing	•	Front loader buckets	Leased to December 31, 2011
Barzel Canada Shawinigan, Québec	• • • •	19,322 sq. ft. Five punch presses Stamping Assembly	•	Hardwood flooring nails, nailers and accessories	Leased to February 28, 2009
Barzel Canada Bromont, Québec	•	7,500 sq. ft.	•	Hardwood flooring nails	Leased to April 30, 2010

The following chart describes our two tubing facilities in the United States:

Subsidiary/location	Description of operations and products				Title
Nova Tube and Steel, Inc. Morrisville, PA	• • • •	163,300 sq. ft. HSS tube mill up to 6" ´ 6" ´ 3¤8" Heavy gauge slitter Heavy gauge cut-to-length line	• •	Hot-rolled HSS tubing up to 6" square Hot-rolled sheet and plate coil	Owned
Nova Tube Indiana, LLC Jeffersonville, IN	• •	108,000 sq. ft. Mechanical tube mill up to 7" O.D.	•	High quality mechanical tubing targeting hydroformed automobile and truck frame components	Owned

The following chart describes each of our other such facilities in the United States:

Subsidiary/location

Description of operations and products

Title

ASA Ashland, VA	• •	45,000 sq. ft. Shearing	•	All carbon steel products and galvanized sheet	Owned
	•	Bar sawing	•	Stainless steel and aluminum products
			•	Tubing and pipe
ASA Auburn, MA	• • •	105,000 sq. ft. Four slitting lines Leveling and cut-to-length line	•	Supplier of cold-rolled and high carbon strip steel	Owned
	•	Blanking line	•	Processing of coated sheets and bright finished materials
			•	Processing of cold-rolled, galvanized, aluminum and stainless coils to supply sheets to all American Steel divisions
ASA Harrisburg, PA	• •	104,000 sq. ft. Shearing	•	All carbon steel products and galvanized sheet	Owned
	•	Bar sawing	•	Stainless steel and aluminum products
			•	Tubing and pipe
ASA Hartford, CT	• •	36,000 sq. ft. Shearing	•	All carbon steel products and galvanized sheet	Owned
	•	Bar sawing	•	Stainless steel and aluminum products	To be closed in February/early
			•	Tubing and pipe	March 2009
ASA Norwood, MA1	• •	55,000 sq. ft. Shearing	•	All carbon steel products and galvanized sheet	Owned
	•	Bar sawing	•	Stainless steel and aluminum products	To be closed in February/early
			•	Tubing and pipe	March 2009
ASA Portland, ME	• •	59,000 sq. ft. Shearing	•	All carbon steel products and galvanized sheet	Owned
	•	Bar sawing	•	Stainless steel and aluminum products
				Tubing and pipe
ASA Syracuse, NY	• •	53,000 sq. ft. Shearing	•	All carbon steel products and galvanized sheet	Owned
	•	Bar sawing	•	Stainless steel and aluminum products
			•	Tubing and pipe

ITEM 3.

LEGAL PROCEEDINGS

In addition to the claims mentioned in the "Environmental Regulation" section of "Item 1. Business," we are a party to various legal actions that we believe are ordinary in nature and incidental to the operation of our business. In our opinion, the outcome of these additional proceedings is not likely to have a material adverse effect upon our business, results of operations or financial condition.

1 In the first quarter of 2009, we further simplified the design of the network, including a reduction in U.S. and Canadian workforce, and rationalized our distribution facilities in the U.S. The implementation of the reduction in workforce and rationalization of our distribution facilities in the U.S. resulted in a total reduction of 203 employees in the U.S. and Canada in the first quarter of 2009. It also included the exit of four redundant distribution facilities located in Connecticut, Massachusetts, Rhode Island and New York in the first quarter of 2009.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

None.

PART II

ITEM 5.

MARKET FOR COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Common Stock

On March 12, 2007, our initial public offering of 18,750,000 units was consummated. Each unit consisted of one share of common stock and one warrant. Each warrant entitles the holder to purchase from us one share of our common stock. On April 4, 2007 our common stock began trading separately from the warrants on the American Stock Exchange ("AMEX"). Our common stock, warrants and units traded publicly on AMEX under the trading symbols "SHJ," "SHJ.WS" and "SHJ.U," respectively, until the close of business on December 28, 2007, at which time each of the common stock, warrants and units were delisted. Effective December 31, 2007, the Company's common stock and warrants began trading publicly on NASDAQ, under the trading symbols "TONS" and "TONSW," respectively. The Company's units which had traded as a separate class of security, ceased to trade as such and all outstanding units were automatically separated into common stock and warrants. Effective February 17, 2009, the Company’s common stock and warrants began trading publicly on NASDAQ under the trading symbol’s “TPUT” and “TPUTW”, respectively. The following table shows the high and low sales prices per share of our common stock, per warrant and per unit as reported by the AMEX and NASDAQ, as applicable, for the periods indicated:

	Common Stock				Warrants				Units
Quarter Ended	HIGH		LOW		HIGH		LOW		HIGH		LOW
March 31, 2007		n/a		n/a		n/a		n/a	$	8.10	$	7.82
June 30, 2007	$	7.70	$	7.05	$	1.50	$	0.86	$	9.10	$	7.89
September 30, 2007	$	7.67	$	7.40	$	1.51	$	0.85	$	9.10	$	8.70
November 24, 2007	$	8.10	$	6.80	$	2.30	$	1.30	$	9.68	$	8.60
February 23, 2008	$	3.15	$	3.00	$	0.95	$	0.63		N/A		N/A
May 31, 2008	$	3.50	$	3.36	$	0.78	$	0.65		N/A		N/A
August 30, 2008	$	3.00	$	2.82	$	0.00	$	0.00		N/A		N/A
November 29, 2008	$	1.70	$	0.99	$	0.44	$	0.36	$	N/A	$	N/A

The last reported closing price per share of our common stock as reported by NASDAQ on January 30, 2009 was $0.65 per share. As of January 31, 2009, there were 15 holders of record of our common stock and one holder of record of our warrants.

Dividend Policy and Restrictions

It is the current policy of our Board of Directors to retain earnings to repay debt and other obligations, finance strategic plans, conduct business operations and fund acquisitions. Any declaration and payment of cash dividends or repurchases of common stock will be subject to the discretion of our Board of Directors, the limitations contained in the ABL Credit Facility and the Notes, and will be dependent upon our financial condition, results of operations, cash requirements, future prospects and other factors deemed relevant by our Board of Directors. Barzel did not pay any cash dividends or purchase common shares in the fiscal year ended November 29, 2008. Subject to the restrictions set forth below, we may from time to time use our liquidity or cash flow to repurchase our debt or equity securities.

Under the ABL Credit Facility, in general, we are permitted to pay dividends and repurchase common stock so long as after paying such dividend or repurchasing the common stock, at least $65.0 million is available to be drawn by our subsidiary borrowers under the ABL Credit Facility and we would be able to meet certain fixed charge coverage ratio requirements. In addition, we are permitted to make payments not to exceed $275,000 to redeem the outstanding warrants.

Under the Notes Indenture, in general, we are permitted to pay dividends and repurchase common stock if certain consolidated interest coverage ratio requirements are satisfied plus, regardless of compliance with such ratio requirements, an amount of up to the sum of 50.0% of certain consolidated net income (cumulative from the commencement of fiscal year 2008),

100.0% of net cash proceeds from certain sales of common stock (subsequent to November 14, 2007) and certain investment returns may be used to pay dividends and repurchase common stock. In addition, we are permitted to make payments not to exceed $275,000 to redeem the outstanding warrants.

Performance Graph

The following graph compares the total return provided to shareholders of our common stock since inception to the AMEX Composite Index, Russell Microcap Index and NASDAQ Composite Index. An investment of $100 is assumed to be made in our stock and each index at inception on April 4, 2007 and its relative performance is tracked through November 28, 2008, the last trading day of fiscal year 2008.

Issuances of Our Securities

On November 3, 2008, pursuant to privately negotiated exchange agreements between the Company and certain holders of the Company's warrants, the Company issued an aggregate of 201,717 shares of common stock in exchange for an aggregate of 706,010 outstanding warrants to purchase common stock. The holders consisted of certain non-affiliates of the Company. The issuance of the 201,717 shares of common stock was exempt from registration under Section 3(a)(9) of the Securities Act of 1933, as amended, as the exchanges were between the Company and existing security holders and no commission or other remuneration was paid or given directly or indirectly for soliciting such exchanges.

The Company has not issued any securities during the fiscal year ended November 29, 2008, other than those issuances disclosed above and in the Company’s Current Reports on Form 8-K, filed with the SEC on July 28, 2008, July 30, 2008, August 11, 2008 and October 28, 2008.

ITEM 6.

SELECTED FINANCIAL DATA

The data set forth below should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and Notes thereto. We maintain our records on the basis of a fiscal year ending on the last Saturday in November. Results for fiscal 2003, fiscal 2004, fiscal 2005 and fiscal 2006 represent the operating results of Acquired Company and its subsidiaries as reflected in their consolidated financial statements. The consolidated financial statements for the period April 26, 2006 to December 31, 2006 include only the financial results of Symmetry commencing with its inception. The consolidated financial statements for the period January 1, 2007 through November 24, 2007 include the financial results of Barzel, its wholly-owned subsidiaries Barzel Holdings and Barzel Finco, and ten days of Acquired Company (the period from November 15, 2007 until November 24, 2007). The consolidated financial statements for the fiscal year ended November 29, 2008, include the financial results of Barzel, its wholly-owned subsidiaries Barzel Holdings, Barzel Finco, Barzel Canada (including Acquired Company), and Barzel U.S.

		Acquired Company										Barzel
		Year ended November 25, 2003		Year ended November 27, 2004		Year ended November 26, 2005		Year ended November 25, 2006		Period From November 26, 2006 to November 14, 2007		Period from April 26, 2006 to December 31, 2006			Period from January 1, 2007 to November 24, 2007			Year ended November 29, 2008
	(in thousands of U.S. dollars, except share and per share data)
Consolidated Statements of Operations:
Net sales(a)		$	507,067	$	768,627	$	834,689	$	840,798	$	785,045	$	-		$	16,304		$	801,058

Net income (loss)(b)			13,082		72,911		36,938		44,298		20,405		(148	)		(3,799	)		(54,599	)

Net income (loss) per share

Basic			1.35		7.51		3.70		4.26		1.95		(0.03	)		(0.20	)		(2.39	)

Diluted(c)			1.35		7.35		3.58		4.25		1.95		(0.03	)		(0.20	)		(2.39	)

Weighted average number of common stock outstanding (c)			9,700,000		9,707,270		9,993,337		10,391,891		10,450,000		4,687,500			19,375,451			22,872,867

Weighted average number of diluted common stock outstanding (c)			9,700,000		9,921,725		10,319,629		10,450,000		10,450,000		4,687,500			19,375,451			22,872,867

Balance Sheet Data (at period end):

Total assets(d)			312,656		434,880		441,583		469,047		487,562		714			678,220			476,940

Total debt(e)			76,525		65,063		47,536		41,800		-		-			390,588			348,814

(a)	For Barzel’s fiscal year 2006, includes only the financial results of Symmetry commencing with its inception on April 26, 2006. For Barzel fiscal year 2007, includes net sales for ten days of Acquired Company.
(b)	For Barzel’s fiscal year 2007, includes $2.3 million of formation and operating costs and $4.4 million of transaction expenses associated with the Acquisition. For 2008, includes $25.6 million for a trade name impairment charge $0.4 for a goodwill impairment charge and $13.3 million for restructuring charges.
(c)	For Barzel’s fiscal year 2007, weighted average shares outstanding include 4,687,500 shares issued to the founding stockholders, initial public offering of 18,750,000 shares on March 12, 2007, the subsequent exercise of conversion rights for 3,860,196 shares on November 15, 2007 and the private placement of 1,875,000 units, consisting of one share of common stock and one warrant, also occurring on November 15, 2007. As a result of the net loss reported for Barzel’s fiscal year 2007, 25,579,069 of potential common shares underlying dilutive securities have been excluded from the calculation. As a result of the net loss reported for 2008, 6,352,847 of potential common shares underlying dilutive securities have been excluded from the calculation.
(d)	At the end of Barzel’s fiscal year 2007, includes assets of Acquired Company. Financial information for the business

acquisition is provided in “Item 8 - Consolidated Financial Statements - Notes to Consolidated Financial Statements - Note 3 - Business Acquisition” of this report. That financial information is incorporated herein by reference.

(e)

At the end of Barzel’s fiscal year 2007, includes $75.6 million outstanding on the Company’s $175.0 million, five year ABL Credit Facility and the Notes in an aggregate principal amount of $315.0 million. For Fiscal year 2008, includes $33.8 million outstanding on the ABL Credit Facility and the Notes. Financial information for long-term debt is provided in “Item 8 - Consolidated Financial Statements - Notes to Consolidated Financial Statements - Note 11 - Long-Term Debt” of this report. That financial information is incorporated herein by reference.

		2007									2008
		First Quarter		Second Quarter		Third Quarter		Fourth Quarter			First Quarter			Second Quarter			Third Quarter			Fourth Quarter
	(in thousands of U.S. dollars, except per share data)
Net sales (a)		$	—	$	—	$	—	$	16,304		$	195,629		$	241,336		$	230,919		$	133,174
Net income (loss) (b)			185		932		941		(5,857	)		(7,889	)		(4,361	)		(1,804	)		(40,545	)
Net income (loss) per share
Basic		$	0.02	$	0.04	$	0.04	$	(0.25	)	$	(0.37	)	$	(0.20	)	$	(0.08	)	$	(1.56	)
Diluted		$	0.02	$	0.03	$	0.03	$	(0.25	)	$	(0.37	)	$	(0.20	)	$	(0.08	)	$	(1.56	)

(a) The 2007 fourth quarter includes net sales for ten days of Acquired Company.

(b) The 2007 first, second and third quarters include formation and operating costs of $0.1 million, $0.5 million and $0.4 million, respectively and interest income, net, of $0.4 million, $1.9 million and $1.9 million, respectively. Interest income, net, was earned on the net proceeds from Symmetry's initial public offering held in trust until the closing of the Acquisition of Acquired Company on November 15, 2007. The 2007 fourth quarter includes 10 days of Acquired Company. The 2007 fourth quarter also includes $1.4 million of formation and operating costs, $4.4 million of transaction expenses and $0.5 million of interest income, net. The 2008 fourth quarter, includes $25.6 million for a trade name impairment charge, $0.4 million for the goodwill impairment charge and $4.5 million for restructuring charges.

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our consolidated financial condition and results of operations together with "Item 6. Selected Financial Data," "Unaudited Pro Forma Condensed Financial Information" and our consolidated financial statements and notes thereto that appear elsewhere in this Report. This discussion and analysis contains forward looking statements that involve risks, uncertainties and assumptions. Actual results may differ materially from those anticipated in these forward looking statements.

Corporate Overview

The Company

Today, 30 years after the birth of our business, we are shedding the vestiges of its out-dated past and marking the start of a new journey. It is a journey to show the industry that reliability and quality of goods does not necessarily come at the expense of speed of delivery. It is a journey to show the industry that traditional management models are incomplete at best. It is a journey to show that the decisions of our sophisticated employee network have a collective and positive impact on our industry.

The Acquisition

On November 15, 2007, Barzel completed the Acquisition. The Acquisition had been approved by Barzel’s stockholders on October 25, 2007 and by Acquired Company’s shareholders on October 31, 2007. The Acquisition was carried out pursuant to an arrangement agreement, pursuant to which (i) Barzel indirectly acquired all of the outstanding stock of Acquired Company and (ii) Certain of Acquired Company’s wholly owned Canadian subsidiaries were wound-up, amalgamated or otherwise combined with Acquired Company to form Barzel Canada, in each case in accordance with the terms of a court-approved statutory plan of arrangement under the Canada Business Corporations Act. Barzel’s stockholders who properly exercised their conversion rights received $7.84 in cash per share. A total of 3,860,196 shares were converted for an aggregate of $30.3 million in cash. Under the terms of the arrangement agreement, the shareholders of Acquired Company received $56.00 in cash per share ($585.2 million in cash in the aggregate) for all of the outstanding shares of Acquired Company.

Business Overview

sections and manufacture heavy equipment parts and accessories. Our flat rolled processing capabilities include pickling, slitting, blanking, leveling, temper-rolling and cutting-to-length to precise customer specifications. Additionally, we perform many of these processing services for customers who provide their own steel, referred to in the industry as toll processing. For a detailed description of our steel processing services, see "Business Products and Services."

Business Strategy

Our company operates as one system, governed by The Decalogue methodology:

Throughput is the speed at which a system can generate cash through sales. In our case, it’s the speed at which we can move metal through the system, starting from our suppliers’ ability to provide us with the raw materials, to the delivery of the final product to our customer and our receipt of payment for the work done.

As generations of throughput takes into account supplier capabilities and customer feedback, it is critical that a holistic approach is used to understand our business. To do that, we use a systemic organizational design to replace traditional hierarchal organizational charts. What the Decalogue methodology acknowledges, that other management systems do not, is the systemic nature of an organization, meaning that the effectiveness of the manufacturing processes in the system can be profoundly impacted by other processes, like human resources or marketing. Thus, the same tools that are used to monitor and manage variations in manufacturing are also used to monitor and manage variations in other processes within our system. The aim is to have a totally synchronized system that is moving, in its entirety, towards the same goal.

We have significantly progressed our project plans for implementing the Decalogue operating methodology at the Company. This transformation allows us to operate as one system instead of 18 separate facilities, and has enabled (a) the system to operate at much faster cycle times, enabling us to maximize the throughput from the sale of our enhanced capacity, (b) a permanent cash inventory reduction of $88.4 million primarily from this faster replenishment and operating cycle, and (c) the implementation of organizational changes, especially in our replenishment, processing, distribution and sales processes, which we believe will result in a reduction of operating expenses of over $20.0 million in 2009 as compared to 2008.

Through February of 2009, we have implemented organizational changes resulting in the reduction of approximately 392 employees, primarily in the areas of administration and general management, purchasing, inside sales, accounting and plant operating personnel. These reductions have been offset by the addition of approximately 82 new employees of substantially different competencies, educational backgrounds and cultural diversities. To date, we have hired professionals in the areas of statistical studies, quality, technical services, new product development, marketing, logistics, safety, process engineering, synchronized manufacturing, human development, information services and sales, among others, of which over 30 have post-graduate degrees, including seven PhDs. We are becoming a Decalogue methodology company, that is, a knowledge-based organization.

Industry Overview

Products and Services

Our tubular capabilities are represented by five mills, of which three are located in Canada and two are located in the United States. One of our Tube Mills, Delta Tube Inc., is a joint venture with ArcelorMittal Tubular Products Montreal Inc. Tubing is a process by which flat rolled coils are slit and formed into circular, oval, square or rectangular shapes and the seams are welded through an electrical resistance process. We produce steel tubing in various sizes for use in the structural, mechanical and, to a lesser extent, the automotive markets. Our tubing operations are presently structured as follows:

a majority of our tube production is hollow structural sections ("HSS") tubing used largely in construction, energy, agricultural, infrastructure, transportation and industrial applications; and

our tube mills, in Mississauga, Ontario and Jeffersonville, Indiana, primarily produce high pressure, hydroform quality tubes for the automotive industry and include in-line precision cutting, finishing, testing and packaging capabilities and currently have limited capability for producing HSS tubing.