AGY Holding Corp. Preliminary Third Quarter Results and Update on Union Negotiations.

AIKEN, S.C. -- AGY Holding Corporation's ("AGY" or the "Company") financial performance for the quarter and year-to-date period ended September 30, 2006 exceeded prior year performance for the equivalent period. The Company's preliminary, unaudited financial statements are summarized below. Detailed financial disclosure will be provided in January 2007.

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Net revenue increased $4.0 million, or 10.4% in the third quarter of 2006 compared to the third quarter of 2005. Increased sales to the more profitable markets and applications, including defense (60% increase) and specialty electronics (16% increase), resulted in a favorable product mix compared to the same period last year. In addition, AGY's Adjusted EBITDA was further increased by higher manufacturing efficiencies, successful cost reduction programs, and a 13% decrease in energy cost compared to the same period last year. The Company's current cash balance exceeds $3.0 million.

The Company continues to negotiate labor contracts with each of its unions. The terms of the Huntingdon labor contract with the UNITE union expired on October 31, 2006, and the hourly workers initiated a work stoppage the following day despite ongoing negotiations. On November 9, the Company and the union negotiating committee reached a tentative agreement on the terms of a new collective bargaining agreement. The union negotiating committee has stated it will recommend ratification of the agreement among the full membership. The Company remains optimistic that it can have union members back at work shortly, but cannot give any assurances. No deliveries to customers have been interrupted to date, and AGY estimates to have approximately one month of available inventory. Salaried AGY employees, with the help of outsourced temporary labor, are operating the plant at approximately one third of typical operating levels. The on-going fixed manufacturing costs have been reduced by approximately 50% and the work stoppage cost is not expected to be material until the depletion of available inventory that would cause the loss of sales and contribution margin and an ongoing operating cost of approximately $100,000 per week.

The current extension to the Aiken labor contract with the Teamsters union expires on November 21, 2006, and the plant continues to operate as normal as negotiations continue. The Company is hopeful it will reach an agreement with the Teamsters union before November 21, but is taking precautionary measures it believes will ensure that, should an agreement not be reached by then, customer deliveries can continue uninterrupted in the event of a work stoppage. Although the Company does not view this scenario as likely, it estimates that during a work stoppage in Aiken, on-going fixed manufacturing costs would be reduced to approximately 90% of normal operating levels. After depletion of available inventory, the Company would experience the loss of sales and contribution margin, an ongoing cost of approximately $400,000 per week and one-time re-start costs of approximately $200,000 for each furnace banked for more than a two-week period.

Forward-Looking Statements

Certain statements contained in this release, including those relating to expected results and future operations, as well as statements containing words like "believes," "estimates," "would" and other similar expressions, are forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those projected in the Company's forward-looking statements include risks relating to the impact of labor disputes and other risks generally affecting the Company's business that are described in the Company's final offering memorandum dated October 20, 2006 relating to its 11% Senior Second Lien Notes due 2014, copies of which are available from the Company on request. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changes in circumstances or any other reason.

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