TMS International (TMS) is scheduling a $200 million IPO with a market capitalization of $554 million at the price range mid-point of $16, for Thursday, April 14, 2011.

CONCLUSION

. TMS is an overpriced leveraged buyout bailout, with 50% of IPO proceeds going to selling shareholders. . For the December 2010 fiscal year TMS earned $7 million and paid $40 million in interest expenses. . TMS only made a profit in three most recent quarters. Revenue and EBITDA trended down for both the Sept & Dec quarters . TIMS’s P/E ratio for the trailing 12 months is 79, the P/E ratio annualizing the December quarter is 55.

Comparing valuation ratios for SIMS, mentioned in the S-1 filing as a competitor, TMS looks overpriced

Valuation Ratios	IPO Mrkt	Price /	Price /	Price /	Price /
annualized Dec quarter	Cap (mm)	Sales	Earnings	BookValue	TangibleBV
TMS Intern'l (TMS)	$554	0.3	55	2.6	-2.9
Sims Metal Mgt (SMS)	$3,790	0.5	38	1.3	2.2

BUSINESS

. TMS is the largest provider of outsourced industrial services to steel mills in North America as measured by revenue and believes it has a substantial and growing international presence. . Operates at 73 customer sites in nine countries. TMS’s global raw materials procurement network spans five continents. . Over the past 80 years TMS has established long-standing customer relationships and have served our top 10 customers, on average, for over 28 years. . TMS’s diversified customer base includes 12 of the top 15 largest global steel producers, including United States Steel, ArcelorMittal, Gerdau, Nucor, Baosteel, POSCO and Tata Steel.

LEVERAGED BUYOUT

. By Toronto-based Onex Partners in 2007. . Onex shares trade on the Toronto Stock Exchange under the stock symbol "OCX."

STEEL INDUSTRY CONDITIONS

. Global steel production is expected to grow at a compound annual growth rate, or CAGR, of 6.1% between 2010 and 2015, according to CRU International Ltd., driven by continued growth in emerging economies and the economic rebound in the developed economies. Steel production growth in North America, TMS’s largest market, has continued to recover from the lows of 2009 driven by economic recovery and re-stocking of inventories. . North American steel production declined precipitously during the last quarter of 2008 and the first quarter of 2009 as a result of the global economic crisis. Steel producers responded to the crisis by idling capacity to better align supply with demand, preserve liquidity and reduce costs. . Since April 2009, steel production in North America has gradually improved in line with improving economic fundamentals. The U.S. steel industry production capacity utilization rate increased to 75% by the end of February 2011 from a low of 34% in December 2008, according to the American Iron and Steel Institute. . North American production capacity utilization levels remain below 25-year average levels of 82% as well as the 85% average utilization level observed in the post-consolidation restructured steel industry from 2002 to 2008.

STEEL DEMAND DRIVERS IN NORTH AMERICA

Steel demand in North America is driven primarily by applications in non-residential construction, automotive, industrial equipment and consumer appliance end markets, which appear to be in various stages of recovery and resumed growth at this time.

Non-residential construction markets remained at cyclical lows in 2010, but are expected to start recovering in 2011 and grow at a CAGR of 16.9% between 2010 and 2015, according to F.W. Dodge Corporation.

The North American automotive end-market experienced a strong rebound in 2010, posting a 38% increase in light vehicle production to 11.8 million units when compared to 2009, and is expected to continue to improve for the next several years, growing at a CAGR of 7.2% between 2010 and 2014, as per J.D. Power & Associates

LONG TERM CONTRACTS

. In 2010, 91% of Revenue After Raw Materials Costs was generated from long-term contracts. TIM earnings are primarily driven by the steel production volumes of customers rather than by steel prices. . Based on production volumes for the year ended December 31, 2010, TIM estimates existing contracts would generate approximately $1.7 billion of future Revenue After Raw Materials Costs over their remaining terms. . More than 92% of such revenue would be generated from contracts that expire after 2013, and the weighted average remaining term of the contracts is approximately 4.0 years.

OVER THE PAST SIX YEARS

. Expanded the number of customer sites at which TMS operates from 64 to 73, only a 14% expansion over six years , Increased the average number of services offered at customer sites from 2.0 to 2.3, a 15% increase over six years

SERVICES PROVIDED

. Scrap management and preparation;

. Semi-finished and finished material handling; . Metal recovery and slag handling, processing and sales; . Surface conditioning; . Raw materials procurement and logistics; and . Proprietary software-based raw materials cost optimization.

COMPETITION

North America, primary direct competitors include: Harsco Corporation, through its Harsco Metals division; Edward C. Levy Co.; Nucor Corporation, through its acquisition of the David J. Joseph Company; Stein Steel Mill Services, Inc.; Philip Services Corporation; Sims Metal Management and Phoenix Services, LLC, although most of our service categories include one or more additional significant competitors. In Europe, Latin America and Asia, competitors include Harsco Metals, Phoenix Services, LLC, Edward C. Levy, BIS, Sims Metal Management.

EMPLOYEES

3,500 employees and operate at 73 customer sites

USE OF PROCEEDS

$91million to company, $93 million to selling shareholders

$44 million repay debt Balance for general corporate purposes, including capital expenditures and working capital.

TMS International	TMS, C+, 6.5					Post IPO shares: 34mm
Outsourced steel mill svcs
Glassport, PA		2008	2009	2010		IPO Mkt
Total Revenues ($mm)		$2,982	$1,298	$2,030		Cap (mm)
. From sale of raw material		$2,895	$986	$1,629		$554
. Serivce revenue		$387	$312	$401		@$16
Gross margin on sale of matrl		3%	5%	4%
Interet expense		$38	$45	$40
Net income (loss)		-$6	-$8	$7
Net income % of rev		-0.2%	-0.6%	0.3%
Quarterly results	Sep-09	Dec 2009	March 2010	June 2010	Sept, 2010	Dec, 2010
Total Revenue ($mm)	$396	$358	$471	$623	$478	$454
Revenue after mat costs	$97.0	$98.0	$107.0	$123.0	$117.0	$120.0
Profit (loss)	-$5.7	-$6.7	-$2.6	$5.2	$2.0	$2.5
% profit of rev after mat cots	-5.9%	-6.8%	-2.4%	4.2%	1.7%	2.1%
Adj EBITDA	$22	$24	$26	$35	$30	$29
EBITDA % of rev after	23%	24%	24%	28%	26%	24%
material costs
Valuation Ratios	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
Year ended Dec 31, 2010	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
TMS Intern'l (TMS)	$554	0.3	79	2.6	-2.9	36%
Annualizing Dec qrt			55
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	1.5	2	1	6.5
COMPARE
Valuation Ratios	IPO Mrkt	Price /	Price /	Price /	Price /
annualized Dec quarter	Cap (mm)	Sales	Earnings	BookValue	TangibleBV
TMS Intern'l (TMS)	$554	0.3	55	2.6	-2.9
Sims Metal Mgt (SMS)	$3,790	0.5	38	1.3	2.2