1392600--5/20/2008--Esmark

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Wheeling-Pittsburgh has sustained significant losses in the past and there can be no assurance that Esmark will achieve profitability on a consistent basis in the future. Any decrease in the availability, or increase in the cost, of raw materials and energy could materially increase the costs of Wheeling-Pittsburgh and adversely impact cash flow and liquidity. A loss of ESSG primary suppliers, or inability to obtain sufficient amounts of necessary metal substrate on a timely basis, may lead to an inability to meet our customers needs thus resulting in reduced sales. The costs that ESSG pays for metals fluctuate due to a number of factors beyond our control, and such fluctuations could adversely affect operating results, particularly if ESSG cannot pass on higher metal prices to customers. Because Wheeling-Pittsburgh is significantly leveraged, it may not be able to successfully run its business, service debt obligations or refinance indebtedness. Wheeling-Pittsburgh may not be able to comply with its financial covenants, which may result in a default under its credit agreements. ESSG may not be able to comply with its financial covenants, which may result in a default under its credit agreements. Restrictive covenants in debt instruments may limit both Wheeling-Pittsburgh s and ESSG s flexibility and ability to implement their business plans The level of indebtedness and restrictions in the debt instruments of Wheeling-Pittsburgh, may limit the ability of Esmark to take certain actions, including paying any dividends and obtaining additional financing, in the future. Restrictions in ESSG s credit agreement may limit the ability of ESSG to take certain actions, including paying any dividends and obtaining additional financing, in the future. Funds managed by Franklin Mutual Advisers, LLC own over 60% of our outstanding common stock and are in a position to control us. Esmark s historical financial information is not comparable to our current financial information and results of operation because of our use of purchase accounting in connection with the business combination transaction completed in November 2007 between ESSG and Wheeling-Pittsburgh. Intense competition in the steel industry and substitute materials could adversely affect the Company s results of operations, and, ultimately, the liquidity and financial condition of the Company. Increased imports from China or other countries could lower domestic steel prices and adversely affect Esmark s profitability. Vertical integration may not be successful. The integration of the businesses of ESSG and Wheeling-Pittsburgh may not be successful. Wheeling-Pittsburgh may be unsuccessful in increasing the production of its electric arc furnace (EAF), which would adversely affect its near-term and long-term financial performance. Any decrease in the availability, or increase in the cost, of cold-rolled substrate could adversely affect Wheeling-Pittsburgh s production or increase costs. Wheeling-Pittsburgh has relied on a core group of significant customers for a substantial portion of its net sales, and a reduction in demand from, or an inability to pay by, this group could adversely affect the total revenue. Esmark may not be able to implement its business plan because it may be unable to fund the substantial ongoing capital and maintenance expenditures that the operations of Wheeling-Pittsburgh require. Esmark services industries which are highly cyclical, and any downturn in its customers industries could reduce Esmark s sales and profitability. Operating results may fluctuate depending on the season. Esmark s production costs may increase and Esmark may not be able to sustain sales and earnings if Esmark fails to maintain satisfactory labor relations. Increases in the healthcare costs for active employees and future retirees of Wheeling-Pittsburgh may lower the earnings of Wheeling-Pittsburgh and negatively affect the competitive position of Esmark in the industry. A significant interruption or casualty loss at any of the Esmark s facilities could increase production costs and reduce sales and earnings. Esmark may not be able to use existing net operating loss carryovers to reduce taxable income, which could adversely affect liquidity and cash flow. Esmark has a substantial amount of intangible assets, including goodwill, which may require an impairment adjustment in the future which could have a significant negative effect on the profitability of Esmark. Antidumping and other duties could be imposed on Esmark, its suppliers and its products. Esmark may not be able to retain or expand its customer base if the United States manufacturing industry continues to erode. Environmental compliance and remediation costs could decrease the net cash flow, reduce the results of operations and impair the financial condition of Esmark. Regulatory compliance for Esmark may be more difficult as a result of the fact that ESSG had been a private company. Esmark s independent public accounting firm identified a material weakness and a significant deficiency in the Company s internal control over financial reporting as of December 31, 2007, which, if not properly remediated could result in misstatements in the financial statements in future periods. The internal control over financial reporting of Esmark and its subsidiaries has not yet been evaluated in accordance with the provisions of the Sarbanes Oxley Act of 2002, and any deficiencies in ESSG s internal controls or disclosure controls and procedures that Esmark may find would require Esmark to spend resources to correct those deficiencies and could adversely affect market confidence in Esmark s reported consolidated financial information. The Company s current revolving credit facilities are due and payable no later than September 30, 2008 and the Company has received a going concern opinion in the report of its independent registered public accounting firm. The Company s common stock is subject to potential delisting from The Nasdaq Stock Market as a result of its failure to timely file this Annual Report on Form 10-K with the SEC, and may be subject to similar delisting proceedings as a result of the failure to timely file the Company s Quarterly Report on Form 10-Q for the period ended March 31, 2008.

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1392600--5/20/2008--Esmark_INC