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Metals USA Reports 1st Quarter Results
04/29/2008 - Metals USA Holdings reports net income of $3.8 million on sales revenues of $489.0 million for the quarter ended March 31, 2008.
Metals USA Holdings Corp. reported net income of $3.8 million on sales revenues of $489.0 million for the quarter ended March 31, 2008.
Net income of $3.8 million was in line with net income of $3.8 million that was recorded for the first quarter 2007. Sales revenues, $489.0 million, reflect a $26.4 million improvement over sales revenues of $462.6 million recorded during the first quarter 2007.
Adjusted EBITDA $40.3 million, $5.6 million higher than in the year-ago first quarter. The company recognized depreciation and amortization expenses of $5.5 million, and interest expense for the quarter was $25.1 million. Operating income was $31.2 million for the first quarter, a $5.7 million improvement over the same period last year.
“Everyone is now fully aware that steel prices are increasing rapidly as mills pass along their rising costs,” commented Lourenco Goncalves, the company's Chairman, President and CEO. “We saw this coming and successfully positioned Metals USA accordingly.
“In addition to expanded margins our results were also influenced by a 2.4% increase in shipped volume. Our customer base has demonstrated a resiliency that appears to be contrary to the economic news of the day.”
Goncalves added, "Our objective is to keep our customers well positioned versus their competitors. One of the more valuable services we provide is insight regarding future metal price and demand trends. Fortunately we are able to position our customers to be in front of the curve. Where many end users worry about physical delivery as well as price, Metals USA customers continue with business as usual knowing we have them covered.”
The company had $334.0 million drawn under its ABL credit facility at March 31, 2008, with excess availability of $135.9 million. Net debt increased by $44.2 million during the quarter to $887.9 million on March 31, 2008 due primarily to an increase in working capital. Capital expenditures were $2.8 million for the quarter.
Net cash used in operating activities for first quarter 2008 was $40.8 million. This amount represents net income for the period of $3.8 million, adjusted for costs that did not involve cash flows for the period of $6.1 million. Additionally, changes in operating assets and liabilities resulted in a cash outflow of $50.7 million for the period, an amount that was primarily attributable to increases in inventories and accounts receivables, partially offset by an increase in accounts payable.
Metals USA provides a wide range of products and services in the heavy carbon steel, flat-rolled steel, non-ferrous metals, and building products markets.
