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Metals USA Reports 1st Quarter Results
05/01/2007 - Metals USA announced net income of $6.6 million on sales revenues $462.6 million for the quarter ended March 31, 2007.
Metals USA, Inc. (a wholly-owned subsidiary of Metals USA Holdings Corp. through its wholly-owned subsidiary
Flag Intermediate Holdings Corp.) announced net income of $6.6 million on sales revenues $462.6 million for the quarter ended March 31, 2007.
Net income of $6.6 million compares to net income of $2.1 million for the first quarter of 2006. Sales revenues of $462.6 million exceeded year-earlier first quarter sales of $429.6 million by $33.0 million. Sales volumes in our metal service center business decreased by 2% when compared to the same period last year.
Adjusted EBITDA of $34.7 million reflects a $3.4-million increase over adjusted EBITDA for the first quarter of 2006. The company recognized $5.5 million in depreciation and amortization expenses, and interest expense was $14.7 million. Operating income, which included a one-time stock option expense of $3.0 million, was $25.5 million, $10.0 million better than the year-earlier first quarter.
Management Comments—“Our business continued to be strong during the first quarter,” said Lourenco Goncalves, the company's Chairman, President and CEO. “Material availability in the market tightened noticeably and prices rose accordingly, benefiting the service center companies that are able to efficiently manage inventories, such as Metals USA. The first quarter was a good one for Metals USA, and the second quarter should be even better.”
Goncalves added, “The service center business continues to demonstrate superior returns. Our industry has undergone a transformational shift to sustainable and attractive financial performance.”
The company had $332.0 million drawn under its ABL credit facility at March 31, 2007, with excess availability of $100.3 million and suppressed availability of $56.7 million. Total debt of $613.5 million at quarter-end was $2.9 million higher than at December 31, 2006. During the quarter, the company made capital expenditures of $5.5 million. Net cash provided by operating activities was $8.1 million, representing $6.6 million net income plus $9.8 million adjustments for costs that did not involve cash flows, offset by changes in operating assets and liabilities that resulted in a cash outflow of $8.3 million for the period. The company says the $8.3-million cash outflow was primarily attributable to increases in accounts receivable partially offset by increases in accounts payable and accrued liabilities.
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. In its Building Products Division, Metals USA is the largest manufacturer of patio products and stone-coated steel roofing products in North America, primarily serving the home remodeling industry.
