Metals USA Reports 2007 Year-End Results
02/04/2008 - Metals USA reports net income of $7.6 million on sales revenues of $432.2 million for the fourth quarter, and net income of $36.6 million on sales revenues of $1,845.3 million for the year ended December 31, 2007.
Metals USA, Inc. announced net income of $7.6 million on sales revenues of $432.2 million for the fourth quarter, and net income of $36.6 million on sales revenues of $1,845.3 million for the year ended December 31, 2007.
Fourth Quarter Results—Net income of $7.6 million compares to net income of $6.2 million for the year-ago fourth quarter. Adjusted EBITDA (a non-GAAP financial measure used by Metals USA and its creditors to monitor the performance of the business) was $29.8 million—$4.6 million lower than in the fourth quarter of 2006.
Sales revenues of $432.2 million are $5.3 million lower than sales revenues of $437.5 million for the year-ago fourth quarter. Operating income (the GAAP measure that Metals USA uses for its comparability to Adjusted EBITDA) was $19.3 million; $4.7 million lower than last year’s fourth quarter.
The company recognized depreciation and amortization expenses of $6.6 million. Interest expense was $13.7 million.
Full Year Results—Net income of $36.6 million compares to net income of $39.5 million in 2006. Adjusted EBITDA (a non-GAAP financial measure used by Metals USA and its creditors to monitor the performance of the business) was $146.2 million, which was $10.0 million lower than fiscal 2006.
Sales revenues of $1,845.3 million were $42.4 million higher than 2006 sales revenues. Operating income was $113.5 million, which was $5.5 million less than the previous year.
The company recognized depreciation and amortization expenses of $22.1 million for the full year. Interest expense was $57.6 million.
Management Comments—"During the fourth quarter the market lacked a consensus view about market direction,” said Lourenco Goncalves, the company's Chairman, President and CEO. “Several of our competitors actively sold steel below replacement cost, while the vast majority of end-users remained on the sidelines. Metals USA used the seasonally weak fourth quarter to rebuild inventories, ensuring our ability to supply and properly service our customers in the months ahead, while continuing to be consistently profitable."
“At this point, it is very clear that our forecast of significant higher steel prices in early 2008 was correct,” continued Goncalves. “With the new reality of meaningful domestic mill exports, virtually no foreign imports, and historically low inventories throughout the entire supply chain, we are already seeing the beginning of real availability problems. Fortunately for our customers, Metals USA is prepared for these market conditions and will continue to execute with the discipline for which we are known.”
Financial Position—At December 31, 2007, the company had $280.5 million drawn under its ABL credit facility with excess availability of $120.3 million. Total debt of $565.4 million at year-end was $45.2 million lower than at December 31, 2006. Capital expenditures were $21.5 million for the year.
Net cash provided by operating activities for 2007 was $126.8 million. This amount represents net income for the period of $36.6 million, adjusted for $29.6 million in costs that did not involve cash flows for the period. Additionally, changes in operating assets and liabilities (net of the effects of acquisitions) resulted in a cash inflow of $60.6 million for the period, an amount that was primarily attributable to decreases in inventories and accounts receivables.
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. The company is a wholly owned subsidiary of Metals USA Holdings Corp. through its wholly-owned subsidiary Flag Intermediate Holdings Corp.
