Metals USA Reports 2008 Year-End Results
02/03/2009 - Metals USA Holdings Corp. reported a net loss of $7.0 million on net sales of $456.4 million for the fourth quarter and net income of $72.6 million on net sales of $2,156.2 million for the full year ended December 31, 2008.
Metals USA Holdings Corp. reported a net loss of $7.0 million on net sales of $456.4 million for the fourth quarter and net income of $72.6 million on net sales of $2,156.2 million for the full year ended December 31, 2008.
Fourth Quarter Results — The $7.0 million net loss compares to net income of $1.8 million in the year-ago quarter. The $456.4 million net sales reflect a $24.2 million increase from the $432.2 million recorded during the fourth quarter of 2007.
EBITDA was $12.8 million, a $13.6 million decrease from the $26.4 million recorded in the fourth quarter of 2007. Results included a pre-tax $6.8 million write-down for inventory lower of cost or market adjustments in the metals service center segments. Adjusted EBITDA of $19.1 million compares to adjusted EBITDA of $29.8 million for the year-ago fourth quarter.
The company recognized depreciation and amortization expenses during the quarter of $5.1 million, and interest expense was $22.5 million.
Operating income was $7.4 million, $11.9 million lower than the same period last year.
Full Year Results — The $72.6 million net income compares to net income of $13.9 million in 2007. Net sales of $2,156.2 million reflect a $310.9 million increase from the $1,845.3 million recorded during fiscal year 2007. EBITDA was $230.0 million, a 68% increase from the $137.1 million recorded for fiscal year 2007. Results include non-cash costs of approximately $33 million.
Adjusted EBITDA of $242.1 million compares to adjusted EBITDA of $146.1 million for 2007. The company recognized depreciation and amortization expenses of $21.3 million for the full year, and interest expense was $87.9 million for the year.
Operating income was $206.4 million, $93.0 million more than the previous year.
Management Comments — "Despite the recessionary environment and challenging conditions for business, 2008 was Metals USA's best year ever, which translated into record revenues and record profits," stated Lourenco Goncalves, the company's Chairman, President and CEO.
Goncalves added: "We initiated our response to the first signs of approaching market weakness and by year-end we believe we are appropriately positioned for 2009. Our working capital is in great shape and our customers recognize our ability to provide service."
Financial Results — The company had $368 million drawn under its asset based loan facility ("ABL Facility") at December 31, 2008, with excess availability of $71 million. Cash balances were $167 million at year-end. Between the Company's cash on hand and its excess availability Metals USA had $238 million of liquidity at December 31, 2008.
Net debt of $777 million at year-end was $67 million lower than net debt of $844 million on December 31, 2007 due primarily to strong earnings in 2008. Capital expenditures for 2008 were $12 million. Net cash provided by operating activities during 2008 was $73 million. Changes in operating assets and liabilities resulted in a cash outflow of approximately $33 million for the year, an amount that was primarily attributable to increases in inventories and a decrease in accounts payable, partially offset by a decrease in accounts receivable.
On September 26, 2008 the company elected the PIK Interest payment option on its Senior Floating Rate Toggle Notes due 2012 for the interest period beginning on October 1, 2008, and ending on December 31, 2008. The company said it intends to continue its PIK Interest election for the foreseeable future. Additionally, a pre-tax $5.1 million charge for the impairment of goodwill and customer list intangible assets associated with the building products segment was recorded in the corporate segment at year end.
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.
