Metals USA Reports 2010 Year-End Results
02/02/2011 - Metals USA Holdings Corp. reported net income of $3.1 million on net sales of $323.9 million for the fourth quarter and net income of $11.5 million on net sales of $1,292.1 million for the year ended December 31, 2010.
Metals USA Holdings Corp. reported net income of $3.1 million on net sales of $323.9 million for the fourth quarter and net income of $11.5 million on net sales of $1,292.1 million for the year ended December 31, 2010.
Fourth Quarter Results — Net income of $3.1 million ($0.08 per share) compares to net income of $5.8 million ($0.16 per share) in the previous quarter and a net loss of $4.4 million (-$0.18 per share) in the year-ago fourth quarter.
Recorded net sales of $323.9 million reflect a decrease of 6% compared to $345.3 million in net sales for the previous quarter and an increase of 32% compared to net sales of $245.3 million for the year-ago fourth quarter. Metal shipments were 267,000 tons, down 2% compared to the 273,000 tons shipped during the previous quarter and up 22% compared to year-ago fourth quarter shipments of 219,000 tons. The average metal sales price was 3% lower than the previous quarter and 11% higher than the same period last year.
Operating income for the fourth quarter of 2010 was $11.2 million, compared to $5.2 million for the fourth quarter of 2009 and $18.9 million for the third quarter of 2010.
Adjusted EBITDA was $16.8 million, compared to Adjusted EBITDA of $24.3 million for the previous quarter and year-ago fourth quarter 2009 Adjusted EBITDA of $11.5 million.
Full Year Results — 2010 net income of $11.5 million, or $0.34 per share, compared favorably to 2009 net income of $3.5 million, or $0.14 per share.
Net sales for the year ended December 31, 2010 were $1,292.1 million, an increase of 18% compared to 2009 net sales of $1,098.7 million. Metal shipments for 2010 were 1,059,000 tons, a 16% increase compared to 2009 shipments of 913,000 tons. The average metal sales price in 2010 was 4% higher than in 2009.
The company reported operating income of $60.2 million for 2010, compared to a $22.1 million operating loss for 2009. The year-over-year increase in operating income was driven by an 18% increase in net sales, partially offset by a 12% increase in cost of sales. In addition, operating income for the Building Products segment improved by $3.3 million.
Adjusted EBITDA for 2010 was $85.0 million, compared to $2.8 million for 2009.
Management Comments — "Fourth quarter shipments were in line with the normal seasonal pattern that incorporates year-end holidays and fewer shipping days,” sated Lourenco Goncalves, the company's Chairman, President and CEO. “Several steel price increases were announced by the mills in December, but their benefit will not be seen until the first quarter of 2011."
Goncalves added: "Our customers' metal demand in the fourth quarter was consistent with a continuing economic recovery, which has been occurring in parallel with a serious scrap shortage after more than two years of subpar industrial output in the United States. The combined effect of the economic recovery with steel price increases should continue to support the positive momentum we are seeing in our business in the first quarter of 2011."
2010 Highlights — On December 17, 2010 Metals USA amended and restated its existing asset-based credit facility providing for a new $500-million, five-year senior secured asset-based credit facility. The credit facility replaces the company's existing $625-million senior secured asset-based credit facility that was scheduled to mature in November 2011. Metals USA also completed the previously announced acquisition of Ohio River Metal Services, Inc. on December 31, 2010.
"We continue to operate with a high sense of urgency as demonstrated with our new credit agreement and the acquisition of Ohio River Metal Services,” commented Goncalves. “Together with our IPO in April and our June acquisition of J. Rubin & Co., 2010 was filled with important events demonstrating Metals USA's ability to continually strengthen and grow the company.
“We remain committed to our multi-prong growth strategy that emphasizes tuck-in acquisitions and focused investments in existing facilities," added Goncalves.
Net cash used in operating activities for the twelve-month period ending December 31, 2010, was $56.9 million. During the fourth quarter of 2010, the company's working capital increased $18.2 million due primarily to an increase in inventory. Capital expenditures were $1.8 million for the fourth quarter and $4.0 million for 2010. The Company had $106.0 million drawn under the ABL Facility at December 31, 2010, with excess availability of $161.5 million, which exceeds the $122.9 million available at December 31, 2009. Availability under the ABL Facility expanded commensurate with the increase in working capital.
Net debt at December 31, 2010, of $329.9 million exceeded net debt of $295.2 million on September 30, 2010, due to the acquisition of Ohio River Metal Services, the increase in working capital, and costs incurred in association with refinancing the ABL Facility.
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.
