Aug. 2, 2006 — Metals USA, Inc. announced operating income of $37 million on sales revenues of $458 million for the second quarter of 2006.

Second Quarter Results—The $37 million operating income was 37% higher than the $27 million recorded during the second quarter 2005. Sales revenues, $458 million, exceeded prior-year sales of $427 million as volumes climbed by almost 6% in the metal distribution segments.

On a sequential basis, sales revenues were up by $28 million when compared to first quarter 2006 sales revenue of $430 million, on similar volumes.

Management Comments—Lourenco Goncalves, Chairman, President and CEO of Metals USA commented: "We are very pleased with our performance this quarter as we continue to maximize our profitability and maintain strong inventory control. Our recent acquisitions have been adding to our results from day one and, as our identified synergies are realized, their contributions will be even more rewarding. Going forward, we will continue to execute according to our proven, successful three-prong strategy — organic growth, acquisitions, and de-leveraging."

Adjusted EBITDA was $42 million, $11 million better than first quarter 2006 adjusted EBITDA of $31 million and $14 million higher than EBITA for the second quarter of 2005. The company recognized $5 million in depreciation and amortization expenses during the quarter. Interest expense was $13 million.

The company had $294 million drawn under the ABL credit facility at quarter-end, with excess availability of $137 million. Total debt of $576 million at June 30, 2006 was $102 million higher than at December 31, 2005 primarily due to a $25 million dividend payment, $46 million in cash paid for the Port City Metal Services and Dura-Loc Roofing Systems acquisitions, and a net change in working capital as the unit value of materials purchased and product sold increased.

Capital expenditures during the first six months of 2006 were almost $7 million. Changes in net working capital consisted primarily of a $43-million increase in accounts receivable and a
$36-million increase in inventories partially offset by a $28-million increase in payables.

Metals USA provides a wide range of products and services in the heavy carbon steel, flat-rolled steel, specialty metals, and building products markets.