Metals USA Reports 3rd Quarter 2009 Results
10/20/2009 - Metals USA Holdings reports a net loss of $1.8 million on sales revenues of $255.4 million for the third quarter and net income of $7.9 million on sales revenues of $853.4 million for the nine months ended September 30, 2009.
Metals USA Holdings Corp. reported a net loss of $1.8 million on sales revenues of $255.4 million for the third quarter and net income of $7.9 million on sales revenues of $853.4 million for the nine months ended September 30, 2009.
Third Quarter Results — The $1.8 million net loss compares to net income of $36.0 million for the same period last year. The $255.4 million sales revenues compare to $617.7 million of sales revenues for the year-ago third quarter.
Adjusted EBITDA was $19.7 million, which compares to third quarter 2008 Adjusted EBITDA of $90.1 million.
Year-to-Date Results — The $7.9 million net income compares to net income of $79.8 million in the comparable year-ago period. The $853.4 million sales revenues compare to sales revenues of $1.7 million in the year-ago period.
Operating income, the GAAP measure the company believes is most comparable to Adjusted EBITDA, was $12.7 million for the third quarter of 2009, compared to $84.4 million of operating income recorded in the same period last year.
Management Comments — "We are pleased with the sequential improvement in our profitability, which is a direct consequence of the aggressive cost cutting initiatives we have implemented,” stated Lourenco Goncalves, the company's Chairman, President and CEO. “Working capital continues to be a source of cash, and our balance sheet has been significantly improved."
Goncalves concluded: "We continue to work out of a much smaller inventory, and have no plans to change that as we stand prepared to benefit from the market rebound when it occurs."
Financial Position — The company had $90.0 million drawn under its asset-based (ABL) credit facility at September 30, 2009, with excess availability of $128.9 million. Total liquidity, defined as excess availability plus cash, was $149.0 million at September 30, 2009.
Net debt of $481.0 million on September 30, 2009 was $296.5 million lower than net debt of $777.5 million on December 31, 2008, due primarily to a decrease in working capital and debt repurchases. Total debt of $501.1 million at September 30, 2009 comprised outstanding advances under the ABL Facility in the amount of $90.0 million; outstanding 11 1/8% Senior Secured Notes in the amount of $226.3 million; outstanding PIK Toggle Notes of $178.9 million; and $5.9 million of other long term debt. Capital expenditures were $1.3 million for the current quarter and $3.6 million year-to-date. Net cash provided by operating activities for the first nine months of 2009 was $228.4 million.
The company recognized $4.7 million of depreciation and amortization expenses during the quarter. Interest expense for the quarter was $14.0 million, which included $3.4 million of interest on the company's Senior Floating Rate Toggle Notes due 2012 that was paid entirely in kind (PIK Interest).
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.
