Nov. 1, 2006 — Metals USA, Inc., a wholly owned subsidiary of Metals USA Holdings Corp. through its wholly-owned subsidiary Flag Intermediate Holdings Corp., announced net income of $17.3 on net sales of $478 million for the third quarter of 2006.

The $478 million sales revenues exceeded prior-year sales of $396 million as volumes in the metal service center segments climbed by almost 6%. On a sequential basis, sales revenues increased by $20 million when compared to second-quarter 2006 sales revenue of $458 million. Operating income during the quarter was $43 million, significantly higher than the $20 million recorded during the third quarter of 2005.

Lourenco Goncalves, Chairman, President and CEO of Metals USA commented: "Metals USA had a very solid third quarter as demand for metal products continues to be strong. I have confidence regarding our fourth quarter performance and do not see any reason to modify our current behavior in the market. Our superior profitability is based on building long-term relationships and providing our customers with high quality service and value-added processing. Going forward, we will continue to execute according to our proven, successful three prong strategy—organic growth, acquisitions, and de-leveraging."

Adjusted EBITDA was $48 million, or $6 million better than second quarter 2006 Adjusted EBITDA of $42 million, and $27 million higher than third quarter 2005 EBITDA. The company recognized $5 million in depreciation and amortization expenses, and interest expense was $15 million. Operating income was $43 million.

The company had $328 million drawn under its ABL credit facility at quarter-end, with excess availability of $96 million. Total debt of $609 million at September 30, 2006 was $136 million higher than at December 31, 2005 primarily due to a $25 million dividend payment, $46 million in cash paid for the acquisitions of Port City Metal Services and Dura-Loc Roofing Systems, and a net change in working capital as the unit value of both materials purchased and product sold increased.

Capital expenditures during the first nine months of 2006 were $11 million. Changes in net working capital for the nine months ended September 30, 2006, net of the effect of acquisitions, consisted primarily of a $54 million increase in accounts receivable and a $92 million increase in inventories, partially offset by a $30 million increase in payables.

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. In its Building Products Division, Metals USA is the largest manufacturer of patio products and roofing products in North America, primarily serving the home remodeling industry.