Metals USA Reports First Quarter 2009 Results
04/15/2009 - Metals USA Holdings reports a net loss of $4.1 million on sales revenues of $330.2 million for the first quarter ended March 31, 2009.
Metals USA Holdings Corp. reported a net loss of $4.1 million on sales revenues of $330.2 million for the first quarter of 2009, which ended March 31, 2009.
Sales revenues of $330.2 million reflect a $158.8 million decrease from revenues of $489.0 million recorded during the first quarter of 2008.
Adjusted EBITDA (a non-GAAP financial measure) was a negative $14.9 million for the first quarter, reflecting a $55.2-million decrease compared to the year-ago first quarter. Current results included a $19.5 million pre-tax write-down for inventory lower-of-cost-or-market adjustments in the metals service center segments.
“Despite the difficult market conditions resulting from the absence of financing activity, the steel mills drove prices down to unnecessarily low levels, creating avoidable losses for their most important customers — the service centers — and also for themselves,” commented Lourenco Goncalves, the company's Chairman, President and CEO. “Going forward, as banks resume normal lending practices, we expect demand to start increasing as well.”
“During the first quarter we continued to emphasize cash generation and paid down an additional $117 million of debt, bringing the total ABL facility reduction to $291 million during the last six months,” added Goncalves.
The company recognized $4.7 million of depreciation and amortization expenses during the quarter. Interest expense was $19.3 million, including $8.2 million of interest on the company's Senior Floating Rate Toggle Notes due 2012 that was paid entirely in kind ("PIK Interest").
Operating income was a loss of $20.9 million, reflecting a $52.1-million decrease compared to the $31.2 million of operating income recorded in the same period last year. Net loss of $4.1 million compares to net income of $3.8 million recorded for the first quarter 2008.
Operating income was a loss of $20.9 million, reflecting a $52.1-million decrease compared to the $31.2 million of operating income recorded in the same period last year. Net loss of $4.1 million compares to net income of $3.8 million recorded for the first quarter 2008.
The company had $251.0 million drawn under its asset-based credit facility at March 31, 2009, with excess availability of $58.2 million. Net debt decreased by $143.3 million during the quarter to $634.2 million on March 31, 2009, due primarily to a decrease in working capital. Capital expenditures were $0.9 million for the quarter. Net cash provided by operating activities for first quarter of 2009 was $124.0 million. This amount represents net loss of $4.1 million, less gain on extinguishment of debt and costs that did not involve cash flows for the period which totaled $5.8 million, plus changes in operating assets and liabilities that resulted in a cash inflow of $133.9 million, an amount that was primarily attributable to decreases in inventories and accounts receivables.
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.
