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Metals USA Reports Projected 2nd Quarter Results
06/22/2007 - Metals USA announces projected second quarter operating results, including net income in the range of $13.7 to $14.7 million on net sales that will range from $475 to $490 million.
Metals USA, Inc. announced projected operating results for the quarter ended June 30, 2007, including net income in the range of $13.7 to $14.7 million on net sales that will range from $475 to $490 million.
Metals USA says it is experiencing a strong second quarter in its metal service center businesses, with average selling prices and profit margins on a per-ton basis trending higher on both a sequential and year-over-year basis. The higher selling prices are the result of strong metal markets supported by continued strength in oil and gas, non-residential construction, marine and the defense industries.
However, the company says its year-over-year volumes will likely be lower as it shifts its product mix toward non-ferrous and stainless products; this shift is part of the company’s to increase its focus on higher-margin volumes. Non-ferrous and stainless products represented more than 44% of net sales in the company's Flat Rolled and Non-Ferrous Group in the first quarter, compared with 39% in 2006, and the company observes this increasing trend continuing in the second quarter.
Sales volumes of the company's Building Products Group have improved compared to the first quarter, but volume remains lower than the prior year as Metals USA continues to be affected by the cyclical slowdown in home remodeling. Despite current market conditions, the company has begun to realize improvements in its second quarter results. Such improvements are due to a restructuring of the Building Products Group that was completed in the first quarter of 2007.
For the second quarter, Metals USA is projecting the following results:
- Net sales will be in the range of $475 to $490 million
- Net income will be in the range of $13.7 to $14.7 million
- Adjusted EBITDA will be in the range of $43 to $45 million
- Total debt will be in the range of $600 to $610 million
- Cash will be in the range of $12 to $14 million at June 30, 2007.
The company noted that these ranges are preliminary and could change once the quarter is complete. In addition, the numbers have not yet been reviewed by auditors and could change as part of the quarterly review process.
The company says it expects to see further improvements during the remainder of 2007, and believes the business is well-positioned to take advantage of a recovery in the residential housing market.
