Feb. 27, 2007 — 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 $6.2 million on revenues of $438 million for the fourth quarter of 2007.

Fourth Quarter Results—Sales revenues of $438 million reflect a $49 million increase over prior-year sales of $389 million. Operating income was $24 million, or $19 million better than fourth quarter 2005.

Adjusted EBITDA was $34 million, $6 million higher than fourth-quarter 2005. The company recognized $8 million in depreciation and amortization expenses during the quarter. Interest expense was $15 million. Operating income was $24 million.

Full Year Results—Sales revenues of $1.8 billion reflect a $164 million increase over prior-year sales of $1.6 billion. Volumes increased more than 4% in the company’s metal service center business. Operating income was $119 million, $36 million better than fiscal 2005.

Management Comments—"2006 was a good year for Metals USA,” said Lourenco Goncalves, the company's Chairman, President and CEO. “Adjusted EBITDA of $156 million was our second-best ever, further confirming our belief that our business is strong and consistently profitable. Equally important, during the fourth quarter we grew our business year-over-year, and entered January 2007 with the right inventory mix. Our customers are focused on their businesses, without concern about metal availability. Metals USA continues to deliver value added performances to its customers, vendors and shareholders."

The company had $329 million drawn under its ABL credit facility at year-end, with excess availability of $103 million. Total debt of $611 million at December 31, 2006 was $137 million higher than at December 31, 2005 primarily due to cash payments of $46 million for the acquisitions of Port City Metal Services and Dura-Loc Roofing Systems, and a net change in working capital. Capital expenditures made during fiscal year 2006 were $17 million.

During the year ended December 31, 2006, net cash used in operating activities was $46 million. This amount represents net income of $40 million, adjustments for costs that did not involve cash flows for the period of $24 million, offset by changes in operating assets and liabilities that resulted in a cash outflow of $110 million for the period, an amount that was primarily attributable to increases in accounts receivable and inventories, partially offset by decreases in prepaid expenses and increases in accounts payable and accrued liabilities.

"The outlook for 2007 is favorable,” concluded Mr. Goncalves. “Metal demand appears to be stable to somewhat improving, coupled with tightening metal availability and an increasing price trend."

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 stone-coated steel roofing products in North America, primarily serving the home remodeling industry.