TMS International's Quarterly Results Impacted By Softness in Steel Production
08/05/2013 - TMS International Corp., the parent company of Tube City IMS Corp., a leading provider of outsourced industrial services to steel mills globally, announced results for its second quarter ended 30 June 2013.
2013 Second Quarter Results
Revenue after raw materials costs in the quarter was US$153.1 million, compared to US$153.6 million in the second quarter of 2012. Adjusted EBITDA for the quarter was US$36.1 million compared to US$37.8 million in the second quarter of 2012.
Net income attributable to common stock was US$8.1 million for the second quarter compared with US$9.8 million in 2012. Basic and diluted earnings per share were US$0.21 for the second quarter of 2013 compared with US$0.25 in 2012.
The company's Adjusted EBITDA Margin for the second quarter of 2013 was 23.6% compared to 24.6% in the second quarter of 2012. Total Revenue for the second quarter was US$631.4 million compared to US$669.4 million in the second quarter of 2012.
Discretionary cash flow, which the company uses to measure operating cash flow generation, was US$25.7 million for the second quarter of 2013 compared with US$28.6 million in the second quarter of 2012.
Fiscal 2013 Six Month Results
Revenue after raw materials costs for the six months ended 30 June 2013 was US$309.0 million comparable from US$309.5 million for the first six months of 2012. Adjusted EBITDA for the first six months of 2013 was US$74.4 million compared to US$74.7 million for the first six months of 2012. Adjusted EBITDA margin for the first six months of 2013 was 24.1% comparable to 24.1% for the first six months of 2012.
Total revenue for the first six months of 2013 was US$1.2 billion compared with US$1.4 billion for the first six months of 2012. For the first six months of 2013, the company produced Discretionary Cash Flow of US$53.7 million compared with US$57.7 million for the first six months of 2012.
Commenting on the second quarter results, Raymond Kalouche, president and chief executive officer of TMS International Corp., said, "While new contracts in our mill services group performed very well in the quarter, our results were unfavorably impacted by softness in steel production at our customer mills in North America, mostly due to planned and unplanned outages, as well as lower activity in our raw materials procurement business. However, we continue to focus on creating value and delivering exceptional service for our customers globally, and are optimistic about improving production volumes in the second half of 2013."
Expansion of Services at Existing Customer Site in Mexico
The company also announced today that it has expanded its services with the largest integrated steel mill in Mexico. These services are expected to generate more than US$66 million in revenue during the term of these services, at expected production levels, with aggregate growth capital investments of approximately US$9.5 million.
Outlook
The company is lowering its full-year guidance for 2013 adjusted EBITDA to a range of US$150 million to US$155 million, from its original guidance of US$152 million to US$160 million.
TMS International Corp., through its subsidiaries, including Tube City IMS, is the largest provider of outsourced industrial services to steel mills in North America as measured by revenue and has a substantial and growing international presence. The company provides mill services at 81 customer sites in 12 countries and operates 36 brokerage offices from which it buys and sells raw materials across five continents.
