HOUSTON, Oct. 20 /PRNewswire-FirstCall/ -- Metals USA Holdings
Corp. today announced its results for the quarter ended September
30, 2008. The Company recorded net sales for the third quarter of
$617.7 million, a $148.1 million increase from the $469.6 million
recorded during the third quarter 2007. Adjusted EBITDA for the
quarter ended September 30, 2008 was $90.1 million, a 150% increase
from the $36.1 million recorded in the third quarter 2007. Adjusted
EBITDA (as defined and calculated in the attached table) is a
non-GAAP financial measure used by Metals USA and its creditors to
monitor the performance of the business. The Company recognized
depreciation and amortization expenses during the quarter of $5.3
million. Operating income, the GAAP measure that we believe is most
comparable to Adjusted EBITDA, was $84.4 million for the third
quarter, $55.2 million higher than the same period last year.
Interest expense for the quarter was $20.4 million. Net income was
$36.0 million, compared to a net loss of $3.4 million recorded for
the third quarter 2007, a $39.4 million increase. Lourenco
Goncalves, the Company's Chairman, President and C.E.O., stated:
"Market conditions during the third quarter remained favorable for
us. Demand continued to be healthy and our margins remained
relatively unchanged from our record breaking second quarter. As a
consequence, we are reporting great third quarter results with a
record year-to-date adjusted EBITDA of $223 million. We began to
reposition our inventory well in advance of recent market
dislocation, which has proven prudent in the current environment,
and have taken several steps to ensure continued access to
financial liquidity." The Company announced on September 26th that
it made a permitted election under the indenture governing its $300
million Senior Floating Rate Toggle Notes due 2012 to pay all
interest under the Notes that is due on January 1, 2009, for the
interest period beginning on October 1, 2008, and ending on
December 31, 2008, entirely in kind ("PIK Interest"). The Company
had $542.0 million drawn under its asset based loan facility ("ABL
Facility") at September 30, 2008, with excess availability of $61.5
million. Cash balances were $173.1 million at quarter-end,
reflecting the deposit into short term money market accounts
invested in government securities of the Company's draw of over
$160 million of its excess borrowing capacity under its ABL
Facility. Between the Company's cash on hand and its excess
availability Metals USA had $234.6 million of liquidity at
September 30, 2008. Net debt of $944.7 million on September 30,
2008 was $101.0 million higher than net debt of $843.7 million on
December 31, 2007 due primarily to an increase in working capital.
Capital expenditures were $4.0 million for the quarter and $8.9
million year-to-date. Net cash used in operating activities for
first nine months of 2008 was $97.7 million. Net income for the
period was $79.6 million, which included non-cash costs of
approximately $21.4 million. Additionally, changes in operating
assets and liabilities resulted in a cash outflow of $198.7 million
for the period, an amount that was primarily attributable to
increases in inventories and accounts receivable, partially offset
by an increase in accounts payable. Metals USA has scheduled a
conference call for Tuesday, October 21, 2008 at 11:00 a.m. Eastern
Time. Anyone interested in hearing the call live may gain access
via the Company's website. A replay of the call will be available
approximately two hours after the live broadcast ends and will be
available for approximately 30 days following the call. To access
the replay, dial (888) 203-1112 and enter the pass code 1540704.
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. For more information, visit the
Company's website at http://www.metalsusa.com/. The information
contained in this release is limited and the Company encourages
interested parties to read the Company's Prospectus to our
Registration Statement on Form S-1, as amended, dated July 17,
2008, and historical Form 10-K and 10-Q's which are on file with
the Securities and Exchange Commission for more complete historical
information about the Company. Additionally, copies of the
Company's filings with the Securities and Exchange Commission,
together with press releases and other information investors may
find of benefit, can be found at the Company's website at
http://www.metalsusa.com/ under "Investor Relations." This press
release contains certain forward-looking statements which involve
known and unknown risks, uncertainties or other factors not under
the Company's control which may cause the actual results,
performance or achievement of the Company to be materially
different from the results, performance or other expectations
implied by these forward-looking statements. These factors include,
but are not limited to, those disclosed in the Company's historic
periodic filings with the Securities and Exchange Commission. -
Tables follow - Metals USA Holdings Corp. Unaudited Consolidated
Statements of Operations (In millions) Three Months Ended Nine
Months Ended September 30, June 30, September 30, 2008 2007 2008
2008 2007 Revenues: Net sales $617.7 $469.6 $593.1 $1,699.8
$1,413.1 Operating costs and expenses: Cost of sales (exclusive of
operating and delivery, and depreciation and amortization shown
below) 446.4 363.2 422.9 1,245.9 1,083.2 Operating and delivery
48.6 43.7 49.5 144.6 133.6 Selling, general and administrative 33.9
28.3 33.4 96.5 86.5 Depreciation and amortization 5.3 5.2 5.4 16.2
15.5 (Gain) loss on sale of property and equipment (0.9) - (1.5)
(2.4) - Impairment of property and equipment - - - - 0.2 Operating
income 84.4 29.2 83.4 199.0 94.1 Other (income) expense: Interest
expense 20.4 24.7 19.9 65.4 63.7 Loss on extinguishment of debt -
8.4 - - 8.4 Other (income) expense, net 0.2 (0.7) 0.1 0.2 (0.8)
Income (loss) before income taxes 63.8 (3.2) 63.4 133.4 22.8
Provision for income taxes 27.8 0.2 23.6 53.8 10.7 Net income
(loss) $36.0 $(3.4) $39.8 $79.6 $12.1 Metals USA Holdings Corp.
Unaudited Consolidated Balance Sheets (In millions, except share
amounts) September 30, December 31, 2008 2007 Assets Current
assets: Cash and cash equivalents $173.1 $13.6 Accounts receivable,
net of allowance of $8.7 and $8.3, respectively 277.8 196.8
Inventories 562.5 409.8 Deferred income tax asset 22.0 19.7
Prepayments and other 7.3 7.5 Total current assets 1,042.7 647.4
Property and equipment, net 190.1 202.1 Assets held for sale, net
1.8 - Intangible assets, net 16.3 23.3 Goodwill 57.9 60.2 Other
assets, net 26.5 26.0 Total assets $1,335.3 $959.0 Liabilities and
Stockholders' Deficit Current liabilities: Accounts payable $85.1
$75.5 Accrued liabilities 81.5 63.3 Current portion of long-term
debt 1.6 2.3 Total current liabilities 168.2 141.1 Long-term debt,
less current portion 1,116.2 855.0 Deferred income tax liability
64.5 67.4 Other long-term liabilities 24.2 21.1 Total liabilities
1,373.1 1,084.6 Commitments and contingencies Stockholders'
deficit: Common stock, $.01 par value, 30,000,000 shares
authorized, 14,077,500 issued and outstanding at September 30, 2008
and December 31, 2007, respectively 0.1 0.1 Additional paid-in
capital 6.3 0.7 Retained deficit (47.5) (127.1) Accumulated other
comprehensive income 3.3 0.7 Total stockholders' deficit (37.8)
(125.6) Total liabilities and stockholders' deficit $1,335.3 $959.0
Metals USA Holding Corp. Unaudited Consolidated Statements of Cash
Flows (In millions) Nine Months Ended September 30, 2008 2007 Cash
flows from operating activities: Net income $79.6 $12.1 Adjustments
to reconcile net income to net cash (used in) provided by operating
activities: (Gain) loss on sale of property and equipment (2.4) -
Impairment of property and equipment - 0.2 Provision for bad debts
2.3 1.7 Depreciation and amortization 18.2 16.6 Loss on debt
extinguishment - 8.4 Amortization of debt issuance costs and
discounts on long-term debt 4.4 3.6 Deferred income taxes (1.9)
(4.5) Stock-based compensation 0.8 4.5 Changes in operating assets
and liabilities, net of acquisitions: Accounts receivable (81.8)
(16.4) Inventories (152.7) 50.6 Prepayments and other (0.6) 3.5
Accounts payable and accrued liabilities 26.9 14.2 Other 9.5 3.7
Net cash (used in) provided by operating activities (97.7) 98.2
Cash flows from investing activities: Sale of assets 9.5 1.0
Purchases of assets (8.9) (16.0) Acquisition costs, net of cash
acquired - (38.4) Net cash provided by (used in) investing
activities 0.6 (53.4) Cash flows from financing activities:
Borrowings on credit facility 959.5 337.0 Repayments on credit
facility (698.0) (366.0) Issuance of long-term debt - 291.0
Repayments of long-term debt (2.3) (150.5) Deferred financing costs
(2.6) (6.3) Dividends paid - (288.5) Net cash provided by (used in)
financing activities 256.6 (183.3) Net increase (decrease) in cash
and cash equivalents 159.5 (138.5) Cash and cash equivalents,
beginning of period 13.6 155.8 Cash and cash equivalents, end of
period $173.1 $17.3 Metals USA Holdings Corp. Unaudited
Supplemental Segment and Non-GAAP Information (In millions, except
shipments) Three Months Ended Nine Months Ended September 30, June
30, September 30, 2008 2007 2008 2008 2007 Segment: Flat Rolled and
Non-Ferrous: Net sales $244.5 $205.6 $234.5 $695.0 $630.1 Operating
Income $28.0 $12.5 $29.2 $72.1 $42.9 Depreciation and amortization
$1.7 $1.1 $1.9 $5.4 $2.9 EBITDA (1) $29.7 $13.6 $31.1 $77.5 $45.8
Adjusted EBITDA (2) $29.7 $13.6 $31.1 $77.5 $45.8 Shipments (3) 151
144 164 483 467 Plates and Shapes: Net sales $339.9 $225.3 $325.6
$915.1 $672.7 Operating Income $62.4 $23.2 $64.2 $155.0 $73.7
Depreciation and amortization $2.3 $2.1 $2.2 $6.9 $6.6 EBITDA (1)
$64.7 $25.3 $66.4 $161.9 $80.3 Adjusted EBITDA (2) $64.7 $25.3
$66.4 $161.9 $80.3 Shipments (3) 212 207 240 672 626 Building
Products: Net sales $37.8 $41.7 $36.4 $100.3 $121.0 Operating
Income $1.8 $1.1 $(2.5) $(6.4) $2.4 Depreciation and amortization
(5) $0.7 $0.5 $0.5 $2.5 $1.6 EBITDA (1) $2.5 $1.6 $(2.0) $(3.9)
$4.0 Adjusted EBITDA (2) $1.8 $1.8 $0.9 $0.2 $4.2 Shipments (3) - -
- - - Corporate and other: Net sales $(4.5) $(3.0) $(3.4) $(10.6)
$(10.7) Operating Income $(7.8) $(7.6) $(7.5) $(21.7) $(24.9)
Depreciation and amortization $1.1 $1.9 $1.2 $3.4 $5.5 EBITDA (1)
$(6.7) $(5.7) $(6.3) $(18.3) $(19.4) Adjusted EBITDA (2) $(6.1)
$(4.6) $(5.8) $(16.6) $(14.0) Shipments (3) (4) (3) (2) (3) (8) (8)
Consolidated: Net sales $617.7 $469.6 $593.1 $1,699.8 $1,413.1
Operating Income $84.4 $29.2 $83.4 $199.0 $94.1 Depreciation and
amortization (5) $5.8 $5.6 $5.8 $18.2 $16.6 EBITDA (1) $90.2 $34.8
$89.2 $217.2 $110.7 Adjusted EBITDA (2) $90.1 $36.1 $92.6 $223.0
$116.3 Shipments (3) 360 349 401 1,147 1,085 (1) EBITDA is the
summation of Operating Income and Depreciation and Amortization. We
believe that EBITDA is commonly used as a measure of performance
for companies in our industry and is frequently used by analysts,
investors, lenders and other interested parties to evaluate a
company's financial performance and its ability to incur and
service debt. EBITDA should not be considered as a measure of
financial performance under accounting principles generally
accepted in the United States. The items excluded from EBITDA are
significant components in understanding and assessing financial
performance. EBITDA should not be considered in isolation or as an
alternative to net income, cash flows generated by operating,
investing or financing activities or other financial statement data
presented in the consolidated financial statements as an indicator
of operating performance or a measure of liquidity. (2) Adjusted
EBITDA, as contemplated by our credit documents, is used by our
lenders for debt covenant compliance purposes. Adjusted EBITDA is
EBITDA adjusted to eliminate management fees to related parties,
one-time, non-recurring charges related to the use of purchase
accounting, and other non-cash income or expenses, which are more
particularly defined in our credit documents and the indenture
governing our notes. (3) Unaudited and is expressed in thousands of
tons. Not a meaningful measure for Building Products. (4) Negative
net sales and shipment information represent the elimination of
intercompany transactions. (5) Includes depreciation expense
recorded in cost of sales. EBITDA and Adjusted EBITDA Non-GAAP
Measures, Reconciliations and Explanations EBITDA is defined as net
income (loss) before interest, taxes, depreciation and amortization
and is used by management, together with Adjusted EBITDA, as a
measure for certain performance-based bonus plans. Adjusted EBITDA,
as contemplated by our credit documents, is used by our lenders for
debt covenant compliance purposes. Adjusted EBITDA is EBITDA
adjusted to eliminate management fees to related parties, one-time,
non-recurring charges related to the use of purchase accounting,
and other non-cash income or expenses, which are more particularly
defined in our credit documents and the indenture governing our
notes. Our credit documents and the indenture governing our notes
require us to meet or exceed specified minimum financial measures
before we will be permitted to consummate certain acts, such as
complete acquisitions, declare or pay dividends and incur
additional indebtedness, and one of the more significant measures
contained in our credit documents and the indenture governing our
notes is Adjusted EBITDA. We believe that EBITDA and Adjusted
EBITDA are useful to investors because the measures are frequently
used by securities analysts, investors and other interested parties
to evaluate companies in our industry. EBITDA and Adjusted EBITDA
are not recognized terms under generally accepted accounting
principles which we refer to as "GAAP," and should not be viewed in
isolation and do not purport to be an alternative to net income as
an indicator of operating performance or cash flows from operating
activities as a measure of liquidity. There are material
limitations associated with making the adjustments to our earnings
to calculate EBITDA and Adjusted EBITDA and using these non-GAAP
financial measures as compared to the most directly comparable U.S.
GAAP financial measures. For instance, EBITDA and Adjusted EBITDA
do not include: * interest expense, and because we have borrowed
money in order to finance our operations, interest expense is a
necessary element of our costs and ability to generate revenue; *
depreciation and amortization expense, and because we use capital
assets, depreciation and amortization expense is a necessary
element of our costs and ability to generate revenue; and * tax
expense, and because the payment of taxes is part of our
operations, tax expense is a necessary element of our costs and
ability to operate. Additionally, neither EBITDA nor Adjusted
EBITDA are intended to be a measure of free cash flow for
management's discretionary use, as neither considers certain cash
requirements such as capital expenditures, contractual commitments,
interest payments, tax payments and debt service requirements.
Because not all companies use identical calculations, this
presentation of EBITDA and Adjusted EBITDA may not be comparable to
other similarly titled measures for other companies. Below is a
reconciliation of operating income to EBITDA and Adjusted EBITDA.
Amounts for year-to-date periods may not equal the sum of the
individual quarters due to rounding. Three Months Ended Nine Months
Ended September 30, June 30, September 30, 2008 2007 2008 2008 2007
(In millions) Operating Income $84.4 $29.2 $83.4 $199.0 $94.1
Depreciation and amortization (1) 5.8 5.6 5.8 18.2 16.6 EBITDA 90.2
34.8 89.2 217.2 110.7 Indenture defined adjustments to EBITDA:
Facility closure (0.7) 0.2 2.8 4.0 0.2 Stock options and grant
expense 0.3 0.8 0.3 0.9 4.5 Management fees and other costs 0.3 0.3
0.3 0.9 0.9 Adjusted EBITDA $90.1 $36.1 $92.6 $223.0 $116.3 (1)
Includes depreciation expense recorded in cost of sales for the
Building Products Group. DATASOURCE: Metals USA Holdings Corp.
CONTACT: Robert McPherson, Sr. Vice President, CFO of Metals USA
Holdings Corp., +1-713-965-0990 Web site: http://www.metalsusa.com/
Copyright