Metals USA, Inc. announced net income of $7.7 million on sales revenues of $469.6 million for the quarter ended September 30, 2007.
Third Quarter Results—Net income of $7.7 million compares to net income of $17.3 million for the third quarter of 2006. Sales revenues of $469.6 million were $8.0 million lower than third quarter-prior year sales of $477.6 million. Adjusted EBITDA was $36.2 million, $12.3 million lower than third-quarter 2006.
The company recognized $5.2 million in depreciation and amortization expenses during the quarter, and interest expense was $14.4 million. Operating income was $29.3 million, $13.6 million lower than last year’s third quarter.
Metals USA Holdings announced intentions to withdraw its Form S-1 currently on file with the Securities and Exchange Commission citing a lack of favorable equity market conditions.
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Management Comments—"The third quarter was a challenging quarter in the service center industry, with tight metal supply, declining surcharge values in stainless and soft demand in certain sectors of the economy, particularly affecting our Building Products business,” said Lourenco Goncalves, the company's Chairman, President and CEO. “Despite these challenges, Metals USA was still able to deliver decent results in Q3."
“We continue to see deficits in the availability of steel raw material inputs world-wide and this should keep steel supply relatively low for the foreseeable future,” Goncalves added. “Additionally, the weak U.S. Dollar should continue to limit the presence of imports into the U.S. All things considered, we are confident the inconsistent movement of indicators is just noise associated with a market in transition, and that consistent profits will continue in Q4 and beyond.”
The company had $300.0 million drawn under its ABL credit facility at September 30, 2007, with excess availability of $145.0 million. Total debt of $584.9 million at the end of the quarter was $25.7 million lower than at December 31, 2006. The company made capital expenditures of $5.0 million during the quarter.
During the first nine months of this year net cash provided by operating activities was $98.0 million. This amount represents net income of $29.0 million, plus adjustments for costs that did not involve cash flows for the period of $20.5 million, in addition to changes in operating assets and liabilities (net of the effects of acquisitions) that resulted in a cash inflow of $48.5 million for the period, an amount that was primarily attributable to decrease in inventories and an increase in accounts payable and accrued liabilities, partially offset by an increase in accounts receivable.
In other news, Metals USA Holdings Corp announced on Tuesday, Oct. 30, that it intends to withdraw its Form S-1 currently on file with the Securities and Exchange Commission citing a lack of favorable equity market conditions.
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. Metals USA, Inc. is a wholly-owned subsidiary of Metals USA Holdings Corp.