Metals USA Reports Second Quarter 2012 EPS Of $0.51 On Net Income 17% Above First Quarter 2012

FORT LAUDERDALE, Fla., July 23, 2012 /PRNewswire/ -- Metals USA Holdings Corp. (NYSE: MUSA) today reported its results for the three and six month periods ended June 30, 2012.

Net sales for the second quarter of 2012 were $537.1 million, up 6% from net sales of $505.6 million for the second quarter of 2011.  Net income for the second quarter of 2012 was $19.0 million, compared to net income of $21.5 million in the second quarter of 2011.  Net sales improved 2% and net income improved 17% compared to the first quarter of 2012. Earnings per diluted share were $0.51 in the second quarter of 2012 compared to $0.57 in the second quarter of 2011.

Net sales for the first six months of 2012 were $1,062.4 million, up 13% from net sales of $937.9 million for the first six months of 2011.  Net income for the first six months of 2012 was $35.3 million, compared to net income of $33.9 million for the first six months of 2011.  Earnings per diluted share were $0.94 for the first six months of 2012, compared to $0.91 for the first six months of 2011.  

Metal shipments were 413,660 tons for the second quarter of 2012, up 15% from metal shipments of 360,430 tons in the second quarter of 2011.  Metal shipments for the first six months of 2012 were 816,452 tons, up 12% compared to metal shipments of 728,342 tons for the first six months of 2011.  Toll processed tonnage was 52,470 tons during the second quarter of 2012, compared to 42,077 tons for the second quarter of 2011.  Toll processed tonnage was 92,719 tons during the first six months of 2012, compared to 86,634 tons for the first six months of 2011. 

Lourenco Goncalves, the Company's Chairman, President and C.E.O., stated: "We are very pleased to achieve yet another quarter of strong results.  Despite a persistently weak pricing environment in the second quarter, Metals USA delivered sequential growth, generating more revenues and profit in Q2 than in the first quarter."

Mr. Goncalves concluded: "Several steel mills have announced price increases at the outset of Q3, but end users continue to be skeptical regarding the ultimate direction prices will go.  We expect our customers' purchasing behavior to be similar to their Q2 behavior, and have positioned our inventory accordingly.  Consequently, we expect a decrease in both working capital and net debt during the third quarter."

Adjusted EBITDA (as defined and calculated in the attached table), a non-GAAP financial measure used by Metals USA and its lenders to evaluate the performance of the business, was $45.2 million for the second quarter of 2012 compared to $50.0 million for the second quarter of 2011, and $41.0 million for the first quarter of 2012. Adjusted EBITDA was $86.2 million for the first six months of 2012 compared to $87.3 million for the first six months of 2011.  As of June 30, 2012, the Company's trailing twelve month Pro Forma Adjusted EBITDA (as defined and calculated in the attached table) was $163.7 million.

Metals USA had $262.0 million drawn under its asset-based credit facility at June 30, 2012 with excess availability of $175.2 million, compared to excess availability of $163.8 million at December 31, 2011.  Net debt, a non-GAAP measure defined as total outstanding debt less cash on hand, was $487.3 million as of June 30, 2012, an increase of $4.2 million from the first quarter of 2012.  Net cash used in operating activities for the first six months of 2012 was $5.5 million.  Capital expenditures were $4.0 million for the three months ended June 30, 2012 and $8.5 million for the first six months of 2012. 

Conference Call and Webcast

Metals USA has scheduled a conference call for Tuesday, July 24, 2012 at 10 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 60 days.  To access the replay, dial (888) 286-8010 and enter the pass code 72934503.

About Metals USA

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 www.metalsusa.com.  The information contained in this release is limited and the Company encourages interested parties to read the Company's annual report on Form 10-K, its quarterly reports on Form 10-Q and its other reports, statements and materials filed with the Securities and Exchange Commission for more complete 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 interest, can be found at the Company's website at www.metalsusa.com under "Investor Relations."

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements within the meaning of the federal securities laws 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.  Such statements include, but are not limited to, statements concerning the Company's financial performance, plans, competitive position and market share; projections concerning revenue, profitability, raw material pricing, cash flows, earnings, sales, volumes, working capital, balance sheet strength, debt or other financial and operational measures; projected working capital needs; demand trends for the Company's products or its markets; pricing trends for metal or other raw materials and finished goods and the impact of pricing changes; anticipated capital expenditures; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain; projected timing, results, benefits, costs, charges and expenditures related to acquisitions or divestitures; the ability to operate profitably and generate cash in the current economic environment; the ability to capture and maintain margins and market share and to develop or take advantage of future opportunities, new products, services and markets; expectations for Company and customer inventories and customer orders; expectations for the economy and markets or improvements therein; expectations for improving earnings, margins or shareholder value; and other non-historical matters.  Factors that could cause the Company's results to differ materially from actual results or current expectations include, but are not limited to, changes in metal prices; the effect of economic conditions generally in the United States and in the regions in which the Company operates and international economies and within major product markets, including a prolonged or substantial economic downturn; the effect of consolidation or other actions of our suppliers; disruptions in our sources of supply; increased competition and the other factors detailed in the Company's annual report on Form 10-K under the caption "Risk Factors" and other reports filed with the Securities and Exchange Commission.  In addition, these statements are based on a number of assumptions that are subject to change.  This press release speaks only as of this date and the Company disclaims any duty to update the information herein.

-Tables follow -

 

Metals USA Holdings Corp.
Unaudited Consolidated Statements of Operations
and Comprehensive Income
(In millions, except per share amounts)



Three Months Ended


Six Months Ended



June 30,


March 31,


June 30,



















2012


2011


2012


2012


2011

































































Revenues:
















Net sales


$

537.1


$

505.6


$

525.3


$

1,062.4


$

937.9

Operating costs and expenses:
















Cost of sales (exclusive of operating and delivery,
and depreciation and amortization shown below) 



414.4



382.9



407.1



821.5



712.6

Operating and delivery



51.0



45.9



51.0



102.0



87.0

Selling, general and administrative



27.8



27.9



27.8



55.6



54.7

Depreciation and amortization



5.6



5.6



5.3



10.9



10.4

(Gain) loss  on sale of property and equipment



-



-



(0.1)



(0.1)



0.1

Operating income



38.3



43.3



34.2



72.5



73.1

Other expense:
















Interest expense



9.2



9.3



9.2



18.4



18.3

Income before income taxes 



29.1



34.0



25.0



54.1



54.8

Provision for income taxes



10.1



12.5



8.7



18.8



20.9

Net income


$

19.0


$

21.5


$

16.3


$

35.3


$

33.9

















Income per share:
















Income per share - basic


$

0.51


$

0.58


$

0.44


$

0.95


$

0.92

Income per share - diluted


$

0.51


$

0.57


$

0.44


$

0.94


$

0.91

















Number of common shares used in the per share calculation:
















Basic



37.1



37.0



37.1



37.1



37.0

Diluted



37.4



37.3



37.4



37.4



37.3

















Net income



19.0



21.5



16.3



35.3



33.9

   Other comprehensive income (loss):
















      Foreign currency translation adjustments



(0.1)



(0.1)



0.1



-



-

      Deferred hedging gains



-



-



-



-



0.1

Total other comprehensive income (loss)



(0.1)



(0.1)



0.1



-



0.1

Total comprehensive income


$

18.9


$

21.4


$

16.4


$

35.3


$

34.0

 

Metals USA Holdings Corp.
Unaudited Consolidated Balance Sheets
(In millions, except share amounts)



June 30,



December 31,



2012



2011

















Assets








Current assets:








Cash


$

15.3



$

12.1

Accounts receivable, net of allowance of $5.8 and $6.9, respectively



249.2




212.2

Inventories



411.7




402.5

Deferred income tax asset



6.1




7.9

Prepayments and other



7.5




9.4

Total current assets



689.8




644.1

Property and equipment, net



249.6




247.8

Intangible assets, net



32.3




26.6

Goodwill



56.0




52.8

Other assets



12.1




13.5

Total assets


$

1,039.8



$

984.8









Liabilities and Stockholders' Equity








 Current liabilities:








Accounts payable


$

93.9



$

110.0

Accrued liabilities



31.5




29.7

Current portion of long-term debt



1.0




1.0

Total current liabilities



126.4




140.7

Long-term debt, less current portion



501.6




467.6

Deferred income tax liability



99.0




97.1

Other long-term liabilities



19.1




22.3

Total liabilities



746.1




727.7

Commitments and contingencies








Stockholders' equity:








Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or








outstanding at June 30, 2012 and December 31, 2011



-




-

Common stock, $0.01 par value, 140,000,000 shares authorized, 37,075,927 issued








and 37,075,198 outstanding at June 30, 2012 and 37,059,236 issued








and 37,058,507 outstanding at December 31, 2011



0.4




0.4

Additional paid-in capital



232.6




231.3

Retained earnings



60.4




25.1

Accumulated other comprehensive income



0.3




0.3

Total stockholders' equity



293.7




257.1

Total liabilities and stockholders' equity


$

1,039.8



$

984.8

 

Metals USA Holding Corp.
Unaudited Consolidated Statements of Cash Flows
(In millions)



Six Months Ended



June 30,



2012



2011







Cash flows from operating activities:








Net income


$

35.3



$

33.9

Adjustments to reconcile net income to net cash used in operating activities:








        (Gain) loss  on sale of property and equipment



(0.1)




0.1

Provision for bad debts



1.0




1.6

Depreciation and amortization



12.0




11.4

Amortization of debt issuance costs



1.6




1.4

Deferred income taxes



1.2




8.7

Stock-based compensation



1.2




0.8

Changes in operating assets and liabilities, net of acquisitions:








Accounts receivable



(36.6)




(67.5)

Inventories



(8.5)




(47.1)

Prepayments and other



1.9




4.0

Accounts payable and accrued liabilities



(14.6)




7.8

Other operating



0.1




1.1

Net cash used in operating activities



(5.5)




(43.8)









Cash flows from investing activities:








Sales of assets



0.2




0.1

Purchases of assets



(8.5)




(3.7)

Acquisition costs, net of cash acquired



(17.0)




(88.4)

Net cash used in investing activities



(25.3)




(92.0)









Cash flows from financing activities:








Borrowings on credit facility



163.8




176.5

Repayments on credit facility



(129.5)




(42.4)

Repayments of long-term debt



(0.3)




(0.3)

Deferred financing costs



(0.1)




(0.9)

Exercise of stock options



0.1




-

Net cash provided by financing activities



34.0




132.9









Net increase (decrease) in cash



3.2




(2.9)

Cash, beginning of period



12.1




16.6

Cash, end of period


$

15.3



$

13.7