Empire Resources Reports Fourth Quarter And Full Year 2013 Results

FORT LEE, N.J., March 31, 2014 /PRNewswire/ -- Empire Resources, Inc. (NASDAQ: ERS), a distributor of value added, semi-finished metal products, announced today that net sales for the fourth quarter of 2013 were $112.4 million, an increase of 3% from the fourth quarter of 2012, and 11% lower than the third quarter of 2013.  The improvement compared with the 2012 fourth quarter reflected increased sales in Europe, Latin America and North America, offset by lower sales in the Australia/New Zealand region.  Sequentially, sales were higher in Australia/New Zealand and Europe and lower in the Americas.

Gross profit for the fourth quarter of 2013 was $4.5 million, or 4.0% of sales, compared with 5.6% of sales in the fourth quarter of 2012 and 4.2% of sales in the 2013 third quarter.  Competitive market conditions negatively affected the gross profit margin as did the imposition of import duty on one of the Company's principal supplier, to a lesser extent. 

Operating income for the fourth quarter of 2013 was $1.5 million compared with $3.0 million in the fourth quarter of 2012 and $1.7 million in the third quarter of 2013.  SG&A expenses were 1% lower than the fourth quarter of 2012 and 16% lower sequentially, due in part to the alignment of commissions paid with sales level.   

Net interest expense for the fourth quarter of 2013 was $1.1 million, approximately level with both the fourth quarter of 2012 and the third quarter of 2013. 

Pre-tax income, before including non-cash non-operating derivative-related amounts in all periods was $0.4 million in the fourth quarter of 2013, compared with $1.9 million in fourth quarter of 2012 and $0.6 million in the third quarter of 2013.

The Company recognized a non-cash non-operating gain of $0.4 million in the fourth quarter of 2013, related to the change in fair market valuation of the derivative feature of its convertible subordinated note.  That compares with a non-cash non-operating loss of $0.4 million in the fourth quarter of 2012 and a non-cash non-operating gain of $1.7 million in the third quarter of 2013, due to the derivative valuation recognized in those periods.  

Net income for the fourth quarter of 2013 was $0.5 million, or $0.04 per diluted share, including the derivative related non-cash non-operating gain.  That compares with net income of $0.9 million, or $0.11 per diluted share, in the fourth quarter of 2012, and net income of $1.5 million, or $0.06 per diluted share, in the third quarter of 2013, including the non-cash non-operating loss and gain in those respective prior year periods.  

For full year 2013, net sales were $482.7 million; pre-tax income was $3.8 million, before including a non-cash non-operating derivative-related loss of $0.05 million; and net income was $2.4 million, or $0.27 per diluted share, including the derivative-related loss.  For full year 2012, net sales were $538.5 million; pre-tax income was $6.5 million, before including a non-cash non-operating derivative-related loss of $0.06 million; and net income was $4.0 million, or $0.42 per diluted share, including the derivative-related loss.   

Nathan Kahn, President and CEO, commented, "Through the efforts of our entire team, we achieved solid sales and profitability in each quarter of 2013, including the fourth quarter, despite exceptionally difficult industry and competitive conditions. 

"Even with those challenges, our sales initiatives have enabled us to improve our results in Europe, where our fourth quarter sales were at the highest level since 2011.  We also realized a sequential step-up in our sales in the Australia/New Zealand region in the final quarter of the year.  And, we have expanded our presence in Latin America, which represented 14% of full year sales versus 11% in 2012.  At the same time, our ongoing inventory management efforts have enabled us to reduce storage and processing costs, lower working capital and pay down debt. 

"While current market conditions remain difficult, we are continuing to see promising signs in our bookings.  In the meantime, we are firmly focused on executing our growth strategy to increase shareholder value.  Towards that end, we are pleased to have recently announced our 44th consecutive quarterly cash dividend."

Empire Resources, Inc. is a distributor of a wide range of semi-finished metal products to customers in the transportation, automotive, housing, appliance and packaging industries in the U.S., Canada, Latin America, Australia, New Zealand and Europe. It maintains supply contracts with mills in various parts of the world.

This press release contains "forward-looking statements." Such statements may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) the loss or default of one or more suppliers; (ii) the loss or default of one or more significant customers; (iii) a default by counterparties to derivative financial instruments; (iv) changes in general, national or regional economic conditions; (v) an act of war or terrorism that disrupts international shipping; (vi) changes in laws, regulations and tariffs; (vii) the imposition of anti-dumping duties on products the Company imports; (viii) changes in the size and nature of the Company's competition; (ix) changes in interest rates, foreign currencies or spot prices of aluminum; (x) the loss of one or more key executives; (xi) increased credit risk from customers; (xii) the Company's failure to grow internally or by acquisition and (xiii) the Company's failure to improve operating margins and efficiencies. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.

SOURCE Empire Resources, Inc.