METALS USA HOLDINGS CORP 
By FORT LAUDERDALE, Fla., Jan. 26, 2012 /PRNewswire/ -- Metals USA Holdings Corp. (NYSE: MUSA) today reported its results for the three and twelve months ended December 31, 2011.
Net sales for the fourth quarter of 2011 were $455.7 million, an increase of 40.7% over net sales of $323.9 million for the fourth quarter of 2010. Net income for the fourth quarter of 2011 was $14.0 million compared to net income of $3.1 million for the fourth quarter of 2010. Earnings per diluted share ("EPS") were $0.37 in the fourth quarter of 2011 compared to $0.08 for the fourth quarter of 2010.
Net sales for fiscal year 2011 were $1.9 billion, an increase of 46.0% over net sales of $1.3 billion for fiscal year 2010. Net income for fiscal year 2011 was $64.6 million compared to net income of $11.5 million for the fiscal year 2010. Fiscal year 2011 EPS was $1.73 compared to $0.34 for fiscal year 2010.
Metal shipments for the fourth quarter of 2011 were 327,000 tons, an increase of 23.1% over metal shipments of 267,000 tons for the fourth quarter of 2010. Metal shipments for fiscal year 2011 were 1,396,000 tons, up 32.0% compared to metal shipments of 1,059,000 tons for fiscal year 2010. Toll processed tonnage was 33,000 tons during the fourth quarter of 2011 compared to 15,000 tons for the fourth quarter of 2010. Toll processed tonnage was 156,000 tons during fiscal year 2011 compared to 51,000 tons for fiscal year 2010.
Lourenco Goncalves, the Company's Chairman, President and C.E.O., stated: "Our 2011 results are a clear demonstration that Metals USA is able to consistently generate strong profits even under less than ideal business conditions. The fourth quarter was no different, and Metals USA delivered the great results we planned and diligently worked for. In an environment best characterized by slow economic recovery and inconsistent metal price direction, Metals USA strengthened our business with established customers, developed relationships with new customers, and expanded our market reach."
Mr. Goncalves concluded: "First quarter demand looks solid, and current price trends are favorable. We believe 2012 domestic steel consumption growth will outpace GDP growth."
Adjusted EBITDA (as defined and calculated in the accompanying table), a non-GAAP financial measure used by Metals USA and its lenders to evaluate the performance of the business, was $34.5 million for the fourth quarter of 2011, an increase of $17.7 million compared to the Company's Adjusted EBITDA of $16.8 million for the fourth quarter of 2010. The Company recorded Adjusted EBITDA of $163.1 million for fiscal year 2011, compared to $85.0 million for fiscal year 2010.
The Company had $227.7 million drawn under its asset-based credit facility at December 31, 2011, with excess availability of $163.8 million. Net debt, a non-GAAP measure defined as total outstanding debt minus cash, decreased by $14.7 million during the quarter to $456.5 million as of December 31, 2011. When viewed along with other GAAP balance sheet measures, we believe net debt is a useful measure of our financial position. Net cash used in operating activities for 2011 was $12.3 million. Capital expenditures during 2011 were $21.8 million.
Conference Call and Webcast
Metals USA has scheduled a conference call for Friday, January 27, 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 until approximately March 26, 2012. To access the replay, dial (888) 286-8010 and enter the pass code 46257300.
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 reports 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 future performance of the Company, statements concerning the Company's plans, competitive position and market share, projections concerning revenue, profitability, cash flows, earnings, sales, volumes, 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 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 identify, execute and successfully integrate acquisitions; 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 metal prices and steel consumption; 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, internationally and in the regions in which the Company operates 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 the date hereof and the Company disclaims any duty to update the information herein.
-Tables follow -
Metals USA Holdings Corp.
Unaudited Consolidated Statements of Operations
(In millions, except per share data)
Three Months Ended Twelve Months Ended
------------------ -------------------
September
December 31, 30, December 31,
------------ ---------- ------------
2011 2010 2011 2011 2010
---- ---- ---- ---- ----
Revenues:
Net sales $455.7 $323.9 $492.3 $1,885.9 $1,292.1
Operating costs and expenses:
Cost of sales (exclusive of
operating and delivery, 353.3 252.2 379.8 1,445.7 996.7
and depreciation and amortization
shown below)
Operating and delivery 44.7 34.2 44.0 175.7 131.9
Selling, general and administrative 25.1 21.5 28.3 108.1 81.9
Depreciation and amortization 5.8 4.4 5.0 21.2 17.8
Loss (gain) on sale of property and
equipment - 0.4 (0.1) - 0.3
Advisory agreement termination
charge - - - - 3.3
--- --- --- --- ---
Operating income 26.8 11.2 35.3 135.2 60.2
Other expense:
Interest expense 9.0 9.0 9.3 36.6 38.9
Loss on extinguishment of debt - - - - 3.5
Other expense, net - - 0.1 0.1 -
--- --- --- --- ---
Income before income taxes 17.8 2.2 25.9 98.5 17.8
Provision (benefit) for income taxes 3.8 (0.9) 9.2 33.9 6.3
Net income $14.0 $3.1 $16.7 $64.6 $11.5
===== ==== ===== ===== =====
Income per share:
Income per share - basic $0.38 $0.08 $0.45 $1.74 $0.34
Income per share - diluted $0.37 $0.08 $0.45 $1.73 $0.34
Number of common shares used in the
per share calculation:
Basic 37.1 37.0 37.1 37.0 33.8
Diluted 37.3 37.3 37.3 37.3 34.1
Metals USA Holdings Corp.
Unaudited Consolidated Balance Sheets
(In millions, except share amounts)
December December
31, 31,
2011 2010
---- ----
Assets
Current assets:
Cash $12.1 $16.6
Accounts receivable, net of allowance of
$6.9 and $5.9, respectively 212.2 149.3
Inventories 402.5 290.8
Deferred income tax asset 7.9 12.0
Prepayments and other 9.4 9.8
--- ---
Total current assets 644.1 478.5
Property and equipment, net 247.8 198.8
Intangible assets, net 26.6 7.4
Goodwill 52.8 47.3
Other assets 13.5 13.5
---- ----
Total assets $984.8 $745.5
====== ======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $110.0 $66.6
Accrued liabilities 29.7 30.6
Current portion of long-term debt 1.0 1.1
--- ---
Total current liabilities 140.7 98.3
Long-term debt, less current portion 467.6 345.4
Deferred income tax liability 97.1 88.5
Other long-term liabilities 22.3 22.2
---- ----
Total liabilities 727.7 554.4
----- -----
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000
shares authorized, none issued or
outstanding at December 31, 2011 and
December 31, 2010 - -
Common stock, $.01 par value, 140,000,000
shares authorized, 37,059,236 issued
and 37,058,507 outstanding at December 31,
2011 and 37,024,842 issued
and outstanding at December 31, 2010 0.4 0.4
Additional paid-in capital 231.3 229.8
Retained earnings (accumulated deficit) 25.1 (39.5)
Accumulated other comprehensive income 0.3 0.4
--- ---
Total stockholders' equity 257.1 191.1
----- -----
Total liabilities and stockholders' equity $984.8 $745.5
====== ======
Metals USA Holding Corp.
Unaudited Consolidated Statements of Cash Flows
(In millions)
Twelve Months Ended
December 31,
------------
2011 2010
---- ----
Cash flows from operating
activities:
Net income $64.6 $11.5
Adjustments to reconcile
net income to net cash
used in operating
activities:
Loss on sale of property
and equipment - 0.3
Provision for bad debts 2.9 2.4
Depreciation and
amortization 23.3 19.8
Loss on extinguishment of
debt - 3.5
Amortization of debt
issuance costs and
discounts on long-term
debt 2.9 4.3
Deferred income taxes 15.4 1.1
Stock-based compensation 1.5 1.2
Excess tax benefit from
stock-based
compensation - (0.1)
Non-cash interest on PIK
option - 6.2
Cash payment of interest
on PIK option - (23.2)
Advisory agreement
termination charge - 3.3
Changes in operating
assets and liabilities,
net of acquisitions:
Accounts receivable (48.6) (13.8)
Inventories (93.6) (64.0)
Prepayments and other 0.5 (3.0)
Accounts payable and
accrued liabilities 18.6 (6.5)
Other operating 0.2 0.1
--- ---
Net cash used in
operating activities (12.3) (56.9)
----- -----
Cash flows from investing
activities:
Sales of assets 0.3 0.7
Purchases of assets (21.8) (4.0)
Acquisition costs, net of
cash acquired (88.1) (28.0)
Net cash used in
investing activities (109.6) (31.3)
------ -----
Cash flows from financing
activities:
Borrowings on credit
facility 233.8 99.5
Repayments on credit
facility (112.1) (68.5)
Repayments of long-term
debt (1.4) (146.7)
Deferred financing costs (2.9) (6.8)
Excess tax benefit from
stock-based
compensation - 0.1
Net proceeds from initial
public stock offering - 221.2
Net cash provided by
financing activities 117.4 98.8
----- ----
Net (decrease) increase
in cash (4.5) 10.6
Cash, beginning of period 16.6 6.0
Cash, end of period $12.1 $16.6
===== =====
Metals USA Holdings Corp.
Unaudited Supplemental Segment and Non-GAAP Information
(In millions, except shipments)
Three Months Ended Twelve Months Ended
------------------ -------------------
September
December 31, 30, December 31,
------------ ---------- ------------
2011 2010 2011 2011 2010
---- ---- ---- ---- ----
Segment:
Flat Rolled and
Non-Ferrous:
Net sales $261.0 $171.4 $279.7 $1,046.7 $680.5
Operating income $17.3 $9.1 $20.6 $78.1 $45.3
Depreciation and
amortization $3.4 $1.8 $2.5 $10.9 $7.0
EBITDA (1) $20.7 $10.9 $23.1 $89.0 $52.3
Adjusted EBITDA
(2) $20.7 $11.0 $23.1 $89.0 $52.4
Shipments (3) 195 140 198 812 558
Plates and
Shapes:
Net sales $177.8 $135.2 $191.3 $765.9 $538.0
Operating income $15.9 $8.2 $20.0 $83.0 $38.4
Depreciation and
amortization $2.3 $2.2 $2.4 $9.6 $9.2
EBITDA (1) $18.2 $10.4 $22.4 $92.6 $47.6
Adjusted EBITDA
(2) $18.2 $10.4 $22.4 $93.2 $47.6
Shipments (3) 135 129 146 596 509
Building
Products:
Net sales $19.7 $19.3 $24.7 $85.8 $83.0
Operating income
(loss) $(1.0) $(0.7) $0.9 $(0.7) $(0.6)
Depreciation and
amortization
(5) $0.6 $0.6 $0.5 $2.2 $2.4
EBITDA (1) $(0.4) $(0.1) $1.4 $1.5 $1.8
Adjusted EBITDA
(2) $(0.4) $(0.1) $1.4 $1.5 $1.8
Shipments (3) - - - - -
Corporate and
other:
Net sales (4) $(2.8) $(2.0) $(3.4) $(12.5) $(9.4)
Operating loss $(5.4) $(5.4) $(6.2) $(25.2) $(22.9)
Depreciation and
amortization $0.1 $0.3 $0.1 $0.6 $1.2
EBITDA (1) $(5.3) $(5.1) $(6.1) $(24.6) $(21.7)
Adjusted EBITDA
(2) $(4.0) $(4.5) $(5.6) $(20.6) $(16.8)
Shipments (3)
(4) (3) (2) (3) (12) (8)
Consolidated:
Net sales $455.7 $323.9 $492.3 $1,885.9 $1,292.1
Operating income $26.8 $11.2 $35.3 $135.2 $60.2
Depreciation and
amortization
(5) $6.4 $4.9 $5.5 $23.3 $19.8
EBITDA (1) $33.2 $16.1 $40.8 $158.5 $80.0
Adjusted EBITDA
(2) $34.5 $16.8 $41.3 $163.1 $85.0
Shipments (3) 327 267 341 1,396 1,059
Product Mix: (6)
Carbon Flat
Rolled 34.8% 34.6% 34.3% 34.7% 35.1%
Mini Mill
Products 10.4% 12.1% 10.5% 10.5% 11.2%
Non-Ferrous 25.5% 21.4% 25.9% 24.4% 21.9%
Plate 17.0% 18.3% 17.0% 17.6% 18.1%
Structural 12.3% 13.6% 12.3% 12.8% 13.7%
---- ---- ---- ---- ----
Total 100.0% 100.0% 100.0% 100.0% 100.0%
(1) EBITDA is the summation of operating income (loss) 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 of America. 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
indentures governing our notes.
(3) 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.
(6) Based on net sales by product line excluding Building Products.
EBITDA and Adjusted EBITDA Non-GAAP Measures, Reconciliations and Explanations
EBITDA is the summation of operating income (loss) and depreciation and amortization.
EBITDA also represents net income before interest, income taxes, depreciation and
amortization. Adjusted EBITDA (as defined by the loan and security agreement governing
the ABL facility and the indentures governing our notes) is defined as EBITDA further
adjusted to exclude certain non-cash, non-recurring and realized (or in the case of the
indentures, expected) future cost savings directly related to prior acquisitions. EBITDA
and Adjusted EBITDA are not defined terms under accounting principles generally accepted
in the United Sates of America ("GAAP"). Neither EBITDA nor Adjusted EBITDA should be
considered an alternative to operating income or net income as a measure of operating
results or an alternative to cash flow 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 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
income 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.
We present EBITDA because we consider it an important supplemental measure of our
performance and believe it is frequently used by our investors and other interested
parties, as well as by our management, in the evaluation of companies in our industry,
many of which present EBITDA when reporting their results. In addition, EBITDA provides
additional information used by our management and board of directors to facilitate
internal comparisons to historical operating performance of prior periods. Further,
management believes EBITDA facilitates our operating performance comparisons from period
to period because it excludes potential differences caused by variations in capital
structure (affecting interest expense), tax positions (such as the impact of changes in
effective tax rates or net operating losses) and the age and book depreciation of
facilities and equipment (affecting depreciation expense).
We believe that the inclusion of supplemental adjustments to EBITDA applied in presenting
Adjusted EBITDA are appropriate to provide additional information to investors about the
performance of the business, and we are required to present Adjusted EBITDA to demonstrate
compliance with our debt covenants. Management uses Adjusted EBITDA as a key indicator to
evaluate performance of certain employees.
Pro Forma Adjusted EBITDA is defined as Adjusted EBITDA (as discussed above) with additions
for the Adjusted EBITDA of our recent acquisitions, as though we owned those businesses
for the twelve-month period ended December 31, 2011. Adjusted EBITDA on a Pro Forma
Basis, as defined by our credit agreements, is a non-GAAP measure used in the calculation
of our Consolidated Total Debt Ratio, as defined by the indenture governing our notes.
Twelve Months
Three Months Ended Ended
------------------ -------------
December September
31, 30, December 31,
--------- ---------- ------------
2011 2010 2011 2011 2010
---- ---- ---- ---- ----
(In millions)
Operating income $26.8 $11.2 $35.3 $135.2 $60.2
Depreciation and amortization (1) 6.4 4.9 5.5 23.3 19.8
--- --- --- ---- ----
EBITDA 33.2 16.1 40.8 158.5 80.0
Indenture defined adjustments to EBITDA:
Facility closure and severance costs - - - 0.6 -
Non cash employee benefit expense 1.2 0.5 0.4 2.4 1.2
Acquisition expenses 0.1 - 0.1 1.6 -
Advisory agreement fees and other costs - 0.2 - - 3.8
--- --- --- --- ---
Adjusted EBITDA $34.5 $16.8 $41.3 $163.1 $85.0
===== ===== ===== =====
Pro forma acquisition adjustments 1.2
Pro forma Adjusted EBITDA $164.3
======
(1) Includes depreciation expense recorded in cost of sales for the Building Products
Group.
SOURCE Metals USA Holdings Corp.
