SOURCE: Metalico, Inc.

Metalico, Inc.

March 11, 2010 09:46 ET

Metalico Reports 2009 Results

CRANFORD, NJ--(Marketwire - March 11, 2010) - Metalico, Inc. (NYSE Amex: MEA) today reported its results for the year and quarter ended December 31, 2009.

2009 FINANCIAL HIGHLIGHTS

-- 2009 revenues of $291.7 million.
-- Operating income of $ 13.7 million.
-- EBITDA of $28.6 million.
-- Net loss of $3.4 million.
-- Fully diluted loss per share of $0.08.

Net loss for the year ended December 31, 2009 was $3.4 million or $0.08 per share on a diluted basis on sales of $291.7 million. These results compare to a net loss of $43.7 million or $1.25 per share on a diluted basis on sales of $818.2 million for the year ended December 31, 2008.

Sales decreased by $526.5 million or 64% from the Company's 2008 results. But operating income for 2009 rose to $13.7 million as compared to an operating loss of $40.0 million for the prior year.

The Company's scrap segment generated operating income of $12.9 million for 2009 and the lead fabrication segment had operating income of $2.7 million. In 2008, the scrap segment reported an operating loss of $24.6 million and the lead fabrication segment showed an operating loss of $12.2 million. Corporate and other eliminations were responsible for the rest of the Company's 2008 operating losses.

Fourth Quarter Results Summary

Fourth Quarter financial results include the following, compared to the prior year's Fourth Quarter:

-- Sales increased by 31% to $84.6 million.
-- Operating income was $3.0 million, compared to an operating loss of
   $89.9 million.
-- Net loss was $6.0 million compared to a net loss of $67.5 million.
-- EBITDA was $6.3 million, as opposed to a negative $26.2 million.
-- 2009 loss per share was $0.13, compared to 2008 loss of $1.86 per share.

The combined effect of the following items turned the $3.0 million of operating income into a $6.0 million net loss for the quarter. In the period, Metalico wrote off the $2.8 million carrying value of its investment in Beacon Energy Holdings, Inc. due to the expiration of federal renewable energy tax credits, low product demand, rising feedstock costs and diminished working capital balances at year end. The Company incurred $3.0 million of interest expense and $2.2 million of non-recurring charges related to legal settlements.

Further complicating the comparisons, certain charges described above that produced the net loss for the Fourth Quarter are not tax deductible, thereby resulting in federal and state income tax expense of $1.7 million, or $0.04 per diluted share.

"Fourth Quarter operating income was negatively impacted by buying prices rising more rapidly than selling prices and by the mix and quantity of metals sold," said Carlos E. Agüero, Metalico's President and Chief Executive Officer. "The Company generated higher than anticipated PGM sales in the fourth quarter which normally carry a lower gross margin than ferrous scrap sales. Ferrous volumes and price were negatively affected by year-end seasonal factors."

"However, with plenty of inventory on hand at the beginning of 2010, we are well poised to benefit from robust demand from domestic consumers and sharply higher ferrous and non-ferrous commodity prices," Agüero added.

Debt and Shareholders' Equity

Metalico's outstanding debt decreased to $116.8 million as of December 31, 2009 from $184.7 million at December, 31, 2008, a difference of $67.9 million. Shareholders' equity increased 33% or $37.3 million to $150.3 million as of December 31, 2009, from $113.0 million as of December 31, 2008. As recently announced, Metalico closed on a new three-year $65 million senior secured credit facility led by JPMorgan Chase Bank, which will produce annualized interest savings of approximately $2.9 million, which will be partially offset in the first quarter of 2010 by a one-time non-cash capitalized cost write-off of $2.2 million.

As of December 31, 2009, Metalico had 46,425,224 common shares issued and outstanding. The Company has no outstanding preferred shares.

OUTLOOK AND UPDATE

The Company said it believes its results for 2010 may be influenced by the following factors:

-- In the First Quarter of 2010, all grades of ferrous metals are
   experiencing considerable upward pricing trends and surging demand for
   scrap from steel mills in domestic markets.  We believe these positive
   trends will carry into the second quarter.   However, demand from
   export markets for ferrous scrap remains weak relative to recent norms,
   but is expected to strengthen.  The Company anticipates that its first
   quarter ferrous scrap shipments will double over 2009 fourth quarter
   shipments.
-- Demand for non-ferrous metals in the First Quarter is robust.  Many
   items appear to be in tight supply for recyclers, compared to recent
   norms.  Demand for Aluminum Deox has been steadily improving along with
   steel industry capacity utilization.
-- Non-ferrous prices increased substantially through 2009 and remain
   strong so far in 2010.  The Company believes that base metal prices
   will continue at or near current levels as the global economy gradually
   recovers and a supply shortage manifests itself.
-- Intake of ferrous and non-ferrous scrap continues well below historic
   levels and is expected to remain so for the foreseeable months,
   potentially putting further upward pressure on buying prices.
-- Average prices for Platinum Group Metals have increased dramatically
   from their lows in the second half of 2008 and remain in a narrow
   trading range, although still well below historic peaks.  Platinum
   prices had severely impacted unit volumes industry-wide as suppliers
   held back saleable metals in hopes of stronger precious metal pricing
   throughout 2009.  The net reduction of cars scrapped during 2009
   contributed to a significant reduction in converter units available for
   recycling.  However, Metalico expects that units purchased and PGM
   selling prices will continue to show improvement during 2010, in part
   driven by rising car sales and in part by increasing the Company's share
   of the converter recycling market.
-- Fabricated product sales should benefit in 2010 from an improving
   economy and customary pickup in the spring/summer repair and
   construction season.

Metalico, Inc. is a holding company with operations in two principal business segments: ferrous and non-ferrous scrap metal recycling, and fabrication of lead-based products. The Company operates twenty-four recycling facilities in New York, Pennsylvania, Ohio, West Virginia, New Jersey, Texas, and Mississippi and four lead fabrication plants in Alabama, Illinois, and California. Metalico's common stock is traded on NYSE Amex (formerly the American Stock Exchange) under the symbol MEA.

Metalico operates in a highly cyclical and volatile commodity metals universe made more difficult by uncertain economic conditions. The Company's strategy involves diversification among various commodity metal groups, a focus on capacity utilization, internal growth and acquisitions, while taking a long-term view to achieve growth and above-average financial results.

When the Company uses the term "EBITDA," the Company is referring to earnings before interest, stock-based compensation, income taxes, depreciation and amortization, impairment charges, other expense, equity in loss of unconsolidated investee, gain on acquisition, gain on debt extinguishment, financial instruments fair value adjustment and discontinued operations. EBITDA is considered non-GAAP financial information and a reconciliation of net income to EBITDA is included in the attached financial tables.

Forward-looking Statements

This news release, and in particular its "Outlook and Update" section, contains "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, such as Metalico's expectations with respect to its results of operations for the first quarter of 2010, commodity pricing, volumes, and trends. These statements may contain terms like "expect," "anticipate," "believe," "appear," "estimate" and other words that convey a similar meaning, or are statements that do not relate strictly to historical or current facts. Forward-looking statements include statements with respect to Metalico's beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond Metalico's control, and which may cause Metalico's actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause such material difference are discussed in more detail in the Company's most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. All statements other than statements of historical fact are statements that could be forward-looking statements. Metalico assumes no obligation to update the information contained in this news release.

                              METALICO, INC.
                    SELECTED HISTORICAL FINANCIAL DATA
                                (UNAUDITED)
                   ($ thousands, except per share data)



                           Three        Three
                          Months       Months
                           Ended        Ended     Year Ended   Year Ended
Selected Income         December 31, December 31, December 31, December 31,
 Statement Data:        -----------  -----------  -----------  -----------
                            2009          2008        2009          2008
                        -----------  -----------  -----------  -----------
Revenue                 $    84,621  $    64,542  $   291,733  $   818,195
                        -----------  -----------  -----------  -----------
Costs and expenses:
   Operating expenses        72,312       83,762      239,647      756,099
   Selling, general &
    administrative
    expenses                  6,708        7,596       25,994       30,146
   Depreciation &
    amortization              3,472        4,038       13,240       12,864
   Impairment charges             -       59,043            -       59,043
   Gain on acquisition         (866)           -         (866)           -
                        -----------  -----------  -----------  -----------
                             81,626      154,439      278,015      858,152
                        -----------  -----------  -----------  -----------
Operating income (loss)       2,995      (89,897)      13,718      (39,957)
                        -----------  -----------  -----------  -----------
Interest expense             (2,999)      (4,914)     (15,857)     (17,355)
Equity in loss of
 unconsolidated
 subsidiaries                (2,809)      (3,334)      (3,839)      (3,419)
Financial instrument
 fair value adjustment         (614)       1,458       (2,035)       1,943
Gain on debt
 extinguishment                   -            -        8,072            -
Other (expense) income       (2,152)         208       (1,963)         410
                        -----------  -----------  -----------  -----------
                             (8,574)      (6,582)     (15,622)     (18,421)
                        -----------  -----------  -----------  -----------
Loss from continuing
 operations before
 income taxes  and
 minority interest           (5,579)     (96,479)      (1,904)     (58,378)
Provision (benefit) for
 income taxes                   475      (29,371)       1,736      (15,535)
                        -----------  -----------  -----------  -----------
Loss from continuing
 operations before
 minority interest           (6,054)     (67,108)      (3,640)     (42,843)
Minority interest in
 loss of consolidated
 subsidiaries                     -            1            -          413
                        -----------  -----------  -----------  -----------
Loss from continuing
 operations                  (6,054)     (67,107)      (3,640)     (42,430)
Discontinued operations:
   Gain (loss) from
    discontinued
    operations                   18         (397)         195       (1,230)
                        -----------  -----------  -----------  -----------
Net loss                $    (6,036) $   (67,504) $    (3,445) $   (43,660)
                        ===========  ===========  ===========  ===========
Diluted loss per common
 share:
   Loss from continuing
    operations          $     (0.13) $     (1.85) $     (0.08) $     (1.21)
   Discontinued
    operations (net)              -        (0.01)           -        (0.04)
                        -----------  -----------  -----------  -----------
   Net loss             $     (0.13) $     (1.86) $     (0.08) $     (1.25)
                        ===========  ===========  ===========  ===========
Diluted weighted
 average common shares
 outstanding:            46,409,899   36,281,432   41,200,895   35,136,316
                        ===========  ===========  ===========  ===========



                              METALICO, INC.
              SELECTED HISTORICAL FINANCIAL DATA (CONTINUED)
                                (UNAUDITED)
                              ($ thousands)



                                                  December 31, December 31,
                                                      2009         2008
Assets:
     Current Assets                               $     99,435 $    133,359
     Property Plant & Equipment, net                    75,253       80,083
     Intangible and Other Assets                       118,728      126,851
                                                  ------------ ------------
          Total Assets                            $    293,416 $    340,293
                                                  ============ ============

Liabilities & Stockholders' Equity:
     Current Liabilities                          $     22,836 $     66,551
     Debt & Other Long Term Liabilities                120,323      156,770
          Total Liabilities                            143,159      223,321
     Redeemable Common Stock                                 -        4,000
     Stockholders' Equity                              150,257      112,972
     Total Liabilities & Stockholders' Equity     $    293,416 $    340,293
                                                  ============ ============

Non-GAAP Financial Information

Reconciliation of Non-GAAP EBITDA and Net Income

When the Company uses the term "EBITDA," the Company is referring to earnings before interest, stock-based compensation, income taxes, depreciation and amortization, impairment charges, other expense, equity in loss of unconsolidated investee, gain on acquisition, gain on debt extinguishment, financial instruments fair value adjustment and discontinued operations. The Company presents EBITDA because it considers it an important supplemental measure of the Company's performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in Metalico's industry. The Company also uses EBITDA to determine its compliance with some of the covenants under its credit facility. EBITDA is not a recognized term under generally accepted accounting principles in the United States ("GAAP"), and has limitations as an analytical tool. You should not consider it in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities or any other measure calculated in accordance with GAAP. Other companies in the Company's industry may calculate EBITDA differently from how the Company does, limiting its usefulness as a comparative measure. EBITDA should not be considered as a measure of discretionary cash available to the Company to invest in the growth of its business. The following table reconciles EBITDA to net income:


                           Three        Three
                          Months       Months
                           Ended        Ended     Year Ended   Year Ended
                        December 31, December 31, December 31, December 31,
                           2009          2008        2009         2008
                        -----------  -----------  -----------  -----------
                                            (UNAUDITED)

                                          ($ thousands)

EBITDA                  $     6,268  $   (26,198) $    28,581  $    34,357
  Less:
   Interest expense           2,999        4,914       15,857       17,355
   Stock based
    compensation                667          617        2,489        1,994
   Provision
    (benefit)for
    federal and state
    income taxes                475      (29,371)       1,736      (15,535)
   Other expense
    (income)                  2,152         (208)       1,963         (410)

   Equity in loss of
    unconsolidated investee   2,809        3,334        3,839        3,419
   Impairment charges             -       59,043            -       59,043
   Gain on acquisition         (866)           -         (866)           -
   Gain on debt
    extinguishment                -            -       (8,072)           -
   Depreciation and
    amortization              3,472        4,038       13,240       12,864
  Financial instruments
   fair value adjustment        614       (1,458)       2,035       (1,943)

   Discontinued
    operations, net             (18)         397         (195)       1,230
                        -----------  -----------  -----------  -----------
Net loss                $    (6,036) $   (67,504) $    (3,445) $   (43,660)
                        ===========  ===========  ===========  ===========

Contact Information

  • Contact:
    Metalico, Inc.
    Carlos E. Agüero
    Michael J. Drury
    Email Contact

    186 North Avenue East
    Cranford, NJ 07016
    (908) 497-9610
    FAX: (908) 497-1097
    www.metalico.com