SOURCE: Metalico, Inc.

Metalico, Inc.

March 10, 2011 08:10 ET

Metalico Reports Record 2010 EBITDA, Volumes

CRANFORD, NJ--(Marketwire - March 10, 2011) - Metalico, Inc. (NYSE Amex: MEA) today announced results for the year and quarter ended December 31, 2010 including EBITDA of $53 million, a Company record for a single year, on all-time high volumes of ferrous and non-ferrous scrap.

2010 HIGHLIGHTS

Determined in accordance with GAAP where applicable and without non-GAAP adjustment:

--  Revenues of $553 million, up 90% from 2009 revenues of $292 million.
--  Operating income increased 166% to $36.5 million.
--  Record EBITDA (defined below) of $53 million, nearly double compared to
    $29 million in 2009.
--  Net income of $13.5 million, compared to a loss of $3.4 million in
    2009.
--  Fully diluted earnings per share of $0.29 versus loss per share of
    $0.08 the year before.
--  Record shipments of ferrous gross tons of 450,800.
--  Record non-ferrous shipments of 141.2 million pounds.

Adjusted net income and diluted earnings per share were $2.8 million and $0.06 for the fourth quarter. Adjusted net income for calendar 2010 was $15.7 million and $0.34 diluted earnings per share. Volumes of ferrous and non-ferrous scrap sold in 2010 also reached record levels, surpassing the highs of 2008.

Without adjustment, the Company's reported net income for the quarter ended December 31, 2010 was $1 million or $0.02 per diluted share, and for the year $13.5 million net income and $0.29 per diluted share.

The following table reconciles the Company's adjusted net income to net income as reported in accordance with GAAP:

                           Quarter Ended  Diluted   Year Ended    Diluted
($ in thousands, except     December 31,  Earnings  December 31,  Earnings
 per share data)                2010     Per Share     2010      Per Share
                            ----------- ----------- ----------- -----------

Net income as reported      $     1,037 $      0.02 $    13,462 $      0.29

Non-operating adjustments:
  Financial instruments
   fair value adjustments         1,718        0.04         496        0.01
  Non cash charge for debt
   refinance net of tax               -           -       1,767        0.04

                            ----------- ----------- ----------- -----------
Net income as adjusted      $     2,775 $      0.06 $    15,725 $      0.34
                            =========== =========== =========== ===========

Sales of $553.3 million in 2010 increased by $261.5 million or 90% from the prior year. Operating income for 2010 surged by 166% to $36.5 million compared to $13.7 million for 2009.

The Company's scrap segment generated $41.5 million in operating income and its lead fabricating segment contributed operating income of $1.3 million, both excluding corporate overhead. In 2009, scrap generated operating income of $18.5 million and the lead fabricating segment contributed $3.6 million, also excluding corporate overhead.

                        Year over Year Units Sold


                                                   Amount of      2010
                            2010         2009       Change       Change
                        ------------ ------------ -----------  -----------

Ferrous (gross tons)         450,800      306,600     144,200           47%

Non-Ferrous (pounds)     141,188,000   94,560,000  46,628,000           49%

PGM (troy ounces)            145,600       86,500      59,100           68%

Lead (pounds)             45,886,000   58,341,000 (12,455,000)         -21%

Fourth Quarter Results Summary

Fourth Quarter reported results (exclusive of non-GAAP adjustment) include the following highlights, compared to the same quarter in the prior year:

--  Sales increased by 63% to $137.6 million from $84.6 million.
--  Operating income more than doubled to $6.6 million, compared to $3
    million.
--  Net income was $1 million compared to a net loss of $6 million.
--  EBITDA was $10.9 million, versus $6.3 million.
--  Earnings per share of $0.02, compared to a loss of $0.13 per share.

Carlos E. Agüero, Metalico's President and Chief Executive Officer, said, "2010 was a great year for Metalico and based on what we see so far I am very optimistic that 2011 has the potential to be even better. We are very focused on driving operational margin improvements and executing on internal growth plans with the guidance and leadership of our expanding senior management team. I have never been more excited about the future growth prospects of our Company than I am today."

Volume and Price Comparisons

Excluding acquisitions, year-over-year fourth quarter sales rose by $45.9 million. The increase was due to higher selling volumes, amounting to $10.9 million, and higher average metal selling prices, accounting for $35 million. Acquisitions added $7.1 million to sales for the quarter.

For the full year comparison, sales excluding acquisitions increased by $222 million, owing to $68.6 million in higher selling volumes and $153.4 million in higher average metal selling prices. Acquisitions added $39.5 million to 2010 sales.

Sequentially, quarterly volumes shipped decreased seasonally, except for an increase in PGM (Platinum Group Metals) units.

                           Quarterly Unit Sales


                                             Sequential            Annual
                         Q4 2010     Q3 2010   Change    Q4 2009   Change
                        ----------  ---------- -------  ---------- -------

Ferrous (gross tons)       100,800     119,700     -16%     60,400      67%

Non-Ferrous (pounds)    32,437,000  36,636,000     -11% 26,247,000      24%

PGM (troy ounces)           37,700      31,441      20%     36,214       4%

Lead (pounds)           10,765,000  12,524,000     -14%  9,040,000      19%

Average selling prices increased for all other metals sequentially and year-over-year.

                      Quarterly Unit Selling Prices


                                             Sequential
                                                2010               Annual
                          Q4 2010    Q3 2010   Change    Q4 2009   Change
                         ---------- ---------- -------  ---------- -------

Ferrous (gross ton)      $      376 $      363       4% $      292      29%

Non-Ferrous (pound)      $     1.21 $     1.20       1% $     0.92      32%

PGM (troy ounce)         $    1,117 $      986      13% $      801      39%

Lead (pound)             $     1.51 $     1.33      14% $     1.39       9%

Debt and Shareholders' Equity

Metalico's outstanding debt increased $9.2 million to $126 million as of December 31, 2010 from $116.8 million at December, 31, 2009, while shareholders' equity increased 11% or $17 million to $167.3 million, from $150.3 million.

As of December 31, 2010, Metalico had 46,559,878 common shares issued and outstanding.

OUTLOOK

Metalico finished 2010 with one of the best fourth quarters in its history. The Company continues to see improving macroeconomic conditions, strong commodity prices and exceptional organic growth opportunities in many of Metalico's markets.

The Company said it anticipates that first-quarter 2011 revenues will be higher than revenues for the quarter just ended and that ferrous scrap shipments could surpass the first quarter of 2010.

During the 2010 fourth quarter, ferrous scrap selling prices and related domestic steel mill demand decreased slightly while buy prices moderated. Scrap generation has been slow in the first quarter due to severe winter weather in the Northeastern U.S. The Company anticipates scrap intake will increase significantly as weather conditions improve. Non-ferrous volumes have remained firm in the first quarter while prices have risen modestly.

The reduced rate of scrap generation, combined with recovering U.S. production and demand for metals from the export market, could provide a favorable selling environment during the first half of the year.

Ferrous: The Company experienced a small selling price decline in the fourth quarter. Industry expectations are for ferrous pricing to rebound and continue to improve for the remainder of 2011. Domestic mills slowed their melting schedules in the fourth quarter but steel industry capacity utilization has since improved, reaching 75.3% by early March 2011. A pickup in demand from the export markets could continue to pressure the availability of scrap for domestic markets.

Non-Ferrous: Non-ferrous commodity prices were firm to rising in the fourth quarter. Volumes purchased and sold were slightly lower reflecting normal seasonal fluctuations. Early in 2011 demand for non-ferrous scrap, particularly aluminum and copper, remains strong and supplies are tight. The export markets continue to pressure available scrap. However, the continued unrest in the Middle East is resulting in increased price volatility.

Aluminum De-ox: The Company saw demand for de-ox moderate in the fourth quarter along with declines in steel production. Early in 2011, selling prices have been rising due to improved demand from aluminum product manufacturers and continued scarce scrap supply. Declines in steel industry capacity utilization in the fourth quarter are being reversed early in 2011 and support demand for steel scrap and for Metalico's de-ox products.

PGMs: Pricing for PGMs during the fourth quarter was positively influenced by rising commodity prices and weakness in the U.S. dollar. Demand for precious metal from investors and improving auto production could help support prices.

Palladium continues to lead the PGMs with anticipated depletion of inventories and growing utilization that could cause prices to rise further. Metalico increased shipments in the fourth quarter and took advantage of a good price environment. So far in 2011, pricing has been upward but erratic, and the supply of converters on the East Coast has been negatively impacted by bad weather. The Company expects buying volumes to improve with the arrival of milder weather.

Lead Fabricating: Metalico's lead segment improved in the fourth quarter by penetrating new markets, adding value-added products and improving plant efficiency. The Company's lead scrap purchase and refining program is generating increased yields and continues to help lower average costs and improve Metalico's competitive position.

The Company expects to see some strength in the commercial construction markets in 2011, which could translate into increased plant utilization in its lead operations.

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-six 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 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, other expense and income, 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" 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 2011, 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 Statement    December    December    December    December
 Data:                       31, 2010    31, 2009    31, 2010    31, 2009
                            ----------  ----------  ----------  ----------
Revenue                     $  137,643  $   84,621  $  553,253  $  291,733
                            ----------  ----------  ----------  ----------
Costs and expenses:
  Operating expenses           120,885      72,312     477,066     239,647
  Selling, general &
   administrative expenses       6,543       6,708      26,482      25,994
  Depreciation &
   amortization                  3,642       3,472      13,728      13,240
  Gain on insurance
   recovery                          -           -        (513)          -
  Gain on acquisition                -        (866)          -        (866)
                            ----------  ----------  ----------  ----------
                               131,070      81,626     516,763     278,015
                            ----------  ----------  ----------  ----------
Operating income (loss)          6,573       2,995      36,490      13,718
                            ----------  ----------  ----------  ----------
Financial and other income
 (expense)
  Interest expense              (2,300)     (2,999)     (9,837)    (15,315)
  Accelerated amortization
   and other costs related
   to refinancing of senior
   debt                              -           -      (3,046)       (542)
  Financial instruments fair
   value adjustment             (1,718)       (614)       (496)     (2,035)
  Equity in income (loss) of
   unconsolidated investee          30      (2,809)         28      (3,839)
  Gain on debt
   extinguishment                    -           -         101       8,072
  Other (expense) income           (16)     (2,152)         10      (1,963)
                            ----------  ----------  ----------  ----------
                                (4,004)     (8,574)    (13,240)    (15,622)
                            ----------  ----------  ----------  ----------
Income (loss) from
 continuing operations
 before provision for
 income taxes                    2,569      (5,579)     23,250      (1,904)
Provision for federal and
 state income taxes              1,531         475       9,779       1,736
                            ----------  ----------  ----------  ----------
Income (loss) from
 continuing operations           1,038      (6,054)     13,471      (3,640)
Discontinued
 operations:
  Income (loss)
   from operations                  (1)         18          (9)        195
                            ----------  ----------  ----------  ----------
Net income (loss)           $    1,037  $   (6,036) $   13,462  $   (3,445)
                            ==========  ==========  ==========  ==========

Diluted income (loss) per
 common share:
  Income (loss) from
   continuing operations    $     0.02  $    (0.13) $     0.29  $    (0.08)
  Discontinued operations
   (net)                             -           -           -           -
                            ----------  ----------  ----------  ----------
  Net income (loss)         $     0.02  $    (0.13) $     0.29  $    (0.08)
                            ==========  ==========  ==========  ==========

Diluted weighted average
 common shares outstanding: 46,495,116  46,409,898  46,454,177  41,200,895
                            ==========  ==========  ==========  ==========






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


                                                December 31,  December 31,
                                                    2010          2009
                                                ------------  ------------
Assets:

  Current Assets                                $    143,705  $    102,720

  Property Plant & Equipment, net                     70,215        75,253

  Intangible and Other Assets                        114,587       118,728
                                                ------------  ------------

    Total Assets                                $    328,507  $    296,701
                                                ============  ============

Liabilities & Stockholders' Equity:

  Current Liabilities                           $     34,194  $     29,362

  Debt & Other Long Term Liabilities                 126,998       117,082
                                                ------------  ------------

    Total Liabilities                                161,192       146,444

  Stockholders' Equity                               167,315       150,257
                                                ------------  ------------
  Total Liabilities & Stockholders' Equity      $    328,507  $    296,701
                                                ============  ============

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, other expense (income), 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    December    December    December
                             31, 2010    31, 2009    31, 2010    31, 2009
                            ----------  ----------  ----------  ----------
                                              (UNAUDITED)
                                             ($ thousands)

EBITDA                      $   10,926  $    6,268  $   53,013  $   28,581
  Less:
    Interest expense             2,300       2,999      12,883      15,857

    Stock based compensation       711         667       2,795       2,489
    Provision for federal
     and state income taxes      1,531         475       9,779       1,736

    Other expense (income)          16       2,152         (10)      1,963

    Equity in loss of
     unconsolidated
     investee                      (30)      2,809         (28)      3,839

    Gain on acquisition              -        (866)          -        (866)

    Gain on debt
     extinguishment                  -           -        (101)     (8,072)

    Depreciation and
     amortization                3,642       3,472      13,728      13,240
    Financial instruments
     fair value adjustment       1,718         614         496       2,035

    Discontinued
     operations, net                 1         (18)          9        (195)
                            ----------  ----------  ----------  ----------

Net income (loss)           $    1,037  $   (6,036) $   13,462  $   (3,445)
                            ==========  ==========  ==========  ==========

The Company disclosed segment operating income excluding corporate overhead charges for the years ended December 31, 2010 and 2009. Set forth below is the reconciliation from segment operating income, excluding corporate overhead, to segment operating income as reported:

                            Segment Reporting
                             ($ in thousands)

                       Year Ended December 31, 2010

                                     Scrap Metal      Lead      Corporate
                        Consolidated  Recycling   Fabrication   And Other
                        ------------ -----------  -----------  -----------
Operating income
 before Corporate
 overhead               $     36,490 $    42,000  $     2,078  $    (7,588)
less: Corporate
 overhead                          -      (6,424)        (968)       7,392
                        ------------ -----------  -----------  -----------
Segment operating
 income                 $     36,490 $    35,576  $     1,110  $      (196)
                        ============ ===========  ===========  ===========



                       Year Ended December 31, 2009

                                     Scrap Metal      Lead      Corporate
                        Consolidated  Recycling   Fabrication   And Other
                        ------------ -----------  -----------  -----------
Operating income
 before Corporate
 overhead               $     13,718 $    18,546  $     3,601  $    (8,429)
less: Corporate
 overhead                          -      (5,694)        (888)       6,582
                        ------------ -----------  -----------  -----------
Segment operating
 income                 $     13,718 $    12,852  $     2,713  $    (1,847)
                        ============ ===========  ===========  ===========



                     Quarter Ended December 31, 2010

                                     Scrap Metal      Lead      Corporate
                        Consolidated  Recycling   Fabrication   And Other
                        ------------ -----------  -----------  -----------
Operating income
 before Corporate
 overhead               $      6,573 $     5,710  $       430  $       433
less: Corporate
 overhead                          -       2,154          324       (2,478)
                        ------------ -----------  -----------  -----------
Segment operating
 income                 $      6,573 $     7,864  $       754        2,045
                        ============ ===========  ===========  ===========



                     Quarter Ended December 31, 2009

                                     Scrap Metal      Lead      Corporate
                        Consolidated  Recycling   Fabrication   And Other
                        ------------ -----------  -----------  -----------
Operating income
 before Corporate
 overhead               $      2,994 $     3,910  $       485  $    (1,401)
less: Corporate
 overhead                          -        (876)        (132)       1,008
                        ------------ -----------  -----------  -----------
Segment operating
 income                 $      2,994 $     3,034  $       353  $      (393)
                        ============ ===========  ===========  ===========

Contact Information

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

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