Metal Management (NASDAQ:MTLM)
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From May 2019 to May 2024
Metal Management, Inc. (Nasdaq:MTLM):
-- Net Sales of $378 million
-- Net Income of $16.9 Million
-- EPS of $0.66 per diluted share
Metal Management, Inc. (Nasdaq:MTLM), one of the nation's largest
full service scrap metal recyclers, today announced results for the
second fiscal quarter ended September 30, 2005.
The company generated consolidated net sales of $378 million in
the second quarter of fiscal 2006 and net income of $16.9 million.
EBITDA(1) (as defined) was $32.6 million, and earnings per share were
$0.66 per diluted common share.
Second Quarter Highlights
-- Consolidated net sales of $378 million for the quarter ended
September 30, 2005, compared to $425 million for the quarter
ended September 30, 2004.
-- EBITDA (as defined) of $32.6 million in the quarter ended
September 30, 2005, compared to EBITDA (as defined) of $57.7
million in the quarter ended September 30, 2004.
-- Net income was $16.9 million or $0.66 per diluted common
share, compared to $34.1 million or $1.40 per common diluted
share for the quarter ended September 30, 2004.
-- Approximately 1.2 million tons of metal were processed and
sold or brokered, including ferrous yard shipments of
approximately 1.0 million tons and non-ferrous shipments of
approximately 111 million pounds.
-- The Company turned ferrous inventories approximately 11 times
and non-ferrous inventories (excluding stainless and alloy)
approximately 14 times.
-- A dividend of $0.075 per share was paid to all shareholders of
record.
-- The company ended the fiscal quarter with no borrowings under
its line of credit and a solid cash position, including
short-term investments, of $43.6 million.
Year to Date Highlights
-- Consolidated net sales of $760 million for the six months
ended September 30, 2005, compared to net sales of $792
million for the six months ended September 30, 2004.
-- EBITDA (as defined) of $45.6 million in the six months ended
September 30, 2005, compared to EBITDA (as defined) of $83.7
million in the six months ended September 30, 2004.
-- Net income of $22.4 million for the six months ended September
30, 2005, or $0.88 per common diluted share compared to net
income of $46.6 million, or $1.92 per common diluted share for
the six months ended September 30, 2004.
"We are very pleased with our solid results in the second fiscal
quarter," said Daniel W. Dienst, Chairman, Chief Executive Officer and
President of Metal Management. "Our strong performance reflects the
outstanding effort put forth by Metal Management's 1,600 employees at
our 40 recycling facilities in 15 states across the country. The
earnings we generated in the second quarter are outstanding when
considered in the context of the extreme volatility in ferrous scrap
prices rendering year-over-year comparisons to be difficult. Our
business is strong and we have posted 15 consecutive quarters of
positive pre-tax income."
Commenting on market conditions, Mr. Dienst stated, "The ferrous
markets, though volatile, bounced back from the unprecedented weakness
we experienced in the first half of calendar 2005. Notwithstanding
that volatility, we are encouraged by the momentum that we currently
see in the ferrous markets. Non-ferrous markets, principally copper
and aluminum, remained strong this past quarter and remain so in this
current quarter."
Metal Management's wholly-owned operations were largely unaffected
by the devastation caused by Hurricanes Katrina and Rita. The Company
does, however, have a 28.5 percent interest in Southern Recycling,
L.L.C., one of the largest metal recyclers in the Gulf Coast region.
Mr. Dienst noted, "Metal Management was fortunate to have experienced
very little financial impact in the quarter from the recent
hurricanes, primarily due to the heroic and tireless efforts of our
partner, Southern Recycling, and its dedicated employees and managers.
In our second fiscal quarter, despite the effects of the hurricanes,
the operations at Southern Recycling remained profitable. Southern
Recycling did establish loss accruals and recorded impairment charges
for certain asset damage, but we expect that will be mitigated to some
extent by insurance claims in the future. The loss accrual and asset
impairment charges recorded at Southern Recycling reduced Metal
Management's earnings in the second quarter by $0.02 per share. The
primary effect of the hurricanes on Metal Management itself was the
significant disruption to transportation systems that made
coordinating shipments difficult and affected the timing of export
cargoes at the end of the quarter. As a result, two cargo shipments to
export markets were delayed, which reduced our second quarter net
sales by about $11 million. Those sales will be recognized in our
third fiscal quarter."
In addition to Southern Recycling, the company's other joint
ventures have continued to perform well and once again this quarter
Metal Management's joint venture in Albany, New York generated
outstanding results. Cumulatively, Metal Management's joint ventures
contributed more than $2 million, before loss accruals and impairment
charges, to the company's pre-tax earnings in the second fiscal
quarter. "Our successful joint ventures are a natural extension of our
partnership culture," said Mr. Dienst. "They are a critical component
of our ongoing efforts to enhance the scope of our operations,
strengthen our relationships with consumers and expand our geographic
footprint. We look forward to continuing to build on our strong
relationships throughout the industry, to expand the services we offer
and to create additional value for our shareholders."
In conclusion, Mr. Dienst stated, "Once again we demonstrated the
benefits of our disciplined operational strategy. By turning our
inventories 11 and 14 times for ferrous and non-ferrous metals
(excluding stainless and alloy), respectively, we generated solid
returns, posted strong unit shipments and successfully mitigated the
risk inherent in the volatile markets in which we operate. With our
strong balance sheet and proven track-record of operational
excellence, we are well-positioned to continue investing in our
business and generating attractive returns on capital for our
shareholders. As always, we will carefully consider all opportunities
to prudently deploy shareholder capital and to grow our business. We
are confident that Metal Management has a very bright future and we
look forward to capitalizing on new opportunities, when and if they
present themselves, as we continue to successfully execute our
business strategy."
Investor Conference Call
Metal Management will host its Second Quarter Results Conference
Call and Webcast at 11:00 am ET (10:00 am CT) on November 2, 2005. The
conference call can be accessed by dialing 866-800-8651 passcode
25687789. International callers can dial 617-614-2704 passcode
25687789. The conference will also be accessible via the web at
www.mtlm.com. A replay of the call will be available by dialing
888-286-8010 passcode 39901875 through November 9, 2005. International
callers can dial 617-801-6888 passcode 39901875 for the replay.
About Metal Management, Inc.
Metal Management is one of the largest full service metal
recyclers in the United States, with approximately 40 recycling
facilities in 15 states.
For more information about Metal Management, Inc., visit the
Company's website at www.mtlm.com.
Forward Looking Statements
All of the statements in this release, other than historical
facts, are forward-looking statements made in reliance upon the Safe
Harbor Provisions of the Private Securities Litigation Reform Act of
1995. As such, they involve risks and uncertainties and are subject to
change at any time. These statements reflect our current expectations
regarding the future profitability of the Company and its
subsidiaries. As discussed in our annual report on Form 10-K for the
fiscal year ended March 31, 2005, and in other periodic filings filed
by the Company with the U.S. Securities and Exchange Commission, some
of the factors that could affect our performance include, among other
things: cyclicality and competitiveness of the metals recycling
industry, commodity price fluctuations, debt covenants that restrict
our ability to engage in certain transactions, compliance with
environmental, health, safety and other regulatory requirements
applicable to the Company, potential environmental liability, risk of
deterioration of relations with labor unions, dependence on key
management, dependence on suppliers of scrap metal, concentration of
customer risk, impact of export and other market conditions on the
business, availability of scrap alternatives, and under funded defined
benefit pension plans.
(1) EBITDA is defined by the company to be earnings before
interest, taxes, depreciation, amortization, non-cash and
non-recurring expense (income), income from joint ventures, gain
(loss) on sale of fixed assets, other income (expense), stock-based
compensation expense, and gain (loss) on debt extinguishment. EBITDA
is presented because management believes it provides additional
information with respect to the performance of its fundamental
business activities. Management also believes that debt holders and
investors commonly use EBITDA to analyze company performance and to
compare that performance to the performance of other companies that
may have different capital structures. A reconciliation of EBITDA to
GAAP net income is included in the table attached to this release.
EBITDA is a measure of performance typically used by many investors,
but is not a measure of earnings as defined under GAAP, and may be
defined differently by others.
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METAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
Three months ended Six months ended
--------------------------- ---------------------------
September 30, September 30, September 30, September 30,
2005 2004 2005 2004
------------- ------------- ------------- -------------
Net sales $378,301 $425,007 $759,935 $792,183
Operating
expenses:
Cost of sales
(excluding
deprecia-
tion) 329,048 350,066 679,427 673,845
General and
adminis-
trative 18,496 18,314 38,242 36,996
Depreciation
and
amortization 4,363 4,680 8,977 9,209
------------- ------------- ------------- -------------
Operating
income 26,394 51,947 33,289 72,133
Income from
joint ventures 1,451 4,707 3,502 7,937
Interest
expense (382) (921) (758) (2,234)
Interest and
other income,
net 585 35 1,057 74
Loss on debt
extinguishment 0 0 0 (1,653)
------------- ------------- ------------- -------------
Income before
income taxes 28,048 55,768 37,090 76,257
Provision for
income taxes 11,127 21,715 14,723 29,679
------------- ------------- ------------- -------------
Net income $16,921 $34,053 $22,367 $46,578
============= ============= ============= =============
Earnings per
share:
Basic $0.69 $1.48 $0.92 $2.03
============= ============= ============= =============
Diluted $0.66 $1.40 $0.88 $1.92
============= ============= ============= =============
Cash dividends
declared per
share $0.075 $0.000 $0.15 $0.00
============= ============= ============= =============
Weighted
average common
shares
outstanding:
Basic 24,376 22,986 24,365 22,967
============= ============= ============= =============
Diluted 25,566 24,357 25,433 24,259
============= ============= ============= =============
METAL MANAGEMENT, INC.
EBITDA (AS DEFINED)
RECONCILIATION TO GAAP FINANCIAL MEASURES
(unaudited, in thousands)
Three months ended Six months ended
--------------------------- ---------------------------
September 30, September 30, September 30, September 30,
2005 2004 2005 2004
------------- ------------- ------------- -------------
Net income $16,921 $34,053 $22,367 $46,578
Add Back:
Depreciation
and
amortization 4,363 4,680 8,977 9,209
Tax provision 11,127 21,715 14,723 29,679
Stock-based
compensation
expense 1,864 1,104 3,362 2,171
Income from
joint
ventures (1,451) (4,707) (3,502) (7,937)
Interest
expense 382 921 758 2,234
Interest and
other
income, net (585) (35) (1,057) (74)
(Gain) loss
on sale of
fixed assets 12 (7) (4) 138
Loss on debt
extinguish-
ment 0 0 0 1,653
------------- ------------- ------------- -------------
EBITDA
(AS DEFINED) $32,633 $57,724 $45,624 $83,651
============= ============= ============= =============
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