UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
|
Date of Report (Date of Earliest Event Reported):
|
|
May 20, 2015
|
Metalico, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
|
|
|
Delaware
|
001-32453
|
52-2169780
|
_____________________
(State or other jurisdiction
|
_____________
(Commission
|
______________
(I.R.S. Employer
|
of incorporation)
|
File Number)
|
Identification No.)
|
|
|
|
186 North Ave. East, Cranford, New Jersey
|
|
07016
|
_________________________________
(Address of principal executive offices)
|
|
___________
(Zip Code)
|
|
|
|
Registrants telephone number, including area code:
|
|
(908) 497-9610
|
Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On May 20, 2015, the Company issued a press release announcing results of operations for the quarter ended March 31, 2015. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by reference. The attached press release can also be accessed on the Company's website at www.metalico.com.
Item 9.01 Financial Statements and Exhibits.
99.1 Press Release issued May 20, 2015.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for any purposes of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
|
|
|
|
|
|
Metalico, Inc.
|
|
|
|
|
|
May 20, 2015
|
|
By:
|
|
Carlos E. Aguero
|
|
|
|
|
|
|
|
|
|
Name: Carlos E. Aguero
|
|
|
|
|
Title: Chairman, President and Chief Executive Officer
|
Exhibit Index
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
99.1
|
|
Press Release issued May 20, 2015
|
Exhibit 99.1
FOR IMMEDIATE RELEASE
METALICO REPORTS Q1 RESULTS
CRANFORD, NJ, May 20, 2015 Metalico, Inc. (NYSE MKT: MEA) today reported a net loss
for the quarter ended March 31, 2015 of $10.9 million, or $0.15 per share.
The Company posted sales of $75.9 million for the quarter, compared to $118.5 million for last
years first quarter, and a net loss of $3.9 million or $0.08 per share for the comparable 2014
period. In the fourth quarter of 2014 Metalico reported an adjusted net loss of $6 million, or
$0.10 per share.
The Companys first quarter results were impacted by a drastic drop in ferrous prices which
impacted inventory valuations and virtually eliminated margin on ferrous sales for the quarter. In
addition, results were affected by lower inflows and outbound volumes and lower average non-ferrous
commodity selling prices.
Non-ferrous pricing was affected by the continued strength of the U.S. dollar and weakening
demand from Asia, which translated into a rise in products imported into the U.S. Pricing for
virtually all grades of ferrous scrap declined in February. The drop was attributable to several
factors including a strong U.S. dollar, a reduction in overseas demand for U.S. ferrous scrap, and
a decline in demand for energy-related finished steel products.
Prior Years First Quarter Comparison
Year-over-year first quarter comparisons reflect lower financial and mixed volume results:
|
|
|
Sales fell 36% to $75.9 million from $118.5 million. |
|
|
|
Operating loss of $8.9 million compares to a loss of $3.1 million. |
|
|
|
Net loss was $10.9 million compared to a net loss of $3.9 million. |
|
|
|
Loss per share was $0.15 compared to a loss per share of $0.08. |
|
|
|
EBITDA was negative $5.3 million, as compared to EBITDA of $3.1 million. |
|
|
|
Cash flow from continuing operating activities was $16.0 million as compared to $7.4
million. |
|
|
|
Ferrous unit volume shipments fell 25% and non-ferrous volume slipped 10%. |
Sequential Comparison to Fourth Quarter of 2014
|
|
|
Sales fell 26% to $75.9 million from $103 million. |
|
|
|
EBITDA was negative $5.3 million as compared to EBITDA of $1.4 million. |
|
|
|
Operating loss of $8.9 million compares to an adjusted loss of $6 million. |
|
|
|
Net loss of $10.9 million follows an adjusted net loss of $4.5 million. |
|
|
|
Loss per share was $0.15 compared to a loss of $0.10 per share. |
|
|
|
Cash flow from continuing operating activities was $16 million as compared to $1.2
million. |
|
|
|
Unit volumes shipped fell by 14% for ferrous scrap and 11% for non-ferrous scrap. |
Metalico was out of compliance with its maximum leverage ratio covenant as of March 31, 2015
but entered into forbearance agreements with its principal secured lenders to resolve current
noncompliance issues. The lenders have agreed to forbear with respect to existing covenant
breaches through August 31, 2015 and to substitute an availability covenant for the leverage ratio
during the forbearance period. The forbearance agreement also provides for a reduction in the
maximum amount available under the Companys senior secured revolving credit facility to $35
million, subject to a borrowing base. The Company believes this amount is more than adequate for
its needs for the foreseeable future given current market conditions.
Result Drivers for the Quarter
The Company generated an operating loss of $8.9 million for the quarter compared to an
operating loss of $3.1 million in the prior year period. The Companys first quarter loss was
largely attributable to sharp declines in both selling prices and volumes within a short period of
time, which hurt margins. As the Company worked through higher priced inventory in this rapidly
declining selling price environment, margins on ferrous sales and remaining inventory were reduced
by $4.4 million from anticipated margins at the time of purchase. This price effect, coupled with
transportation issues related to severe weather and a significant drop in steel mill demand in
energy-related businesses, resulted in weaker than expected results for the quarter.
Average ferrous metal selling prices for the quarter fell sequentially by $42 per gross ton.
Non-ferrous selling prices fell $0.12 per pound in the quarter. The Companys scrap revenue mix
was 45% ferrous and 55% non-ferrous in the quarter.
Commenting on the results, Carlos E. Agüero, Metalicos President and Chief Executive Officer,
said, Bad winter weather and the large drop in ferrous pricing, coupled with weak inflows and poor
mill demand, combined into a perfect storm adversely impacting results.
He continued, The market is finding stability and flows into yards are gradually increasing,
but it will continue to be a very challenging year for the Company and our industry.
The Company is not having a conference call to discuss first-quarter results.
Balance Sheet Data
At the end of the quarter the Company had cash on hand of $2.4 million and $16.7 million drawn
under its senior secured revolving credit facility.
First quarter cash flow from continuing operations was $16 million compared to $1.2 million in
the fourth quarter of 2014. The increase in cash flow was largely due to reductions in inventories
and accounts receivable that followed lower prices and volumes. Debt was $64.1 million, a $15.3
million reduction since the start of 2015, resulting principally from reduced borrowings under the
revolving credit facility. Shareholders equity fell to $108.3 million from $117.7 million at
years end due to the quarters net loss.
Capital expenditures were $1.8 million, principally for processing equipment, shredder
upgrades, and building improvements at several facilities. In an effort to conserve capital, the
Company is restricting capital expenditures to minimum requirements.
Market and Metals Outlook
After a steady decline in the first quarter of 2015, domestic steel production appears to have
bottomed at 67.7% capacity utilization for the week ending April 4, 2015, rebounding to 72.1% for
the week ending May 16, 2015. Steel prices experienced a significant decline in the first quarter
of 2015 largely due to oversupply from foreign state-owned steel manufacturing facilities,
particularly in tube steel which supplies oil and gas customers.
Metalico believes excess steel production capacity and weak demand in China, coupled with a
strong U.S. dollar, accelerated the flow of imports into the U.S. However, demand for steel is
growing in nonresidential and infrastructure construction, a segment that has been depressed since
the 2008-2009 financial crisis. Though the increase has been modest, this uptick in activity is
beginning to offset the weakness in the energy segment resulting from the collapse in energy prices
that has slowed domestic exploration and production.
The strong U.S. dollar has paved the way for a flood of finished and semi-finished steel
imports impacting demand for scrap by domestic producers. Overseas buyers of scrap have sought
cheaper material from locations outside the U.S., causing scrap traditionally destined for export
to be offered instead to domestic consumers, keeping supply elevated and prices pressured. Demand
for energy-related steel products, principally pipe, has been materially impacted and will not
fully recover until drilling activity improves.
Additionally, low iron ore prices have made it an economic alternative to scrap. Sharply
lower world oil prices have curbed U.S. oil and gas exploration and production which have been
strong drivers of demand for steel tubular products. As the oversupply from the import surge is
worked through and demand from nonresidential construction and the automotive sector improves,
domestic mill utilization should recover.
Prices for aluminum, copper and other non-ferrous metals have trended lower from the start of
the year but have not experienced the degree of decline ferrous prices have seen. A recent change
to Chinese export taxes has resulted in more aluminum exported into the U.S. These imports will
likely keep supply ample, offsetting demand from the automotive sector and driving prices lower.
Copper demand has stabilized as of late, and pricing remains in a narrow trading band.
About Metalico
Metalico, Inc. and its subsidiaries operate Ferrous and Non-Ferrous Scrap Metal Recycling
sites, including PGM and Minor Metals Recycling facilities. Company recycling locations, including
three automobile shredders, are located in New York, Pennsylvania, Ohio, West Virginia, New Jersey
and Mississippi. Metalicos common stock is traded on the NYSE MKT under the symbol MEA.
Forward-looking Statements
This news release, and in particular its Market and Metals Outlook section, contains
forward-looking statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, such as Metalicos expectations with respect to its results of
operations for the second quarter of 2015, commodity pricing, volumes, and trends. These
statements may contain terms like expect, anticipate, believe, should, 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 Metalicos 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 Metalicos control, and which may cause Metalicos actual
results, performance or achievements to be materially different from future results, performance,
expectations or achievements expressed or implied by such forward-looking statements. Factors that
could cause such material difference are discussed in more detail in the Companys 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.
|
|
|
Contact:
|
|
Metalico, Inc.
Carlos E. Agüero
Michael J. Drury
info@metalico.com |
|
|
|
|
|
186 North Avenue East
Cranford, NJ 07016
(908) 497-9610
Fax: (908) 497-1097
www.metalico.com |
|
|
|
# # #
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table I Unit Shipment Comparison |
|
|
|
|
|
|
|
|
|
|
|
|
Q1 |
|
Q4 |
|
Sequential |
|
Q1 |
|
Year-over-year |
|
|
|
|
2015 |
|
2014 |
|
Change |
|
2014 |
|
Change |
|
|
Ferrous (gross tons)
|
|
|
109,800 |
|
|
|
127,600 |
|
|
-14%
|
|
|
146,900 |
|
|
-25% |
|
|
Non-Ferrous (pounds)
|
|
|
39,396,000 |
|
|
|
44,029,000 |
|
|
-11%
|
|
|
43,658,000 |
|
|
-10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table II Unit Price Comparison |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year- |
|
|
|
|
Q1 |
|
Q4 |
|
Sequential |
|
Q1 |
|
over-year |
|
|
|
|
2015 |
|
2014 |
|
Change |
|
2014 |
|
Change |
|
|
Ferrous (per gross ton)
|
|
$ |
308 |
|
|
$ |
350 |
|
|
-12%
|
|
$ |
402 |
|
|
-23% |
|
|
Non-Ferrous (per pound)
|
|
$ |
0.78 |
|
|
$ |
0.90 |
|
|
-13%
|
|
$ |
0.93 |
|
|
-16% |
Table III Non-GAAP Financial Measures
The non-GAAP financial measures table shown below details the non-GAAP measures and reconciles
reported net loss to adjusted net loss before impairment and other special items, all net of tax.
|
|
|
|
|
|
|
|
|
(In thousands, except per share data) |
|
|
|
|
Q4 |
|
Per Share |
|
|
2014 |
|
|
|
|
Net loss as reported |
|
$ |
(33,863 |
) |
|
$ |
(0.59 |
) |
Impairment charges |
|
|
11,398 |
|
|
|
0.20 |
|
Early repayment fees on debt |
|
|
1,057 |
|
|
|
0.02 |
|
Loss on debt extinguishment |
|
|
16,567 |
|
|
|
0.29 |
|
Fair value adjustment |
|
|
(1,578 |
) |
|
|
(0.03 |
) |
Discontinued operations |
|
|
432 |
|
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
Adjusted net (loss)income |
|
$ |
(5,986 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
The Company believes adjusted earnings (net loss) per share from continuing operations,
excluding non-cash impairments and special items, are more useful to investors because they provide
a better picture of the Companys operations. Excluding impairment charges and special items
allows evaluation and comparison of the Companys operations, which is the basis that Meta
management utilizes to assess performance internally. These measurements should be considered in
addition to, rather than a substitute for, other information provided in accordance with U.S. GAAP.
2
METALICO, INC.
SELECTED HISTORICAL FINANCIAL DATA
(UNAUDITED)
($ thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
March 31, |
|
March 31, |
|
|
2015 |
|
2014 |
Revenue |
|
$ |
75,888 |
|
|
$ |
118,539 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses
Operating expenses |
|
|
76,433 |
|
|
|
112,265 |
|
Selling, general, and administrative expenses |
|
|
4,770 |
|
|
|
5,362 |
|
Depreciation and amortization |
|
|
3,629 |
|
|
|
3,995 |
|
|
|
|
|
|
|
|
|
|
|
|
|
84,832 |
|
|
|
121,622 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(8,944 |
) |
|
|
(3,083 |
) |
|
|
|
|
|
|
|
|
|
Financial and other income (expense) |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(1,642 |
) |
|
|
(2,320 |
) |
Financial instruments fair value adjustment |
|
|
(161 |
) |
|
|
|
|
Other income |
|
|
23 |
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,780 |
) |
|
|
(2,312 |
) |
|
|
|
|
|
|
|
|
|
Loss from continuing operations before
income taxes |
|
|
(10,724 |
) |
|
|
(5,395 |
) |
Provision (benefit) for federal and state
income taxes |
|
|
154 |
|
|
|
(598 |
) |
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
|
(10,878 |
) |
|
|
(4,797 |
) |
Income from discontinued operations net of
income taxes |
|
|
|
|
|
|
586 |
|
|
|
|
|
|
|
|
|
|
Consolidated net loss |
|
|
(10,878 |
) |
|
|
(4,211 |
) |
Net loss attributable to noncontrolling interest |
|
|
|
|
|
|
293 |
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Metalico, Inc. |
|
$ |
(10,878 |
) |
|
$ |
(3,918 |
) |
|
|
|
|
|
|
|
|
|
(Loss) earnings per common share: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
$ |
(0.15 |
) |
|
$ |
(0.09 |
) |
Income from discontinued operations |
|
|
|
|
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(0.15 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
72,383,689 |
|
|
|
48,166,209 |
|
|
|
|
|
|
|
|
|
|
3
METALICO, INC.
SELECTED HISTORICAL FINANCIAL DATA (CONTINUED)
(UNAUDITED)
($ thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2015 |
|
2014 |
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
$ |
73,525 |
|
|
$ |
98,362 |
|
|
|
Property & Equipment, net
|
|
|
80,158 |
|
|
|
81,620 |
|
|
|
Intangible and Other Assets
|
|
|
37,775 |
|
|
|
38,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$ |
191,458 |
|
|
$ |
218,344 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities & Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
$ |
74,570 |
|
|
$ |
20,922 |
|
|
|
Debt & Other Long-Term Liabilities
|
|
|
8,561 |
|
|
|
79,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
83,131 |
|
|
|
100,643 |
|
|
|
Total Metalico, Inc. and Subsidiaries Equity
|
|
|
108,327 |
|
|
|
117,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities & Equity
|
|
$ |
191,458 |
|
|
$ |
218,344 |
|
|
|
|
|
|
|
|
|
|
|
|
4
Non-GAAP Financial Information
Reconciliation of Non-GAAP EBITDA and Net Loss
The Company presents EBITDA because it considers it an important supplemental measure of the
Companys performance and believes it is frequently used by securities analysts, investors and
other interested parties in the evaluation of companies in Metalicos 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
Companys 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 Months Ended |
|
Three Months Ended |
|
|
March 31, 2015 |
|
March 31, 2014 |
|
|
(UNAUDITED) |
|
|
($thousands) |
EBITDA |
|
$ |
(5,274 |
) |
|
$ |
3,103 |
|
Less: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
1,642 |
|
|
|
2,320 |
|
Stock-based compensation |
|
|
41 |
|
|
|
125 |
|
(Benefit) for federal and
state income taxes |
|
|
154 |
|
|
|
(598 |
) |
Depreciation and amortization |
|
|
3,629 |
|
|
|
3,995 |
|
Financial instruments fair
value adjustments |
|
|
161 |
|
|
|
|
|
Noncontrolling interest |
|
|
|
|
|
|
293 |
|
Other |
|
|
(23 |
) |
|
|
(8 |
) |
Discontinued operations: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
397 |
|
Provision for federal and
state income taxes |
|
|
|
|
|
|
497 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(10,878 |
) |
|
$ |
(3,918 |
) |
|
|
|
|
|
|
|
|
|
5