Metals USA reports lower earnings for third quarter

Metals USA reports lower earnings for third quarter

Metals USA, a service center for heavy structurals, flat rolled and specialty steels, reported its net sales for the third quarter ending September 30, 2005 fell 4.0 percent from the third quarter 2004. The decrease is largely due to mid-year weakness in the automotive industry. Net income fell to $11.2 million, or $0.53 per diluted share, compared to $31.8 million, or $1.53 per diluted share, for the same quarter last year. Year-to-date net income was reported as $42.8 million, compared to the year-to-date 2004 net income of $84.0 million. C. Lourenco Goncalves, President and CEO, stated, “While Metals USA is not dependent upon the automotive industry, the mid-year slowdown of that industry affected the steel business as a whole in July and part of August. Metals USA continued to reduce inventories, and paid down an additional $75.4 million of our debt during the third quarter. As soon as scrap prices increased and the market realized that inventories were low across the board, the leading steel mills successfully increased steel prices, benefiting all members of the supply chain, particularly service center companies like Metals USA.” Mr. Goncalves continued, “Following the restructure of the Building Products Group during the later part of last year, this division continues to deliver consistent, improved results, contributing $5.4 million of operating income this quarter.” Mr. Goncalves concluded, “We expect a strong and profitable fourth quarter, and are extremely excited with the prospects ahead of us.” Metals USA, headquartered in Houston, Texas, operates the Flat Rolled Group, the Plates and Shapes Group, and Metals USA Building Products LP to provide a wide range of steel products and services in locations throughout the Southern, Midwestern, Southwestern, and Eastern United States.