CHICAGO Service center operator Metals USA Holdings Corp. posted net income of $3.7 million for the fourth quarter, down 73.6 percent from $14 million in the same period a year earlier, on sales that slipped 4 percent to $437.5 million.
Its fourth-quarter results included a non-recurring pre-tax expense of $6.3 million on debt extinguishment in connection with the companys senior secured note refinancing, $600,000 for non-cash pretax annual pension expenses and $200,000 for pre-tax expenses attributable to secondary offering costs.
"During the fourth quarter, the market continued to be impacted by too much steel chasing too few orders," chairman, president and chief executive officer Lourenco Goncalves said Feb. 6. "A prevailing weak business environment, compounded with typical seasonality around the holidays, forced us to choose between preserving margin or sales volumes, and we chose to maintain margin."
As a consequence, he said, the companys gross margin of 23.2 percent in the final quarter was consistent with margins achieved throughout the year.
However, Goncalves was optimistic. "We believe the demand weakness experienced in late 2012 is now behind us and we have begun 2013 with well-positioned inventory," he said.
The Fort Lauderdale, Fla.-based company reported full-year net income of $52.7 million, down 18.4 percent from 2011 despite a 5.2-percent increase in sales to more than $1.98 billion. Annual shipments of flat-rolled, plate, shapes and nonferrous products rose 11 percent to 1.55 million tons.
The company ended 2012 with $432.3 million in inventory, up 7.4 percent from the end of 2011.