Metalico Inc. fell deeper into the red in the third quarter due
primarily to a non-cash impairment charge in its scrap metal
recycling segment, but expects scrap demand to rebound in the
N.J.-based scrap metal recycler and processor posted a net loss
of $27.65 million for the three months ended Sept. 30 compared
with a $10.68-million loss in the same period last year despite
a 2.3-percent increase in revenue to $135.78 million. Excluding
the impairment charge, which was due primarily to
acquisition-related write-offs, the companys adjusted net
income was $938,000.
"We remain confident
in being able to navigate through a difficult environment,"
president and chief executive officer Carlos E. Agüero
said in a conference call.
An increase in steel
production and higher tags for finished steel products are
working to increase demand and prices for scrap metal,
according to Metalico executives.
unplanned outages appear to be at an end, which should equate
to increased demand as mills return to the market to build
inventory, the company said. In addition to mills returning to
their melt schedules, expansions by Ohio steelmakers are
expected to strengthen demand.
"We see demand for
shredded scrap growing in coming months," Agüero said.
metal recycling segment reported a third-quarter operating loss
of $38.4 million compared with an operating loss of nearly $15
million in the same period last year.
increased 11.7 percent to 152,200 gross tons from 136,200 tons
a year ago, but average selling prices dipped 0.5 percent to
$366 per ton. Nonferrous shipments increased 2.5 percent to
45.4 million pounds from 44.3 million pounds and average
selling prices rose 3.3 percent to 95 cents per pound in the
The recycler expects
the pricing environment to remain flat and shipments to retreat
slightly through year-end.