Black ink for Metal Management in 2003 - Scrap Industry News

Recycling Today, July, 2003

Metal Management Inc., Chicago, has announced results for its fiscal year and fourth quarter period that ended March 31, 2003.

For its 2003 fiscal year, the scrap recycling firm has reported consolidated net sales totaling $770.0 million with net income of $20.5 million, or $1.98 per common diluted share for the year.

For its most recent quarter, net sales increased by more than 28 percent to $214.2 million while net income grew by more than 200 percent to $7.1 million compared to the same quarter last year.

The company also says its debt was reduced by $44 million in the recently concluded fiscal year.

"The company is very pleased with our results in the fourth quarter and for the full fiscal year," says Albert A. Cozzi, vice chairman and CEO of the firm.

According to Cozzi, "The company's total processed ferrous metal shipments were slightly more than 4.1 million tons for the year, an increase of about 200,000 tons from the year-ago period. Conversely, our nonferrous business continues to be negatively affected by the generally weak domestic manufacturing sector, particularly the commercial aerospace and stainless steel markets. Nonetheless, since Metal Management's ferrous business represents 71 percent of total net sales, our overall results remained solid and we are well positioned for a recovery in the nonferrous markets."

A look at the company's most recent quarterly filing, published by the Securities and Exchange Commission on June 9, shows some potential corporate control intrigue.

The documents reveal that former Metal Management chairman Ben Jennings, who has not been affiliated with the company for more than two years, has received an unsecured loan of $9.6 million from U.K.-based European Metal Recycling (EMR) to purchase shares on the open market of Metal Management. The loan has helped Jennings acquire 842,000 shares in the company, or about 8.3 percent of total shares. Additionally, EMR owns more shares equal to about 15 percent of overall common stock. The purchases by EMR and Ben Jennings were all made in late May.

Whether the EMR position in Metal Management is a prelude to an upcoming buyout bid remains to be seen. Cozzi reports separately that the company is working toward a long-term credit arrangement. "Also noteworthy is the support of our asset-based lenders who have supported the company for over five years. We recently agreed with our bank group to extend the maturity date of our credit agreement to June 7, 2004, as we explore long-term financing opportunities for the company."