Metal Management Inc., Chicago, has announced results for its third fiscal quarter ended Dec. 31, 2005, that mark a decline from the figures the company reported in the third quarter of the previous year.
The company reported net sales of $395 million, a decline from net sales of $447.6 million for the third quarter of the previous year. Metal Management reported a profit of $15.3 million for the quarter, compared to $29.5 million during Q3 of the previous year.
During its third quarter, Metal Management handled about 1.2 million tons of metal--about 1.1 million tons of ferrous scrap and 124 million pounds of nonferrous material.
For the first nine months of its fiscal year, the company reported consolidated net sales of $1.2 billion, essentially unchanged from sales the same time in 2004. Metal Management also reported net income of $37.7 million for the first nine months of its fiscal year, compared to net income of $76.1 million during the first three quarters of its previous fiscal year.
"Metal Management delivered strong results in the third quarter despite challenging ferrous market conditions evidenced by a volatile pricing environment in the U.S. and weak international demand," Daniel Dienst, the company's chairman, CEO and president, says.
"Operational excellence and diversification are two important differentiators for Metal Management, helping us deliver solid results even in very difficult market conditions," Dienst says. "The company's performance this quarter once again demonstrated the importance of rapidly turning inventories to limit the impact of price fluctuations and the strategic value of our diversified product offering and geography."
Metal Management notes that domestic demand for ferrous scrap metal was relatively strong throughout its third fiscal quarter. Pricing remained volatile, however, demonstrating the importance of Metal Management's approach to rapidly turning inventory, according to the company.
In response to weakness in demand from export markets, Metal Management says it leveraged its operational flexibility and distribution network to take advantage of more favorable U.S. markets.
Nonferrous markets, which account for about 30 percent of Metal Management's sales, benefited from robust pricing. "The considerable units of copper, aluminum and nickel that we process balance our exposure to the steel markets," Dienst says. "This diversification is an important part of our business strategy."
He adds that Metal Management anticipates processing nearly 475 million pounds of nonferrous scrap metal at the completion of its fiscal year.
The company also reports that Southern Recycling LLC, in which Metal Management has a 28.5 percent interest, is now nearly fully recovered from the operational damage caused by Hurricane Katrina and is well-positioned to assist with the recycling and recovery challenges in New Orleans and the Gulf Coast region.
Metal Management also completed a number of capital improvement projects during the period. "In the third quarter we finished the installation of our Gamma-Tech metal analyzer in Memphis and completed the installation of state-of-the-art metal recovery technology at six shredding facilities, bringing the number of these plants across our system to eight."
