NEWS
FOR IMMEDIATE RELEASE
TSX STOCK SYMBOL: RUS
RUSSEL METALS ANNOUNCES 3RD QTR. EARNINGS OF $1.18 PER SHARE
TORONTO, CANADA -- October 22, 2004 -- Russel Metals Inc. today reported third quarter 2004 net earnings of $58.6 million, or $1.18 per share compared to the third quarter 2003 net earnings of $3.6 million or $0.07 per share. Earnings from operations for the three business segments improved over the second quarter of 2004 and the Company generated earnings before interest, income taxes, depreciation and amortization of $103 million.
Net earnings for the nine months ended September 30, 2004 were $134.3 million or $2.77 per share, which was significantly above the nine months ended September 30, 2003 net earnings of $10.7 million or earnings per share of $0.23.
The 2004 nine months results include a pre-tax charge of $13.2 million related to the redemption of long-term debt, $3.0 million for restructuring primarily as a result of the Acier Leroux acquisition and $0.6 million, net of tax, related to discontinued operations. The earnings per share, without these charges, was $3.02 for the nine months ended September 30, 2004 compared with $0.30 for the nine months ended September 30, 2003. The Company has generated earnings before interest, income taxes, depreciation and amortization of $248 million for the nine months ended September 30, 2004.
Revenue for the third quarter of 2004 was $698 million, up 17% from the second quarter 2004 and 78% from the $392 million reported in the third quarter of 2003. Revenue for the nine months ended September 30, 2004 was $1.8 billion, up 65% from $1.1 billion in the same period of 2003.
Bud Siegel, President and C.E.O. stated, "This peak in the cycle has reached higher pricing levels and has lasted longer than could have been contemplated. The 2004 total asset expansion of $298 million, caused by the higher steel prices, is unprecedented. The first quarter 2004 debt issue coupled with increased profitability for the first nine months have enabled the Company to reduce interest bearing debt slightly over the period despite the balance sheet expansion. Consequently, the total debt as a percentage of capitalization improved to 37%, our lowest level ever."
The Board of Directors approved a 17% increase in the quarterly dividend to 17.5 cents per common share payable December 15, 2004 to shareholders of record as of November 5, 2004.
The Company will be holding an Investor Conference Call on Monday, October 25, 2004 at 9:00 a.m. ET to review its third quarter results for 2004. The dial in telephone number for the call is 1-800-818-6210.
For those unable to participate in the conference call, it will be recorded and available for listening at 1-800-558-5253 until midnight, November 1st. You will be required to enter reservation number 21164260 in order to access the call.
Additional supplemental financial information is available in our investor conference call package located on our website at www.russelmetals.com.
Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three metals distribution segments: service center, energy tubular products and import/export, under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Armabec, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Drummond McCall, Ennisteel, Fedmet Tubulars, Leroux Steel, McCabe Steel, Mégantic Métal, Métaux Russel, Milspec Industries, Poutrelles Delta, Pioneer Pipe, Russel Leroux, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Vantage Laser, Wirth Steel and York Steel.
- 30 -
For further information, contact:
Brian R. Hedges, C.A.
Executive Vice President
and Chief Financial Officer
Russel Metals Inc.
(905) 819-7401
E-mail: info@russelmetals.com
Website: www.russelmetals.com
RUSSEL METALS INC. |
CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
| | |
| September 30, | December 31, |
($000) | 2004 | 2003 |
|
ASSETS | | |
Current | | |
Cash | $ - | $ 19,008 |
Accounts receivable | 407,351 | 248,904 |
Inventories | 465,467 | 303,048 |
Prepaid expenses and other assets | 5,691 | 5,028 |
Income taxes receivable | 177 | 5,912 |
Discontinued operations | 168 | 1,107 |
|
| 878,854 | 583,007 |
| | |
Property, Plant and Equipment | 181,642 | 184,929 |
Assets Held For Sale | 3,313 | 1,622 |
Deferred Financing Charges | 7,254 | 3,547 |
Goodwill | 7,815 | 4,216 |
Future Income Tax Assets | 6,736 | 10,458 |
Other Assets | 2,641 | 2,840 |
|
| $ 1,088,255 | $ 790,619 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY | | |
Current | | |
Bank indebtedness | $ 32,005 | $ 78,093 |
Accounts payable and accrued liabilities | 335,571 | 217,173 |
Income taxes payable | 48,297 | 11,729 |
Discontinued operations | 2,914 | 2,729 |
|
| 418,787 | 309,724 |
Other Accrued Liabilities | 5,410 | - |
Long-Term Debt | 221,183 | 179,402 |
Pensions and Benefits | 11,974 | 11,542 |
Future Income Tax Liabilities | 7,391 | 6,109 |
|
| 664,745 | 506,777 |
|
Shareholders' Equity | | |
Preferred shares | - | 30,000 |
Shareholders' equity | 423,510 | 253,842 |
|
| 423,510 | 283,842 |
|
| $ 1,088,255 | $ 790,619 |
|
RUSSEL METALS INC. |
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS |
(UNAUDITED) |
| |
| Quarters ended September 30, | Nine months ended September 30, |
($000, except per share data) | 2004 | 2003 | 2004 | 2003 |
|
Revenues | $ 697,756 | $ 392,490 | $1,810,306 | $ 1,099,267 |
Cost of sales and operating expenses | 597,881 | 375,300 | 1,560,054 | 1,060,968 |
|
Earnings before the following | 99,875 | 17,190 | 250,252 | 38,299 |
Restructuring | (1,598) | (3,597) | (2,950) | (3,597) |
Debt redemption costs | - | - | (13,172) | - |
Foreign exchange gain | - | - | - | 348 |
Interest expense | (4,912) | (6,463) | (15,828) | (16,438) |
|
Earnings before income taxes | 93,365 | 7,130 | 218,302 | 18,612 |
Provision for income taxes | (35,155) | (2,871) | (83,411) | (7,292) |
|
Earnings from continuing operations | 58,210 | 4,259 | 134,891 | 11,320 |
Gain (loss) from discontinued operations | 395 | (652) | (575) | (652) |
|
Net earnings for the period | 58,605 | 3,607 | 134,316 | 10,668 |
| | | | |
Retained earnings -- | | | | |
| | | | |
Dividends on preferred shares | - | (563) | (611) | (1,688) |
|
| | | | |
Earnings available to common | | | | |
shareholders | 58,605 | 3,044 | 133,705 | 8,980 |
Dividends on common shares | (7,463) | (2,921) | (16,281) | (8,258) |
Retained earnings, beginning of the period | 176,784 | 106,457 | 110,502 | 105,858 |
|
Retained earnings, end of the period | $ 227,926 | $ 106,580 | $ 227,926 | $ 106,580 |
|
| | | | |
Basic earnings per common share - continuing operations | $ 1.17 | $ 0.09 | $ 2.78 | $ 0.25 |
|
Basic earnings per common share | $ 1.18 | $ 0.07 | $ 2.77 | $ 0.23 |
|
Diluted earnings per common share - continuing operations | $ 1.15 | $ 0.09 | $ 2.71 | $ 0.24 |
|
Diluted earnings per common share | $ 1.16 | $ 0.07 | $ 2.70 | $ 0.23 |
|
|
