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Q1 2008 METALICO INC Earnings Conference Call - Final.

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Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good morning. My name is Mindy and I will be your conference facilitator. At this time, I would like to welcome everyone to the Metalico 2008 first-quarter results call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. I would like to remind you that today's call is being recorded for transcription purposes. The purpose of today's call is to discuss the results of the Company's operations for the quarter ended March 31, 2008.

Earlier today, Metalico issued a press release announcing first-quarter results and filed a Report on Form 8-K in connection with the release. You can access copies of Metalico's filings through the SEC's EDGAR online files or directly through the Company's website at www.metalico.com. Just log on to the website, click on Investors at the top of the homepage, and then click on SEC Filings in the left column. Then click to download the report. Metalico's filings are also available at the SEC's website at www.sec.gov.

In addition, an audio replay of the call will also be available at 800-642-1687 or 706-645-9291 for the first 48 hours after the call's conclusion. To access the recording, callers will be required to enter the conference identification number of 42429235.

As is customary, let me reiterate the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. The following discussion contains forward-looking statements that are subject to risks and uncertainties, including those risks set forth in Metalico's filings with the SEC. These risks could cause actual results for the current period and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company.

We refer you to Metalico's periodic reports that are filed from time to time with the SEC for a more detailed discussion of forward-looking statements and a discussion of the factors that could cause the results to differ materially from the discussion today. Please refer to the risk factor discussion in Metalico's Form 10-K for 2007, which is also available online.

In addition, during the course of the conference call, certain non-GAAP financial measures may be described which should be considered in addition to and not in lieu of comparable GAAP financial measures. The Company has provided reconciliations of these non-GAAP measures to what it believes are the most directly comparable GAAP measures in the earnings release.

Thank you, ladies and gentlemen. I would now like to turn the call over to Mr. Carlos Aguero, President and Chief Executive Officer of Metalico.

CARLOS AGUERO, PRESIDENT AND CEO, METALICO, INC.: Thank you, Mindy. Good morning and thank you for joining today's conference call. With me here today are Michael Drury, our Executive Vice President, and Eric Finlayson, our Senior Vice President and Chief Financial Officer.

Following my presentation, we will be available to answer any questions you may have. We will also post a transcript of our remarks and the question-and-answer session on the Metalico website when the transcript becomes available after this call.

Let's review the financials. Metalico posted another strong quarter, with record sales and increases in net income compared to last year. Our comparative results for this quarter were enhanced by starting 2008 as a much larger company than last year as a result of our successful acquisition program. We also enjoyed very strong pricing gains in most of our commodity groups.

First-quarter financial highlights include the following, all as compared to prior year's first quarter. Sales increased by 230% to $170.5 million. Operating income increased 153% to $13.1 million. Income from continuing operations increased 104% to $6.5 million. EBITDA increased 57% to $15.8 million. And earnings per share from continuing operations increased 67% to $0.20 per share.

Looking at some of the details, net income for the quarter ended March 31, 2008, was $6.1 million or $0.19 per share on a diluted basis on sales of $170.5 million. These results compare to net income of $3.1 million or $0.12 per share on a diluted basis on sales of $51.8 million for the quarter ended March 31, 2007. They also represent an increase in sales of $56.9 million or 50% over our fourth-quarter 2007 results, a sequential increase.

Operating income for the quarter increased by $7.9 million or 153% to $13.1 million as compared to $5.2 million in 2007. The Company's scrap segment saw a 307% increase in operating income, while the lead fabricating segment showed a $2.3 million loss for the quarter. Net income for the first quarter benefited from higher ferrous and nonferrous and platinum group metal...

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