TORONTO, ONTARIO — (Marketwired) — 05/02/13 — Russel Metals Inc. (TSX: RUS) today announced first quarter 2013 earnings of $22 million, or $0.36 per share on revenues of $822 million. These results compare to the earnings of $33 million or $0.55 per share on revenues of $803 million in the same quarter last year and are above the fourth quarter 2012 earnings of $0.34 per share.
Revenues in our metals service center segment decreased 16% to $359 million in the first quarter of 2013 compared to the 2012 first quarter due to lower demand levels. Gross margins at metals service centers improved from the 2012 fourth quarter and were slightly lower than the same quarter last year reflecting the levelling off of steel prices. Operating profit as a percentage of revenues was consistent with the fourth quarter last year at 5.0%.
Revenues in our energy products segment for the first quarter of 2013 increased 42% or $114 million to $389 million compared to the 2012 first quarter, aided by the Apex Distribution revenues which were $118 million in the first quarter. Gross margins at energy products improved from both the 2012 fourth and first quarters to 15.3% from 13.1% and 13.7% respectively due to stronger operating margins at Apex Distribution. Operating profit as a percentage of revenues was 6.3%.
Revenues in our steel distributors segment decreased by 26% to $74 million in the 2013 first quarter compared to the 2012 first quarter due to lower demand levels. Operating profits for the first quarter of 2012 decreased to $5 million from $10 million for the 2012 first quarter.
Brian R. Hedges, President and CEO, commented, „The volume decline experienced throughout the service center industry was also felt by Russel Metals. The decline in volume in the first quarter impacted most sectors and was exacerbated by fewer working days in 2013 due to the timing of the Easter holidays and inclement weather following the relatively mild weather experienced in 2012. The drop in Canada was more severe than the US and reflects the impact on the Canadian economy of the energy slowdown in Alberta for both the oil sands and conventional gas drilling activities. The gross margins in service center are stabilizing, which is positive. In the energy sector, excluding Apex Distribution, pricing pressures continue and gross margins on pipe products declined further in the first quarter. We do not see any meaningful improvement in volumes at this time and the energy sector will improve should the XL pipeline to the Gulf be approved.“
Mr. Hedges further commented, „The performance of Apex Distribution was the bright spot in the first quarter and validated our strategic acquisition of this operation. Apex Distribution has maintained a more stable earnings pattern despite the slowdown in the Western Canada energy sector. One of our goals in acquiring Apex Distribution was to reduce the volatility of our energy products segment and this was demonstrated in the first quarter.“
The Board of Directors approved a quarterly dividend of $0.35 per common share payable June 14, 2013 to shareholders of record as of May 24, 2013.
The Company will be holding an Investor Conference Call on Friday, May 3, 2013 at 10:00 a.m. ET to review its 2013 first quarter results. The dial-in telephone numbers for the call are 416-340-2216 (Toronto and International callers) and 1-866-226-1792 (U.S. and Canada). Please dial in 10 minutes prior to the call to ensure that you get a line.
A replay of the call will be available at 905-694-9451 (Toronto and International callers) and 1-800-408-3053 (U.S. and Canada) until midnight, Friday, May 17, 2013. You will be required to enter pass code 7908038 in order to access the call.
Additional supplemental financial information is available in our investor conference call package located on our website at .
Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three metals distribution segments: metals service centers, energy products and steel distributors, under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Alberta Industrial Metals, Apex Distribution, Apex Remington, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, JMS Russel Metals, Leroux Steel, McCabe Steel, Megantic Metal, Metaux Russel, Metaux Russel Produits Specialises, Milspec, Norton Metals, Pioneer Pipe, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Siemens Laserworks, Spartan Energy Tubulars, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.
Statements contained in this press release or on the related conference call that relate to Russel Metals- beliefs or expectations as to certain future events are not statements of historical fact and are forward-looking statements. Russel Metals cautions readers that there are important factors, risks and uncertainties, including but not limited to economic, competitive and governmental factors affecting Russel Metals- operations, markets, products, services and prices that could cause its actual results, performance or achievements to be materially different from those forecasted or anticipated in such forward-looking statements.
The forward-looking statements in this document reflect management-s current beliefs and are based on information currently available to management. The material assumptions applied in making the forward-looking statements in this document include the following: demand from the manufacturing, resource and construction segments of the Canadian economy remains at current levels and these conditions will continue in the foreseeable future; and oil and gas prices, the price of steel and the value of the Canadian dollar relative to the U.S. dollar will be at similar levels with what we experienced during the latter half of 2012 and the first quarter of 2013. Although the forward-looking statements contained in this document are based upon what management believes to be reasonable estimates and assumptions, Russel Metals cannot ensure that actual results will not be materially different from those expressed or implied by these forward-looking statements and does not intend to update any forward-looking statement other than required by law.
Contacts: Russel Metals Inc. Marion E. Britton, C.A. Vice President and Chief Financial Officer (905) 819-7407
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