TORONTO, CANADA — (Marketwired) — 08/07/13 — Russel Metals Inc. (TSX: RUS) today announced second quarter 2013 earnings of $20 million, or $0.33 per share on revenues of $758 million. These results compare to earnings of $23 million or $0.37 per share on revenues of $719 million in the same quarter last year and the first quarter 2013 earnings of $0.36 per share.
Revenues in our metals service center segment slipped 13% to $378 million in the second quarter of 2013 compared to the 2012 second quarter due to a combination of lower demand levels and pricing. Gross margins at metals service centers in the 2013 second quarter were consistent with the same quarter last year and were slightly lower than the 2013 first quarter reflecting modestly lower steel prices. Operating expenses as a percentage of revenues improved to 14.9% from 15.8% from the first quarter of 2013 mainly due to reduced variable compensation. The 2013 second quarter metals service center operating profits were $10 million lower than the 2012 second quarter, but improved by $3 million from the 2013 first quarter.
Revenues in our energy products segment for the second quarter of 2013 increased 63% or $121 million to $313 million compared to the 2012 second quarter, primarily due to the acquisition of Apex Distribution. Operating profit improved by $6 million to $17 million in the 2013 second quarter versus the same quarter last year due to our acquisition and a strong 2013 second quarter from our Comco Pipe and Supply operation servicing the Canadian oil sands. The weakness that our energy products group traditionally experiences in the second quarter was muted by the Apex Distribution acquisition.
Revenues in our steel distributors segment decreased by 29% to $65 million in the 2013 second quarter compared to the 2012 second quarter due to lower demand and pricing levels. Operating profits for the second quarter of 2013 decreased to $5 million from $8 million for the 2012 second quarter. Industry wide demand declines and pricing pressures resulted in customers delaying their purchases which adversely affected this segment.
Brian R. Hedges, President and CEO, commented „The weakness in demand levels experienced since the start of 2013 continued in the second quarter. We expect volumes to continue at current levels in our metals service center and steel distributor segments in the second half of 2013. We also believe that we are at or near the bottom of the pricing curve and expect some price improvements in the upcoming quarters. The typical seasonality experienced in our Western Canadian energy products operations in second quarter was extended by the flooding in Western Canada and the year over year drop in North American rig counts. Our energy products segment, however, experienced a strong second quarter with the addition of Apex Distribution and the continued strong performance of Comco Pipe and Supply.“
Mr. Hedges further commented, „We continue to focus on cost reductions and managing inventory levels in all of our segments to generate stronger results as we do not anticipate any meaningful improvement in shipments.“
The Board of Directors approved a quarterly dividend of $0.35 per common share payable September 16, 2013 to shareholders of record as of August 28, 2013.
The Company will be holding an Investor Conference Call on Thursday August 8, 2013 at 10:00 a.m. ET to review its 2013 second 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, Thursday, August 22, 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.
Cautionary Statement on Forward-Looking Information
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 stable and at similar levels with what we experienced at the end of the 2013 second quarter. 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.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOW (UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
Contacts: Marion E. Britton, C.P.A., C.A. Executive Vice President and Chief Financial Officer Russel Metals Inc. (905) 819-7407
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