Russel Metals Inc. (TSX: RUS) reported second quarter net earnings
of $79 million or $1.25 per share. Net earnings reported in the
second quarter of 2007 were $29 million or $0.47 per common share.
Consolidated revenues for the second quarter of 2008 were $856
million, an increase of 31% from the second quarter of 2007
revenues of $653 million and an increase of 20% from $712 million
reported in the first quarter of 2008.
Revenues for our energy tubular products segment were $235
million for the second quarter of 2008 compared to $167 million for
the second quarter of 2007. Steel price increases and increased
volumes in our U.S. energy operations and our operation servicing
the oil sands of Northern Alberta produced operating profits of $29
million for the second quarter of 2008 compared to $11 million for
the second quarter of 2007. The strength of our U.S. energy
operations and Alberta oil sands businesses outweighed the seasonal
downturn in our operations that service Alberta-based gas
drilling.
Metals service center revenues increased 34% to $497 million for
the second quarter of 2008 compared to 2007. Operating profits for
our metals service centers for the second quarter of 2008 were $72
million, up $41 million from the second quarter of 2007. The metals
service centers results strengthened from the second quarter of
2007 due to steel price increases initiated in the first quarter of
2008, improved same store volumes and the acquisition of JMS Russel
Metals.
Steel distributors produced operating profits of $26 million for
the second quarter of 2008 compared to $12 million for the second
quarter of 2007. The increase is a result of higher margins which
more than offset the reduced volumes. Volumes in this segment were
lower compared to 2007 due to lower import levels as strong
worldwide steel demand, higher steel prices outside of the region
and the weak U.S. dollar have made imports uneconomical for some
products.
Bud Siegel, President and Chief Executive Officer, commented,
"We are extremely pleased with our results for the second quarter.
The primary sectors serviced by our metals operations have
outperformed the rest of the Canadian economy and even our same
store volumes were up in the second quarter. In addition, our
energy tubular products segment had increased volumes which further
strengthened their results. Although economic uncertainty is
evident in certain sectors, many of the sectors we service remain
buoyant."
Free cash flow for the second quarter 2008 was $79 million and
was $116 million for the six months ended June 30, 2008. Our focus
on working capital management allowed the Company to moderate the
impact of steel price increases and net working capital increased
by only $8 million for the first six months of 2008. Marion
Britton, Vice President and Chief Financial Officer, commented "Our
strong cash flow over the cycle supports our industry leading
dividend policy. The strength of our year to date cash flow in an
environment of significant steel price increases reflects
positively on the working capital management skills of our
operations."
The Board of Directors approved a quarterly dividend of $0.45
per common share and a supplemental dividend of $0.05 per common
share payable September 15, 2008 to shareholders of record as of
August 28, 2008.
The Company will be holding an Investor Conference Call on
Wednesday, August 6, 2008 at 9:00 a.m. ET to review its second
quarter results for 2008. The dial-in telephone numbers for the
call are 416-641-6130 (Toronto and International callers) and
1-866-226-1793 (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 416-695-5800 (Toronto
and International callers) and 1-800-408-3053 (U.S. and Canada)
until midnight, Wednesday, August 13, 2008. You will be required to
enter pass code 3264763 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
distribution segments: metals service centers, energy tubular
products and steel distributors, under various names including
Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier
Richler, 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 Industries, Pioneer
Pipe, Russel Metals Specialty Products, Russel Metals Williams
Bahcall, Spartan Steel Products, 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 will be consistent with what we
experienced in the second quarter of 2008, oil and gas prices will
not change materially, the recent stability in the price of steel
will either remain constant or increase, and the Canadian dollar
will maintain recent gains while not appreciating significantly.
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.
RUSSEL METALS INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
(millions) 2008 2007
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents $ 235.5 $ 181.8
Accounts receivable 478.4 341.8
Inventories 620.5 572.6
Prepaid expenses and other assets 5.5 8.5
Income taxes 0.3 3.9
-------------------------------------------------------------------------
1,340.2 1,108.6
Property, Plant and Equipment 231.8 227.9
Deferred Financing Charges 0.2 0.3
Future Income Tax Assets 1.0 1.0
Other Assets 9.0 12.1
Goodwill and Intangibles 54.5 53.4
-------------------------------------------------------------------------
$ 1,636.7 $ 1,403.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 442.7 $ 294.2
Income taxes payable 19.6 2.8
Current portion long-term debt 1.1 0.9
-------------------------------------------------------------------------
463.4 297.9
Derivatives 39.1 39.5
Long-Term Debt 180.4 174.9
Pensions and Benefits 1.3 1.4
Future Income Tax Liabilities 6.8 5.8
-------------------------------------------------------------------------
691.0 519.5
-------------------------------------------------------------------------
Shareholders' Equity
Common shares 507.3 504.2
Retained earnings 462.8 411.7
Contributed surplus 8.6 6.2
Accumulated other comprehensive loss (33.0) (38.3)
-------------------------------------------------------------------------
945.7 883.8
-------------------------------------------------------------------------
$ 1,636.7 $ 1,403.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
RUSSEL METALS INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(millions, except per Quarters ended June 30, Six months ended June 30,
share data) 2008 2007 2008 2007
----------------------------------------------------------------------------
Revenues $ 856.3 $ 652.8 $ 1,568.6 $ 1,336.5
Cost of sales and operating
expenses 734.9 603.9 1,395.1 1,241.6
----------------------------------------------------------------------------
Earnings before the following 121.4 48.9 173.5 94.9
Other income (expense) 0.7 - (2.5) -
Interest expense, net (2.3) (1.6) (4.4) (3.4)
----------------------------------------------------------------------------
Earnings before income taxes 119.8 47.3 166.6 91.5
Provision for income taxes (41.0) (18.0) (58.6) (33.5)
----------------------------------------------------------------------------
Net earnings for the period $ 78.8 $ 29.3 $ 108.0 $ 58.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic earnings per common
share $ 1.25 $ 0.47 $ 1.71 $ 0.93
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Diluted earnings per common
share $ 1.24 $ 0.47 $ 1.71 $ 0.92
----------------------------------------------------------------------------
----------------------------------------------------------------------------
RUSSEL METALS INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
Quarters ended Six months ended
June 30, June 30,
(millions) 2008 2007 2008 2007
----------------------------------------------------------------------------
Retained earnings, beginning of the
period, as previously reported $ 412.5 $ 414.3 $ 411.7 $ 411.1
Transitional adjustment -
financial instruments - - - (0.5)
----------------------------------------------------------------------------
Retained earnings, beginning of the
period, as restated 412.5 414.3 411.7 410.6
Net earnings for the period 78.8 29.3 108.0 58.0
Dividends on common shares (28.5) (28.3) (56.9) (53.3)
----------------------------------------------------------------------------
Retained earnings, end of the period $ 462.8 $ 415.3 $ 462.8 $ 415.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
RUSSEL METALS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Quarters Six months
Ended June 30, Ended June 30,
(millions) 2008 2007 2008 2007
----------------------------------------------------------------------------
Net earnings for the period $ 78.8 $ 29.3 $ 108.0 $ 58.0
----------------------------------------------------------------------------
Other comprehensive income (loss)
Unrealized foreign exchange gains
(losses) on translating financial
statements of self sustaining foreign
operations (U.S. subsidiaries) (2.6) (16.2) 9.6 (18.5)
Gains and (losses) on derivatives
designated as net investment hedges 0.5 5.6 (1.6) 6.4
Gains and (losses) on derivatives
designated as cash flow hedges (2.2) 1.4 (2.7) 2.3
----------------------------------------------------------------------------
Other comprehensive income (loss) (4.3) (9.2) 5.3 (9.8)
----------------------------------------------------------------------------
Comprehensive income $ 74.5 $ 20.1 $ 113.3 $ 48.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
RUSSEL METALS INC.
CONSOLIDATED STATEMENTS OF ACCUMULATED OTHER COMPREHENSIVE LOSS
(UNAUDITED)
Quarters Six months
Ended June 30, Ended June 30,
(millions) 2008 2007 2008 2007
---------------------------------------------------------------------------
Accumulated net unrealized foreign
currency translation gains (losses)
Balance, beginning of period $ (33.5) $ (13.5) $ (45.7) $ (11.2)
Net unrealized gain (loss) on
translation of net investment
in foreign operations (2.6) (16.2) 9.6 (18.5)
---------------------------------------------------------------------------
Balance, end of period (36.1) (29.7) (36.1) (29.7)
---------------------------------------------------------------------------
Accumulated net unrealized loss on cash
flow and net investment hedges
Balance, beginning of period 4.8 (7.6) 7.4 -
Transitional adjustment - - - (9.3)
Unrealized gains (losses) on items
designated as net investment hedges 0.5 5.6 (1.6) 6.4
Unrealized gains (losses) on items
designated as cash flow hedges (2.2) 1.4 (2.7) 2.3
---------------------------------------------------------------------------
Balance, end of period 3.1 (0.6) 3.1 (0.6)
---------------------------------------------------------------------------
Total accumulated other
comprehensive loss $ (33.0) $ (30.3) $ (33.0) $ (30.3)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
RUSSEL METALS INC.
CONSOLIDATED CASH FLOW STATEMENTS
(UNAUDITED)
Quarters ended Six months ended
June 30, June 30,
(millions) 2008 2007 2008 2007
--------------------------------------------------------------------------
Operating activities
Net earnings $ 78.8 $ 29.3 $ 108.0 $ 58.0
Depreciation and amortization 5.7 5.0 11.4 9.9
Future income taxes 1.2 1.5 1.3 1.9
Gain on sale of fixed assets 0.1 0.1 0.1 (0.6)
Stock-based compensation 0.4 3.1 2.9 3.9
Pension expense (funding) - 0.3 (0.1) (1.3)
Other (0.7) 0.1 2.7 0.3
--------------------------------------------------------------------------
Cash from operating activities
before working capital 85.5 39.4 126.3 72.1
--------------------------------------------------------------------------
Changes in non-cash working
capital items
Accounts receivable (62.4) 18.4 (133.7) (38.6)
Inventories (55.3) (12.7) (42.6) 9.6
Accounts payable and accrued
liabilities 90.1 (14.2) 145.8 18.8
Current income taxes 13.1 (4.1) 21.9 (12.7)
Other (0.9) (0.8) 0.2 0.1
--------------------------------------------------------------------------
Change in non-cash working capital (15.4) (13.4) (8.4) (22.8)
--------------------------------------------------------------------------
Cash from operating activities 70.1 26.0 117.9 49.3
--------------------------------------------------------------------------
Financing activities
Issue of common shares - options
exercised 1.5 10.0 2.5 10.8
Dividends on common shares (28.5) (28.3) (56.9) (53.3)
Repayment of long-term debt (0.2) - (0.4) -
--------------------------------------------------------------------------
Cash used in financing activities (27.2) (18.3) (54.8) (42.5)
--------------------------------------------------------------------------
Investing activities
Purchase of fixed assets (6.1) (4.9) (10.4) (8.6)
Proceeds on sale of fixed assets 0.1 - 0.1 1.3
Other (0.8) (0.5) (0.3) 0.2
--------------------------------------------------------------------------
Cash used in investing activities (6.8) (5.4) (10.6) (7.1)
--------------------------------------------------------------------------
Effect of exchange rates on cash (0.2) (2.7) 1.2 (2.9)
--------------------------------------------------------------------------
Increase (decrease) in cash and
cash equivalents 35.9 (0.4) 53.7 (3.2)
Cash and cash equivalents,
beginning of the period 199.6 207.1 181.8 209.9
--------------------------------------------------------------------------
Cash and cash equivalents,
end of the period $ 235.5 $ 206.7 $ 235.5 $ 206.7
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Supplemental Cash flow information:
Income taxes paid $ 25.5 $ 21.6 $ 35.7 $ 44.9
Interest paid $ 0.1 $ - $ 7.5 $ 7.6
Contacts: Russel Metals Inc. Marion E. Britton, C.A. Vice
President and Chief Financial Officer (905) 819-7407 Email:
info@russelmetals.com Website: www.russelmetals.com
Russel Metals (TSX:RUS)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Russel Metals (TSX:RUS)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
