ESMK Esmark (MM)

WHEELING, W.Va., June 9 /PRNewswire-FirstCall/ -- Esmark Incorporated (NASDAQ:ESMK) (the "Company") today reported its financial results for the first quarter ended March 31, 2008, which consist of the results of both Esmark Steel Service Group, Inc. (ESSG), and the results of Wheeling-Pittsburgh Corporation (Wheeling-Pittsburgh) as a result of the merger on November 27, 2007. Comparative 2007 results referenced in this release include only ESSG. Consolidated EBITDA for the first quarter of 2008 was $11.4 million versus $3.5 million for the first quarter of 2007. For the first quarter of 2008, the Company reported a net loss of $15.8 million, or $(0.40) per basic and diluted share. This compares to a net loss of $0.2 million for first quarter of 2007, or $(0.51) per basic and diluted share. Net sales for the first quarter of 2008 totaled $600.1 million on shipments of 789,164 tons. The average selling price in the first quarter of 2008 was $760 per ton. Cost of sales for the first quarter of 2008 amounted to $553.4 million. The average cost per ton sold in the first quarter of 2008 was $701. Comparisons to prior quarter results are not meaningful due to the acquisition of Wheeling-Pittsburgh. Esmark Chairman and CEO, James P. Bouchard, stated that "As projected in our earnings call comments on April 30, I am pleased to report positive EBITDA for the first quarter, our first full quarter as a merged entity, evidencing the progress made by our management team and our entire workforce. As expected, both ESSG and Wheeling-Pittsburgh contributed positively to this result. Finally, we take great satisfaction from the denial by the West Virginia Supreme Court of Massey's appeal of the July 2007 Brooke County Circuit Court verdict, validating the position which Wheeling-Pittsburgh has taken from the outset." Conference Call Management will conduct a live call tomorrow, June 10, 2008 at 2 p.m. ET to review the Company's financial results and business prospects. Individuals wishing to listen can join the conference call by dialing 888-727-7659 or 913-312-9325. A replay will be available through June 17, 2008 by dialing 888-203-1112 or 719-457-0820, and using the pass code 1607524. The call can also be accessed via the Internet live or as a replay through http://www.investorcalendar.com/ or the company's website at http://www.esmark.com/. Use of Non-GAAP Financial Measures The Company provides other financial data in addition to providing financial results in accordance with GAAP. This data is not in accordance with, or an alternative to GAAP, and may be different from Non-GAAP financial data used by other companies. This Non-GAAP financial data is EBITDA and Adjusted EBITDA, which the Company believes provides useful information, to both its management and investors about the Company's current performance. The Company believes the most directly comparable GAAP financial measure is net income (loss) and has provided a reconciliation of GAAP net income (loss) to Non-GAAP EBITDA and Adjusted EBITDA. Forward-Looking Statements Cautionary Language This release contains certain projections or other forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities-Exchange Act regarding future events or the future financial performance of the Company that involve risks and uncertainties. Forward-looking statements reflect the current views of management and are subject to a number of risks and uncertainties that could cause actual results to differ materially from actual future events or results. These risks and uncertainties include, among others, factors relating to (1) intense competition, dependence on suppliers of raw materials and cyclical demand for steel products; (2) lower than expected operating results for the Company; (3) the Company's potential inability to generate sufficient operating cash flow to service or refinance its indebtedness; (4) concerns relating to the maturity dates of its credit agreements; and (5) certain other risks identified in section "Item 1A - Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2007, and other reports and filings with the SEC, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. In addition, any forward-looking statements represent the Company's views only as of today and should not be relied upon as representing the Company's views as of any subsequent date. While the Company may elect to update forward-looking statements from time to time, the company specifically disclaims any obligation to do so. About Esmark Incorporated Esmark Incorporated is a vertically integrated steel producer and distributor, combining steel production capabilities through both blast furnace and electric arc furnace technologies with the just-in-time delivery of value-added steel products to a broad customer base concentrated in the Ohio Valley and Midwest regions. Currently headquartered in Wheeling, WV, the Company is a producer of carbon flat-rolled products for the construction, container, appliance, converter/processor, steel service center, automotive and other markets. The company's products include various sheet products such as hot rolled, cold rolled, hot dipped galvanized, electro-galvanized, black plate and electrolytic tinplate. More information about Esmark can be found at http://www.esmark.com/. ESMARK INCORPORATED AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except per share amounts) Quarter Ended March 31, 2008 2007 Revenues Net sales, including sales to affiliates of $64,614 in 2008 $600,056 $163,001 Cost and expenses Cost of sales, including cost of sales to affiliates of $64,184 in 2008, excluding depreciation and amortization expense 553,362 148,189 Depreciation and amortization expense 15,160 2,769 Selling, general and administrative expense 32,242 11,461 Total costs and expenses 600,764 162,419 Operating (loss) income (708) 582 Interest expense and other financing costs (11,234) (995) Other (loss) income (3,132) 48 Loss before income taxes and minority interest (15,074) (365) Income tax provision (benefit) 801 (107) Loss before minority interest (15,875) (258) Minority interest 51 98 Net loss $(15,824) $(160) Net loss (15,824) (160) Preferred stock dividends - (3,459) Loss available to common stockholders $(15,824) $(3,619) Loss per share: Basic $(0.40) $(0.51) Diluted $(0.40) $(0.51) Weighted average common shares outstanding (in thousands): Basic 39,402 7,120 Diluted 39,402 7,120 Shipments (tons) 789,000 191,000 ESMARK INCORPORATED AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands, except share amounts) March 31, December 31, 2008 2007 Assets Current assets: Cash and cash equivalents $22,073 $20,007 Accounts receivables, less allowance for doubtful accounts of $3,330 and $3,081 246,894 198,089 Inventories 373,838 395,009 Prepaid expenses and other current assets 16,889 9,374 Total current assets 659,694 622,479 Investment in and advances to affiliates 178,458 252,330 Property, plant and equipment, less accumulated depreciation of $31,289 and $17,727 654,953 663,305 Deferred income tax benefits 59,759 54,900 Intangible assets, less accumulated amortization of $17,170 and $15,772 39,531 41,060 Goodwill 32,217 32,217 Other assets 5,981 2,759 Total assets $1,630,593 $1,669,050 Liabilities Current liabilities: Accounts payable, including book overdrafts of $7,571 and $13,176 $168,990 $154,720 Short-term debt 245,130 208,439 Payroll and employee benefits payable 64,770 63,225 Accrued income and other taxes 8,463 8,792 Deferred income taxes payable 60,385 55,805 Accrued interest and other current liabilities 54,489 68,605 Long-term debt due in one year 161,198 229,065 Total current liabilities 763,425 788,651 Long-term debt, less amount due in one year 27,891 31,640 Employee benefits 184,191 182,879 Other liabilities 27,932 26,962 Total liabilities 1,003,439 1,030,132 Minority interest 649 500 Stockholders' equity Common stock - $.01 par value; 100,000,000 shares authorized; 39,435,942 and 39,332,685 shares issued and outstanding 394 393 Additional paid-in capital 740,488 736,578 Accumulated deficit (113,821) (97,997) Accumulated other comprehensive loss (556) (556) Total stockholders' equity 626,505 638,418 Total liabilities and stockholders' equity $1,630,593 $1,669,050 ESMARK INCORPORATED AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures to US GAAP (unaudited) (Dollars in thousands) The following table sets forth a reconciliation of EBITDA and Adjusted EBITDA from net income, which management believes is the most nearly equivalent measure under US GAAP for the reporting periods indicated. Quarter Ended March 31, 2008 2007 Net (loss) income $(15,824) $(160) Income tax provision (benefit) 801 (107) Interest expense and other financing costs 11,234 995 Depreciation and amortization 15,160 2,769 EBITDA $11,371 $3,497 Amortization of fair value adjustment to equity investments 1,453 - Adjusted EBITDA $12,824 $3,497 DATASOURCE: Esmark Incorporated CONTACT: Media, Bill Keegan of Edelman for Esmark Incorporated, +1-312-927-8424 (mobile), ; or Media or Investor Relations, Dennis Halpin of Esmark Incorporated, +1-304-234-2421 (office), +1-304-650-6474 (mobile), Web site: http://www.esmark.com/ Company News On-Call: http://www.prnewswire.com/comp/967451.html

Copyright