Empire Resources Reports 2012 Full Year And Fourth Quarter Results
FORT LEE, N.J., March 25, 2013
FORT LEE, N.J., March 25, 2013 /PRNewswire/ --Empire Resources, Inc. (NASDAQ:
ERS), a distributor of value added, semi-finished metal products, announced
today that net sales for full year 2012 increased 5% to $538.5 million from
$514.6 million recorded in 2011. The increase in sales reflected higher unit
shipment volume in North and South America and in Australia.
Gross profit increased 2% to $25.0 million in 2012 compared with $24.5 million
in 2011, while operating income for 2012 increased 5% to $11.7 million
compared with $11.2 million in 2011. The improvement in operating income
included 1% lower SG&A costs even allowing for increased expenses on becoming
an SEC registrant company and the Company's tender offer to repurchase shares
Net income for 2012 was $4.0 million, or $0.42 per diluted share, and included
a non-cash non-operating loss of $0.1 million, attributable to the derivative
feature of a convertible subordinated note. Net income for 2011 was $5.0
million, or $0.46 per diluted share, including a gain of $0.9 million
attributable to the derivative liability.
The Company achieved strong operating cash flow in 2012, with cash provided by
operating activities totaling $39.3 million in 2012 compared with cash used in
operating activities of $55.8 million in 2011. The positive operating cash
flow in 2012 reflected the Company's focus on reducing inventory and improving
inventory turns while maintaining its current sales volume during the year.
For 2012, the inventory turn rate approximated 2.9 times (or 4.1 months on
hand), compared to2.8 times (or 4.3 months on hand) in 2011. In total,
inventories were reduced by $38.6 million in 2012, which enabled the Company
to pay down $30 million of its bank debt.
Fourth Quarter Results
Net sales for the fourth quarter of 2012 were $109.5 million compared with
$136.8 million in the fourth quarter of 2011. Unit shipment volume was lower
to all geographic regions, with the exception of South America, due to a drop
in demand in December with growing economic concerns and uncertainty.
Gross profit was $6.1 million, or 5.6% of sales, and included recovery of a
claim against MF Global. Before including this recovery, the gross profit
margin was 5.1%. Consistently achieving a 5% gross profit margin level has
been a target for the Company throughout 2012.
Operating income for the fourth quarter of 2012 increased 4% to $3.0 million
compared with $2.9 million in the fourth quarter of 2011. Interest costs were
27% lower in the fourth quarter of 2012 compared with the same quarter of 2011
largely due to the Company's pay down of bank debt enabled by the reduction in
Net income for the fourth quarter of 2012 was $0.9 million, or $0.11 per
diluted share, and included a non-cash non-operating loss of $0.4 million
attributable to the derivative liability. In the fourth quarter of 2011, net
income was $0.8 million, or $0.09 per diluted share, including a loss of $0.1
million attributable to the derivative liability.
Nathan Kahn, President and CEO, commented, "We made important progress in
2012; our sales growth came from the major market share gains that we achieved
in South America and strong results in Australia and New Zealand, which more
than offset the decline in European business, while we held our own in North
America, despite continued challenging economic conditions.
We worked hard to strengthen profitability and cash flow in 2012 and our
progress is evidenced by the improvement in our gross margin, inventory turns
and cash flow as the year progressed.
Building shareholder value and return remained major priorities in 2012.
Towards that goal and based on our profitability and strong cash flow, we paid
a special cash dividend at year-end in addition to our regular quarterly
dividends. Additionally, we returned to our status as an SEC registrant
company with the successful filing of an S-1 registration in May, repurchased
600,000 shares of our common stock through a tender offer commenced in June,
and sought listing of our stock on the NASDAQ Capital Market, which we
achieved in February of this year.
For 2013, we remain fully focused on pursuing new and profitable opportunities
in both steel and aluminum across our global markets, while continuing to
serve as effective partners to both our customers and suppliers."
Empire Resources, Inc. is a distributor of a wide range of semi-finished metal
products to customers in the transportation, automotive, housing, appliance
and packaging industries in the U.S., Canada, Brazil, Australia, New Zealand
and Europe. It maintains supply contracts with mills in various parts of the
This press release contains forward-looking statements. Such statements
involve various risks that may cause actual results to differ materially.
These risks include, but are not limited to, the ability of the company to
grow internally or by acquisition and to integrate acquired businesses, not
being able to improve operating margins and efficiencies, changing industry
and competitive conditions, and other risks referred to in the Company's
publicly available statements and periodic reports.
Three Months Ended December Year Ended December 31,
2012 2011 2012 2011
Unaudited See notes to consolidated
In thousands,except per
Net sales $ 109,521 $ 136,847 $ 538,527 $ 514,633
Cost of goods sold 103,437 129,518 513,560 490,102
Gross profit 6,084 7,329 24,967 24,531
Selling, general and 3,067 4,439 13,258 13,336
Operating income 3,017 2,890 11,709 11,195
Change in value of (424) (70) (63) 896
Interest expense, (1,106) (1,521) (5,225) (4,039)
Income before income 1,487 1,299 6,421 8,052
Income taxes 574 508 2,457 3,091
Net income $ 913 $ 791 $ 3,964 $ 4,961
Weighted average shares
Basic 8,897 9,255 8,897 9,255
Diluted 12,028 10,987 12,028 10,987
Earnings per share: *
Basic $0.11 $0.09 $0.45 $0.54
Diluted $0.11 $0.09 $0.42 $0.46
* Earnings per Share – Earnings per share ("EPS") consists of two separate
components, basic EPS and diluted EPS. Basic EPS is computed based on
theweighted average number of shares of common stock outstanding for each
period presented. Diluted EPS is calculated based on the weighted average
number of shares of common stock outstanding plus dilutive common stock
equivalents ("CSEs") and giving effect to all dilutive outstanding stock
options, using the treasury stock method, and assumed conversion of
subordinated debt, weighted for the period the debt was outstanding. CSEs for
which the grant price exceeds the average market price over the period have an
anti-dilutive effect on EPS, and, accordingly, are excluded from the
calculation. See Note O of the 2012 consolidated financial statements on Form
10-K for reconciliation of the numerators and denominators of the basic and
diluted earnings per share.
SOURCE Empire Resources, Inc.
Contact: Investor Relations - Comm-Counsellors, LLC, Edward Nebb, +1
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