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New earnings on this stock today. The company is buying back shares, balance sheet getting better, and trading at an incredibly low P/E. The only worry is that they are in a cyclical business, but have managed to maintain profits on lower revenues over past year. Anyone else following this stock? Russel Metals Announces Record Earnings Per Share Of $0.74 For 1999 TORONTO--(BUSINESS WIRE)--Feb. 16, 2000-- (NASDAQ:RUSM - news; TSE:RUS. - news; WINNIPEG STOCK EXCHANGE:RUS.) (TSE:RUS.PR.C. - news; WINNIPEG STOCK EXCHANGE:RUS.PR.C.) Russel Metals Inc. today announced record net earnings for the year ended December 31, 1999 of $41.9 million or $0.74 per share, an increase of 17% over the December 31, 1998 earnings per share of $0.63 and net earnings of $40.1 million. Revenue for the year ended December 31, 1999 decreased to $1.4 Billion from $1.8 Billion in 1998 due to a combination of lower volumes and selling prices. The fourth quarter 1999 net income improved to $20.2 million or $0.41 per share, up from $8.1 million or $0.12 per share earned for the same period in 1998. Revenues declined 8.8% to $352.7 million for the quarter ended December 31, 1999 compared with $386.8 million in the same quarter of 1998. In the quarter, price increases resulted in higher operating profits for the service center and import/export operations. As well, the increased oil price resulted in significant activity in our Western Canada energy operations. Bud Siegel, President and CEO of Russel Metals stated, ''Management anticipated in the third quarter of 1998 those changing market conditions that would affect our Company during 1999 and as a result of staying focused and true to our business model, we were able to produce operating profits in all segments. Reductions in working capital resulted in interest expense being lowered by $10.6 million, which also contributed significantly to the higher earnings per share.' During 1999, Russel Metals, together with RMI USA LLC, issued a new 10% Senior Note. In addition, the Company redeemed its 10.25% U.S. Senior Note as well as its 9% Subordinated Debenture. During the year, the Company purchased for cancellation 3,546,300 common shares pursuant to its normal course issuer bid. During the fourth quarter, the Company purchased for cancellation 855,700 common shares. As a result, the Company's issued and outstanding common shares has been reduced to 47,489,547 at December 31, 1999. Bud Siegel further commented, ''As we move forward through 2000, Russel Metals will continue to focus on strengthening the balance sheet and improving on profitability. I am looking forward to meeting new cycle challenges in 2000.' Russel Metals is one of the largest steel distribution companies in North America. It carries on business primarily in three steel distribution business segments: service center distribution, energy sector distribution and steel import/export, under various names including Russel Metals, B&T Steel, Bahcall Group, Baldwin International, Copco Steel, Comco Pipe and Supply, Drummond McCall, Fedmet Tubulars, Metaux Russel, Pioneer Pipe, Sunbelt Group, Total Distributors Supply Corporation and Wirth Limited. RUSSEL METALS INC. Consolidated Statements of Earnings and Retained Earnings -------------------------------------------------------------------- Quarters Ended Years Ended December 31, December 31, -------------------- -------------------- ($000, except per share data) 1999 1998 1999 1998 -------------------------------------------------------------------- Segment Revenues Service Center Distribution $187,479 $ 192,182 $ 760,568 $ 875,229 Energy Sector Distribution 75,890 81,455 274,519 353,424 Steel Import/Export 86,308 113,186 369,285 556,134 Other 3,028 - 11,020 - -------------------------------------------------------------------- $352,705 $ 386,823 $1,415,392 $1,784,787 -------------------------------------------------------------------- -------------------------------------------------------------------- Segment Operating Profits Service Center Distribution $ 12,576 $ 11,048 $ 39,501 $ 45,929 Energy Sector Distribution 3,611 3,782 7,362 16,401 Steel Import/Export 5,591 1,504 17,811 22,601 Other income 1,171 - 3,513 - Corporate expenses (1,788) (2,226) (7,880) (9,336) -------------------------------------------------------------------- Total operating profits 21,161 14,108 60,307 75,595 Debt redemption costs - - (1,087) - -------------------------------------------------------------------- 21,161 14,108 59,220 75,595 Interest expense - net 4,708 5,911 19,343 27,129 -------------------------------------------------------------------- Earnings before income taxes 16,453 8,197 39,877 48,466 Provision for (recovery of) income taxes (3,788) 101 (1,979) 8,333 -------------------------------------------------------------------- Net earnings for the period 20,241 8,096 41,856 40,133 -------------------------------------------------------------------- Retained Earnings --- Distributions on preferred shares and Convertible Debentures Dividends on preferred shares (562) (562) (2,250) (2,250) 9% Convertible Debentures - (1,435) (2,885) (5,663) -------------------------------------------------------------------- (562) (1,997) (5,135) (7,913) -------------------------------------------------------------------- Earnings available to common shareholders 19,679 6,099 36,721 32,220 Amount related to common shares purchased for cancellation (35) - (1,097) - Retained earnings, beginning of the period 56,538 48,763 54,862 22,642 Adjustment for pensions and benefits - - (14,304) - -------------------------------------------------------------------- Retained earnings, end of the period $ 76,182 $ 54,862 $ 76,182 $ 54,862 -------------------------------------------------------------------- -------------------------------------------------------------------- Basic earnings per common share $ 0.41 $ 0.12 $ 0.74 $ 0.63 -------------------------------------------------------------------- -------------------------------------------------------------------- Average shares outstanding 47,728,745 51,035,864 49,573,917 51,029,103 -------------------------------------------------------------------- -------------------------------------------------------------------- RUSSEL METALS INC. Consolidated Balance Sheets --------------------------------------------------------- At December 31 ($000) 1999 1998 --------------------------------------------------------- ASSETS Current Cash $ 19,968 $ - Accounts receivable 212,156 228,809 Income taxes recoverable - 4,635 Inventories 254,527 331,790 Prepaid expenses and other assets 4,581 4,854 Current assets - discontinued operations 15,439 15,439 --------------------------------------------------------- 506,671 585,527 --------------------------------------------------------- Fixed Property, plant and equipment 96,265 90,045 Property held for resale - discontinued operations 19,941 26,351 --------------------------------------------------------- 116,206 116,396 --------------------------------------------------------- Other Long-term receivables 10,600 10,600 Other investments 4,539 4,258 Deferred financing charges 8,249 4,595 Goodwill 5,066 7,201 Deferred income taxes 4,522 - Other assets 593 5,114 --------------------------------------------------------- 33,569 31,768 --------------------------------------------------------- $656,446 $733,691 --------------------------------------------------------- --------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Bank indebtedness $ - $ 58,268 Accounts payable and accrued liabilities 173,415 182,287 Current income taxes payable 552 - Current portion of long-term debt - 4,943 Current liabilities - discontinued operations 8,353 15,442 --------------------------------------------------------- 182,320 260,940 Long-Term Debt 210,413 163,154 Pensions and Benefits 9,411 - --------------------------------------------------------- 402,144 424,094 --------------------------------------------------------- Shareholders' Equity and Convertible Debentures 9% Convertible Debentures - 65,817 Preferred shares 30,000 30,000 Shareholders' equity 224,302 213,780 --------------------------------------------------------- 254,302 309,597 --------------------------------------------------------- $656,446 $733,691 --------------------------------------------------------- --------------------------------------------------------- RUSSEL METALS INC. Consolidated Cash Flow Statements --------------------------------------------------------- For The Years Ended December 31 ($000) 1999 1998 --------------------------------------------------------- Operating activities Net earnings for the year $ 41,856 $ 40,133 Depreciation and amortization 12,444 11,693 Income taxes 665 742 Loss on sale of fixed assets 111 6 Debt redemption costs 1,087 - --------------------------------------------------------- Cash from continuing operating activities before working capital 56,163 52,574 --------------------------------------------------------- Changes in working capital items of continuing operations Accounts receivable 16,653 33,440 Inventories 77,263 (30,021) Accounts payable and accrued liabilities (8,872) (20,897) Other 273 (155) --------------------------------------------------------- Change in non-cash working capital 85,317 (17,633) --------------------------------------------------------- Cash from continuing operating activities 141,480 34,941 --------------------------------------------------------- Financing activities Issue of long-term debt 184,050 - Redemption of long-term debt (198,209) (37,143) Issue (purchase) of common shares (12,481) 114 Distributions (5,135) (7,913) Deferred financing costs (7,070) (761) --------------------------------------------------------- Cash used in financing activities (38,845) (45,703) --------------------------------------------------------- Investing activities Purchase of fixed assets (17,249) (11,002) Proceeds on sale of fixed assets 341 3,015 Non-core assets (383) 27,725 Other (6,429) 2,402 --------------------------------------------------------- Cash from (used in) investing activities (23,720) 22,140 --------------------------------------------------------- Increase in cash from continuing operations 78,915 11,378 Cash from (used in) discontinued operations (679) 11,024 --------------------------------------------------------- Increase in cash 78,236 22,402 Cash position, beginning of the year (58,268) (80,670) --------------------------------------------------------- Cash position, end of the year $ 19,968 $(58,268) --------------------------------------------------------- --------------------------------------------------------- NOTE: For the beginning of the years and December 31, 1998, cash position represents bank indebtedness. | ||||||||||||
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