Metalico, Inc. (MEA) is a holding company with operations in two principal business segments: ferrous and non-ferrous scrap metal recycling, and fabrication of lead-based products. The company operates twenty recycling facilities in New York, Pennsylvania, Ohio, New Jersey, Texas, Mississippi, and West Virginia. Metalico also owns five lead fabrication plants in Alabama, Illinois, Nevada, and California.
Shareholders have questioned the company regarding the rapid decline in the stock price in the past two weeks and whether the company is facing near-term profitability or liquidity problems. Therefore, Metalico issued a statement regarding the recent trading activity of its common stock. Due to the volatile and uncertain conditions that exist today in the financial markets, Metalico decided to deviate from its established policy of not commenting on results before release of quarterly earnings to reassure shareholders and the investing community about the company and its prospects.
Metalico is in a liquid and strong working-capital position with borrowing availability of approximately $60,000,000 and only a relatively small amount of debt outstanding under its revolving credit facility. The company is conducting business as usual and is using conversion of inventories and collections of accounts received to reduce indebtedness by approximately $30,000,000 for the quarter and to further strengthen their financial position going forward.
Carlos E. Agueero, president and chief executive officer, stated, “During this period of lower commodity metal prices and uncertain financial markets, we intend to concentrate operationally on protecting margins, turning over inventories and using our positive cash flow to further strengthen our balance sheet. We remain optimistic about the company’s long-term prospects and our ability to create shareholder value in the future.”
Let us hear your thoughts below: