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EXHIBIT 99.1
[METAL MANAGEMENT, INC. LETTERHEAD]
AT METAL MANAGEMENT:
Robert C. Larry
Chief Financial Officer
David A. Carpenter
Executive Vice-President
(312) 645-0700
FOR IMMEDIATE RELEASE
TUESDAY, NOVEMBER 21, 2000
METAL MANAGEMENT, INC. ANNOUNCES COMPLETION OF FIRST STEP OF ITS ANNOUNCED
RESTRUCTURING; RESULTS FOR THE SECOND QUARTER ENDED SEPTEMBER 30, 2000
CHICAGO, IL - NOV. 21/BUSINESSWIRE/-- METAL MANAGEMENT, INC. (NASDAQ: MTLM), one
of the nation's largest full service scrap metal recyclers, announced today that
it filed a petition to reorganize under Chapter 11 of the U. S. Bankruptcy Code
on November 20, 2000, in furtherance of a previously announced financial
restructuring agreement negotiated among the Company, its senior lenders, and
the holders of the Company's 10% Senior Subordinated Notes due 2008 and 12 3/4%
Senior Secured Notes due 2004. The Company concurrently reported its results of
operations for the second fiscal quarter ended September 30, 2000.
The financial restructuring, as previously announced, contemplates the
conversion of all of the Company's $180 million of Senior Subordinated Notes
into common stock representing a 99% ownership interest in the restructured
company. The conversion of this debt will substantially strengthen the Company's
capital structure and result in the elimination of $18 million of annual
interest expense. The remaining 1% of the Company's common stock, together with
warrants to acquire an additional 7.5% of the restructured company, will be
issued to the Company's existing common and preferred stockholders.
The Company also indicated that in connection with the filing of its Chapter 11
petition, it had sought and obtained several important first day motions, which
will allow it to continue to operate in the ordinary course of business during
the pendancy of the restructuring process. In particular, the Company indicated
that it had obtained interim court approval of a $200 million post-petition
credit facility among the Company and its senior lenders. According to the
Company, this facility provides the Company with $20 million of additional
availability over and above its prepetition borrowing capacity.
The Company also indicated that it had received court approval of its request to
continue to pay the prepetition claims of its suppliers of scrap metal, subject
to the agreement of these suppliers to continue to provide, and in some cases,
reestablish credit support to the Company. In accordance with the court order,
the company will not be able to pay prepetition claims of scrap suppliers that
choose not to prospectively sell scrap metals with open credit consistent with
past practices.
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SECOND QUARTER RESULTS
The Company reported revenues of $213.8 million and a net loss before preferred
stock dividends of $25.4 million, or $.44 per share, from recurring operations
(i.e. before non-recurring expense) during the quarter ended September 30, 2000,
compared to revenues of $211.5 million and a net loss before preferred stock
dividends of $2.9 million, or $.06 per share, from recurring operations for the
quarter ended September 30, 1999. The second quarter ended September 30, 2000
included an income tax expense of $12.2 million to fully reserve against net
deferred tax assets due to the bankruptcy filing. EBITDA during the quarter
ended September 30, 2000 was $3.5 million, a decrease of $8.3 million over the
comparable prior year period and a $4.3 million decrease from the quarter ended
June 30, 2000.
SIX MONTH RESULTS
The Company reported revenues of $455.7 million and a net loss before preferred
stock dividends of $32.1 million, or $.56 per share, from recurring operations
(i.e. before non-recurring expense) during the six months ended September 30,
2000, compared to revenues of $410.1 million and a net loss before preferred
stock dividends of $6.0 million, or $.11 per share, from recurring operations
for the six months ended September 30, 1999. The six months ended September 30,
2000 included an income tax expense of $8.3 million to fully reserve against net
deferred tax assets due to the bankruptcy filing. EBITDA during the six months
ended September 30, 2000 was $11.3 million, a decrease of $11.5 million over the
comparable prior year period.
ABOUT METAL MANAGEMENT, INC.
Metal Management is one of the largest full service metals recyclers in the
United States, with approximately 50 recycling facilities in 14 states and
estimated annualized revenues of nearly $1 billion.
* * * * * * * * * * * * * * * * * * * * * * * * * *
All of the statements in this release, other than historical facts, are
forward-looking statements made in reliance upon the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995. As such, they involve
risks and uncertainties and are subject to change at any time. As discussed in
MTLM's annual report on Form 10-K for the fiscal year ended March 31, 2000, and
in the periodic filings filed by the Company after the date thereof, some of the
factors that could affect MTLM's performance include, among other things: the
effects of leverage on Metal Management, potential inability to control growth
or to successfully integrate acquired businesses, cyclicality of the metals
recycling industry, commodity price fluctuations, compliance with environmental,
health, safety and other regulatory requirements applicable to MTLM, potential
environmental liability, risk of deterioration in relations with labor unions,
dependence on key management, dependence on suppliers of scrap metal,
concentration of customer risk, availability of scrap alternatives, debt
covenants that restrict our ability to engage in certain transactions and
accumulated losses to date. The consummation of the restructuring described
herein and the Company's ability to implement the agreements described above are
subject to a number of important conditions, including the negotiation,
execution and approval of definitive plan of reorganization documentation, and
court approval of the proposed restructuring plan.
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METAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------- -------------------------
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
30, 2000 30, 1999 30, 2000 30, 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET SALES $ 213,774 $ 211,466 $ 455,683 $ 410,148
Cost of sales 195,238 186,908 414,166 359,759
----------- ----------- ----------- -----------
Gross profit 18,536 24,558 41,517 50,389
OPERATING EXPENSES:
General and administrative 15,041 12,782 30,242 27,609
Depreciation and amortization 6,696 6,669 13,613 13,301
Non-cash and non-recurring expense 211 5,014 2,850 5,014
----------- ----------- ----------- -----------
Total operating expenses 21,948 24,465 46,705 45,924
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Operating income (loss) from continuing operations (3,412) 93 (5,188) 4,465
OTHER INCOME (EXPENSE):
Loss from joint ventures (515) (90) (649) (31)
Interest expense (10,675) (9,258) (21,003) (17,994)
Interest and other income, net 93 305 202 362
----------- ----------- ----------- -----------
Loss from continuing operations before income taxes (14,509) (8,950) (26,638) (13,198)
Provision (benefit) for income taxes 12,201 (3,050) 8,291 (4,194)
----------- ------------ ----------- ------------
Loss from continuing operations (26,710) (5,900) (34,929) (9,004)
Gain on sale of discontinued operations, net of taxes 0 27 0 27
----------- ----------- ----------- -----------
NET LOSS (26,710) (5,873) (34,929) (8,977)
Premium paid on redemption of preferred stock 0 616 0 616
Preferred stock dividends 117 225 233 459
----------- ----------- ----------- -----------
NET LOSS APPLICABLE TO COMMON STOCK $ (26,827) $ (6,714) $ (35,162) $ (10,052)
============ ============ ============ ===========
Basic and diluted loss per share $ (0.46) $ (0.13) $ (0.61) $ (0.19)
=========== ============ =========== ============
Shares used in computation of basic and diluted loss
per share 57,904 53,210 57,839 52,915
</TABLE>
