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December 03, 2008


Novamerican announces Q1 2008 results

Novamerican Steel Inc announced its financial results for the first fiscal quarter ended February 23rd 2008.

2008 First Fiscal Quarter Highlights:

1. Net sales increased USD 8.4 million or 4.5%to USD 195.6 million, as compared to USD 187.2 million in the first fiscal quarter of 2007.

2. Total tonnes increased by 6.2% to 372,200 tonnes as compared to 350,600 tonnes in the first fiscal quarter of 2007.

3. Direct sales tonnes decreased slightly to 202,600 or 54.4% of total tonnes as compared to 203,400 tonnes or 58% of total tonnes in the first fiscal quarter of 2007.

3. Gross margin decreased by 20.5% to USD 27.7 million or 14.2% of net sales, as compared to USD 34.9 million or 18.6% of net sales, in the first fiscal quarter of 2007. Cost of sales in the first fiscal quarter of 2008 included the remaining USD 6.7 million of purchase price that was allocated to certain inventories. The impact of exchange rates was an increase of USD 2.2 million.

4. Operating expenses increased by USD 2.9 million or 10.2% to USD 31.6 million, as compared to USD 28.7 million in the first fiscal quarter of 2007. Operating expenses included USD 2.7 million from higher depreciation and amortization associated with the purchase price allocation for fixed assets and other intangible assets. The impact of exchange rates on operating expenses was an increase of USD 2.6 million. Excluding the impact of exchange rates and higher depreciation and amortization, operating expenses would have decreased USD 2.4 million to USD 26.3 million.

5. Adjusted EBITDA decreased by USD 2.6 million or 23.2% to USD 8.6 million as compared to USD 11.2 million in the first fiscal quarter of 2007.

6. Long term debt at February 23rd 2008 was USD 373.1 million and cash and cash equivalents were USD 18.6 million.

Mr Corrado De Gasperis CEO of of Novamerican said that "Our first fiscal quarter of 2008 started off with a very slow first two months, particularly from weaker Canadian manufacturing and automotive markets. February represented the strongest month in the quarter, with higher shipping rates for processing and structural tube and higher average selling prices."