Metal Management Improves Second Quarter Results

Chicago, IL - Metal Management, Inc., a scrap metal recycler, announced operating results for the three and six month periods ended September 30, 2001.

On June 29, 2001, the company emerged from Chapter 11 bankruptcy and adopted "fresh start" accounting. Results after the effective date are those of a new reporting entity (the Reorganized Company) and are not comparable to the pre-confirmation periods of the old reporting entity (the predecessor company). The reorganized company's results for the three months ended September 30, 2001 are compared to the predecessor company's results for the three months ended September 30, 2000. In addition, the reorganized company's results for the three months ended September 30, 2001 have been combined with the predecessor company's results for the three months ended June 30, 2001 and are compared to the Predecessor Company's results for the six months ended September 30, 2000.

Second Quarter Results

The company reported revenues of $157.0 million and EBITDA(1) of $6.2 million during the quarter ended September 30, 2001 compared to revenues of $213.8 million and EBITDA of $3.5 million during the quarter ended September 30, 2000. The company's operating results as measured by loss before reorganization costs, income taxes, cumulative effect of change in accounting principle and extraordinary gain improved by $12.8 million to a loss of only $1.7 million in the quarter ended September 30, 2001 from the quarter ended September 30, 2000. The sequential improvement in operating results is related to increases in gross profits realized as a percentage of sales and lower administrative expenses that declined by nearly $4 million, or 25 percent, in the quarter ended September 30, 2001. The improvements in gross profit as a percentage of sales are realized from improved material margins and lower processing expenses.

Administrative expenses continue to decline and represent a significant benefit associated with integration activities implemented by the company.

Six Month Results

The Company reported revenues of $323.2 million and EBITDA of $11.6 million during the six months ended September 30, 2001, compared to revenues of $455.7 million and EBITDA of $11.3 million for the six months ended September 30, 2000. The company's operating results as measured by loss before reorganization costs, income taxes, cumulative effect of change in accounting principle and extraordinary gain improved by $18.5 million to a loss of $8.1 million in the six months ended September 30, 2001 from the results for the six month period ended September 30, 2000. The sequential improvement in operating results is related to increases in gross profits realized as a percentage of sales and lower administrative expenses that declined by nearly $8 million, or nearly 25 percent, in the six month period ended September 30, 2001. The improvements in gross profit as a percentage of sales are realized from improved material margin and lower processing expenses. Administrative expenses continue to decline and represent a significant benefit associated with integration activities implemented by the company.


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