The Company's net loss for the quarter ended March 31, 2009 was $3.6 million or $0.10 per share (on a diluted basis) on sales of $53.3 million, compared to net income of $6.1 million or $0.19 per share (on a diluted basis) on sales of $170.5 million for the quarter ended March 31, 2008, a decrease in sales of $117.2 million over the same quarter 2008 results. Operating income for the 2009 First Quarter was $215,000, compared to $13.1 million for the prior year quarter.

The Company had previously announced repayments of outstanding term loans in the aggregate amount of $15.2 million during the First Quarter, with additional reductions of another $5 million already closed and up to $10 million more scheduled to occur, both in the Second Quarter.

Sequential Quarter Comparison

Compared sequentially with the Fourth Quarter of 2008, operating performance improved substantially:

 --  First Quarter 2009 operating income was $215,000, compared to a loss     of $19.6 million before impairment and inventory write-downs. --  First Quarter 2009 EBITDA was $3.8 million, compared to negative     EBITDA of $29.2 million before impairment. --  First Quarter 2009 unit volumes shipped increased by 25% for ferrous     scrap and 26% for non-ferrous scrap. --  Lead product shipments in the seasonally busy quarter were up by 39%.      

Overall, First Quarter 2009 sales slipped to $53.3 million, a 17% decline from $64.5 million in the 2008 Fourth Quarter. Shipments of Platinum Group Metals ("PGM") substrates were down by 34%.

Cost reduction initiatives in the just-completed quarter, primarily in wages, benefits and administrative costs, realized $2.5 million of savings compared to the Fourth Quarter of 2008. First Quarter metal margins improved substantially, in part related to stabilized metal prices, and a 25% increase in units shipped as compared to the Fourth Quarter of 2008, which was impacted by pricing erosion and depressed unit volumes.

Prior Year's First Quarter Comparison

 --  First Quarter sales decreased $117.2 million to $53.3 million in 2009     compared to $170.5 million in the prior year's First Quarter. --  Operating income for the quarter was $215,000, compared to operating     income of $13.1 million for the quarter ended March 31, 2008. --  Loss from continuing operations of $0.10 per diluted share for the     First Quarter of 2009 compared to income of $0.20 per share in the prior     year's First Quarter. --  EBITDA (as defined below) decreased $12.0 million to $3.8 million for     the quarter ended March 31, 2009 compared to $15.8 million in the prior     year's First Quarter.      

Metalico's Scrap Metal segment experienced quarter-over-quarter unit volume decreases of approximately 21% for ferrous, 38% for non-ferrous and 70% for PGMs. The Lead Fabrication segment saw an increase in volume of 2% quarter-over-quarter. Average metal selling prices decreased 33% for ferrous metals, 51% for non-ferrous metals, 61% for PGMs and 47% for lead fabricated products.

Excluding corporate overhead charges, the Company's Lead Fabrication segment reported $599,000 in operating income compared to an operating loss of $1.9 million in the prior year period. The Company's Scrap Metal segment reported $1.3 million in operating income in the First Quarter compared to $17.8 million in operating income for the same period last year.

Commenting on the results for the quarter, Carlos E. Agueero, Metalico's President and Chief Executive Officer, said, "We continue to be buffeted by the effects of the recession and weak demand in the domestic economy. However, demand and pricing for exported scrap metal is strong so we have accelerated our efforts at selling both non-ferrous and ferrous directly and through third parties into the export market. That trend has continued into the Second Quarter with emphasis on ferrous grades of scrap.

"We are also satisfied with the contribution from our lead fabricating segment despite generally lackluster demand domestically in many of the markets that it serves. Conversely, we continue to be disappointed with the performance of the Platinum Group Metals which, despite some recovery in metals prices, has not translated into sufficient volume recovery to achieve a positive contribution."

He added, "We are focused on cost and debt reduction and sales in the export markets. Our immediate goal is to position Metalico to take advantage of the recovery when it comes."

Shareholders Equity and Debt

Metalico's outstanding debt decreased to approximately $169.5 million as of March 31, 2009 from $184.7 million at December 31, 2008, a reduction of $15.2 million, largely from repayment of principal outstanding under the Company's institutional financing agreements.

The Company recently announced a two-tranche exchange of unsecured notes for common stock that reduced outstanding debt by $5 million in April. The second $5 million tranche is scheduled to occur, if conditions permit, in June. Metalico is also scheduled to make a $5 million payment on its institutional term debt later this month. The Company had $46.2 million cash on hand as of March 31, 2009 and net working capital of $67.3 million.

Shareholders' equity decreased by 3% or $3.0 million to $110.0 million as of March 31, 2009, from $113.0 million as of December 31, 2008.

As of March 31, 2009, Metalico had 36,426,654 common shares issued and outstanding. The Company has no outstanding preferred stock.

Metalico operates in the highly cyclical and volatile commodity metals universe, made even more difficult by the current challenging economic and capital market conditions. The Company's core business strategy emphasizes balanced growth of the ferrous and non-ferrous Scrap Metal Recycling business through acquisitions or new facility development in existing and new markets.