The Company's net income for the quarter ended September 30, 2009 was $5.1 million or $.12 per share (on a diluted basis) on sales of $91.5 million, compared to net income of $1.1 million or $.03 per share (on a diluted basis) on sales of $62.3 million for the quarter ended June 30, 2009.

Results for the quarter were positively impacted by a $3.0 million gain on debt extinguishment and a $613,000 gain for a fair value adjustment on financial instruments, resulting in a combined net after-tax benefit of $2.7 million or $.06 per diluted share. Operating income for the 2009 Third Quarter increased sequentially by 175% to $7.7 million, compared to $2.8 million for the Second Quarter of 2009.

For the quarter ended September 30, 2008, the Company earned net income of $9.7 million (including an $8.2 million non-cash fair value adjustment), or $.25 per share (on a diluted basis), on sales of $288.0 million, for a decrease in sales of $196.5 million in the same quarter for 2009. Operating income for the 2008 Third Quarter was $6.7 million.

As of September 30, Metalico had lowered its debt by $68.2 million in 2009, reducing its annualized interest expense by approximately $6.9 million. The Company had previously announced repayments of outstanding term loans in the aggregate amount of $37.5 million through June 30, 2009, with additional reductions of $30.7 million in the Third Quarter from repayments of debt and exchanges of outstanding debt for equity. These reductions included debt of $36.5 million accruing interest at a rate of 14% per annum and $18.4 million accruing interest at 7%.

Sequential Quarter Comparison

Compared sequentially with the Second Quarter of 2009, operating performance improved substantially:

--  Third Quarter 2009 sales increased 47% to $91.5 million from $62.3
    million.
--  Third Quarter 2009 operating income increased by 175% or $7.7 million,
    compared to $2.8 million.
--  Third Quarter 2009 EBITDA (as defined below) increased 77% to $11.3
    million, compared to EBITDA of $6.4 million.
--  Third Quarter 2009 unit volumes shipped increased by 43% to 105,300
    gross tons for ferrous scrap and 34% to 27.3 million pounds for non-ferrous
    scrap.
--  Average ferrous selling price was $269 per gross ton compared to $205
    per gross ton.
--  Average non-ferrous selling price was $.98 per pound compared to $.83
    per pound.
--  Shipments of Platinum Group Metals ("PGM") substrates increased by
    76%.
--  Lead product shipments were down by 4.4 million pounds or 23%,
    primarily due to reduced shot sales.
    

Third Quarter metal margins improved substantially, in part related to stronger scrap metal prices and increased units shipped as compared to the Second Quarter of 2009.

Metalico has traditionally used an EBITDA performance benchmark of 10% or more for its operations or for companies under review for acquisitions. In the Third Quarter of 2009 the Company realized an EBITDA margin of 12.3% as compared to 10.3% and 7.1% for the Second Quarter and First Quarter of 2009, respectively. The EBITDA margin for the Third Quarter of 2008 by comparison was 3.7% of sales.

Prior Year's Third Quarter Comparison

--  Third Quarter 2009 sales decreased 68% to $91.5 million, compared to
    $288.0 million in the quarter ended September 30, 2008.
--  Operating income for the quarter increased 15% to $7.7 million,
    compared to operating income of $6.7 million.
--  Income from continuing operations decreased to $.12 per diluted share
    compared to income of $.25 per diluted share.
--  Excluding this quarter's gain of $3.0 million from debt extinguishment
    and $613,000 in non-cash fair value adjustments, income from continuing
    operations was $.06 per diluted share, unchanged compared to $.06 per
    diluted share before the impact of a non-cash fair value adjustment that
    added $8.3 million or $.19 per share last year.
--  EBITDA increased 7% to $11.3 million compared to $10.6 million.
    

In the 2009 Third Quarter, Metalico's Scrap Metal segment experienced year-over-year unit volume decreases of approximately 32% for ferrous, 35% for non-ferrous and 74% for PGM's while the Lead Fabricating segment saw volume remain relatively unchanged. Average metal selling prices decreased 50% for ferrous metals, 28% for non-ferrous metals, 40% for PGM's and 24% for lead fabricated products.

Excluding Corporate overhead charges, the Company's Lead Fabricating segment reported $1.0 million in operating income compared to an operating loss of $818,000 in the prior-year period. The Company's Scrap Metal segment reported $10.0 million in operating income in the Third Quarter compared to $8.7 million in operating income for the same period last year.

The Company's Hypercat manufacturing operation, which was a virtual start-up when acquired in 2007, became profitable during the Second Quarter. It continued strong product shipments and had an encouraging backlog of orders through the Third Quarter and into the Fourth. Hypercat applies PGM's in solution to ceramic and metallic converters for industrial pollution control applications and for the replacement automotive catalytic converter market.

Nine-Month Results

For the first nine months of 2009, the Company reported net income of $2.6 million or $.07 per diluted share. Net income for the corresponding 2008 period was $23.8 million or $.66 per diluted share.

Nine-month 2009 sales were $207.1 million compared with $753.7 million for the prior year. Shipments for the nine months, including acquisitions, were down 36% for ferrous, 39% for non-ferrous (including lead), and 76% for PGM's. The steep reduction in shipments and sales was partly attributable to the severe decline in the world economy and specifically in the steel and automotive related industries.

Carlos Agueero, Metalico's President and Chief Executive Officer, stated, "We are very satisfied with our Third Quarter results, particularly in light of continued weak economic conditions. All of our operations enjoyed increases in metal shipments and improvement in selling prices during the quarter.

"Our PGM business experienced significantly higher intake and shipments over the Second Quarter which has carried over into the Fourth Quarter," he continued. "The average ferrous scrap selling prices of $269 a gross ton was the highest for the Company since last year. Our average realized selling price of $.98 per pound for non-ferrous shipments was also the highest for the year. However, as we expected, Lead Fabricating results were still positive but lower than in the seasonably strong Second Quarter of 2009."

He added, "Ferrous market conditions and Lead Fabricating operations will likely remain weak for the remainder of the year. The PGM business, which along with non-ferrous scrap metal recycling represented 50% of our consolidated Third Quarter revenue, has stayed firm.