Metalico CEO Discusses Q2 2013 Results - Earnings Call Transcript

Aug. 9.13 | About: Metalico, Inc (MEA)

Metalico, Inc. (NYSEMKT:MEA)

Q2 2013 Earnings Call

August 9, 2013 10:00 AM ET

Executives

Carlos Agüero - President and CEO

Analysts

Brent Thielman – D.A. Davidson

Robert Manning – Private Investor

Scott Huntington – Bodell Overcash

Victor Simonte - Hudson Bay Capital

Dan Snyder - Private Investor (ph)

Operator

Good morning. My name is Vanessa and I will be your conference facilitator. At this time I would like to welcome everyone to the Metalico 2013 Second Quarter Results Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. I would like to remind you that today’s call is being recorded for transcription purposes. The purpose of today’s call is to discuss the results of the Company’s operations for the quarter ended June 30, 2013.

Earlier today Metalico issued a Press Release announcing second quarter results and filed a report on Form 8-K in connection with the release. The company is scheduled to file its quarterly report on Form 10-K for the period ending June 30, 2013 shortly. You can access copies of Metalico’s filings through the SEC’s Edgar online files or directly through the Company’s website at www.metalico.com. Just log on to the website, click on Investors at the top of the home page and then click on SEC filings in the left column. Then click to download the report. Metalico’s filings are also available at the SEC’s website at www.sec.gov.

In addition, an audio replay of the call will also be available at 888-843-7419 or at 630-652-3042 for the first week after the call’s conclusion. To access the recording callers will be required to enter the conference identification number of 35356820.

As is customary, let me reiterate the Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995. The following discussion contains forward-looking statements that are subject to risks and uncertainties including those risks set forth in Metalico’s filings with the SEC. These risks could cause actual results for the current period and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of the company. We refer you to Metalico’s periodic reports that are filed from time to time with the SEC. For a more detailed discussion of forward-looking statement and a discussion of the factors that could cause results to differ materially from the discussion today, please refer to the risk factor discussion in Metalico’s Annual Report on Form 10-K for 2012 which is also available online.

In addition, during the course of the conference call certain non-GAAP financial measures may be described which should be considered in addition to and not in lieu of comparable GAAP financial measures. The company has provided reconciliations of these non-GAAP measures to what it believes are most directly comparable GAAP measures in the earnings release.

Thank you. Ladies and gentlemen, I would not like to turn the call over to Mr. Carlos Agüero, President and Chief Executive Officer of Metalico.

Carlos Agüero

Welcome, and thank you for joining us today. With me here today is Kevin Whalen, our Senior Vice President and Chief Financial Officer. Michael Drury, our Vice President and Chief Operating Officer is travelling. So he will not be on the call with us today. Following my remarks we will be available for questions. We will also post a transcript of our remarks along with the question-and-answer session on the website when the transcript becomes available after this call.

As reported earlier this morning second quarter was challenging and difficult. Like many of our peers in the scrap and recycling industry we are experiencing pressured margins particularly on ferrous scrap metal, while our lead fabricating segment performed well and we see encouraging signs of recovery and long term progress there.

Before we get to specifics I want to remind you that earlier this year we combined PGM and Minor Metals recycling with Scrap Metal Recycling segment to reduce our three operating segments down to two, Scrap Metal Recycling and Fabrication. Any previously reported numbers discussed today and in the press release have been adjusted to reflect this change.

The Company has previously commented on anticipated volatility in commodity prices and competitor pressures for sourcing Scrap at acceptable margins. Although we have seen some improvement in the flow of scrap into our yard, material is still being bid up aggressively by buyers. Our results in the first half are evidence of this.

Although the third quarter has started out better, these growth conditions may persist until second half. Having said that we remain confident in our ability to navigate through these tough times. We continue to believe in the long term viability of our company and the scrap industry.

Now let’s go over some particulars of the second quarter. As anticipated scrap selling prices softened during the period, especially ferrous scrap which we sold at an average price of $50 per gross ton less than what we did last year’s Q2. Sequential ferrous selling prices continue to drop during the quarter but rose somewhat going into July. We shipped a 136,000 gross tons this quarter with a drop of 3% from last year and so far this year we have shipped in excess of 279,000 gross tons of ferrous products which represents 45% of our total scrap sales.

Our non-ferrous average selling price was also down by $0.09 to $0.92 per pound as a result of lower commodity prices and a slight change in mix. Overall, unit's volumes remain flat however at just over 44 million pounds for the quarter and 90 million pounds for the six months period.

In the quarter Scrap Metal Recycling suffered an operating loss before corporate overhead of $1.4 million. The lead fabricating segment completed another good quarter with operating income of $1.4 million before corporate overhead, compared to $1.2 million in the same period last year. The change in product mix towards higher value products led to improved average selling price.

Quarter-over-quarter volumes sold fell 6% to 11.7 million pounds, but were offset by average selling price per pound which rose 10% to $1.69 from a $1.54 a pound. We anticipate the lead fabricating segment will continue to perform well.

Company wise we remain focused on operating efficiencies and cost controls and reducing overhead while we endeavor hard to improve metal margins. The reduced operating cost and SG&A expense is also down, largely due to automating administrator functions and we will continue looking for opportunities to improve our cost structure.

In our release issued earlier this morning, we detailed year-over-year second quarter financial statement and volume comparisons reflecting lower performance for the reasons discussed. I won’t repeat the details again but instead provide some highlights and refer you both to the release and our Form 10-Q for the quarter which we expect to file later today.

Let’s go over some comparisons of the second quarter to the first quarter. Sales fell 6% to a $130 million from a $138 million. Operating loss of $2 million compared to the operating income of $611,000. Net loss widened to 2.7 from 1.2 in the prior period. Loss per share increased to $0.06 compared to loss of $0.02 per share.

EBITDA dropped to $2.7 million from $5.5 million. Unit volume shipped felt by 5% for ferrous scrap and 2% for non-ferrous scrap. Lead product shipment as we said earlier increased by 10% to 11.7 million pounds from 7.6 million.

Let’s go over some balance sheet highlights now. At June 30, outstanding debt was down $6.5 million to $123.5 million from $130 million at December 31. The decrease resulted from principal payments and reduced borrowings under the Company's revolving credit facility. Basically our debt is made up of three components; outstanding under revolver, which is at $33 million, convertible notes of $69 million and equipment and acquisition term loans of approximately $21 million.

As a result of reclassification of the Company’s senior credit facility to short term due to its 2014 potential maturity, our reported working capital at June 30 was $10.6 million versus the first quarter's $79 million. However, the remaining availability under the revolver even with our outstanding balance stood at $39 million yesterday, providing more than adequate liquidity for our needs.

Despite the loss, Metalico is cash-flow neutral on a year to date basis. We remain optimistic about successfully refinancing our convertible notes and extending our credit facility to 2017 as provided in the amended credit agreement.

During the quarter, the company amended certain provision in our revolving credit agreement. We reduced the overall size of the facility from 110 million to 90 million and we’ll now calculate covenant compliance based upon availability measurements driven by (inaudible) accounts receivable and inventory collateral values rather than a coverage ratio.

The amended volume format is more appropriate for operating our business in the current environment. During the two previous years Metalico benefited from significant capital investments for growth and replacement of material handling equipment. As a result of these investments we have planned to dial back major expenditures during 2013 to conserve capital, and we can limit expenditures to normal replacement of existing equipment and making opportunistic new business investments to strengthen our platform.

In order to lower our debt and reduce leverage Metalico has reviewed its operations to determine which are non-core or where we have less than optimal competitive market presence to see which are potential candidates for divestiture. Although the process is still in an early stage, we are pursuing discussion with potentially interested buyers for the operations that fit these criteria. We will keep shareholders informed of developments as they occur.

Before I start on our business outlook, I want to once again remind listeners of our policy and guidance and forward-looking statements. Metalico’s long standing policy is not to provide guidance and earnings estimates. Nothing we say today should be interpreted as earnings guidance.

Scrap recycling industry is highly cyclical and commodity metal prices can be volatile and fluctuate widely. We’ve consistently stated that the earnings estimates could prove to be unreliable because of unpredictability and potential magnitude of commodity price swings and the related effect of scrap volume purchases and shipments.

Moving on now for an outlook and some commentary our industry. The U.S. economy continues to improve gradually and demand for steel is recovering. Particularly, demand for our automotive steel and oil and gas industry tubing is certainly growing. But domestic builds are not benefiting as expected. The proof is that steel production is down 5% so far this year compared to last year and order books at the mills are slow.

The domestic steel industry is plagued by an influx of competing imported steel products which ultimately decreases scrap metal demand by the U.S. steel mills. We expect that the U.S. will be successful in reducing imports when and if the anti-dumping trade cases that have been filed by industry are won. If so, then less steel import should create demand for more scrap.

Meanwhile, our outlook for the second half for year reflects expectations of continued moderate economic improvement in the manufacturing and industrial sectors. Manufacturing has shown slow progress, except for automotive manufacturing which is doing exceptionally well in shipped (ph).

Looking at the industry by metal product, let’s start with it ferrous. Sluggish demand from exporters and an oversupplied domestic shred market have impacted the price gains achieved in July of 2013 and are expected to remain soft going into the third and fourth quarter. Steel industry capacity utilization is expected to fluctuate within the 75% to 79% range through year-end, dampened by the competition from imported steel products that we mentioned earlier.

Scrap availability, although still under significant competitive pressure, is adequate and appears currently driven by seasonal upswings in demolition activity, along with the supply of more cars being scrapped and replaced by surge of new vehicle sales.

Our non-ferrous including aluminum de-ox, not surprisingly price of aluminum, copper, nickel and lead have remained under pressure due to lackluster Chinese demand, also dampened investor interest, a strong U.S. dollar and, with the exception of the automotive sector, a sluggish overall construction and manufacturing recovery in North America. De-ox demand and pricing is expected to remain unimpressive at comparable levels to those during the first half of the year and demand should follow industry capacity utilization.

The prices of platinum group and minor metals have been trending lower during Q2 and into Q3 but based on rising demand for PGM's from auto manufacturers and a stabilizing minor metal market, the second half could show improvement in metal demand and possibly support related commodity prices.

For Lead Fabricating Metalico expects continued steady to slightly improving demand in its markets served and the products which it sells. The supply and pricing of scrap and refined lead for raw materials is expected to be more than adequate to meet the Company's need for the remainder of the year.

And with that, that covers all of the areas and products that we are engaged in. So, in conclusion before we move on to questions, I’d like to extend my appreciation to our suppliers, our consumers for their business. I also want to thank all of our employers, employees and managers for their efforts and their commitment to the company and of course I want to thank all our shareholders for their continued support for Metalico.

This concludes our prepared comments. Operator we're ready for questions.

Question-and-Answer Session

Operator

We will now begin the question and answer session. (Operator Instructions). And we have our first question from Brent Thielman with D.A. Davidson.

Brent Thielman – D.A. Davidson

The lead business has been a nice consistently profitable business for you. And I am curious any new product initiatives or market verticals you are exploring there. And has your strategy shifted at all yet in terms of could we see some more capital deployed toward that business?

Carlos Agüero

On new product initiatives, we’re constantly obviously have our sales people looking out for new opportunities and we are working on a couple of things that are not final at this point, but we have a couple of things in the works. As far as new capital invested in the business, there is always the maintenance requirements and there will be some more need for growth capital there for the next let's say six months to a year or so. But for the most part over the last few years we have made significant investments in capital expenditures there and for the most part all the equipment is newer and modern and up to date and highly productive. So we don't expect to have any significant capital expenditures other than if we enter into a new product line where we might need to spend some capital. But it won't be anything significant that's on the horizon.

Brent Thielman – D.A. Davidson

And Carlos if there were sort of two or three areas of markets that could give that business a little more of the boost in terms of contributions, what would those be?

Carlos Agüero

Well housing and construction market would certainly help. Also the area of healthcare construction, which in the housing boom is going on, and the economy was growing. There were a lot of new clinics and hospitals and add-ons being built out to these local healthcare centers, community healthcare centers. So I would say primarily going back to a more active construction and housing and development of that type of healthcare type industry growth.

Brent Thielman – D.A. Davidson

And then switching gears to kind of the scrap business, are you seeing any changes to sort of the competitive landscape in recycling within sort of the regions you operate or is everyone sort of still grinding it out to this market and same sort of players. And then on top of that are you seeing any consolidation within the region kind of pick up?

Carlos Agüero

There are some signs and I think we may have commented this a little bit earlier in the year that there have been a few companies that have re-evaluated their needs and have shut down some yards. In our areas and outside of our areas there have been a few shutters that have been idle. In fact one was recently idled in our Buffalo market. So we should be able to and we’re seeing a significant increase flow of material there. I think that the trend of change and consolidation and efficiency in eliminating excess capacity is on everybody's mind and that people are trying to work their way through it. It is early in that process but I do not think it has begun and I think that it will continue and hopefully will gain more momentum and the supply and demand aspects of the industry will become more balanced than they have been over the last couple of years but we have also seen. I think we commented just in the prepared remarks somewhat of a pickup in the flow of scrap into the yards, which is certainly very helpful. So, I think that process has begun and picked up momentum. It's going to improve things and I believe will be able to see some of the benefits of that.

Brent Thielman – D.A. Davidson

Do you think that improvement in flows is a function of maybe some rationalization in the industry or just sort of a better economy here, any thoughts on that?

Carlos Agüero

I think it’s a combination of both. I think both are impacting it. Certainly, when you think about new car sales, that’s helping a lot because for the most part when new cars are sold, you go down to the chain of supply and someone jumping across somewhere along the line and so there has been an increased flow there. So yes, I think the economy is defiantly helping and I think people are getting a little bit more rational and hopefully we will get some of this over capacity in the industry behind this over the next few months or couple of years.

Brent Thielman – D.A. Davidson

That’s encouraging and just last one from me, can you provide me kind of where you are within the debt refinancing process and then are you able to elaborate on kind of what the non-core assets you are talking about are and what you are exploring there?

Carlos Agüero

First on the assets we are looking we are looking at, our long term policy is to really not comment until things are done and not try to lead anybody on to speculate as to what might or might not be done. So I would leave it that it would be non-core areas where we have less than prominent market presence and we won’t comment on specific locations or assets.

As far as the debt refinance, we continue to look at different options for that and certainly as the time goes on will be getting closer and closer, getting something done but we are actively engaged in that process and it’s an important high priority item for us and so we definitely putting the attention that requires and deserves and we should be able to get something reported here and hopefully before the end of the year.

Operator

Our next question comes from Robert Manning, who is a private investor. Please go ahead sir.

Robert Manning – Private Investor

Could you comment on whether the continuing weakness makes it more or less likely to be able to get some joint ventures done relating to another way to rationalize capacity?

Carlos Agüero

Yes, I can say that certainly one of the options Robert that joint ventures or things of that nature are still very much viable options but they have to make economic sense for both sides in order for that to progress and as we have noticed, although the trend is underway to have some of these rationalization completed, it never moves at a fast enough pace or the pace you would expect it to move but certainly I still believe that there are things that make sense for us and obviously they may be folks on the line or on this call that have an interest in things that we are looking and I would be careful to comment much more other than to say that we certainly are looking at all the different options, exploring to see what's best for us and each market is different. We have to view it from a different standpoint and we will continue to chug along and work to try to get the ultimate result which is refinancing debt, lowering leveraging, reducing debt and being able to better prepared to operate it in tough times and that requires having to worry less about a debt maturity of any kind.

So we will continue working on all fronts, the debt refinance, any joint ventures or any acquisitions. We completed a couple of small but yet highly strategic acquisition so far this year. We are looking at a couple of more. So it’s not just a matter of joint ventures or divestitures. Is also strengthening markets where you already operate and we have seen a couple of very interesting opportunities that we are going to be pursuing. So you have to attack it from all fronts, not just from one particular front.

Robert Manning – Private Investor

Could you comment at all on the size of the recent two tuck-ins?

Carlos Agüero

They are not huge but they are strategic as to how they fair. One of them obviously will serve our Pittsburg market. It has become a buying center, feeder center for it and we see the volume of that growing. But not so much what the size was at the day that we acquired it. It’s really the potential that it brings for added volume, for growth, for expansion, for new accounts and that’s really the more important element is that we're trying to be very opportunistic in what we go after and go after things that have a high potential for growth. And so I would leave it at that we are pleased with what we picked up. We’re happy at the values that we got them, and we’re even more excited about the opportunities for growing those assets very quickly in those markets and we are doing that as we speak.

Operator

(Operator Instructions) We now have a question from Scott Huntington with Bodell Overcash. Please go ahead.

Scott Huntington – Bodell Overcash

Yes Carlos, we have gone over this insurance bit in the past. I am just wondering about Rochester. Everything that occurred there, is it covered? Of course we haven’t seen the 10-Q yet to find out what is cooking there. But as far as insurance for a possibly business interruption and the damage that might have occurred at the facility?

Carlos Agüero

I am not quite sure, I know what you are referring to. The only thing that I could think of is that we had a very small outdoor fire in our Syracuse facility in the month of June, which was minor-minor damage and minor disruption and not much of an issue. In Rochester we obviously had a situation last year which was a very unfortunate one, with an employee fatality which has been dealt with and insurance; two years ago, actually not last year, two years ago. But since that time, I obviously don’t know why you were referring to Rochester. Maybe it’s the Syracuse fire that you’re referring to where a pile of tins caught fire and was put out within an hour or two. Is that what you’re referring?

Scott Huntington – Bodell Overcash

That was the additional fire that was there and how about answering what the other three incidences. Whether insurance covered on those?

Carlos Agüero

Again, I don’t know what incidences you are referring to. Other than that Syracuse fire, we had a failure on a piece of equipment in our Buffalo Shredder which took us down for a week and that obviously we are pursuing insurance claims on that but that wasn’t anything significant or catastrophic. We worked extra hours and made up the time when we came back on line after we repaired the equipment problem.

So again, I wish I could answer question but you have to give me specifics of what you are referring to. I don’t know if maybe you picked up some information on someone spreading a rumor that it doesn’t have a foundation. I really don’t know what you are talking about. I try to address it from we know inside the company. Anything else, I don’t know where it could be coming from.

Scott Huntington – Bodell Overcash

I think it came from the Rochester Democrat and Chronicle.

Carlos Agüero

Well, again I can tell you there is nothing that we have suffered damage for in Rochester of any significance. We have had no catastrophic failure there. We have had no major insurance claims there. In fact the operation going there quite well.

Scott Huntington – Bodell Overcash

That’s a good question; it was April 16, 2013. So you know.

Carlos Agüero

Well I have to look it up and see because…

Scott Huntington – Bodell Overcash

At least I'd hope so.

Carlos Agüero

Don’t believe everything you read because sometimes the facts don’t get reported correctly but we’ll have to go back and see what you are referring to but I am sitting in a room with a couple of our other people and everybody shaking their heads. We can’t imagine what that could be referring to.

Operator

And we have no further questions at this time. I will now turn the call back over to Mr. Carlos Agüero for closing remarks.

Carlos Agüero

So what we normally do is we give folks about a minute of time to determine whether they want to ask any further questions and if there are we'll address them and if we do not get any further question then we will just conclude the call on that basis but why don’t we start the clock running for that 60 second time and see if anyone else wants to ask something, and if not we will conclude the call.

Operator

And thank you. I do apologize. And in fact we do have two questions in queue. We have a question from Mr. Steven (inaudible) with Bank of America.

Unidentified Analyst

I am actually a Private Investor, not affiliated with Bank of America. Now, I had a question. You mentioning all this debt that became short term and my question is you mentioned that you considering all the other options but what exactly are the options?

Carlos Agüero

The options are to refinance it by issuing new debt which would normally be four or five year's debt instrument. The option is to sell some assets and use the proceeds to pay down some of the debt, which is certainly a very good option for some of it. It won't handle all of it. It's also to be able to take the existing debt and exchange it for a new debt of a different maturity with different provision. It’s a really a number of different things. I don’t expect that any one of them will solve all of the refinancing requirements but it will be a combination of more than one thing.

Unidentified Analyst

Issuing more stock an option as well?

Carlos Agüero

Not really. That would be the last option. Certainly, that is always an option but certainly that’s the least desirable option of all of the ones that’s are on the table.

Unidentified Analyst

Yes I agree with that, but at the same time if you refinance considering the current working capital, as well as your recent operating cash flows, wouldn’t refinancing also be very expensive as well as well as having many restrictions.

Carlos Agüero

It depends how much you refinance versus how much you pay off and depends who your refinancing partner is as to what restrictions that it will have. All the different lenders have different requirements. Some people lend on collateral value, some people lend on cash flow, some people lend short term, some people lend long term. So it's hard to speculate and answer where it's going to be, but the answer to your question is, obviously it's a combination of all the factors that I outlined and it’s something that will take a while to get the right combination of things to keep the cost at the absolute minimum and to preserve as much of the shareholder value in the process as is possible.

Unidentified analyst

And just a follow up, which is I guess relevant to this as well. If you're selling some of the assets and even if you don't sell some of the assets, I still see a significant amount of goodwill on the balance sheet as well as other intangible assets and I notice for 2012 you had a write down of the goodwill. Expecting another significant write down for this year?

Carlos Agüero

Well, if we do not see a recovery in the performance we will probably be facing some sort of a goodwill, non-cash, writ impairment charge probably going forward either the third quarter or fourth quarter depending on what the numbers look like, but again there'll be a non-cash charge.

Look, in some countries the accounting provisions are that when you make an acquisition you write off the goodwill right from the beginning. The U.S. has a different approach that you keep measuring whether that goodwill still should be on the books or not and periodically adjusted if there's been a change in business conditions. But again the important thing is that despite having a difficult year and not having made money so far this year, that we are cash flow neutral so far operationally in the year and we have significant working available capital to run the business and those things are what matter today, while we work through all the other issues.

Unidentified analyst

I agree on the whole, hopefully you guys are able to refinance. I've been a shareholder for many years now and I would like to see the company improve.

Carlos Agüero

So would I and so would everybody in this room and I think all our shareholders share that sentiment and we certainly will work our hardest to try to get that accomplished. Did that answer your question?

I just want to go back before we take the next question and answer Scott Huntington's question on insurance in Rochester. We had a couple of moments to go back and search in our records the April 16th event and now what we find is that there were some drums in one of our warehouse that had ignited and caught fire, and damaged I think a wall in one of the buildings inside the warehouse. There was no significant damage to any valuable property. We just basically had to rebuild the wall and maybe fix a small part of the roof. It was an immaterial cost, no one was hurt, it was a spontaneous combustion type of a thing on magnesium contained in storage and Scott, if you're still on the call this is what you're probably referring to on April 16th at 5 pm, and again there was no damage, no significant cost, no significant insurance claim. I hope that answers your question.

Operator

We now have a question from Victor Simonte with Hudson Bay Capital. Please go ahead

Victor Simonte - Hudson Bay Capital

Just a quick question, I know you didn’t release oil price paid for Segel & Son's acquisition. Just wondering if you can give a little color on (inaudible) was it stock or you just kind of pay cash for working capital.

Carlos Agüero

Cash,

Victor Simonte - Hudson Bay Capital

Cash?

Carlos Agüero

Absolutely. No stock.

Operator

I do not have any questions at this time. I am standing by for further questions.

Carlos Agüero

All right. Now we’ll cut the time in half and give them 30 seconds and see and hopefully someone will ask a question. If not we’ll let everyone move on with their day.

Operator

And I do see we have a question. It is from Dan Snyder (ph) who is a Private Investor.

Dan Snyder - Private Investor

Carols, our your information on shredders, what percentage of your tonnage is from the shredders versus other grades of scrap?

Carlos Agüero

More than 50%, Dan, is coming out of the shredders from the total scrap sales. I would say it’s probably close to, I don’t have a number right in front of me, it’s probably closer to 60%. That would be the number I would use without having to go back and get an exact calculation. But I believe it was about 75,000 out of 136,000. So that would kind of put it over 50%.

Dan Snyder - Private Investor

And with all the competition for shredders and other companies talking about shutting down shredders, is there any thoughts on Metalico’s side of shutting down the shredder that’s not profitable or are they all profitable? Obviously with the lumpy responses incurred in last year or two something is not profitable and is there any consideration to shutting something down?

Carlos Agüero

On the contrary what we have done, Dan, is to invest and making improvements and work harder to secure more scrap at prices that we can have a margin. So there is no consideration at this time of shutting a shredder down. In fact we've spent fair amount of money in the (inaudible) market, rebuilding that facility and we now have a phase two part that we started getting quotes on to rebuild a non-ferrous part. So we will look to do that next. So rather than shutting down we’re looking to upgrade and improve them to be more competitive. Hope that answers your question.

Operator

And I am standing by for further questions. We have none in the queue at this time.

Carlos Agüero

Very good. So on that note, we will conclude the call. I want to thank everyone for joining us today and certainly for your interest in Metalico and the questions and the results and developments. We look forward to speaking with you once again in early November when we present the third quarter results. And for now farewell, have a good day, and we’ll talk to you soon. Thank you very much.

Operator

And, thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating.

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