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Metal Management Inc. (NYSE:MM)

F3Q08 Earnings Call

February 6, 2008 11:00 am ET

Executives

Daniel W. Dienst – Chairman, President, and Chief Executive Officer

Robert Larry - Executive Vice President of Finance, Chief Financial Officer, and Treasurer

Analysts

Sal Tharani - Goldman Sachs

John Rogers - D.A. Davidson

Eric Glover - Canaccord Adams

Bob Richard - Longbow Research

Operator

Good morning, ladies and gentlemen and welcome to the Metal Management, Inc. third quarter of fiscal 2008 conference call. On the call today are Daniel W. Dienst, Chairman, President, and Chief Executive Officer and Robert Larry, Chief Financial Officer. Before we begin, let me remind you that we may discuss on the call forward-looking statements concerning operating performance and future developments in the company’s business or industry or in the economy generally and actual results might differ materially from those projected in forward-looking statements. Factors that have caused results to differ materially from those in the forward-looking statements are described in the risk factor section of the company’s annual report on Form 10-K for the fiscal 2007 as modified in the company’s quarterly reports filed on Form 10-Q and in the forward-looking statements language included in the SEC filings for Metal Management, Inc. including its quarterly reports filed on Form 10-Q and as summarized in the earnings release issued this morning. The company’s earnings release reported its third quarter fiscal 2008 results was filed with the SEC today and this document and the company’s other SEC filings are available on its website at www.mtlm.com. I would now like to turn the call over to Mr. Dienst. Please proceed sir.

Daniel W. Dienst

Thank you, operator. Good morning and welcome to this morning’s call and webcast. We would like to thank everyone for joining us this morning to hear Metal Management’s results for our third quarter of fiscal 2008 which ended December 31, 2007. On the call with me, as usual, is Rob Larry, our Chief Financial Officer. I’ll provide an overview of our performance before turning the call over to Rob to go through the financial results then I’ll make some closing remarks before we go into Q & A, as time permits.

First, I’d like to take a moment to express our gratitude to the men and women of Metal Management, many of whom are employee owners. Every quarter we use this public forum to thank them for their operational excellence, their keen focus on safety, and their unwavering support of Metal Management. Every quarter they answer the call and while the numbers on their face may not immediately make it clear, this quarter was no different. So, to the 2,000+ Metal Management employees, we once again thank you for your dedication to operating safely, serving our customers and consumers, and delivering the best financial results that economic conditions will allow.

This call is somewhat remarkable in that it may be the last reporting period for a stand-alone Metal Management. The men and women of Metal Management have accomplished great things together over the past few years and while it sounds like a cliché, we’ve only just begun.

A quarter-to-quarter time frame is a somewhat artificial measurement of success to any business particularly for an industry that expanses rapid changes in markets like ours. Indeed, I would suggest that the past few years should be viewed similarly. Internally, we joked about what have you done for me tomorrow. Indeed, our employees know that it’s not about what we did yesterday but what we’re going to do tomorrow. We expect that the eyes of the global scrap and securities markets will soon be fixed upon the men and women of both Sims and Metal Management and I have every belief that we will collectively far exceed any expectations that could be put upon us.

Now, let me turn to the third quarter, a quarter we will not so affectionally label a research analyst mid-winter nightmare. Directionally, this morning’s commentary should come as come as no surprise to anyone who had the opportunity to listen to last quarter’s earnings call and those calls of our peers and consumers. In Metal Management’s third fiscal quarter, we faced increased competition for unprocessed scrap and historically high rates in the deep-sea freight market.

As we noted last quarter while we have in the past ceded volume in the discipline pursuit of margin, of late we’ve decided to fight the fight to ensure the market share we have built for ourselves is maintained with an eye towards more generous operating environments, such as the one we now find ourselves in. So while we [fight] like a tighter margins in the December quarter just ended, higher ferrous unit shipments and prices helped us to once again increased the company’s consolidated revenues on a year-over-year basis.

In the third quarter, Metal Management delivered consolidated net sales of $582 million, an increase of over 11% over the same period last year. For the nine months ended December 31, 2007, our consolidated net sales increased a total of 22% to a record $2.0 billion. Yes, that’s a nine month number, up from $1.6 billion in the year ago period.

With respect to volumes during our third fiscal quarter, Metal Management recorded ferrous yard shipments at approximately 1.3 million tons. On the non-ferrous side, we’ve recorded non-ferrous shipments of approximately 117 million pounds. In total, Metal Management brokered a process more than 1.4 million tons of metal in the third quarter. It should also be noted that some conscious decisions or judgment calls regarding the state of the freight market kept us from blowing our brains out on freight at quarter end and we delayed or rolled a near record number of exports from the third quarter into the fourth quarter. EBITDA was $24.5 million and net income was $6.1 million in the three months and Rob will have more details for you on this shortly and will help you bridge the cargo rollover and other significant impacts on those numbers and units.

Let me share a few observations about this peculiar quarter and some significant impacts. I would note that these are observations not excuses. First, as I mentioned several times, we experienced tighter material margins that compressed our earning. You’ve heard a lot about containerization and its impact on the ferrous business but margin compression was particularly evident in our broadly diversified non-product line. We believe that product diversification is more often a blessing rather than a curse but for Q3 it was a rare curse as we got stung on subsets of our non-ferrous product lines, such as specialty metals used in the aerospace manufacturing which should be strong contributors over the past few quarters and years.

We were not immune from the well-publicized production woes of Airbus and Boeing which has rippled through the downstream and upstream aerospace markets, negatively impacting pricing of aerospace related commodities. As a result of lower market prices, we recorded an inventory adjustment of $2.7 million to reduce the carrying value of certain specialty alloys.

As I also just noted, we rolled over five export cargos, four vessels of ferrous scrap metal and one vessel of stainless steel scrap from Q3 to Q4. The revenues and profit associated with these cargos will be recognized in our fourth fiscal quarter. I’m sure we’ll be asked, so let me state this upfront, all cargos but one were consciously rolled that is booked with knowledge that they would likely hit the fourth quarter. One vessel did get delayed in transit by choppy seas, again, an explanation not an excuse. As custodians of your capital and as shareholders ourselves, we have no desire to top tick or overpay the freight market or force tonnage into a lower price domestic market in the name of printing a better quarter.

Another peculiarity which would not be replicated in Q4 relates to our new mega-shredder in New Jersey. As we brought the mega online, we did so cautiously and thus incurred incremental operating expenses as we ran the old machine and the new machine in tandem, what I’d call operating insurance. This incremental expense, approximately close to $1.0 million in Q3, as we double-handed material incurred significant OT and the like. The machine is running very well and now consistently at its rated capacity. Hats off to the men and women in the northeast for building what I consider to be a machine and associated systems without peer from an operational perspective as well as an environmental perspective.

We recognize higher depreciation and amortization expenses in Q3 from recent acquisition in planned investments and while fixed charges, as you know, become recognized immediately upon placement of service the benefits of long-term capital investments take longer to become evident in operating results and they will. As Rob will detail in a few minutes we prudently invested about $45 million into value creating cutbacks in the first nine months in 2008 on our way to approximately $60 million of investment for the full fiscal year 2008.

Finally, we had some significant expenses related to our pending merger with the Sims Group. In light of many of these challenges and distractions I’d like to note to our shareholders that our people did not waver in their commitment to safety. Of all of our accomplishments over the past few years, I am perhaps most proud of the fact that our December 31, 2007 OSHA recordable rate, a federal benchmark for injury rate, is a mere third, yes one-third, of where it stood in 2001. Metal Management worked safer in 2007 than we did in 2006 and 2006 was safer than 2005 and so on. We have undeniable momentum as we head into calendar 2008 as we commit ourselves to making Metal Management an accident-free workplace.

Now back to the quarter just reported where we stand today as we push through our last fiscal quarter. As noted on prior calls with our investors, we have been of the belief that people can and will behave economically irrational only for so long and those with a keen eye on their operating costs and balance sheet will be survivors and the thrivers in this industry. Indeed, after a few quarters of this irrational behavior in the US, some of the challenging conditions we faced in our third quarter are now moderating.

We are now seeing a more rational economic approach to a procurement of unprocessed scrap and this condition is also being further buttressed by a moderation of export freight rates and an increase in ferrous scrap selling prices. All told, we are extremely well positioned as we enter our fourth fiscal quarter. There is a strong belief among my employees that the market owes them some margin in profitability and that they are going to get it back and then some in this last fiscal quarter of the year.

Emotions aside, however, Metal Management continues to general solid results in the face of challenges, exemplifies the discipline and commitment we employ in our daily approach to our business. We have long believed that we can operate successfully no matter what the market may throw at us and resist the urge to sacrifice long-term value creation in the name of short-term gratification, be it profitable results for our shareholders for nearly six years running. That concludes my initial remarks and observations and I’ll turn it over to Rob to go through some of the financial details of our third quarter results.

Robert Larry

Thanks Dan. Good morning to everyone. I’d like to share with you some of Metal Management’s financial highlights from our third fiscal quarter just ended December 31, 2007. Our consolidated net sales were $582 million compared to consolidated net sales of $524 million in the same period a year ago, increase in revenue was approximately 11%. Had the cargos which were reversed in Q3 and the shipments that were intentionally delayed for freight considerations been accomplished in time, our consolidated net sales would have been higher by approximately $80 million and ferrous unit shipments higher by about 180,000 tons and non-ferrous unit shipments higher by about 9 million pounds.

EBITDA for the third quarter was $24.5 million compared to EBITDA of $31.9 million in the year ago period. Had the cargos that were either reversed in Q3 and shipments intentionally delayed for freight consideration been accomplished in time, EBITDA would have been higher by about $7 million in Q3.

Our net income was $6.1 million in our third fiscal quarter or $0.24 per diluted common share as compared to $31.9 million or $0.60 a share of diluted earnings for the same period a year ago. We’d like to note that Metal Management’s results in this quarter just ended include merger expenses aggregating to $747,000 on a pre-tax and after-tax basis, representing about $0.03 per diluted common share of charges.

In addition, and as Dan noted earlier, we did record an inventory adjustment of approximately $2.7 million pre-tax, $1.6 million after-tax or $0.06 per diluted common share to reduce the carrying value of certain specialty alloys to reflect lower market prices.

At the end of the quarter, approximately 1.4 million tons of metal were processed and sold or brokered, including ferrous yard shipments of about 1.3 million tons and non-ferrous yard shipments of approximately 117 million pounds. Had the four cargoes, ferrous cargoes carried in Q3, our ferrous shipments would have been nearly 1.5 million tons in the quarter and had the stainless cargo ship timely, our non-ferrous shipments would have been 126 million pounds in Q3. The average realized price for ferrous yard metals was $304 a ton on the quarter just ended versus $255 a ton in the year ago comparable period. The average realized price of non-ferrous metals in the quarter just ended was approximately $1.39 a pound versus $1.44 a pound in the quarter a year ago.

The company turned its ferrous inventories approximately 11 times and its non-ferrous inventories excluding stainless alloy approximately 10 times in the quarter. Had the four ferrous cargoes been able to be recognized as shipments in Q3 our ferrous turns would have been 12.5 times on a trailing 12-month basis instead of 11 times.

In the third quarter, our effective tax rate was 41%, it was about 39.6% on a year-to-date basis and we expect a full year effective tax rate to be about 40%.

After nine months of fiscal 2008, we’ve invested approximately $45 million in capital projects, the most significant being the completion of the mega-shredder in our Newark, New Jersey plant. That $45 million includes both maintenance as well as growth cutbacks and we currently estimate cutbacks for this fiscal year that we’re in to be about $60 million by the year’s end.

In our third quarter, we paid our thirteenth consecutive quarterly dividend of $0.075 per common share. We’ve not been active in repurchasing shares during our third fiscal quarter but subject to the terms of a merger agreement, the company may repurchase shares in the open market prior to the special meeting of stockholders relating to the Sims merger.

Currently, Metal Management has about 1.2 million shares remaining available under its authorized share repurchase program. We continue to maintain one of the strongest balance sheets in our industry. We concluded our third fiscal quarter with cash and cash equivalents of approximately $12 million and total that including borrowings under the line of credit of $61 million. That after subtracting cash balances at December 31, 2007 was about $49 million and represents about 9% of total capital. So we sit here today we enjoy a markedly lower debt number. That concludes my financial review for the third quarter ended December 31, 2007. So now I’ll turn the call back to Dan for his closing remarks today.

Daniel W. Dienst

Thanks Rob. As you all know we expect to soon complete what is to be one of the most significant milestones in our company’s history and a game change in our opinion for the industry. We strongly believe that the combination of Sims and Metal Management will prove to be a strategic coup. It is a simple equation; two great companies joining together to form one even better company, the world’s preeminent metal recycling company, Sims Metal Management.

We remain confident that the combination of Metal Management and Sims will deliver tremendous benefits to all stakeholders including an expanded global presence, enhanced value per shareholder, improved margins, a well-balanced sales profile, a broader range of products, excellent customer service, and combining two cultures with hallmarks of discipline and entrepreneurial spirit. An amended registration was filed with the SEC on January 17, 2008 and a record date for our special meeting with shareholders was declared as January 25th, 2008. We continue to expect the transaction to close by the end of the first calendar quarter of 2008 subject to the registration statement being declared effective by the SEC, approval by Metal Management shareholders, and other customary closing conditions. All other regulatory hurdles have been previously cleared. We look forward to completing this compelling transaction.

I know that the hardworking employees of Metal Management and Sims will join forces and work as a team to achieve great things together. Indeed, we are not standing still while waiting for the SEC and a shareholder vote. We are finalizing our plans for integrating these two great companies and expect to hit the ground not just running but sprinting. Indeed, our rapidly changing industry mandates this pace. Thank you for your interest and support and Rob and I will turn the call back to the operator and we’ll do some Q & A. Operator?

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Sal Tharani of Goldman Sachs. Please proceed.

Sal Tharani - Goldman Sachs

Good morning, Dan.

Daniel W. Dienst

Good morning, Sal.

Sal Tharani - Goldman Sachs

Dan, can you go with those numbers, actually Robert gave those numbers, had there been no delays what would have been the shipment, 189,000 ferrous, you said?

Daniel W. Dienst

Yeah, Sal, about 180,000 tons of ferrous that would have been reported in Q3, about 9 million pounds of additional shipments in the form of non-ferrous, the incremental revenues about $82 million and the incremental EBITDA would have been about $7 million.

Sal Tharani - Goldman Sachs

On the margin side we have seen some compression or narrowing of the spread between container shipments and the cargo shipments. Are you guys seeing some more flow coming from your smaller suppliers who are probably last quarter involved more in container shipments than bulk?

Daniel W. Dienst

So as we said, Sal, there are factors at work, container rates creeping up, bulk freight rates pulling in. Our own aggressive behavior, if you will, as we procure material and so we’re pleasantly pleased with the state of flows as we sit here today,

Sal Tharani - Goldman Sachs

Are you still competing with Sims as if you were doing before the merger announcement or has the relationship improved already prior to closing? It means that are you still competing with them for the unprocessed scrap?

Daniel W. Dienst

Absolutely, by law we will remain competitors until the day we become one company and continue to behave as such, as we plan in the non-commercial arena we’re making a great deal of decisions for the day that we do close but none of that relates in any way, shape, or form to how we approach the market on a daily basis as we procure material in particular. So now we still compete with them ferociously in the markets that we similarly operate in.

Sal Tharani - Goldman Sachs

But those benefits will actually haven’t been even realized you can realize them at the close of the merger.

Daniel W. Dienst

That is correct.

Sal Tharani - Goldman Sachs

Okay and just something on the export market, how you’re seeing, are there still active [inaudible] for your guys or the other countries.

Daniel W. Dienst

Yeah we’re seeing and currently as we speak there are negotiations going on for vessels in various parts of the world so I characterize the market as fairly consistent where it’s been over the past few months. You have a rapid amount of business transacted, things go back for a few days, more business done, and still very liquid around the world.

Sal Tharani - Goldman Sachs

You didn’t give out the export volume this time. What was that?

Daniel W. Dienst

Oh no, we didn’t, you’re right. Rob, where’s that number?

Robert Larry

Yeah, it was about 340, 000 tons that were exported and counted in the quarter so without the 180 that rolled over.

Sal Tharani - Goldman Sachs

Okay. Thank you, I’ll get back in the queue if I have any question.

Daniel W. Dienst

All right, thanks Sal.

Operator

Your next question comes on the line of John Rogers of D.A. Davidson. Please proceed.

John Rogers - D.A. Davidson

Hi, good morning.

Daniel W. Dienst

Hey, good morning, John.

John Rogers - D.A. Davidson

Hopefully, with Sims there’ll be more calls but a couple of questions. First of all, the numbers that you and Rob gave relative to the export shipments that were delayed end of January, did pricing assumptions for that $7 million in the EBITDA, were those December prices or January prices?

Daniel W. Dienst

They were contracts taken in December and the shipments count in January so they were December contracts.

John Rogers - D.A. Davidson

Okay, so they aren’t at current market prices?

Daniel W. Dienst

Right but the scrap was already sold on the other prices.

John Rogers - D.A. Davidson

Okay, I just want to be clear on that and then in terms of the timeline now for the merger, you’re waiting for final SEC comments but I thought those were due already.

Daniel W. Dienst

By the SEC’s own internal guidelines the second set of comments should have been to us already but again it’s not statutory requirements to their own internal guidelines so we are not so patiently waiting for the next set of comments to come which we hope will be at…

John Rogers - D.A. Davidson

Okay and that will be sometime, it could be anytime now?

Daniel W. Dienst

Your guess is as good as mine but yeah I would hope so.

John Rogers - D.A. Davidson

Okay and then once you get those comments we’re what 25 days or so?

Daniel W. Dienst

Twenty five business days to a meeting.

John Rogers - D.A. Davidson

Okay and it would close at the meeting. Okay and then lastly, could you talk about just two of the current pricing environments, I mean obviously the list prices are what’s being reported are much, much higher and some of the reports on the export prices and just your sense. Is this temporary or is it some inventory adjustment that’s going on or what’s kind of driving this market right now?

Daniel W. Dienst

I think what you’re saying John is I’m not going tell you anything you haven’t seen elsewhere which is people need the units, people are willing to pay for the units particularly on the ferrous side, and units have been a little scarcer to come by. February business is being, at least domestically in the US, being done now, will certainly not be giving back the uptake we had in January. There may be some nod as to give back but we’ll take it. People want the units, need the units. You’ve read about the destocking on finished sale that took place in the last part of the last calendar year. People are restocking now that’s probably a supply issue as opposed to a true fundamental demand issue with everything going on in the economy but either way…

John Rogers - D.A. Davidson

You’re just talking about the domestic market there.

Daniel W. Dienst

Correct.

John Rogers - D.A. Davidson

Okay.

Daniel W. Dienst

Correct.

John Rogers - D.A. Davidson

Yah.

Daniel W. Dienst

So order books are looking better at the steel mills, steel mills want the units domestically, and some retail are being [inaudible] overseas. So we seem to be in a pretty good spot right here.

John Rogers - D.A. Davidson

Okay and your crystal ball is better than mine, do you see this changing into the spring?

Daniel W. Dienst

You know John what we try to do as you noticed, we just try to be out of our positions unless we have some extraordinary freight situation and the likes of our crystal ball is very small. We can’t deny what’s going on around the world. We’re not big table bangers on paradigm shifts in the world. We try to manage our positions and yeah certainly February looks okay and liquid and we have seen spring as in the past where material has come out of the woodwork, after very tight winters. Now, what we have seen is a little bit different this year is weather patterns up until the last few weeks, they’ve been relatively mild in most parts of the country. Now the Midwest is taking it on the chin a little bit, we’re taking in another 10 inches of snow in Chicago next 24 hours but material has flowed. What you saw last winter, I think, was a freezing up of flows as we came to the needy part of the winter as the thaw came, scrap was everywhere and we gave a lot back as you recall. So this year may be different as you know we have one rate of scrap leaving the country in greater numbers over the last year and with material continuing to flow through this winter perhaps you will not see as dramatic a pull back in spring as you have in the past.

John Rogers - D.A. Davidson

No that…

Daniel W. Dienst

We’re working on February, John.

John Rogers - D.A. Davidson

Okay, well I wanted to see what you can do for me tomorrow. Thank you very much.

Daniel W. Dienst

Very good.

Operator

The next question comes from the line of Eric Glover of Canaccord Adams. Please proceed.

Eric Glover - Canaccord Adams

Good morning.

Daniel W. Dienst

Good morning, Eric.

Eric Glover - Canaccord Adams

One thing you did say, I believe, is that you’re seeing a more rational procurement of ferrous scrap currently and I’m just wondering why that is given what you also said about continuing strong demand for material as well as the fact that you’re still competing aggressively with Sims?

Daniel W. Dienst

Well, I mean the market is permitting us to put some money back in our pocket by what we have seen in spikes over the past… In our business as you know Eric is we had a modest amount of volatility. It’s very difficult to widen margins in that scenario and so we have a big move like we had in January. We are able to restore some historical margins back in our pocket. Flows are continuing to go, our suppliers are making good money, they get good service, and continue to bring us the material and they are all cognizant of getting too greedy and having a big shakeout in the market and they themselves get caught with material. So we’ve been very fortunate over the past few weeks and fairly disciplined.

Eric Glover - Canaccord Adams

Okay and just sort of looking, assuming and I know you’re obviously merging with Sims, but if we’re to look at your gross margin going forward and I believe in your press release you stated that you’re seeing a return to more historical spreads. Could we assume then that margins could be getting back to that 12%, 13%, 14% range?

Daniel W. Dienst

Yeah, that’s not an unfair assumption, certainly, well January and as we head into February that’s not an unfair assumption.

Eric Glover - Canaccord Adams

Okay and then finally I was just wondering if you could comment on domestic versus international pricing spreads on ferrous, whether it’s actually more advantageous now to be exporting.

Daniel W. Dienst

Yes, with freight rates I think holding it’s not a bad time for exporters. Indeed, even the delta on the east coast between containers and bulk as I last looked were within a few dollars of each other. So the export market is not a bad place to be right now.

Eric Glover - Canaccord Adams

Yeah and thanks very much.

Daniel W. Dienst

Thanks Eric.

Operator

Your next question is question from the line of Bob Richard of Longbow Research. Please proceed.

Bob Richard - Longbow Research

Good morning and thanks for taking my call.

Daniel W. Dienst

You got it Richard, good morning.

Bob Richard - Longbow Research

Real quickly, the weather issues in China, sir. Are you able to comment on what’s that doing with your business at all? Have they stopped taking material or can you provide any color on that would be appreciated?

Daniel W. Dienst

Okay, Bob, now we haven’t seen any real impact on our business yet. We did as traditionally as you head into the Chinese New Year, we get a little bit quieter this time anyway so the fact that the storms coincided a week before Chinese New Year would be typical. We have not seen any major disruptions to our shipping patterns as we sit here today.

Bob Richard - Longbow Research

Okay, I appreciate it. Good luck.

Daniel W. Dienst

Thank you.

Operator

The next question is a follow-up question from the line of Sal Tharani of Goldman Sachs. Please proceed.

Sal Tharani - Goldman Sachs

Dan, have you seen any problem with the export license, it’s either [inaudible] export licenses in China, have there been any issues over there?

Daniel W. Dienst

No, we’re fine.

Sal Tharani - Goldman Sachs

You are in the list of the people who got licenses?

Daniel W. Dienst

Yes sir.

Sal Tharani - Goldman Sachs

The other thing which we have discussed in the past is the export prices versus the lag between the order when you take them and when you ship. If prices in the domestic market move about $100 a ton or so, $90 a ton in January, will it impact your export orders you took in November, December for January delivery or you took in December for January, February delivery? You think you might see some margin compression offsetting some of the gains you get in the domestic market?

Daniel W. Dienst

Sal, we’ve been very careful here, map the shorter market if you will and we’ve historically before the kind of volatility we may have been very long or very short, we’ve been really tight within a few weeks so our exposure up or down, long or short if you will against the export market has been much tighter than it’s ever been in. We’re in pretty good shape right now.

Sal Tharani - Goldman Sachs

All right, thank you so much.

Daniel W. Dienst

Okay, thanks Sal.

Operator

We have a follow-up question from the line of John Rogers of D.A. Davidson. Please proceed.

John Rogers - D.A. Davidson

Dan, with your agreement with Sims where you are now, has that affected, I assume you can’t enter into any acquisitions at this point, but with the announcement in the relationship with Sims, has it affected how you’re seen as an acquirer in the market?

Daniel W. Dienst

That’s a good question. I mean, let us go to the specifics first. One, the merger agreement is a very specific agreement between the parties, if they want to do a deal or we want to do a deal up to a certain threshold, capital commitment with at $50 million or greater we have to seek each other’s consent. There’s a huge amount of communication between the two companies going on right now outside the commercial arena obviously, so, no it hasn’t slowed us down. We’re not missing anything. People continue to show us things separately and probably consciously or sub-consciously thinking of us as one company down the road. So, we haven’t missed anything. The agreement spells out what we can and cannot do, with or without consent. Going forward, I got to believe that if people want to monetize an asset, I don’t care where it is in the world, we’d be on that first call list and would act accordingly. So, as a combined company with enormous amount of free cash flow and positioned in multiple securities markets and access to capital I got to believe people will be calling us.

John Rogers - D.A. Davidson

But you don’t think there’s any sense of maybe we should wait and see how they work out there, combination first?

Daniel W. Dienst

Judging by the stacks of books in my desk, no.

John Rogers - D.A. Davidson

Okay, good. Thank you.

Daniel W. Dienst

Thanks John.

Operator

As we have no more questions at this time, I would like to turn the call back over to Mr. Dienst. Please proceed.

John Rogers - D.A. Davidson

Okay, thank you operator. I would like to once again express our thanks to all the investors and analysts on the call today who have followed us and supported us over the years and I especially would like to express our gratitude to the hardworking and talented employees of Metal Management. We look forward to updating you on developments and accomplishments on our next quarterly earnings conference call when we expect to be Sims Metal Management. Thank you everybody.

Operator

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect and have a great day.

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Source: Metal Management Inc. F3Q08 (Qtr End 12/31/07) Earnings Call Transcript
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