##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from _________________________ to _____________________________
 Metalico, Inc.
  Delaware(State or other jurisdiction of
incorporation or organization)
    
    001-32453(Commission file number)
    
    52-2169780(I.R.S. Employer Identification No.)
 186 North Avenue East
Cranford, NJ(Address of Principal Executive Offices)
    
    07016(Zip Code)
    
    (908) 497-9610(Registrants Telephone Number)
 þ o
 o þ




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METALICO, INC.
 Form 10-Q Quarterly Report
Table of Contents
  
 PART IItem 1. Unaudited Condensed Consolidated Financial Statements
    
    Page 2Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    Page 11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    Page 19Item 4. Controls and Procedures
    
    Page 20PART IIItem 1. Legal Proceedings
    
    Page 20Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    Page 21Item 5. Other Information
    
    Page 21Item 6. Exhibits
    
    Page 21Certification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of Chief Executive OfficerCertification of Chief Financial Officer




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Unaudited Condensed Consolidated Financial Statements
 METALICO, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2005 and December 31, 2004
 June 30,
    
    December 31,2005
    
    2004(Unaudited)($ thousands)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    768
    
    
    $
    734Trade receivables, net
    
    
    17,605
    
    
    
    17,481Inventories
    
    
    12,343
    
    
    
    13,683Prepaid expenses and other
    
    
    850
    
    
    
    632Deferred income taxes
    
    
    531
    
    
    
    646Total Current Assets
    
    
    32,097
    
    
    
    33,176Property and Equipment, net
    
    
    28,424
    
    
    
    25,269Goodwill
    
    
    27,628
    
    
    
    27,530Other Intangibles and Other Assets, net
    
    
    4,464
    
    
    
    4,562Property Actively Marketed for Sale, net
    
    
    901
    
    
    
    2,426Total Assets
    
    $
    93,514
    
    
    $
    92,963LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesShort-term debt due related parties
    
    $
    1,600
    
    
    $
    1,600Other short-term debt
    
    
    2,166
    
    
    
    2,535Current maturities of long-term debt
    
    
    2,297
    
    
    
    2,529Accounts payable
    
    
    6,906
    
    
    
    7,276Accrued expenses
    
    
    4,115
    
    
    
    4,647Income taxes payable
    
    
    
    
    
    
    405Total Current Liabilities
    
    
    17,084
    
    
    
    18,992Long-Term LiabilitiesLong-term debt due related parties
    
    
    1,022
    
    
    
    2,705Other long-term debt, less current maturities
    
    
    18,837
    
    
    
    22,466Accrued and other
    
    
    1,574
    
    
    
    1,574Deferred income taxes
    
    
    1,706
    
    
    
    526Total Long-Term Liabilities
    
    
    23,139
    
    
    
    27,271Total Liabilities
    
    
    40,223
    
    
    
    46,263Redeemable Common Stock
    
    
    1,100
    
    
    
    1,200Stockholders EquityCapital StockPreferred
    
    
    39,132
    
    
    
    39,132Common
    
    
    8
    
    
    
    6Additional paid-in capital
    
    
    15,208
    
    
    
    11,328Accumulated deficit
    
    
    (1,728
    )
    
    
    (4,537
    )Accumulated other comprehensive income (loss)  unrecognized pension costs
    
    
    (429
    )
    
    
    (429
    )52,191
    
    
    
    45,500Total Liabilities and Stockholders Equity
    
    $
    93,514
    
    
    $
    92,963
  2




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METALICO, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three and Six Months ended June 30, 2005 and 2004
 Three months ended
    
    Six months endedJune 30,
    
    June 30,
    
    June 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004(Unaudited)($ thousands, except per share data)RevenueProduct sales
    
    $
    39,261
    
    
    $
    23,614
    
    
    $
    79,230
    
    
    $
    45,986Tolling services
    
    
    1,083
    
    
    
    1,128
    
    
    
    1,966
    
    
    
    2,64040,344
    
    
    
    24,742
    
    
    
    81,196
    
    
    
    48,626Costs and expensesOperating expenses  product sales
    
    
    32,336
    
    
    
    19,262
    
    
    
    64,657
    
    
    
    37,113Operating expenses  tolling services
    
    
    1,423
    
    
    
    851
    
    
    
    2,420
    
    
    
    1,911Selling, general, and administrative expenses
    
    
    2,939
    
    
    
    1,982
    
    
    
    6,093
    
    
    
    3,627Depreciation and amortization
    
    
    1,121
    
    
    
    651
    
    
    
    2,222
    
    
    
    1,21037,819
    
    
    
    22,746
    
    
    
    75,392
    
    
    
    43,861Operating income
    
    
    2,525
    
    
    
    1,996
    
    
    
    5,804
    
    
    
    4,765Financial and other income (expense)Interest expense
    
    
    (597
    )
    
    
    (356
    )
    
    
    (1,468
    )
    
    
    (584
    )Equity in net income of joint venture investee
    
    
    
    
    
    
    355
    
    
    
    
    
    
    
    603Gain on sale of property and equipment
    
    
    419
    
    
    
    
    
    
    
    419
    
    
    
    Other
    
    
    (6
    )
    
    
    23
    
    
    
    8
    
    
    
    50(184
    )
    
    
    22
    
    
    
    (1,041
    )
    
    
    69Income from continuing operations
before income taxes
    
    
    2,341
    
    
    
    2,018
    
    
    
    4,763
    
    
    
    4,834Provision for federal and state income taxes
    
    
    910
    
    
    
    807
    
    
    
    1,709
    
    
    
    1,932Income from continuing operations
    
    
    1,431
    
    
    
    1,211
    
    
    
    3,054
    
    
    
    2,902Discontinued operations, net
    
    
    (225
    )
    
    
    43
    
    
    
    (245
    )
    
    
    2Net income
    
    
    1,206
    
    
    
    1,254
    
    
    
    2,809
    
    
    
    2,904Preferred stock dividends
    
    
    
    
    
    
    268
    
    
    
    
    
    
    
    734Income available to common stockholders
    
    $
    1,206
    
    
    $
    986
    
    
    $
    2,809
    
    
    $
    2,170Earnings (loss) per common share:Basic:Income from continuing operations
    
    $
    0.06
    
    
    $
    0.08
    
    
    $
    0.13
    
    
    $
    0.24Discontinued operations, net
    
    
    (0.01
    )
    
    
    
    
    
    
    (0.01
    )
    
    
    Net income
    
    $
    0.05
    
    
    $
    0.08
    
    
    $
    0.12
    
    
    $
    0.24Diluted:Income from continuing operations
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.13
    
    
    $
    0.13Discontinued operations, net
    
    
    (0.01
    )
    
    
    
    
    
    
    (0.01
    )
    
    
    Net income
    
    $
    0.05
    
    
    $
    0.06
    
    
    $
    0.12
    
    
    $
    0.13Weighted Average Common Shares Outstanding:Basic
    
    
    24,454,282
    
    
    
    12,511,497
    
    
    
    23,783,523
    
    
    
    9,137,944Diluted
    
    
    26,105,108
    
    
    
    21,816,937
    
    
    
    24,006,164
    
    
    
    22,689,875
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METALICO, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2005 and 2004
 2005
    
    2004(Unaudited)($ thousands)Cash Flows from Operating ActivitiesNet income
    
    $
    2,809
    
    
    $
    2,904Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    2,222
    
    
    
    1,210Amortization of notes payable discounts
    
    
    299
    
    
    
    Deferred income taxes
    
    
    1,295
    
    
    
    1,209Equity in net income of joint venture investee, in excess of distributions
    
    
    
    
    
    
    (398
    )Provision for doubtful accounts receivable
    
    
    20
    
    
    
    (Gain)\Loss on sale of property and equipment
    
    
    (419
    )
    
    
    Stock options and warrants issued
    
    
    32
    
    
    
    Change in assets and liabilities, net of acquisitions:(Increase) decrease in:Receivables
    
    
    (144
    )
    
    
    (5,555
    )Inventories
    
    
    1,340
    
    
    
    (300
    )Prepaid expenses and other
    
    
    (218
    )
    
    
    (283
    )Increase (decrease) in:Accounts payable, accrued expenses, and income taxes payable
    
    
    (1,307
    )
    
    
    1,923Net cash provided by operating activities
    
    
    5,929
    
    
    
    710Cash Flows from Investing ActivitiesProceeds from sale of property and equipment
    
    
    2,002
    
    
    
    Purchase of property and equipment
    
    
    (5,218
    )
    
    
    (2,405
    )(Increase) decrease in other assets
    
    
    (169
    )
    
    
    50Cash paid for business acquisitions
    
    
    (48
    )
    
    
    (1,612
    )Net cash used in investing activities
    
    
    (3,433
    )
    
    
    (3,967
    )Cash Flows from Financing ActivitiesNet borrowings (payments) under revolving lines-of-credit
    
    
    (1,844
    )
    
    
    3,662Proceeds from other borrowings
    
    
    2,951
    
    
    
    1,900Principal payments on other borrowings
    
    
    (3,469
    )
    
    
    (1,641
    )Redemption of redeemable common stock
    
    
    (100
    )
    
    
    Redemption of common stock warrants
    
    
    
    
    
    
    (151
    )Net cash provided by (used in) financing activities
    
    
    (2,462
    )
    
    
    3,770Net increase in cash and cash equivalents
    
    
    34
    
    
    
    513Cash and cash equivalents:Beginning
    
    
    734
    
    
    
    631Ending
    
    $
    768
    
    
    $
    1,144
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##### Table of Contents



METALICO, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ thousands, except share data)
(Unaudited)
 Note 1  General
 Business
  Basis of Presentation
   Note 2  Inventories
  June 30,
    
    December 31,2005
    
    2004Raw materials
    
    $
    6,360
    
    
    $
    5,052Finished goods and work in progress
    
    
    2,093
    
    
    
    1,976Ferrous scrap metal
    
    
    1,038
    
    
    
    1,813Non-ferrous scrap metal
    
    
    2,852
    
    
    
    4,842$
    12,343
    
    
    $
    13,683
 Note 3  Short and Long-Term Debt
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Note 4  Stock Options and Stock Based Compensation
     Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,
    
    June 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net income:As reported
    
    $
    1,206
    
    
    $
    1,254
    
    
    $
    2,809
    
    
    $
    2,904Pro forma
    
    $
    1,172
    
    
    $
    1,254
    
    
    $
    2,763
    
    
    $
    2,904Earnings per
share on income from
continuing
operations available
to common
stockholders:As reportedBasic
    
    $
    0.06
    
    
    $
    0.08
    
    
    $
    0.13
    
    
    $
    0.24Diluted
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.13
    
    
    $
    0.13ProformaBasic
    
    $
    0.06
    
    
    $
    0.08
    
    
    $
    0.13
    
    
    $
    0.24Diluted
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.13
    
    
    $
    0.13
  Note 5  Earnings Per Share
  6




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Three Months Ended June 30, 2005
    
    Three Months Ended June 30, 2004Income
    
    Shares
    
    Per Share
    
    Income
    
    Shares
    
    Per Share(Numerator)
    
    (Denominator)
    
    Amount
    
    (Numerator)
    
    (Denominator)
    
    AmountIncome from continuing operations
    
    $
    1,431
    
    
    
    
    
    
    
    
    
    
    $
    1,211Less preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (268
    )Basic EPSIncome available to common stockholders
    
    
    1,431
    
    
    
    24,454,282
    
    
    $
    0.06
    
    
    
    943
    
    
    
    12,511,497
    
    
    $
    0.08Effect of Dilutive SecuritiesCommon stock warrants
    
    
    
    
    
    
    99,128
    
    
    
    
    
    
    
    
    
    
    
    30,283Options and rights
    
    
    
    
    
    
    190,967
    
    
    
    
    
    
    
    
    
    
    
    84,606Convertible notes
    
    
    64
    
    
    
    1,360,731
    
    
    
    
    
    
    
    
    
    
    
    Dividends payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,775,862Convertible Preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    268
    
    
    
    7,414,689Diluted EPSIncome from continuing operations
available to common stockholders plus
assumed conversions
    
    $
    1,495
    
    
    
    26,105,108
    
    
    $
    0.06
    
    
    $
    1,211
    
    
    
    21,816,937
    
    
    $
    0.06
 Six Months Ended June 30, 2005
    
    Six Months Ended June 30, 2004Income
    
    Shares
    
    Per Share
    
    Income
    
    Shares
    
    Per Share(Numerator)
    
    (Denominator)
    
    Amount
    
    (Numerator)
    
    (Denominator)
    
    AmountIncome from continuing operations
    
    $
    3,054
    
    
    
    
    
    
    
    
    
    
    $
    2,902Less preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (734
    )Basic EPSIncome available to common stockholders
    
    
    3,054
    
    
    
    23,783,523
    
    
    $
    0.13
    
    
    
    2,168
    
    
    
    9,137,944
    
    
    $
    0.24Effect of Dilutive SecuritiesCommon stock warrants
    
    
    
    
    
    
    90,000
    
    
    
    
    
    
    
    
    
    
    
    162,104Options and rights
    
    
    
    
    
    
    132,641
    
    
    
    
    
    
    
    
    
    
    
    70,988Dividends payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,423,748Convertible Preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    734
    
    
    
    9,895,091Diluted EPSIncome from continuing operations
available to common stockholders plus
assumed conversions
    
    $
    3,054
    
    
    
    24,006,164
    
    
    $
    0.13
    
    
    $
    2,902
    
    
    
    22,689,875
    
    
    $
    0.13
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Note 6  Commitments and Contingencies
 Environmental Remediation Matters
       8




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9




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Other Matters
  Note 7  Segment Reporting
  LeadScrap Metal
    
    Fabrication
    
    CorporateRecycling
    
    and Recycling
    
    and Other
    
    ConsolidatedThree months ended June 30, 2005Revenues from external customers
    
    $
    22,321
    
    
    $
    18,023
    
    
    $
    
    
    
    $
    40,344Operating income (loss)
    
    
    2,186
    
    
    
    1,358
    
    
    
    (1,019
    )
    
    
    2,525
 Three months ended June 30, 2004Revenues from external customers
    
    $
    18,440
    
    
    $
    6,302
    
    
    $
    
    
    
    $
    24,742Operating income (loss)
    
    
    2,542
    
    
    
    182
    
    
    
    (728
    )
    
    
    1,996
 Six months ended June 30, 2005Revenues from external customers
    
    $
    44,263
    
    
    $
    36,933
    
    
    $
    
    
    
    $
    81,196Operating income (loss)
    
    
    4,416
    
    
    
    3,260
    
    
    
    (1,872
    )
    
    
    5,804Total assets
    
    
    47,048
    
    
    
    44,701
    
    
    
    1,765
    
    
    
    93,514
 Six months ended June 30, 2004Revenues from external customers
    
    $
    35,475
    
    
    $
    13,151
    
    
    $
    
    
    
    $
    48,626Operating income (loss)
    
    
    5,293
    
    
    
    796
    
    
    
    (1,324
    )
    
    
    4,765Total assets
    
    
    37,380
    
    
    
    26,156
    
    
    
    4,148
    
    
    
    67,684
 10




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This Form 10-Q includes certain statements that may be deemed to be forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements
in this Form 10-Q which address activities, events or developments that Metalico, Inc. (herein,
Metalico, the Company, we, us, our or other similar terms) expects or anticipates will or
may occur in the future, including such things as future acquisitions (including the amount and
nature thereof), business strategy, expansion and growth of our business and operations, general
economic and market conditions and other such matters are forward-looking statements. Although we
believe the expectations expressed in such forward-looking statements are based on reasonable
assumptions within the bounds of our knowledge of our business, a number of factors could cause
actual results to differ materially from those expressed in any forward-looking statements. These
and other risks, uncertainties and other factors are discussed under Risk Factors appearing in
our Annual Report on Form 10-K for the year ended December 31, 2004, as the same may be amended
from time to time.
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion should be read in conjunction with the unaudited condensed
consolidated financial statements and notes thereto included under Item 1 of this Report. In
addition, reference should be made to the audited consolidated financial statements and notes
thereto and related Managements Discussion and Analysis of Financial Condition and Results of
Operations included in our Annual Report on Form 10-K for the year ended December 31, 2004 (Annual
Report).
 General
   Critical Accounting Policies
   Contingencies
  Valuation of Long-lived Assets and Goodwill
  11




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Revenue Recognition
  Accounts Receivable and Allowance for Uncollectible Accounts Receivable
   Inventory
  RESULTS OF OPERATIONS
   12




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RevenuesThree Months Ended
    
    
    Three Months Ended
    
    
    Six Months Ended
    
    

    Six Months EndedJune 30, 2005
    
    
    June 30, 2004
    
    
    June 30, 2005
    
    
    June 30, 2004Net
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    NetWeight
    
    
    Sales
    
    
    %
    
    
    Weight
    
    
    Sales
    
    
    %
    
    
    Weight
    
    
    Sales
    
    
    %
    
    
    Weight
    
    
    Sales
    
    
    %Scrap Metal RecyclingFerrous metals (tons)
    
    
    43.2
    
    
    $
    7,007
    
    
    
    17.4
    
    
    
    38.3
    
    
    $
    6,663
    
    
    
    26.9
    
    
    
    82.8
    
    
    $
    15,602
    
    
    
    19.2
    
    
    
    71.4
    
    
    $
    14,022
    
    
    
    28.8Non-ferrous metals (lbs.)
    
    
    18,652
    
    
    
    14,636
    
    
    
    36.2
    
    
    
    14,810
    
    
    
    10,933
    
    
    
    44.2
    
    
    
    35,111
    
    
    
    27,315
    
    
    
    33.6
    
    
    
    28,420
    
    
    
    20,195
    
    
    
    41.6Scrap Handling
    
    
    
    
    
    
    678
    
    
    
    1.7
    
    
    
    
    
    
    
    844
    
    
    
    3.4
    
    
    
    
    
    
    
    1,346
    
    
    
    1.7
    
    
    
    
    
    
    
    1,258
    
    
    
    2.6Total Scrap Metal Recycling
    
    
    
    
    
    
    22,321
    
    
    
    55.3
    
    
    
    
    
    
    
    18,440
    
    
    
    74.5
    
    
    
    
    
    
    
    44,263
    
    
    
    54.5
    
    
    
    
    
    
    
    35,475
    
    
    
    73.0Lead Fabrication and
RecyclingFabricating (lbs.)
    
    
    15,125
    
    
    
    16,149
    
    
    
    40.0
    
    
    
    6,316
    
    
    
    3,915
    
    
    
    15.8
    
    
    
    33,969
    
    
    
    33,413
    
    
    
    41.2
    
    
    
    12,303
    
    
    
    7,394
    
    
    
    15.2Smelting (lbs.)
    
    
    1,572
    
    
    
    791
    
    
    
    2.0
    
    
    
    2,482
    
    
    
    1,215
    
    
    
    4.9
    
    
    
    3,148
    
    
    
    1,554
    
    
    
    1.9
    
    
    
    7,537
    
    
    
    3,073
    
    
    
    6.3Tolling (lbs)
    
    
    5,532
    
    
    
    1,083
    
    
    
    2.7
    
    
    
    5,566
    
    
    
    1,172
    
    
    
    4.8
    
    
    
    10,386
    
    
    
    1,966
    
    
    
    2.4
    
    
    
    14,032
    
    
    
    2,684
    
    
    
    5.5Total Lead Fabrication and
Recycling
    
    
    22,229
    
    
    
    18,023
    
    
    
    44.7
    
    
    
    14,364
    
    
    
    6,302
    
    
    
    25.5
    
    
    
    47,503
    
    
    
    36,933
    
    
    
    45.5
    
    
    
    33,872
    
    
    
    13,151
    
    
    
    27.0Total Revenue
    
    
    
    
    
    $
    40,344
    
    
    
    100.0
    
    
    
    
    
    
    $
    24,742
    
    
    
    100.0
    
    
    
    
    
    
    $
    81,196
    
    
    
    100.0
    
    
    
    
    
    
    $
    48,626
    
    
    
    100.0
  Average
    
    Average
    
    AverageFerrous
    
    Non-Ferrous
    
    LeadFor the quarter ending:
    
    Price per ton
    
    Price per lb.
    
    Price per lb.June 30, 2005
    
    $
    162
    
    
    $
    0.78
    
    
    $
    0.81March 31, 2005
    
    $
    217
    
    
    $
    0.77
    
    
    $
    0.75December 31, 2004
    
    $
    271
    
    
    $
    0.65
    
    
    $
    0.86September 30, 2004
    
    $
    240
    
    
    $
    0.68
    
    
    $
    0.35June 30, 2004
    
    $
    174
    
    
    $
    0.74
    
    
    $
    0.44
 Three Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004
  Scrap Metal Recycling
 Ferrous Sales
  13




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##### Table of Contents



Non-Ferrous Sales
  Lead Fabrication and Recycling
  Lead Fabrication
  Lead Smelting
  Lead Tolling
  Operating Expenses
  14




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##### Table of Contents



Selling, General and Administrative
  Depreciation and Amortization
  Operating Income
  Financial and Other Income / (Expense)
    Income from Joint Venture
  Income Taxes
  15




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##### Table of Contents



Discontinued Operations
  Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004
  Scrap Metal Recycling
 Ferrous Sales
  Non-Ferrous Sales
  Lead Fabrication and Recycling
  Lead Fabrication
  16




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##### Table of Contents



Lead Smelting
  Lead Tolling
  Operating Expenses
  Selling, General and Administrative
  Depreciation and Amortization
  Operating Income
  17




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##### Table of Contents



Financial and Other Income / (Expense)
    Income from Joint Venture
  Income Taxes
  Discontinued Operations
  LIQUIDITY AND CAPITAL RESOURCES
 Cash Flows
  18




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##### Table of Contents



Future Capital Requirements
  Conversion of Debt to Equity
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest rate risk
  Commodity price risk
  19




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##### Table of Contents



Foreign currency risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
 (a) Evaluation of disclosure controls and procedures.
  (b) Changes in internal controls over financial reporting.
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
   20




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  (c) TotalNumber ofSharesPurchased asPart of(a) Total Number
    
    
    (b) Average
    
    Publicly
    
    
    (d) Approximate Dollarof
    
    
    Price
    
    Announced
    
    
    Value of Shares That MayShares
    
    
    Paid per
    
    Plans or
    
    
    Yet Be Purchased UnderPeriod
    
    Purchased
    
    
    Share
    
    Programs
    
    
    the Plans or ProgramsMay
    
    
    31,250
    (1)
    
    $
    3.20
    
    
    
    
    
    
    
    Total
    
    
    31,250
    
    
    $
    3.20
    
    
    
    
    
    
    
    
 
 (1)
    
    In October 2003, we issued 31,250 shares of our common stock, at $3.20 per share, to each of
two stockholders of a corporation from which we acquired scrap metal recycling assets. In
April 2005, one of those stockholders exercised a contractual right to put his shares to the
Company for a payment of $3.20 per share. The Company repurchased the stock pursuant to the
exercised put on May 2, 2005. The other stockholders contractual put right has expired
without exercise. 
 Item 5. Other Information.
  
 Item 6. Exhibits.
  31.1
    
    Certification of Chief Executive Officer of Metalico, Inc. pursuant
to Rule 13a-14(a) promulgated under the Securities Exchange Act of
1934, as amended31.2
    
    Certification of Chief Financial Officer of Metalico, Inc. pursuant
to Rule 13a-14(a) promulgated under the Securities Exchange Act of
1934, as amended32.1
    
    Certification of Chief Executive Officer of Metalico, Inc. pursuant
to Rule 13a-14(a) promulgated under the Securities Exchange Act of
1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the
United States Code32.2
    
    Certification of Chief Financial Officer of Metalico, Inc. pursuant
to Rule 13a-14(a) promulgated under the Securities Exchange Act of
1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the
United States Code
 21




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##### Table of Contents



SIGNATURES
  METALICO, INC.
(Registrant)Date: August 3, 2005
    
    By:
    
    /s/ CARLOS E. AGÜEROCarlos E. AgüeroChairman, President and ChiefExecutive OfficerDate: August 3, 2005
    
    By:
    
    /s/ ERIC W. FINLAYSONEric W. FinlaysonSenior Vice President and ChiefFinancial Officer
 22