##### 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 September 30, 2007
 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 o þ
 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 Operation
    
    Page 15Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    Page 22Item 4.
    
    Controls and Procedures
    
    Page 22PART IIItem 1.
    
    Legal Proceedings
    
    Page 23Item 1A.
    
    Risk Factors
    
    Page 23Item 6.
    
    Exhibits
    
    Page 23Certification of Chief Executive OfficerCertification of Chief Financial OfficerSection 1350 Certification of Chief Executive OfficerSection 1350 Certification of Chief Financial OfficerAmendment to Amended and Restated Stock Subscription Agreement and Stockholder AgreementForm of Series B Stock Subscription Agreement and Stockholder AgreementCertificationCertificationCertificationCertification
  1




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PART I. FINANCIAL INFORMATION
 
 Item 1. Unaudited Condensed Consolidated Financial Statements
 METALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2007 and December 31, 2006
 September 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)($ thousands)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    1,383
    
    
    $
    1,462Trade receivables, net
    
    
    47,335
    
    
    
    19,530Inventories
    
    
    43,559
    
    
    
    20,489Prepaid expenses and other
    
    
    3,864
    
    
    
    1,771Deferred income taxes
    
    
    3,692
    
    
    
    2,715Total Current Assets
    
    
    99,833
    
    
    
    45,967Cash restricted for investment
    
    
    9,631
    
    
    
    8,891Property and Equipment, net
    
    
    42,548
    
    
    
    29,214Goodwill
    
    
    90,057
    
    
    
    29,067Other Intangibles, net
    
    
    10,346
    
    
    
    2,982Other Assets, net
    
    
    9,954
    
    
    
    2,286Total Assets
    
    $
    262,369
    
    
    $
    118,407LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesShort-term debt
    
    $
    5,333
    
    
    $
    1,897Current maturities of long-term debt
    
    
    5,949
    
    
    
    3,495Accounts payable
    
    
    17,709
    
    
    
    11,156Accrued expenses
    
    
    7,043
    
    
    
    4,117Income taxes payable
    
    
    3,449
    
    
    
    1,407Total Current Liabilities
    
    
    39,483
    
    
    
    22,072Long-Term LiabilitiesLong-term debt, less current maturities
    
    
    82,193
    
    
    
    13,110Accrued and other
    
    
    6,830
    
    
    
    1,054Deferred income taxes
    
    
    4,822
    
    
    
    3,732Total Long-Term Liabilities
    
    
    93,845
    
    
    
    17,896Total Liabilities
    
    
    133,328
    
    
    
    39,968Minority interest
    
    
    7,891
    
    
    
    4,726Stockholders EquityCapital StockPreferred
    
    
    
    
    
    
    34,064Common
    
    
    32
    
    
    
    12Additional paid-in capital
    
    
    97,811
    
    
    
    28,524Retained earnings
    
    
    23,574
    
    
    
    11,380Accumulated other comprehensive income (loss)  unrecognized pension costs
    
    
    (267
    )
    
    
    (267
    )121,150
    
    
    
    73,713Total Liabilities and Stockholders Equity
    
    $
    262,369
    
    
    $
    118,407
  2




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##### Table of Contents



METALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three and Nine Months Ended September 30, 2007 and 2006
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Unaudited)($ thousands, except per share data)Revenue
    
    $
    102,127
    
    
    $
    55,359
    
    
    $
    220,644
    
    
    $
    159,898Costs and expensesOperating expenses
    
    
    84,215
    
    
    
    45,378
    
    
    
    180,934
    
    
    
    129,841Selling, general, and administrative expenses
    
    
    5,782
    
    
    
    3,451
    
    
    
    13,683
    
    
    
    9,995Depreciation and amortization
    
    
    1,667
    
    
    
    907
    
    
    
    4,149
    
    
    
    2,85291,664
    
    
    
    49,736
    
    
    
    198,766
    
    
    
    142,688Operating income
    
    
    10,463
    
    
    
    5,623
    
    
    
    21,878
    
    
    
    17,210Financial and other income (expense)Interest expense
    
    
    (2,426
    )
    
    
    (517
    )
    
    
    (3,515
    )
    
    
    (1,773
    )Other
    
    
    146
    
    
    
    14
    
    
    
    441
    
    
    
    (24
    )(2,280
    )
    
    
    (503
    )
    
    
    (3,074
    )
    
    
    (1,797
    )Income from continuing operations
before income taxes and minority
interest
    
    
    8,183
    
    
    
    5,120
    
    
    
    18,804
    
    
    
    15,413Provision for federal and state income taxes
    
    
    2,945
    
    
    
    1,945
    
    
    
    6,846
    
    
    
    5,845Income from continuing operations
before minority interest
    
    
    5,238
    
    
    
    3,175
    
    
    
    11,958
    
    
    
    9,568Minority interest
    
    
    107
    
    
    
    
    
    
    
    239
    
    
    
    Income from continuing operations
    
    
    5,345
    
    
    
    3,175
    
    
    
    12,197
    
    
    
    9,568Discontinued operations, net of income taxesIncome (loss) from discontinued operations
    
    
    (5
    )
    
    
    (895
    )
    
    
    (3
    )
    
    
    (1,904
    )Gain on sale of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    560(5
    )
    
    
    (895
    )
    
    
    (3
    )
    
    
    (1,344
    )Net income
    
    $
    5,340
    
    
    $
    2,280
    
    
    $
    12,194
    
    
    $
    8,224Earnings (loss) per common share:Basic:Income from continuing operations
    
    $
    0.17
    
    
    $
    0.13
    
    
    $
    0.43
    
    
    $
    0.39Discontinued operations, net
    
    
    
    
    
    
    (0.04
    )
    
    
    
    
    
    
    (0.06
    )Net income
    
    $
    0.17
    
    
    $
    0.09
    
    
    $
    0.43
    
    
    $
    0.33Diluted:Income from continuing operations
    
    $
    0.17
    
    
    $
    0.12
    
    
    $
    0.43
    
    
    $
    0.37Discontinued operations, net
    
    
    
    
    
    
    (0.03
    )
    
    
    
    
    
    
    (0.05
    )Net income
    
    $
    0.17
    
    
    $
    0.09
    
    
    $
    0.43
    
    
    $
    0.32Weighted Average Common Shares Outstanding:Basic
    
    
    31,613,959
    
    
    
    24,971,797
    
    
    
    28,099,006
    
    
    
    24,720,217Diluted
    
    
    31,890,886
    
    
    
    26,042,476
    
    
    
    28,570,460
    
    
    
    25,980,728
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##### Table of Contents



METALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2007 and 2006
 2007
    
    
    2006(Unaudited)($ thousands)Cash Flows from Operating ActivitiesNet income
    
    $
    12,194
    
    
    $
    8,224Adjustments to reconcile net income to net cash (used in) provided by operating activities:Depreciation and amortization
    
    
    4,192
    
    
    
    3,258Amortization of notes payable discounts
    
    
    
    
    
    
    43Deferred income taxes
    
    
    (806
    )
    
    
    1,527Provision for doubtful accounts receivable
    
    
    77
    
    
    
    143(Gain) loss on sale of property and equipment
    
    
    208
    
    
    
    (105
    )Minority interest in loss of consolidated subsidiary
    
    
    (239
    )
    
    
    Gain on sale of discontinued operations
    
    
    
    
    
    
    (903
    )Compensation expense on stock options issued
    
    
    421
    
    
    
    298Impairment loss
    
    
    
    
    
    
    823Change in assets and liabilities, net of acquisitions:(Increase) decrease in:Trade receivables
    
    
    (20,658
    )
    
    
    (6,894
    )Inventories
    
    
    (11,054
    )
    
    
    (2,256
    )Prepaid expenses and other
    
    
    (1,779
    )
    
    
    (1,516
    )Increase (decrease) in:Accounts payable, accrued expenses, and income taxes payable
    
    
    4,177
    
    
    
    4,240Net cash (used in) provided by operating activities
    
    
    (13,267
    )
    
    
    6,882Cash Flows from Investing ActivitiesProceeds from sale of discontinued operations
    
    
    
    
    
    
    5,968Proceeds from sale of property and equipment
    
    
    23
    
    
    
    319Purchase of property and equipment
    
    
    (7,901
    )
    
    
    (7,032
    )Cash restricted for investment
    
    
    (6,112
    )
    
    
    Investment in unconsolidated subsidiary
    
    
    (3,600
    )
    
    
    Decrease (increase) in other assets
    
    
    1,258
    
    
    
    (983
    )Cash paid for business acquisitions, less cash acquired
    
    
    (76,289
    )
    
    
    Net cash provided by (used in) in investing activities
    
    
    (92,621
    )
    
    
    (1,728
    )Cash Flows from Financing ActivitiesSale of common stock
    
    
    34,214
    
    
    
    Proceeds from issuance of subsidiary stock
    
    
    3,613
    
    
    
    Net borrowings (payments) under revolving lines-of-credit
    
    
    17,181
    
    
    
    (4,223
    )Proceeds from other borrowings
    
    
    57,034
    
    
    
    3,758Principal payments on other borrowings
    
    
    (6,944
    )
    
    
    (5,195
    )Excess tax benefit from stock-based compensation
    
    
    57
    
    
    
    Proceeds from issuance of common stock on exercised warrants and options
    
    
    654
    
    
    
    Net cash provided by (used in) financing activities
    
    
    105,809
    
    
    
    (5,660
    )Net (decrease) increase in cash and cash equivalents
    
    
    (79
    )
    
    
    (506
    )Cash and cash equivalents:Beginning
    
    
    1,462
    
    
    
    1,857Ending
    
    $
    1,383
    
    
    $
    1,351
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METALICO, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ thousands, except share data)(Unaudited)
 Note 1  General
 Business
  Basis of Presentation
   Significant Accounting Policies
 Incomes Taxes
 Note 2  Business Acquisitions
  5




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AssetsCash
    
    $
    281Accounts receivable
    
    
    3,405Inventory
    
    
    3,810Other current assets
    
    
    1,018Property and equipment
    
    
    859Other assets
    
    
    10Other
intangibles
    
    
    2,916Goodwill
    
    
    32,577Liabilities AssumedAccounts payable and accrued expenses
    
    
    (1,849
    )Short term debt and notes payable
    
    
    (2,968
    )Present value of put option for remaining 17.5%
    
    
    (5,734
    )Deferred tax liabilities
    
    
    (1,087
    )Other liabilities
    
    
    (1,750
    )Net assets acquired
    
    $
    31,488
   Three Months Ended
    
    Three Months Ended
    
    Nine Months Ended
    
    Nine Months EndedSeptember 30, 2007
    
    September 30, 2006
    
    September 30, 2007
    
    September 30, 2006Revenues
    
    $
    102,127
    
    
    $
    61,610
    
    
    $
    241,188
    
    
    $
    179,751Net Income
    
    $
    5,340
    
    
    $
    1,713
    
    
    $
    10,548
    
    
    $
    7,539Earnings Per ShareBasic
    
    $
    0.17
    
    
    $
    0.07
    
    
    $
    0.38
    
    
    $
    0.30Diluted
    
    $
    0.17
    
    
    $
    0.07
    
    
    $
    0.37
    
    
    $
    0.29
  AssetsInventory
    
    
    3,360Other current assets
    
    
    109Property and equipment
    
    
    6,996Other
intangibles
    
    
    2,317Covenant not-to-compete
    
    
    25Goodwill
    
    
    20,824Liabilities AssumedAccounts payable and accrued expenses
    
    
    (121
    )Net assets acquired
    
    $
    33,510
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Three Months Ended
    
    Three Months Ended
    
    Nine Months Ended
    
    Nine Months EndedSeptember 30, 2007
    
    September 30, 2006
    
    September 30, 2007
    
    September 30, 2006Revenues
    
    $
    102,127
    
    
    $
    73,041
    
    
    $
    251,619
    
    
    $
    210,462Net Income
    
    $
    5,340
    
    
    $
    3,378
    
    
    $
    12,849
    
    
    $
    11,087Earnings Per ShareBasic
    
    $
    0.17
    
    
    $
    0.14
    
    
    $
    0.46
    
    
    $
    0.45Diluted
    
    $
    0.17
    
    
    $
    0.13
    
    
    $
    0.45
    
    
    $
    0.43
  AssetsCash
    
    $
    362Accounts receivable
    
    
    3,818Inventory
    
    
    4,846Property and equipment
    
    
    70Other assets
    
    
    7Covenant not-to-compete
    
    
    250Other
intangibles
    
    
    630Goodwill
    
    
    5,834Liabilities AssumedDebt
    
    
    (2,079
    )Accounts payable and accrued expenses
    
    
    (3,341
    )Deferred tax liabilities
    
    
    (235
    )Net assets acquired
    
    $
    10,162
   Three Months Ended
    
    Three Months Ended
    
    Nine Months Ended
    
    Nine Months EndedSeptember 30, 2007
    
    September 30, 2006
    
    September 30, 2007
    
    September 30, 2006Revenues
    
    $
    102,127
    
    
    $
    59,846
    
    
    $
    230,959
    
    
    $
    177,296Net Income
    
    $
    5,340
    
    
    $
    4,023
    
    
    $
    12,986
    
    
    $
    12,005Earnings Per ShareBasic
    
    $
    0.17
    
    
    $
    0.16
    
    
    $
    0.46
    
    
    $
    0.49Diluted
    
    $
    0.17
    
    
    $
    0.15
    
    
    $
    0.45
    
    
    $
    0.46
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AssetsProperty and equipment
    
    
    1,335Other assets
    
    
    5Covenant not-to-compete
    
    
    120Goodwill
    
    
    1,255Net assets acquired
    
    $
    2,715
   Note 3  Inventories
  September 30,
    
    
    December 31,2007
    
    
    2006Raw materials
    
    $
    13,411
    
    
    $
    4,793Finished goods
    
    
    11,220
    
    
    
    5,005Work in progress
    
    
    4,375
    
    
    
    3,793Ferrous scrap metal
    
    
    5,078
    
    
    
    1,722Non-ferrous scrap metal
    
    
    9,475
    
    
    
    5,176$
    43,559
    
    
    $
    20,489
 Note 4  Stock Options and Stock Based Compensation
  8




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Note 5  Short and Long-Term Debt
   Note 6  Capital Stock
   9




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Note 7  Earnings Per Share
  Three Months Ended
    
    
    Three Months EndedSeptember 30, 2007
    
    
    September 30, 2006Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPSIncome from continuing
operations available to
common stockholders
    
    $
    5,345
    
    
    
    31,613,959
    
    
    $
    0.17
    
    
    $
    3,175
    
    
    
    24,971,797
    
    
    $
    0.13Effect of Dilutive SecuritiesCommon stock warrants
    
    
    
    
    
    
    143,423
    
    
    
    
    
    
    
    
    
    
    
    122,476Options and rights
    
    
    
    
    
    
    133,504
    
    
    
    
    
    
    
    
    
    
    
    75,887Convertible notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36
    
    
    
    872,316Diluted EPSIncome from continuing
operations available to
common stockholders plus
assumed conversions
    
    $
    5,345
    
    
    
    31,890,886
    
    
    $
    0.17
    
    
    $
    3,211
    
    
    
    26,042,476
    
    
    $
    0.12
 Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2007
    
    
    September 30, 2006Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPSIncome from continuing
operations available to
common stockholders
    
    $
    12,197
    
    
    
    28,099,006
    
    
    $
    0.43
    
    
    
    9,568
    
    
    
    24,720,217
    
    
    $
    0.39Effect of Dilutive SecuritiesCommon stock warrants
    
    
    
    
    
    
    172,460
    
    
    
    
    
    
    
    
    
    
    
    91,617Options and rights
    
    
    
    
    
    
    298,994
    
    
    
    
    
    
    
    
    
    
    
    44,997Convertible notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145
    
    
    
    1,123,897Diluted EPSIncome from continuing
operations available to
common stockholders plus
assumed conversions
    
    $
    12,197
    
    
    
    28,570,460
    
    
    $
    0.43
    
    
    $
    9,713
    
    
    
    25,980,728
    
    
    $
    0.37
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Note 8  Commitments and Contingencies
 Environmental Remediation Matters
      11




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Other Matters
          12




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##### Table of Contents



Note 9  Segment Reporting
  Scrap Metal
    
    Lead Fabrication
    
    CorporateRecycling
    
    and Recycling
    
    and Other
    
    ConsolidatedThree months ended September 30, 2007Revenues from external customers
    
    $
    75,764
    
    
    $
    26,363
    
    
    $
    
    
    
    $
    102,127Operating income (loss)
    
    
    7,175
    
    
    
    5,045
    
    
    
    (1,757
    )
    
    
    10,463
 13




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Three months ended September 30, 2006Revenues from external customers
    
    $
    34,946
    
    
    $
    20,413
    
    
    $
    
    
    
    $
    55,359Operating income (loss)
    
    
    4,442
    
    
    
    2,506
    
    
    
    (1,325
    )
    
    
    5,623
 Nine months ended September 30, 2007Revenues from external customers
    
    $
    151,815
    
    
    $
    68,829
    
    
    $
    
    
    
    $
    220,644Operating income (loss)
    
    
    15,662
    
    
    
    11,160
    
    
    
    (4,944
    )
    
    
    21,878Total assets
    
    
    185,616
    
    
    
    55,342
    
    
    
    21,411
    
    
    
    262,369
 Nine months ended September 30, 2006Revenues from external customers
    
    $
    98,087
    
    
    $
    61,811
    
    
    $
    
    
    
    $
    159,898Operating income (loss)
    
    
    13,669
    
    
    
    7,381
    
    
    
    (3,840
    )
    
    
    17,210Total assets
    
    
    65,747
    
    
    
    39,568
    
    
    
    3,291
    
    
    
    108,606
 Note 10  Income Taxes
   Note 11  Discontinued Operations
   Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,837
  Note 12  Subsidiary Investments
  14




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##### Table of Contents



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, 2006, as the same may be amended
from time to time.
 
 tem 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, 2006 (Annual
Report).
 General
   Critical Accounting Policies
   Contingencies
  Valuation of Long-lived Assets and Goodwill
  15




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##### Table of Contents



Revenue Recognition
  Accounts Receivable and Allowance for Uncollectible Accounts Receivable
   Inventory
  RESULTS OF OPERATIONS
   RevenuesThree Months Ended
    
    
    Three Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2007
    
    
    September 30, 2006
    
    
    September 30, 2007
    
    
    September 30, 2006($, pounds and tons in thousands)Net
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    NetWeight
    
    
    Sales
    
    
    %
    
    
    Weight
    
    
    Sales
    
    
    %
    
    
    Weight
    
    
    Sales
    
    
    %
    
    
    Weight
    
    
    Sales
    
    
    %Scrap Metal RecyclingFerrous metals (tons)
    
    
    92.0
    
    
    $
    26,502
    
    
    
    26.0
    
    
    
    49.8
    
    
    $
    10,405
    
    
    
    18.8
    
    
    
    190.4
    
    
    $
    50,984
    
    
    
    23.1
    
    
    
    148.5
    
    
    $
    33,901
    
    
    
    21.2Non-ferrous metals (lbs.)
    
    
    25,217
    
    
    
    49,262
    
    
    
    48.2
    
    
    
    19,550
    
    
    
    24,541
    
    
    
    44.3
    
    
    
    61,473
    
    
    
    100,831
    
    
    
    45.7
    
    
    
    57,415
    
    
    
    64,186
    
    
    
    40.1Total Scrap Metal Recycling
    
    
    
    
    
    
    75,764
    
    
    
    74.2
    
    
    
    
    
    
    
    34,946
    
    
    
    63.1
    
    
    
    
    
    
    
    151,815
    
    
    
    68.8
    
    
    
    
    
    
    
    98,087
    
    
    
    61.3Lead Fabrication (lbs.)
    
    
    15,806
    
    
    
    26,363
    
    
    
    25.8
    
    
    
    21,837
    
    
    
    20,413
    
    
    
    36.9
    
    
    
    49,341
    
    
    
    68,829
    
    
    
    31.2
    
    
    
    64,595
    
    
    
    61,811
    
    
    
    38.7Total Revenue
    
    
    
    
    
    $
    102,127
    
    
    
    100.0
    
    
    
    
    
    
    $
    55,359
    
    
    
    100.0
    
    
    
    
    
    
    $
    220,644
    
    
    
    100.0
    
    
    
    
    
    
    $
    159,898
    
    
    
    100.0
  16




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##### Table of Contents



Average
    
    Average
    
    AverageFerrous Price per
    
    Non-Ferrous Price
    
    LeadFor the quarter ending:
    
    ton
    
    per lb.
    
    Price per lb.September 30, 2007
    
    $
    278
    
    
    $
    1.95
    
    
    $
    1.67June 30, 2007
    
    $
    233
    
    
    $
    1.50
    
    
    $
    1.30March 31, 2007
    
    $
    252
    
    
    $
    1.33
    
    
    $
    1.23December 31, 2006
    
    $
    190
    
    
    $
    1.25
    
    
    $
    1.15September 30, 2006
    
    $
    209
    
    
    $
    1.26
    
    
    $
    0.93June 30, 2006
    
    $
    240
    
    
    $
    1.17
    
    
    $
    0.98March 31, 2006
    
    $
    236
    
    
    $
    0.90
    
    
    $
    0.95
 Three Months Ended September 30, 2007 Compared to Three Months Ended September 30, 2006
  Scrap Metal Recycling
 Ferrous Sales
  Non-Ferrous Sales
  Lead Fabrication
  Operating Expenses
  17




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##### Table of Contents



Selling, General, and Administrative
  Depreciation and Amortization
  Operating Income
  Financial and Other Income/(Expense)
   Income Taxes
  Discontinued Operations
  Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006
  18




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##### Table of Contents



Scrap Metal Recycling
 Ferrous Sales
  Non-Ferrous Sales
  Lead Fabrication
  Operating Expenses
  Selling, General, and Administrative
  Depreciation and Amortization
  19




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##### Table of Contents



Operating Income
  Financial and Other Income/(Expense)
   Income Taxes
  Discontinued Operations
   LIQUIDITY AND CAPITAL RESOURCES
 Cash Flows
  20




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##### Table of Contents



Future Capital Requirements
   Other Matters
   21




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest rate risk
  Commodity price risk
  Foreign currency risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
 (a) Evaluation of disclosure controls and procedures.
   22




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##### Table of Contents



(b) Changes in internal controls over financial reporting.
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 6. Exhibits.
  10.1
    
    Form of Amendment No. 1 dated August 22, 2007 to Amended and Restated
Stock Subscription Agreement and Stockholder Agreement dated November
30, 2006 among AgriFuel Co., nka Beacon Energy Corp. (Beacon), the
purchasers of Beacon stock signatory thereto, and Metalico, Inc.10.2
    
    Form of Series B Stock Subscription Agreement and Stockholder
Agreement dated August 22, 2007 among Beacon Energy Corp. (Beacon),
the purchasers of Beacon stock signatory thereto, and Metalico, Inc.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 Code
 23




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##### Table of Contents



32.2
    
    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
 24




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##### Table of Contents



SIGNATURES
  METALICO, INC.
(Registrant)Date: October 25, 2007
    By:
    /s/ CARLOS E. AGÜEROCarlos E. AgüeroChairman, President and Chief
Executive OfficerDate: October 25, 2007
    By:
    /s/ ERIC W. FINLAYSONEric W. FinlaysonSenior Vice President and Chief
Financial Officer (Principal Financial Officer
and Principal Accounting Officer) 25