##### 



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, 2006
 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.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    001-32453
    
    52-2169780(State or other jurisdiction of 
incorporation or organization)
    
    (Commission file number)
    
    (I.R.S. Employer Identification No.)
 186 North Avenue East Cranford, NJ
    
    07016
    
    (908) 497-9610(Address of Principal 
Executive Offices)
    
    (Zip Code)
    
    (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 13Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
    
    Page 19Item 4.
    
    Controls and Procedures.
    
    Page 20PART IIItem 1.
    
    Legal Proceedings.
    
    Page 20Item 1A.
    
    Risk Factors.
    
    Page 21Item 6.
    
    Exhibits.
    
    Page 21Certification of Chief Executive OfficerCertification of Chief Financial Officer1350 Certification of Chief Executive Officer1350 Certification of Chief Financial Officer
 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, 2006 and December 31, 2005
 September 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)($ thousands)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    1,351
    
    
    $
    1,857Trade receivables, net
    
    
    26,367
    
    
    
    19,616Inventories
    
    
    16,339
    
    
    
    16,273Prepaid expenses and other
    
    
    2,400
    
    
    
    1,108Deferred income taxes
    
    
    377
    
    
    
    358Total Current Assets
    
    
    46,834
    
    
    
    39,212Property and Equipment, net
    
    
    27,720
    
    
    
    28,178Goodwill
    
    
    29,067
    
    
    
    29,067Other Intangibles and Other Assets, net
    
    
    4,795
    
    
    
    4,157Property Actively Marketed for Sale, net
    
    
    190
    
    
    
    823Total Assets
    
    $
    108,606
    
    
    $
    101,437LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesShort-term debt due related parties
    
    $
    
    
    
    $
    1,600Other short-term debt
    
    
    2,009
    
    
    
    2,854Current maturities of long-term debt due related parties
    
    
    1,029
    
    
    
    1,013Current maturities of other long-term debt
    
    
    4,482
    
    
    
    5,559Accounts payable
    
    
    9,985
    
    
    
    7,847Accrued expenses
    
    
    5,029
    
    
    
    4,308Income taxes payable
    
    
    570
    
    
    
    Total Current Liabilities
    
    
    23,104
    
    
    
    23,181Long-Term LiabilitiesLong-term debt, less current maturities
    
    
    14,447
    
    
    
    18,292Accrued and other
    
    
    1,085
    
    
    
    1,662Deferred income taxes
    
    
    3,637
    
    
    
    2,291Total Long-Term Liabilities
    
    
    19,169
    
    
    
    22,245Total Liabilities
    
    
    42,273
    
    
    
    45,426Redeemable Common Stock
    
    
    
    
    
    
    1,000Stockholders EquityCapital StockPreferred
    
    
    35,858
    
    
    
    39,132Common
    
    
    10
    
    
    
    8Additional paid-in capital
    
    
    21,541
    
    
    
    15,371Retained earnings
    
    
    9,276
    
    
    
    1,052Accumulated other comprehensive income (loss)  unrecognized pension costs
    
    
    (352
    )
    
    
    (552
    )66,333
    
    
    
    55,011Total Liabilities and Stockholders Equity
    
    $
    108,606
    
    
    $
    101,437
  2




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##### 



METALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three and Nine Months Ended September 30, 2006 and 2005
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(Unaudited)($ thousands, except per share data)Revenue
    
    $
    55,359
    
    
    $
    39,390
    
    
    $
    159,898
    
    
    $
    117,065Costs and expensesOperating expenses
    
    
    45,378
    
    
    
    31,406
    
    
    
    129,841
    
    
    
    95,339Selling, general, and administrative expenses
    
    
    3,451
    
    
    
    2,885
    
    
    
    9,995
    
    
    
    8,592Depreciation and amortization
    
    
    1,018
    
    
    
    954
    
    
    
    2,957
    
    
    
    2,91149,847
    
    
    
    35,245
    
    
    
    142,793
    
    
    
    106,842Operating income
    
    
    5,512
    
    
    
    4,145
    
    
    
    17,105
    
    
    
    10,223Financial and other income (expense)Interest expense
    
    
    (517
    )
    
    
    (535
    )
    
    
    (1,773
    )
    
    
    (1,999
    )Gain (loss) on sale of property and equipment
    
    
    111
    
    
    
    (70
    )
    
    
    105
    
    
    
    349Other
    
    
    14
    
    
    
    4
    
    
    
    (24
    )
    
    
    12(392
    )
    
    
    (601
    )
    
    
    (1,692
    )
    
    
    (1,638
    )Income from continuing operations
before income taxes
    
    
    5,120
    
    
    
    3,544
    
    
    
    15,413
    
    
    
    8,585Provision for federal and state income taxes
    
    
    1,945
    
    
    
    1,337
    
    
    
    5,845
    
    
    
    3,149Income from continuing operations
    
    
    3,175
    
    
    
    2,207
    
    
    
    9,568
    
    
    
    5,436Discontinued operations, net of income taxesLoss from discontinued operations
    
    
    (895
    )
    
    
    (382
    )
    
    
    (1,904
    )
    
    
    (802
    )Gain on sale of discontinued operations
    
    
    
    
    
    
    
    
    
    
    560
    
    
    
    (895
    )
    
    
    (382
    )
    
    
    (1,344
    )
    
    
    (802
    )Net income
    
    $
    2,280
    
    
    $
    1,825
    
    
    $
    8,224
    
    
    $
    4,634Earnings (loss) per common share:Basic:Income from continuing operations
    
    $
    0.13
    
    
    $
    0.09
    
    
    $
    0.39
    
    
    $
    0.22Discontinued operations, net
    
    
    (0.04
    )
    
    
    (0.02
    )
    
    
    (0.06
    )
    
    
    (0.03
    )Net income
    
    $
    0.09
    
    
    $
    0.07
    
    
    $
    0.33
    
    
    $
    0.19Diluted:Income from continuing operations
    
    $
    0.12
    
    
    $
    0.09
    
    
    $
    0.37
    
    
    $
    0.22Discontinued operations, net
    
    
    (0.03
    )
    
    
    (0.02
    )
    
    
    (0.05
    )
    
    
    (0.03
    )Net income
    
    $
    0.09
    
    
    $
    0.07
    
    
    $
    0.32
    
    
    $
    0.19Weighted Average Common Shares Outstanding:Basic
    
    
    24,971,797
    
    
    
    24,473,051
    
    
    
    24,720,217
    
    
    
    24,015,891Diluted
    
    
    26,042,476
    
    
    
    26,043,791
    
    
    
    25,980,728
    
    
    
    24,206,005
  3




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##### 



METALICO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2006 and 2005
 2006
    
    
    2005(Unaudited)($ thousands)Cash Flows from Operating ActivitiesNet income
    
    $
    8,224
    
    
    $
    4,634Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    3,258
    
    
    
    3,316Amortization of notes payable discounts
    
    
    43
    
    
    
    319Deferred income taxes
    
    
    1,527
    
    
    
    1,295Provision for doubtful accounts receivable
    
    
    143
    
    
    
    43(Gain) Loss on disposal of property and equipment
    
    
    (105
    )
    
    
    (349
    )(Gain) on sale of discontinued operations
    
    
    (903
    )
    
    
    Stock options and warrants issued
    
    
    298
    
    
    
    55Impairment loss
    
    
    823
    
    
    
    Change in assets and liabilities, net of acquisitions:(Increase) decrease in:Trade receivables
    
    
    (6,894
    )
    
    
    (4,758
    )Inventories
    
    
    (2,256
    )
    
    
    1,192Prepaid expenses and other
    
    
    (1,516
    )
    
    
    (532
    )Increase (decrease) in:Accounts payable, accrued expenses, and income taxes payable
    
    
    4,240
    
    
    
    2,506Net cash provided by operating activities
    
    
    6,882
    
    
    
    7,721Cash Flows from Investing ActivitiesProceeds from sale of discontinued operations
    
    
    5,968
    
    
    
    Proceeds from sale of property and equipment
    
    
    319
    
    
    
    2,292Purchase of property and equipment
    
    
    (7,032
    )
    
    
    (6,039
    )Increase in other assets
    
    
    (983
    )
    
    
    (129
    )Cash paid for business acquisitions
    
    
    
    
    
    
    (89
    )Net cash used in investing activities
    
    
    (1,728
    )
    
    
    (3,965
    )Cash Flows from Financing ActivitiesNet borrowings (payments) under revolving lines-of-credit
    
    
    (4,223
    )
    
    
    (1,512
    )Proceeds from other borrowings
    
    
    3,758
    
    
    
    3,166Principal payments on other borrowings
    
    
    (5,195
    )
    
    
    (4,528
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    12Redemption of redeemable common stock
    
    
    
    
    
    
    (100
    )Net cash used in financing activities
    
    
    (5,660
    )
    
    
    (2,962
    )Net (decrease) increase in cash and cash equivalents
    
    
    (506
    )
    
    
    794Cash and cash equivalents:Beginning
    
    
    1,857
    
    
    
    734Ending
    
    $
    1,351
    
    
    $
    1,528
  4




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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
   Note 2  Inventories
  September 30,
    
    
    December 31,2006
    
    
    2005Raw materials
    
    $
    6,585
    
    
    $
    5,713Finished goods and work in progress
    
    
    2,394
    
    
    
    3,655Ferrous scrap metal
    
    
    2,188
    
    
    
    2,498Non-ferrous scrap metal
    
    
    5,172
    
    
    
    4,407$
    16,339
    
    
    $
    16,273
 Note 3  Short and Long-Term Debt
    5




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##### 



Note 4  Capital Stock
  Note 5  Stock Options and Stock Based Compensation
     6




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##### 



Long-Term Incentive Plans
 WeightedAverageExerciseShares
    
    PriceOutstanding at December 31, 2005
    
    
    872,275
    
    
    $
    2.87Granted
    
    
    211,306
    
    
    
    5.39Exercised
    
    
    
    
    
    
    Forfeited or Expired
    
    
    (47,175
    )
    
    
    2.72Outstanding at September 30, 2006 (a)
    
    
    1,036,406
    
    
    
    3.39Exercisable at September 30, 2006 (a)
    
    
    529,877
 
 (a)
    
    As of September 30, 2006, there was $952 of total
unrecognized compensation costs related to non-vested share-based
compensation that is expected to be recognized over a
weighted-average period of 3.5 years.     7




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##### 



Three Months
    
    Nine MonthsEnded
    
    EndedSeptember 30,
    
    September 30,2005
    
    2005Net IncomeAs Reported
    
    $
    1,825
    
    
    $
    4,634Pro Forma
    
    $
    1,789
    
    
    $
    4,552Earnings per share on income from continuing operationsAs ReportedBasic
    
    $
    0.09
    
    
    $
    0.22Diluted
    
    $
    0.09
    
    
    $
    0.22ProformaBasic
    
    $
    0.09
    
    
    $
    0.22Diluted
    
    $
    0.09
    
    
    $
    0.22
 Note 6  Earnings Per Share
  Three Months Ended
    
    
    Three Months EndedSeptember 30, 2006
    
    
    September 30, 2005Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPSIncome from continuing
operations available to common
stockholders
    
    $
    3,175
    
    
    
    24,971,797
    
    
    $
    0.13
    
    
    
    2,207
    
    
    
    24,473,051
    
    
    $
    0.09Effect of Dilutive SecuritiesCommon stock warrants
    
    
    
    
    
    
    122,476
    
    
    
    
    
    
    
    
    
    
    
    94,348Options and rights
    
    
    
    
    
    
    75,887
    
    
    
    
    
    
    
    
    
    
    
    115,661Convertible notes
    
    
    36
    
    
    
    872,318
    
    
    
    
    
    
    
    64
    
    
    
    1,360,731Diluted EPSIncome from continuing
operations available to common
stockholders plus assumed
conversions
    
    $
    3,211
    
    
    
    26,042,476
    
    
    $
    0.12
    
    
    $
    2,271
    
    
    
    26,043,791
    
    
    $
    0.09
 Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2006
    
    
    September 30, 2005Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPSIncome from continuing
operations available to common
stockholders
    
    
    9,568
    
    
    
    24,720,217
    
    
    $
    0.39
    
    
    $
    5,436
    
    
    
    24,015,891
    
    
    $
    0.22Effect of Dilutive SecuritiesCommon stock warrants
    
    
    
    
    
    
    91,617
    
    
    
    
    
    
    
    
    
    
    
    90,500Options and rights
    
    
    
    
    
    
    44,997
    
    
    
    
    
    
    
    
    
    
    
    99,614Convertible notes
    
    
    145
    
    
    
    1,123,897
    
    
    
    
    
    
    
    
    
    
    
    Diluted EPSIncome from continuing
operations available to common
stockholders plus assumed
conversions
    
    $
    9,713
    
    
    
    25,980,728
    
    
    $
    0.37
    
    
    $
    5,436
    
    
    
    24,206,005
    
    
    $
    0.22
 8




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##### 



Note 7  Commitments and Contingencies
 Environmental Remediation Matters
      9




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##### 



Other Matters
   Note 8  Segment Reporting
  LeadScrap Metal
    
    Fabrication
    
    CorporateRecycling
    
    and Recycling
    
    and Other
    
    ConsolidatedThree months ended September 30, 2006Revenues from external customers
    
    $
    34,946
    
    
    $
    20,413
    
    
    $
    
    
    
    $
    55,359Operating income (loss)
    
    
    4,331
    
    
    
    2,506
    
    
    
    (1,325
    )
    
    
    5,512
 Three months ended September 30, 2005Revenues from external customers
    
    $
    22,001
    
    
    $
    17,389
    
    
    $
    
    
    
    $
    39,390Operating income (loss)
    
    
    2,645
    
    
    
    2,585
    
    
    
    (1,085
    )
    
    
    4,145
 Nine months ended September 30, 2006Revenues from external customers
    
    $
    98,087
    
    
    $
    61,811
    
    
    $
    
    
    
    $
    159,898Operating income (loss)
    
    
    13,561
    
    
    
    7,384
    
    
    
    (3,840
    )
    
    
    17,105Total assets
    
    
    65,747
    
    
    
    39,568
    
    
    
    3,291
    
    
    
    108,606
 10




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##### 



Nine months ended September 30, 2005Revenues from external customers
    
    $
    66,264
    
    
    $
    50,801
    
    
    $
    
    
    
    $
    117,065Operating income (loss)
    
    
    7,061
    
    
    
    6,119
    
    
    
    (2,957
    )
    
    
    10,223Total assets
    
    
    49,982
    
    
    
    46,166
    
    
    
    2,547
    
    
    
    98,695
 Note 9  Discontinued Operations
   Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005Revenues
    
    
    
    
    
    
    2,156
    
    
    
    5,837
    
    
    
    5,677
  December 31,2005Accounts receivable
    
    $
    2,351Inventory
    
    
    2,804Prepaid expenses and other current assets
    
    
    43Property and equipment, net
    
    
    4,401Other assets
    
    
    8Total assets of discontinued operations
    
    $
    9,607Accounts payable
    
    $
    598Accrued payroll and related expenses
    
    
    197Current portion of long-term debt
    
    
    18Current environmental remediation costs
    
    
    768Long-term debt
    
    
    33Long-term environmental remediation costs
    
    
    890Total liabilities of discontinued operations
    
    $
    2,504
  11




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##### 



Note
10  Pending Adoption of Accounting Standards
     Note 11  Subsequent Events
   12




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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, 2005, 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, 2005 (Annual
Report).
 General
   Critical Accounting Policies
   Contingencies
  Valuation of Long-lived Assets and Goodwill
  13




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##### 



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, 2006
    
    
    September 30, 2005
    
    
    September 30, 2006
    
    
    September 30, 2005($, pounds and tons in thousands)Net
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    NetWeight
    
    
    Sales
    
    
    %
    
    
    Weight
    
    
    Sales
    
    
    %
    
    
    Weight
    
    
    Sales
    
    
    %
    
    
    Weight
    
    
    Sales
    
    
    %Scrap Metal RecyclingFerrous metals (tons)
    
    
    49.8
    
    
    $
    10,405
    
    
    
    18.8
    
    
    
    45.4
    
    
    $
    8,914
    
    
    
    22.6
    
    
    
    148.5
    
    
    $
    33,901
    
    
    
    21.2
    
    
    
    128.2
    
    
    $
    25,863
    
    
    
    22.1Non-ferrous metals (lbs.)
    
    
    19,550
    
    
    
    24,541
    
    
    
    44.3
    
    
    
    17,516
    
    
    
    13,087
    
    
    
    33.2
    
    
    
    57,415
    
    
    
    64,186
    
    
    
    40.1
    
    
    
    52,627
    
    
    
    40,401
    
    
    
    34.5Total Scrap Metal Recycling
    
    
    
    
    
    
    34,946
    
    
    
    63.1
    
    
    
    
    
    
    
    22,001
    
    
    
    55.8
    
    
    
    
    
    
    
    98,087
    
    
    
    61.3
    
    
    
    
    
    
    
    66,264
    
    
    
    56.6Lead Fabrication (lbs.)
    
    
    22,283
    
    
    
    20,413
    
    
    
    36.9
    
    
    
    20,382
    
    
    
    17,389
    
    
    
    44.2
    
    
    
    65,580
    
    
    
    61,811
    
    
    
    38.7
    
    
    
    57,433
    
    
    
    50,801
    
    
    
    43.4Total Revenue
    
    
    
    
    
    $
    55,359
    
    
    
    100.0
    
    
    
    
    
    
    $
    39,390
    
    
    
    100.0
    
    
    
    
    
    
    $
    159,898
    
    
    
    100.0
    
    
    
    
    
    
    $
    117,065
    
    
    
    100.0
  14




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##### 



Average
    
    Average
    
    AverageFerrous
    
    Non-Ferrous
    
    LeadFor the quarter ending:
    
    Price per ton
    
    Price per lb.
    
    Price per lb.September 30, 2006
    
    $
    209
    
    
    $
    1.26
    
    
    $
    0.92June 30, 2006
    
    $
    240
    
    
    $
    1.17
    
    
    $
    0.96March 31, 2006
    
    $
    236
    
    
    $
    0.90
    
    
    $
    0.95December 31, 2005
    
    $
    214
    
    
    $
    0.75
    
    
    $
    0.91September 30, 2005
    
    $
    196
    
    
    $
    0.75
    
    
    $
    0.86June 30, 2005
    
    $
    178
    
    
    $
    0.78
    
    
    $
    0.89March 31, 2005
    
    $
    234
    
    
    $
    0.77
    
    
    $
    0.92
 Three Months Ended September 30, 2006 Compared to Three Months Ended September 30, 2005
  Scrap Metal Recycling
 Ferrous Sales
  Non-Ferrous Sales
  Lead Fabrication
  Operating Expenses
  15




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##### 



Selling, General, and Administrative
  Depreciation and Amortization
  Operating Income
  Financial and Other Income/(Expense)
   Income
Taxes on Income from Continuing Operations
  Discontinued Operations
   Nine months Ended September 30, 2006 Compared to Nine months Ended September 30, 2005
  Scrap Metal Recycling
 16




---



##### 



Ferrous Sales
  Non-Ferrous Sales
  Lead Fabrication
  Operating Expenses
  Selling, General, and Administrative
  Depreciation and Amortization
  Operating Income
  Financial and Other Income/(Expense)
  17




---



##### 



Income
Taxes on Income from Continuing Operations
  Discontinued Operations
   LIQUIDITY AND CAPITAL RESOURCES
 Cash Flows
   18




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##### 



Future Capital Requirements
  Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest rate risk
  Commodity price risk
  Foreign currency risk
 19




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##### 



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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##### 



Item 1A. Risk Factors
  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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##### 



SIGNATURES
  METALICO, INC.
(Registrant)Date:  October 27, 2006
    By:
    /s/ CARLOS E. AGÜEROCarlos E. AgüeroChairman, President and Chief
Executive OfficerDate:  October 27, 2006
    By:
    /s/ ERIC W. FINLAYSONEric W. FinlaysonSenior Vice President and Chief
Financial Officer
(Principal Financial Officer
and Principal Accounting Officer) 22