Metalico, Inc. (AMEX:MEA) Friday reported its best year ever, with increases in revenues and operating income for 2006 compared to 2005.

Net income for the year ended December 31, 2006 was $10,048,000 or $.39 per share on sales of $207,655,000, compared to net income of $5,589,000 or $.23 per share on sales of $155,237,000 for the year ended December 31, 2005, both on a diluted basis. These results represent an increase in sales of $52,418,000 or 34% over the 2005 results. Operating income for 2006 increased $5,465,000 or 39.8% to $19,183,000, compared to $13,718,000 for 2005.

Metalico's Scrap Metal segment enjoyed year-over-year unit volume increases of approximately 16% for ferrous and 7% for non-ferrous. The Lead Fabrication segment experienced approximately 5% higher year-over-year unit volume. Non-ferrous metal prices saw an increase of 51% year over year, while prices for ferrous and fabricated lead products also rose year over year by 7% and 11%, respectively.

The Company's Scrap segment experienced a 68% increase in operating income while the Lead Fabrication segment increased operating income by 12%. Net income for 2006 benefited from a lower effective tax rate of 35% (versus 40% for 2005) due to state investment tax credits earned for operating and investing in approved enterprise zones.

Fourth-quarter sales increased by 25.1% to $47,757,000 in 2006, compared to $38,172,000 in the prior year's fourth quarter. Operating income for the quarter ended December 31, 2006 was $2,078,000, compared to operating income of $3,495,000 for the quarter ended December 31, 2005, a decrease of 40.5% due to higher operating costs.

Net income for the fourth quarter of 2006 was $1,824,000 or $.07 per diluted share compared to net income and diluted earnings per share of $955,000 and $.04 respectively. A decrease in the Company's income tax expense of $1,041,000 in the fourth quarter of 2006 from the comparable period for 2005 was principally responsible for the increase in fourth-quarter net income.

In May of 2006, the Company sold substantially all of the lead smelting assets of its Gulf Coast Recycling, Inc. subsidiary, in Tampa, Florida, and exited the lead smelting business. For the year-ends December 31, 2006 and 2005, the Company has reclassified the operating losses of Gulf Coast to discontinued operations.

"Our record financial performance in 2006 resulted from solid year-over-year unit volume growth across all commodity products sold and continued pricing strength in non-ferrous metals," said Carlos E. Aguero, Metalico's President and Chief Executive Officer.

"In addition, we improved our net working capital, reduced total debt by more than one-third, and significantly improved shareholders equity. A stronger balance sheet will enhance our financial flexibility as we continue executing our strategy of growth through acquisitions and internal development projects while diversifying our mix of commodity metal revenues."

EBITDA (*defined below) for 2006 was $23,793,000, an increase of $6,198,000 (35.2%) over $17,595,000 of EBITDA reported for 2005.

Metalico's outstanding debt fell to a total of $18,502,000 as of December 31, 2006 from $29,318,000 at December, 31, 2005, a decrease of 37% or $10,816,000, even after financing approximately $9,861,000 in capital expenditures. Shareholders' equity increased by 32% or $17,588,000 as of December 31, 2006 to $72,599,000, from $55,011,000 as of December 31, 2005.

The Company's results also reflect the consolidation of its investment in AgriFuel Co., a biodiesel development company.

As of December 31, 2006, Metalico had 11,754,688 common shares issued and outstanding and 14,372,187 non-trading preferred shares (exchangeable for common at a one-to-one ratio) outstanding, for a total of 26,126,875 common equivalent shares outstanding as of that date. The company's preferred stock is held principally by the financial institutions that financed Metalico at its inception.

Since December 31, 2005, 4,006,421 freely trading shares of Metalico common stock have been issued from the conversion of 2,645,684 preferred shares (including 507,213 shares converted in 2007) and the exchange of convertible debt for another 1,360,737 shares.

Metalico, Inc. is a rapidly growing holding company with operations in two business segments: ferrous and non-ferrous scrap metal recycling, and fabrication of lead-based products. The Company operates six recycling facilities through New York State and five lead fabrication plants in four states. Metalico's common stock is traded on the American Stock Exchange under the symbol MEA.

(*)The Company defines EBITDA as earnings before interest, income taxes, depreciation, amortization, other income and expense, stock based compensation in subsidiaries, minority interests and discontinued operations. EBITDA is considered non-GAAP financial information and a reconciliation of net income to EBITDA is included in the attached financial tables. Metalico's results for all periods have been adjusted for its Gulf Coast Recycling divestiture during the second quarter of 2006 as Gulf Coast's results of operations have been reclassified as discontinued operations.