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Edgen Group Reports Second Quarter 2012 Results

The following table sets forth the computation of basic and diluted loss per share for the period from May 2, 2012 to June 30, 2012 (the period since the IPO and the Reorganization). Prior to the IPO and the Reorganization, all income or loss generated from our operations was allocated to the Predecessor. Because we historically operated as a series of related partnerships and limited liability companies, and there was no single capital structure upon which to calculate historical earnings per share information, we have not provided a calculation of basic and diluted loss per share for periods prior to the IPO and the Reorganization.

Basic loss per share:
Numerator (in thousands):
Net loss attributable to Edgen Group Inc. $ (6,074)
Class A shares 17,213,423
Basic weighted average common shares outstanding 17,213,423
Basic loss per share $ (0.35)
Diluted loss per share:
Numerator (in thousands):
Net loss attributable to Edgen Group Inc. $ (6,074)
Basic weighted average common shares outstanding 17,213,423
Class A unvested restricted shares -
Class B shares -
Class A options (vested and unvested) -
Diluted weighted average common shares outstanding 17,213,423
Diluted loss per share $ (0.35)

The table below presents the shares that were excluded from our dilutive earnings per share calculation because they were anti-dilutive.
Class A unvested restricted shares 311,317
Class B shares 24,343,138
Class A options (vested and unvested) 1,723,981
Total anti-dilutive shares 26,378,436

Use of Non-GAAP Financial Measures

We use EBITDA and Adjusted EBITDA in our business operations to, among other things, evaluate the performance of our operating segments, develop budgets and measure our performance against those budgets, determine employee bonuses and evaluate our cash flows in terms of cash needs. We find these measures to be useful tools to assist us in evaluating financial performance because they eliminate items related to capital structure, taxes and certain non-cash charges. These Non-GAAP measures, as calculated by us, are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these Non-GAAP measures have material limitations as analytical tools, are not a measure of financial performance or liquidity under GAAP and should not be considered in isolation or as an alternative to or superior to GAAP measures such as net income, operating income, net cash flow provided by operating activities or any other measure of financial performance or liquidity calculated and presented in accordance with GAAP. We define EBITDA as net income or loss, plus interest expense, provision for income taxes, depreciation, amortization and accretion expense. We define Adjusted EBITDA as EBITDA plus equity based compensation, loss on prepayment of debt and other income and expense. EBITDA and Adjusted EBITDA are commonly used as supplemental financial measures by management and external users of our financial statements, such as investors, commercial banks, research analysts and rating agencies, to assess: (1) our financial performance without regard to financing methods or capital structures; and (2) our ability to generate cash sufficient to pay interest and support our indebtedness. The table set forth below provides reconciliations of EBITDA and Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP.
Reconciliation of GAAP net income (loss) to non-GAAP EBITDA and Adjusted EBITDA:
Three months ended Six months ended Year ended


Trailing twelve

months ended
June 30, June 30, December 31,   June 30,
2012 2011 2012 2011 2011 2012
NET INCOME (LOSS) $ (13.8 ) $ 1.0 $ (9.7 ) $ (6.4 ) $ (4.2 ) $ (7.5 )
Income tax expense (0.2 ) 1.6 1.1 2.1 4.1 3.1
Interest expense - net 19.5 22.1 41.6 43.8 86.5 84.3
Depreciation and amortization expense   7.9     8.9   16.1     17.8     35.6     33.9  
EBITDA $ 13.4 $ 33.6 $ 49.1 $ 57.3 $ 122.0 $ 113.8
Loss on prepayment of debt 17.0 - 17.0 - - 17.0
Equity based compensation   3.7     0.7   4.4     1.3     2.6     5.7  
ADJUSTED EBITDA $ 34.1   $ 34.3 $ 70.5   $ 58.6   $ 124.6   $ 136.5  

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