Oct. 30, 2013
Castle to Close Four More Facilities in Restructuring
A.M. Castle & Co., Oak Brook, Ill., reported a net loss of $6.9 million during the third quarter, a reversal of the $3.2 million in earnings reported during the same quarter of 2012. Compared to the previous quarter, net sales were down 81.5 percent.
Net sales for the quarter totaled $235.7 million, 22.5 percent below the same period in 2012. Net sales were also down from the $273.4 million reported in the second quarter.
Through three quarters, Castle has reported a net loss of $21.3 million, compared to a loss of $4.1 million in 2012. Year-to-date net sales of $819.8 million are down 17.7 percent from last year. The sales declines were primarily due to Castle’s decision to consolidate its operations through the closure of several facilities.
"Although the third quarter and the first nine months of 2013 were challenging from a top-line perspective, we have achieved cost savings through our restructuring efforts, and we are optimistic about additional opportunities to drive operating efficiencies and working capital improvements going forward," said CEO Scott Dolan during the company’s quarterly conference call. "Our sales initiatives and commercial objectives are key priorities for our leadership team.”
As part of Castle’s ongoing restructuring, the company plans to close four more facilities where it “has a redundant footprint.” Castle will consolidate the operations into existing facilities, with the restructuring continuing into 2014.
In the company’s Metals segment, third-quarter 2013 net sales of $220.0 million were 19.2 percent lower than 2012, primarily due to lower volumes, as tons sold per day for the third quarter of 2013 were down 15.7 percent from the third quarter of 2012.
Conversely, in the Plastics segment, third-quarter 2013 net sales of $33.7 million were 6.7 percent higher than the prior-year period. The growth in net sales of plastic products was primarily driven by strength in the automotive, life science and marine sectors.
“We expect market demand for the rest of the year to be similar to what we experienced during the first nine months of this year. We believe our value-added solutions, strong customer focus and many commercial and operational changes will position us to compete better in the current market conditions and more profitably grow the business as our end markets improve,” Dolan said.