Aug. 7, 2014
A.M. Castle Reports Difficult Second Quarter
A.M. Castle & Co., Oak Brook, Ill., reported a net loss of $72.3 million during the company's second quarter, a significant decline from the $16 million the company lost in the previous quarter, and the $3.8 million loss in the same quarter last year.
Castle's net sales in the quarter totaled $249.5 million, down 8.7 percent from the second quarter last year. Through the first six months Castle’s net sales totaled $502.9 million, down 11.1 percent from 2013 as a result of the company’s ongoing restructuring.
"Sales results for the second quarter did not materialize as we had expected. The positive sales trends we saw at the end of the first quarter and beginning of the second quarter leveled off into May and June," CEO Scott Dolan said during the company’s quarterly conference call.
Dolan expressed disappointment with the company's financial performance. "While this economic recovery has been unbelievably unique and lumpy, there is no question there are pockets of strength where an organization with a strong niche and global presence like Castle should be able to succeed. We can do better and we will do better," he said.
Net sales from Castle's Metals segment during the second quarter totaled $214.1 million, 10.6 percent lower than the second quarter of 2013 and 2.3 percent lower than the first quarter. Lower pricing and a different product mix accounted for most of the decline, compared to the same quarter last year.
On a positive note, the company won a major contract to be a preferred supplier of United Technologies Corp. It also continued its restructuring initiatives, incurring $900,000 of employee termination and related charges, which the company anticipates will save approximately $7 million annually.
"I think it's clear from this quarter's performance, which included a handful of execution issues in various parts of the business, that we still have some work to do. The decisions we have made are absolutely the right ones for our long-term success, but they have obviously hampered our results in the short term," said Dolan said, who expects a better third quarter.