March 6, 2013
A.M. Castle Reports Full-Year Loss
A.M. Castle & Co., Oak Brook, Ill., reported a net loss of $9.7 million for 2012, a decline from the $1.8 million loss suffered in 2011. Net sales totaled $1.27 billion, up 12.3 percent from the previous year.
For the fourth quarter, Castle reported net sales of $274.0 million, down 2.9 percent from the same period in 2011. The company reported a $5.6 million net loss during the quarter, an improvement from the $12.0 million loss in the fourth quarter the previous year.
"As the overall market conditions deteriorated throughout the fourth quarter, we implemented additional measures to lower our costs in order to better position the company heading into 2013 and minimize the loss for the quarter," said Scott Dolan, president and CEO, during the company's quarterly conference call. “In addition, even with the challenging demand environment during the fourth quarter, we surpassed our second half of 2012 inventory reduction goal of $50 million. Inventory levels declined over $65 million, on a replacement cost basis, during the second half of 2012.”
In Castle's Metals segment, fourth-quarter net sales of $242.3 million were down 4.2 percent from the same period in 2011. Metals segment tons sold per day, excluding Tube Supply, for the fourth quarter of 2012 were down 16.3 percent from the fourth quarter of the previous year. Sequentially, tons sold per day were 9.0 percent lower than the third quarter of 2012 as virtually all key end-use markets experienced softer demand due to extended customer shutdowns and weaker conditions in the overall economy compared to the third quarter.
For the full year, Castle's Metal segment sales totaled $1.14 billion, up 12.8 percent from 2011. Tons sold per day, excluding Tube Supply, declined 3.9 percent from 2011 as gains in oil and gas were offset by weakness in the industrial business.
Castle has targeted $33 million of annual operating income improvement as part of a plan announced in January. The company expects to realize $20 million of the targeted amount during 2013 through a restructuring of its operations.
"We remain cautious heading into 2013 based on sentiments from many of our customers and a weaker overall economic outlook compared to early 2012. We will continue to focus on working capital management, maintaining strong gross material margins and executing the plan to reduce costs, improve operating performance and customer service that we announced in January. We have executed the initial steps of our improvement plan as scheduled," Dolan said.