Nov. 11, 2015
Castle Cuts Losses Compared to Prior Quarter
A.M. Castle & Co., Oak Brook, Ill., reported a net loss of $26.3 million during the company’s third quarter, a decline from the $7.3 million loss in the prior-year quarter, but an improvement from the $58.9 million loss in the second quarter. Through nine months, the specialty metals distributor reported a net loss of $105.9 million, a 10.8 percent decline from 2014.
Castle’s net sales totaled $184.7 million for the third quarter, down 24.8 percent compared with third-quarter 2014. For the year to date, the company’s net sales declined 18.9 percent to $606.6 million.
Castle has continued to reshape its business in the face of losses the past several years. It completed the closure and consolidation of five facilities during the third quarter, and broke ground on a new 208,000-square-foot plant in Janesville, Wis., which will allow for the first-quarter closure and sale of its Franklin Park, Ill., facility.
“Our transition plan is succeeding on many important fronts, despite challenging market conditions,” says President and CEO Steve Scheinkman, pointing to $8.7 million of positive operating cash flow and a $5.1 million reduction of operating expenses compared with the prior quarter.
Net sales in the company’s Metals business totaled $150.6 million in the third quarter, 28.5 percent lower than the prior-year quarter and down 9.5 percent from the second quarter. Tons sold per day were down 27.3 percent compared 2014 and down 2.7 percent compared to the second quarter.
Looking ahead, Scheinkman projected a mixed bag for Castle’s primary markets. “While the steel industry in general faces a challenging environment, the conditions are different for each of our target markets. The energy market is particularly weak, and this trend is expected to continue for the foreseeable future. Industrial markets are generally soft, but there are pockets of opportunity, and our new, more nimble branch management strategies are enabling us to capitalize on more of those opportunities. The aerospace market remains strong, and we expect continued growth opportunities in this market,” he said.