May 25, 2016
 
Castle Reports First-Quarter Loss

A.M. Castle & Co., Oak Brook, Ill., reported a net loss of $36.9 million in the company’s first quarter, a decline of 143.7 percent from the same quarter last year. The specialty metal distributor reported a loss of $119.7 million in the prior quarter. Castle’s net sales totaled $163.8 million in the quarter, down 13.1 percent from the first quarter last year. Net sales totaled $231.5 million in fourth-quarter 2015.

“Since I joined Castle a year ago, our primary focus has been on restructuring our branch network costs and improving our capital structure. During the first quarter, we substantially completed the restructuring plan we announced in April 2015 within the projected timeline and on budget,” said President and CEO Steve Scheinkman.

Two major transactions highlighted the first quarter. Castle sold most of its energy inventory and closed its Houston and Edmonton facilities. Later, it sold its Total Plastics, Inc., subsidiary for $55 million.

The company says it has largely completed the restructuring of its branch activities, though it incurred costs related to the opening of its new facility in Janesville, Wis., and the movement and repositioning of inventory.

Excluding the sale of assets, Castle achieved an 8.5 percent quarter-over-quarter increase in tons sold and an improvement in overall gross material margin. “With the goals of each of our branches now clearly defined, we are focused on continuing to improve our overall margin performance and fine-tuning our operating expenses on an individual branch basis while increasing sales through our commercial activities,” Scheinkman said.

After extensive restructuring and cost cutting, the company has begun to expand its sales force again, hiring back several former Castle salespeople “to help drive customer relationships and enhance sales performance in both of our end markets,” he added.

Looking at its primary end markets, Castle executives see continued strength in aerospace and defense, as the company signed several supply agreements with subcontractors during the quarter. The industrial market is less positive, they say, though Castle anticipates growth as customers work through inventories and overall demand improves.


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