Sales Gains Drive Profitable Quarter for A.M. Castle
A.M. Castle & Co., Franklin Park, Ill., returned to profitability during the first quarter, posting a net profit of $2.7 million. The specialty metals distributor had losses of $4.6 million in the same quarter last year, as well as a $1.7 million loss in the fourth quarter.
Castle’s net sales totaled $272.8 million for the three-months ended March 31, 22.3 percent better than the $223.0 million in the first quarter of 2010. Net sales in the fourth quarter totaled $235.6 million.
Sales in the company's Metals segment were $244.6 million, 22.5 percent higher than last year. Metals segment tons sold per day for the first quarter of 2011 were up 17.7 percent from the first quarter of 2010 and 12.3 percent from the fourth quarter of 2010.
"Sales volume was strong for the quarter, reflecting continued improvement in demand within several key end-use markets including oil and gas, mining and heavy equipment, and general industrial markets. Sales growth gained momentum throughout the quarter with March volume per day growing 8.9 percent from January, making March our strongest volume month on a per-day basis since January of 2009,” said Michael Goldberg, president and CEO.
Castle has been quiet on the consolidation front for the past several years, but it is exploring opportunities to grow through acquisition. “We’re very focused around certain end-use markets, such as aerospace, oil and gas, and heavy equipment. The potential candidates may or may not have international operations; they may be domestic. Our orientation is to look through the market lens rather than the geographic lens,” Goldberg said.
He expects underlying demand to continue to improve during the second quarter, while prices appear stable. “Therefore, we expect further sequential sales growth and increased profitability during the second quarter, and we are optimistic about our opportunities to expand our share of the market as the economic recovery progresses."
Goldberg noted that virtually all of the signs— demand, pricing, customer confidence, capital spending and inventory in the chain—point to a healthy business environment in the near future. Additionally he pointed to the macroeconomic trends, such as the PMI indexes, which have been trending positively for more than a year. “If prior correlations hold true, we believe the recent PMI trends bode well for continued expansion of our business into 2012,” he said.