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Castle Enjoys Sales, Volume Gains in Q1

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A.M. Castle and Co., Oak Brook, Ill., reported sales and volume increases during its first quarter. The specialty metals distributor reported net sales of $145.9 million, an increase of 18 percent over the prior quarter and 7 percent over first-quarter 2017.

The company’s volumes increased 13 percent from fourth-quarter 2017 and 4 percent from the same quarter last year. 

Castle reported a net loss of $5.1 million during the quarter, including $7.1 million in interest expense. EBITDA was $3.8 million for the quarter. 

“We are very pleased that the operating performance improvements we implemented last year have translated into significantly improved financial results in only our second full quarter since our emergence from bankruptcy,” said President and CEO Steve Scheinkman. “Our quarterly net sales were higher compared to both the prior quarter and the first quarter of last year, driven by strong volume growth and higher selling prices. Selling prices improved 2.8 percent compared to the fourth quarter, and 5.1 percent compared to the first quarter of last year, as a result of both strong demand and the announced imposition of tariffs by the U.S. on imports of steel and aluminum from certain countries.”

The company also announced it reached an agreement in principle with its first lien lender, PNC Bank, to provide for up to an additional $20.5 million of borrowing capacity under its existing first lien credit facility.

Scheinkman is optimistic about the company’s position in the second quarter and beyond.

“Our gross material margin improved sequentially throughout the first quarter and continued into April," he said. "While we saw some customer buying accelerated in the first quarter in anticipation of price increases, we did not experience any slowing of sales in April and we enter May with the strongest order book we have had in quite some time. Due to our established domestic sourcing relationships, we continue to be well-situated as uncertainty builds around the market in response to announced tariffs and potential for quotas on imports.”