FRANKLIN PARK, Ill., July 28 /PRNewswire-FirstCall/ -- A. M. Castle & Co. (NYSE: CAS), a global distributor of specialty metal and plastic products, value-added services and supply chain solutions, today reported financial results for the second quarter ended June 30, 2009.
Consolidated net sales were $195.1 million for the three months ended June 30, 2009, compared to $397.1 million in the second quarter of 2008 reflecting continued weakness in demand as a result of the global recession. The Company reported a net loss for the quarter of $5.5 million or $0.24 loss per diluted share as compared to net income of $11.3 million or $0.49 income per diluted share in the prior year quarter.
The Company's Metals segment sales were $174.1 million in the second quarter of 2009, compared to $365.4 million last year. Total Metals revenue declined 52% compared to the prior year quarter, as volume of tons sold per day declined approximately 51%. The demand softness experienced in the second quarter was broad-based, impacting virtually all end-markets and products reflecting significantly weaker demand conditions compared to last year.
In the Plastics segment, second quarter sales of $21.0 million were down $10.7 million compared to $31.7 million in the prior year period due to lower sales volume. However, sales in the Plastics segment remained relatively consistent with the first quarter of 2009 as second quarter end-market demand remained stable across most key industries.
"Sales activity and overall business conditions during the second quarter continued to be difficult across most of the end-markets that we serve," stated Michael Goldberg, President and CEO of A.M. Castle. "Gross profit margins for the quarter of 25.6% were higher than the 25.2% in the second quarter of 2008 but were weaker than the 27.8% realized in the first quarter of this year due to increased competition for business in a low-demand environment."
Goldberg continued, "We continued with our cost reduction strategy during the second quarter and saw a number of previously announced actions come to fruition. For the second quarter, consolidated operating expenses were $57.6 million, which represents a 30% reduction versus $82.3 million in the second quarter of 2008. We continue to strive to get our costs in line with our revenues and expect to achieve our goal of reducing 2009 operating costs by $65 million compared to 2008. We remain steadfast to our conservative approach to capital spending."
The Company's debt-to-capital ratio was 24.9% as of June 30, 2009, compared to 25.6% as of March 31, 2009. Total debt was $114 million as of June 30, 2009, compared to $120 million as of March 31, 2009. Interest expense during the second quarter was $1.6 million, or $0.7 million lower than the prior year period due to lower borrowing rates.
"We continue to look for indications of economic recovery. We have seen a few positive signs in some of the macroeconomic trends, most notably an increasing PMI index over the last six months and increased activity in China resulting from its stimulus plan. We recognize that we still have a long road ahead of us. While destocking efforts continued across most end-markets throughout the first half of the year, we remain in close contact with our key customers in order to better understand demand and capacity for 2010. At this point, our customers overall expect destocking to abate in the second half of 2009 compared to the first half of the year," stated Goldberg.
"Our focus for 2009 remains on expense control, working capital management and completing the rollout of our Oracle ERP implementation. We are pleased to report a successful conversion of our domestic western branches to the new ERP platform in June of 2009. We remain on track to convert the balance of the U.S. locations in the second half of 2009," concluded Goldberg.
Webcast Information
Management will hold a conference call at 11:00 a.m. ET today to review the Company's results for the three month and six month period ended June 30, 2009. The call can be accessed via the Internet live or as a replay. Those who would like to listen to the call may access the webcast through http://www.amcastle.com.
An archived version of the conference call webcast will be accessible for replay on the above website until the next earnings conference call. A replay of the conference call will also be available for seven days by calling 303-590-3030 (international) or 800-406-7325 and citing code 4110286.
About A. M. Castle & Co.
Founded in 1890, A. M. Castle & Co. is a global distributor of specialty metal and plastic products and supply chain services, principally serving the producer durable equipment sector of the economy. Its customer base includes many Fortune 500 companies as well as thousands of medium and smaller-sized firms spread across a variety of industries. Within its metals business, it specializes in the distribution of alloy and stainless steels; nickel alloys; aluminum and carbon. Through its subsidiary, Total Plastics, Inc., the Company also distributes a broad range of value-added industrial plastics. Together, Castle operates over 56 locations throughout North America, Europe and Asia.
