AK Steel Reports 1st Quarter 2009 Results
04/22/2009 - AK Steel reports a net loss of $73.4 million on net sales of $922.2 million for the first quarter of 2009.
AK Steel reported a net loss of $73.4 million on net sales of $922.2 million for the first quarter of 2009.
The $73.4 million net loss ($0.67 per diluted share of common stock) compares to net income of $101.1 million ($0.90 per diluted share) for the first quarter of 2008. Net sales of $922.2 million compare to net sales of $1,791.4 million for the year-ago first quarter, and shipments of 778,800 tons compare to shipments of 1,578,400 tons for the year-ago first quarter.
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Pension Trust Fund Contribution
AK Steel’s Board of Directors has authorized the company to make a $50 million contribution to its pension trust fund.
The contribution, which will be made during the second quarter, will reduce the company's future funding requirements. Following the contribution, AK Steel will have made $934 million in pension fund contributions since January of 2005.
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The company said its average selling price was $1,184 per ton in the first quarter, a 4% increase over the $1,135 per ton in the first quarter of 2008, but a 13% decrease from the $1,359 per ton reported in the fourth quarter of 2008. The year-over-year increase in average selling price resulted from a higher percentage of stainless and electrical steel shipments, which was partially offset by lower spot market prices. The decrease in the average selling price (vs. the previous quarter) resulted primarily from lower spot market prices and lower surcharges.
The company recorded an operating loss of $99.9 million ($128 per ton) for the first quarter, which compares to an operating profit of $169.7 million ($108 per ton) in the year-ago first quarter. The company ended the quarter with a strong cash and credit position, comprising $462.0 million of cash and $676.6 million of availability under its credit facility, for total liquidity of more than $1.1 billion.
"Despite the worst market conditions in decades, AK Steel employees responded with outstanding cost and quality performances in the first quarter," said James L. Wainscott, Chairman, President and CEO. "The hard work our company has performed over the past five years allowed us to endure a quarter of record-low steel shipments, and positions us well to make the most of improving markets the balance of the year."
Looking ahead to the second quarter, AK Steel said it expects shipments to be approximately 800,000 tons, slightly higher than for the first quarter. The company anticipates that its second-quarter 2009 average per-ton selling price will be approximately 4% below the first quarter of 2009 level. The company also expects planned maintenance costs to be approximately $15 million higher in the second quarter vs. the first quarter, primarily the result of a planned blast furnace maintenance outage at its Middletown Works, which is underway.
AK Steel said it expects to benefit from lower operating and raw material costs in the second quarter (vs. the first quarter), and anticipates an operating loss of approximately $50 million, a 50% improvement from the first quarter.
AK Steel produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, appliance, construction and electrical power generation and distribution markets. The company employs about 6200 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pa.; Ashland, Ky.; Rockport, Ind.; and its corporate headquarters in West Chester, Ohio.
AK Tube LLC, a wholly owned subsidiary of AK Steel, employs about 260 men and women in plants in Walbridge, Ohio, and Columbus, Ind. AK Tube produces carbon and stainless electric resistance welded (ERW) tubular steel products for truck, automotive and other markets.
