ALJ Announces 1st Quarter Earnings
02/16/2012 - ALJ, the parent company of Kentucky Electric Steel, reported a net profit of $1.724 million on net sales of $38.90 million for the first quarter ended December 31, 2011.
ALJ Regional Holdings, Inc., the parent company of Kentucky Electric Steel, reported a net profit of $1.724 million on net sales of $38.90 million for the first quarter ended December 31, 2011.
“The first quarter of our fiscal year, which corresponds to the fourth calendar quarter, is typically a tough one in the steel industry due to declining shipments related to customer holiday shutdowns,” said John Scheel, ALJ’s Chief Executive Officer. “We saw that once again this year.”
The first quarter net profit of $1.724 million ($0.03 per share) was nearly triple that in 2010 (net profit of $662,510 ($0.01 per share)) mostly due to higher steel prices. Both MBQ and SBQ product pricing in the 2011 quarter were up about 7% due solely to scrap prices, which were at the highest level ever for a December. MBQ base prices were barely up year-over-year as demand in construction products continued to be poor. SBQ base prices were up strongly pulled by strong demand for automotive round bar.
“Though we produce only flat bar, the overall market dynamics favored the SBQ side of our product mix with significant enough price strength to buoy our overall earnings results,” said Scheel. “As can be seen, it is a complicated set of dynamics but we try to work them every day toward the best result for our customers, employees and shareholders.”
The company’s first quarter net sales of $38.90 million compare to net sales of $32.67 million for the year-ago first quarter.
ALJ is the parent company of KES Acquisition Co., which does business as Kentucky Electric Steel, the owner and operator of a steel minimill near Ashland, Ky., producing both merchant bar quality (MBQ) flats, and special bar quality (SBQ) steel flats.
