California Steel Reports 2nd Quarter 2009 Results
08/12/2009 - California Steel Industries reports a net loss of $2.8 million on sales of $104.2 million for the second quarter, and a net loss of $18.2 million on net sales of $251.3 million for the six months ended June 30, 2009.
California Steel Industries, Inc. reported a net loss of $2.8 million on sales of $104.2 million for the second quarter, and a net loss of $18.2 million on net sales of $251.3 million for the six months ended June 30, 2009.
Second Quarter Results — The $2.8 million net loss compares with a net loss of $15.3 million for the previous quarter, and net income of $44.2 million for the year-ago second quarter. EBITDA, as adjusted, was $8.5 million, 58% lower than the previous quarter, and 89% lower than the year-ago second quarter.
Sales revenues for the quarter are $104.2 million on shipments of 176,832 net tons. Average sales prices were down 37% from the previous quarter, and down 40% from the year-ago second quarter.
While the tons shipped were 13% higher than the previous quarter’s 156,884 net tons, it was 59% lower than second quarter 2008's level of 432,771 net tons. Indicative of falling demand for steel products and lower sales prices, sales revenues were 29% lower than the previous quarter and 76% lower than the year-ago second quarter.
Six-Month Results — The $18.2 million net loss compares to net income of $53.85 million for the first six months of 2008. EBITDA, as adjusted, was $28.9 million. Net sales of $251.3 million are 69% lower than the first half of 2008. Sales tonnage at 333,716 net tons was 63% lower than in 2008. Year to date average sales prices are down 14% from 2008.
Management Comments — “This report should be of no surprise to anyone: the rapid decline of sales prices over the past six to nine months are, obviously, the drivers of results such as these throughout our steel industry,” commented Vicente Wright, President & CEO.
“However,” he continued, “while still at historically low levels, we are experiencing a better order book than previous months - which is a welcomed change - due to the completion of our customers' de-stocking phase and the start of their re-stocking phase.”
Wright noted the company continues to hold a strong liquidity position, with a balance of cash and cash equivalents as of June 30, 2009 of $91.8 million. The company has no outstanding balance under its Revolving Credit Agreement as of June 30, 2009, and availability of more than $88 million.
California Steel Industries is the leading producer of flat rolled steel products in the western United States (the 11 states located west of the Rocky Mountains) based on tonnage billed, with a broad range of products, including hot rolled, cold rolled, electric resistant weld pipe and galvanized coil and sheet. Located near Fontana, Calif., the company has about 900 employees.
