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California Steel Reports 2nd Quarter Results

07/16/2008 - California Steel reports net income of $44.2 million on sales revenues of $431.1 million for the second quarter, and net income of $53.8 million on sales revenues of $800.3 million for the six months ended June 30, 2008.

California Steel Industries, Inc. reported net income of $44.2 million on sales revenues of $431.1 million for the second quarter, and net income of $53.8 million on sales revenues of $800.3 million for the six months ended June 30, 2008.
 
Second Quarter Results—The $44.2 million net income compares to net income of $8.2 million in the year-ago second quarter. Sales revenues of $431.1 million reflect a 28% increase compared to sales revenues of $335.8 million in last year’s second quarter.
 
Shipments of 432,771 net tons compare to shipments of 443,332 net tons in last year’s second quarter. Tonnage sold during the quarter was 2% less compared to the second quarter of 2007.
 
EBITDA is $80.3 million, which compares to EBITDA of $24.4 million for the second quarter of 2007.
 
Compared to first quarter 2008's sales of $369.2 million, net sales were 17% higher in the current quarter, while shipments were 7% lower. Net income was more than four times first quarter 2008's net income of $9.6 million.
 
Year-to-Date Results—Net income of $53.8 million compares to net income of $9.5 million for the first six months of 2007. Sales revenues of $800.3 million compare to sales revenues of $650.5 million for the first six months of 2007.
 
Year-to-date EBITDA is $106.9 million, higher than the same period 2007 of $37.1 million.
 
Management Comments—“CSI realized strong margins during this quarter,” said Vicente Wright, President and CEO. “Unlike the international market, today's economic conditions in the United States are reflected in somewhat softer shipment levels. However, CSI's continued focus on cost controls throughout the
company enabled us to report these results.”

On March 28, 2008, CSI entered into a term loan agreement with the Bank of Tokio-Mitsubishi Ltd. for a $40-million unsecured five-year term loan to finance construction of a reheat furnace and other capital needs. On April 1, 2008, the entire principal amount of $40 million was received by CSI.
 
There is no outstanding balance under the company's Revolving Credit Agreement as of June 30, 2008, with availability of over $109.2 million. The company has a balance of cash and cash equivalents of $160.2 million as of June 30, 2008.
 
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 1000 employees.