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California Steel Reports Year End 2007 Results
02/07/2008 - California Steel reports a net loss of $12.2 million on sales of $297.0 million for the fourth quarter, and a net loss of $906,000 on net sales of 1.28 billion for the year ended December 31, 2007.
California Steel Industries, Inc. reported a net loss of $12.2 million on sales of $297.0 million for the fourth quarter, and a net loss of $906,000 on net sales of 1.28 billion for the year ended December 31, 2007.
Fourth Quarter Results—The net loss of $12.2 million compares to net income of $8.4 million in the year-ago fourth quarter. Sales of $297.0 million compare to sales of $309.4 million in the year-ago fourth quarter.
During the quarter, the company shipped 413,143 net tons, slightly higher than in the fourth quarter of 2006. The company's average sales price decreased 9% compared to the fourth quarter of 2006, and decreased 6% when compared to third quarter 2007.
Capital expenditures during the quarter were $14.3 million. EBITDA was negative $12.5 million, down from fourth quarter 2006's level of $22.0 million.
Full-Year Results—The net loss of $906,000 compares to net income of $109.0 million in 2006. Net sales of $1.28 billion reflect a 6% decrease from sales in 2006.
Shipments for the year totaled 1.73 million net tons, 10% lower than in 2006, although shipments of ERW pipe were again at record levels, breaking 2006's record setting year.
Despite the noted decreases in the fourth quarter, the company’s average sales price for the year was about equal to 2006.
Capital expenditures during the year were $33.1 million. EBITDA was $37.5 million, substantially lower than 2006's $213.8 million.
Management Comments—"2007 was a difficult year for California Steel, and is a strong example of the highly cyclical nature of the steel industry," said Masakazu Kurushima, President and CEO. "In 2006, we realized some of the best results in our company's history. This past year, we faced extremely tight margins, given the economic conditions driving demand and pricing here in the United States, while competing in a robust slab market worldwide," he continued.
The balance under the company's Revolving Credit Agreement was $26.5 million as of December 31, 2007, with net availability of over $82.7 million. The company had a cash balance of $13.6 million.
California Steel Industries is the leading producer of flat rolled steel products in the western United States (comprising the 11 states located west of the Rocky Mountains) based on tonnage billed. Its broad range of products includes hot rolled, cold rolled, and galvanized sheet and electric resistant welded pipe. Located in Fontana, Calif., the company has about 1000 employees.
