Oregon Steel Mills to Idle Napa Pipe Mill
06/23/2004 - Oregon Steel Mills, Inc. will idle indefinitely its large-diameter pipe mill located in Napa, Calif., beginning in late June.
Oregon Steel Mills, Inc. will idle indefinitely its large-diameter pipe mill located in Napa, Calif., beginning in late June.
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In late May, Oregon Steel forecasted second-quarter net income within a range of $1.00 to $1.20 per share, exclusive of any further labor dispute settlement adjustments. Oregon Steel now anticipates second-quarter net income from continuing operations will meet or exceed $1.20 per share (exclusive of any further labor dispute settlement adjustments) based on 26.7 million diluted weighted average shares outstanding at March 31, 2004. The company had recorded a pretax non-cash charge of $7 million ($.26 per share) in the first quarter related to its tentative agreement to issue four million shares of company common stock as part of the settlement of the labor dispute at the company's majority-owned subsidiary Rocky Mountain Steel Mills. The charge will fluctuate each quarter as the company continues to adjust the common stock to its current value. The company expects the Settlement agreement will be finalized in July. |
Jim Declusin, the company's CEO, stated, "In this tight steel market we do not believe the operating margin opportunities in large-diameter pipe justify the allocation of steel plate from our Portland, Ore., plate mill for conversion into large-diameter pipe. We feel that, at the present time, the best economic decision for the company is to direct production from the Portland mill to support our plate and coil customers, our structural tubing operation and our Canadian line-pipe business, majority-owned Camrose Pipe Co." Camrose Pipe Co. has two pipe manufacturing mills, a large-diameter pipe mill similar to the Napa Mill and an ERW pipe mill, both located in Camrose, Alta., Canada.
Production at the Napa Mill will be phased out beginning on June 28 and is expected to be completed in July. There are approximately 230 people currently working at the Napa Mill. The company will record a charge of approximately $1 million for employee severance benefits related to the idling of the facility.
Oregon Steel Mills, Inc. is organized into two divisions. The Oregon Steel Division produces steel plate, coil, welded pipe and structural tubing from plants located in Portland, Ore., Napa, Calif., and Camrose, Alta., Canada. The Rocky Mountain Steel Mills Division, located in Pueblo, Colo., produces steel rail, rod, bar, and tubular products.
