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Steel Technologies Reports 4th Quarter Results

11/01/2006 -  

Nov. 1, 2006 — Steel Technologies Inc. reported preliminary results for the fourth quarter and fiscal year ended September 30, 2006.

Steel Technologies also announced that it plans to restate previous financial results to correct the accounting for certain deferred tax assets and liabilities.

Management expects that the restatement will result in a cumulative increase to shareholders' equity through June 30, 2006, of approximately $1.6 million.

Management is currently evaluating the impact of the restatement on net income and earnings per diluted share for prior periods.

The restatement will not have any impact on the company's cash flows or revenues. The company expects to finalize restated amounts for previous periods by the time it files its Annual Report on Form 10-K for the fiscal year ended September 30, 2006.

Fourth Quarter Results—Net income was $3.2 million ($0.24 per diluted share). Sales of $202.3 million reflect a 5% increase compared to $193.1 million for the same period a year ago.

Full Year Results—For the fiscal year ended September 30, 2006, sales declined 8% to $876.3 million from $957.7 million for the same period last year. Net income for fiscal 2006, preliminarily adjusted for the restatement, was $15.1 million or $1.15 per diluted share.

Comments—"This past year marked the thirty-fifth anniversary of our company and our thirty-fifth consecutive year of profitability," said Bradford T. Ray, Chairman and CEO. "This represents another milestone for our dedicated team as we continue to focus on our long-term goal to build the most profitable steel processing company in North America.

"Our sales and earnings in 2006 were below the record levels achieved in 2005 as a more competitive environment in the steel processing sector and reduced automotive schedules put pressure on our operating margins," Ray continued. "While our fourth quarter earnings were significantly above the weak year-earlier period, they remain well below our internal expectations, and we are working hard to improve our results. In the short term, we see similar volumes for our first fiscal quarter of 2007.

“The continued expansion of our platform, including growth in Mexico and our recent acquisition of Kasle Steel, is generating increased marketing opportunities," Ray added. "Looking ahead, we expect to further capitalize on these growth opportunities in 2007. Our 2007 capital projects are focused on productivity enhancements to existing operations and the construction of our greenfield site in Juarez, Mexico. Construction in Juarez is underway, and this facility should be operational by April 2007. We remain very confident in our ongoing strategies, market position and value proposition."

Steel Technologies processes flat-rolled steel to specific thickness, width, temper, finish and shape requirements for automotive, appliance, lawn and garden, office furniture, agriculture, construction, hardware, and consumer goods. The company now has 23 facilities, including its joint-venture operations, located throughout the United States, Mexico and Canada.