A. M. Castle 1Q net sales down 13 percent
OAK BROOK - A. M. Castle & Co. reported net sales for the first quarter of 2016 were down 13.1 percent as the manufacturer continues its restructuring plan.
Net sales in the first quarter were $163.8 million, a decrease of $24.7 million compared to the same period in 2015. Net sales in the first quarter include $27.1 million as a result of the sale of substantially all of the company's energy-related inventory at its Houston and Edmonton facilities. Excluding the $27.1 million sale, net sales in the first quarter decreased by $51.8 million, or 27.5 percent, compared to the first quarter 2015.
The decrease in net sales was mainly attributable to a 27.6 percent decrease in tons sold per day to customers compared to the same period last year, coupled with a slight decrease in average selling prices.
Loss from continuing operations in the first quarter 2016 was $44.8 million, or a loss from continuing operations of $1.90 per diluted common share, compared to a loss from continuing operations of $15.7 million, or a loss from continuing operations of 67 cents per diluted common share, in the prior year period.
"Since I joined Castle a year ago, our primary focus has been on restructuring our branch network costs and improving our capital structure," said President and CEO Steve Scheinkman. "During the first quarter, we substantially completed the restructuring plan we announced in April 2015 within the projected timeline and on budget.
"At the same time, we completed the sale of our Total Plastics, Inc. subsidiary, the sale of a vast majority of our energy-related inventory and the closure of our Houston and Edmonton facilities. The company has utilized the proceeds from these sales to reduce its debt and improve its capital structure. We also negotiated separate exchanges to extend the maturity of substantially all of our Senior Secured Notes and Convertible Notes on terms that further improve our capital structure," Scheinkman added.
Among the accomplishments the company listed were refinancing more than 97 percent of existing Senior Secured Notes due December 2016 with New Senior Secured Notes due December 2018, agreeing with holders to the exchange of more than 99 percent of the existing convertible notes due December 2017 for new convertible notes due December 2019, and receiving the requisite approval from the company's stockholders for issuance of the underlying common stock. The new convertible nNotes provide a 30 percent discount in principal amount, a 1.75 percent reduction in coupon rate and the ability, in certain circumstances, for the Company to initiate conversion into equity.
"We are focused on continuing to improve our overall margin performance and fine-tuning our operating expenses on an individual branch basis while increasing sales through our commercial activities," Scheinkman said.