A. M. Castle sales down 21.4 percent in 2Q
OAK BROOK - A. M. Castle & Co. reported net sales for the second quarter of 2016 were down 21.4 percent over the same period last year as the global distributor of specialty metal and supply chain solutions continues its restructuring plan.
Net sales in the second quarter 2016 were $130.7 million, a decrease of $35.6 million compared to the second quarter 2015. The decrease was attributed to a 6.4 percent decrease in tons sold per day compared to the same period last year, coupled with a 13.9 percent decrease in average selling prices.
The company noted the decrease included sales from its Houston and Edmonton operations, which were closed in February. Excluding those numbers, tons sold per day increased roughly 1 percent in the second quarter 2016 compared to the second quarter 2015.
"The second quarter marked the completion of our strategic restructuring plan announced in April of last year," said Castle President and CEO Steve Scheinkman. "The financial performance recorded in the second quarter demonstrates the emergence of a leaner, more focused A.M. Castle that built momentum during each month of the quarter.
"In the period, we realized both year-over-year and sequential quarter improvement in key financial performance metrics, including tons sold per day and operating expenses, both in absolute terms and cost per ton," he added. "Excluding tons sold by our Houston and Edmonton facilities, which we closed in February 2016 as a result of our strategic decision to reduce our exposure to the oil and gas market, tons sold per day increased by 5 percent compared to the first quarter of this year and roughly 1 percent compared to second quarter 2015."
The company reported operating expenses of $44.3 million in the second quarter 2016, compared to $70.2 million in the second quarter 2015 and $57 million in the first quarter 2016.
"Even without improvement in market demand and replacement cost of the majority of our products, we achieved sequential and year-over-year growth in sales tons and gross material margins as a result of the aggressive organizational actions we have taken over the last year to restructure our branch network costs, better align our sales force with customers' needs, increase our transactional business, and improve our capital structure," Scheinkman said. "We believe these results bode well for our ability to further improve our financial performance as market demand and pricing improves."