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A. M. Castle & Co. Reports Operating Results (10-Q)

November 02, 2012 | About:
10qk

10qk

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A. M. Castle & Co. (CAS) filed Quarterly Report for the period ended 2012-09-30.

A.m. Castle & Co. has a market cap of $284.7 million; its shares were traded at around $12.1 with a P/E ratio of 19.3 and P/S ratio of 0.3.

Highlight of Business Operations:

Consolidated net sales were $304.0 million, an increase of $9.1 million, or 3.1%, compared to the third quarter of 2011. Metals segment sales during the third quarter of 2012 of $272.4 million were $8.0 million, or 3.0%, higher than the same period last year as a result of the inclusion of Tube Supply sales in the third quarter of 2012. Tube Supply had net sales of $39.9 million for the quarter ended September 30, 2012. The decline in sales in the Metals segment, excluding the activity of Tube Supply, was primarily the result of a decrease in demand for the period. Average tons sold per day, excluding Tube Supply, decreased 9.2% compared to the prior year quarter, which was primarily driven by decreases in aluminum, carbon and alloy plate, carbon bar and SBQ bar products. Virtually all key end-use markets experienced weaker demand in the third quarter of 2012 compared to 2011.

Cost of materials (exclusive of depreciation and amortization) during the third quarter of 2012 was $218.0 million, a decrease of $3.7 million, or 1.7%, compared to the third quarter of 2011. Material costs for the Metals segment for the third quarter of 2012 were $195.6 million, or 71.8% as a percent of net sales, compared to $200.2 million, or 75.7% as a percent of net sales, for the third quarter of 2011. Tube Supply cost of materials was $25.8 million for the quarter ended September 30, 2012. Excluding Tube Supply, cost of materials decreased $29.5 million compared to the third quarter of 2011 primarily as a result of the decrease in demand experienced in the Metals segment. Third quarter 2012 results include a $1.0 million gain associated with commodity hedges compared to a $1.6 million loss in the prior year period. The Metals segment recorded a LIFO credit of $4.4 million in the third quarter of 2012 due to changes in the Companys full year LIFO estimate based on expected inventory levels and inflation. This compares to LIFO expense of $3.8 million in the third quarter of 2011. Material costs for the Plastics segment of 70.9% as a percent of net sales for the third quarter of 2012 were higher than 70.5% for the same period last year due to higher costs experienced in the automotive sector of the business.

Consolidated net sales were $996.3 million, an increase of $146.1 million, or 17.2%, compared to the same period last year. Metals segment sales during the first nine months of 2012 of $901.5 million were $140.3 million, or 18.4%, higher than the same period last year as a result of the inclusion of Tube Supply sales in 2012. Tube Supply had net sales of $145.0 million for the first nine months of 2012. Average tons sold per day, excluding Tube Supply, were slightly higher compared to the prior year period. However, the slight tons increase was offset by changes in pricing and mix of the Companys products sold compared to the prior year period.

Cost of materials (exclusive of depreciation and amortization) during the first nine months of 2012 were $722.7 million, an increase of $91.1 million, or 14.4%, compared to the same period last year. Material costs for the Metals segment for the first nine months of 2012 were $655.9 million or 72.8% as a percent of net sales compared to $569.6 million or 74.8% as a percent of net sales for the first nine months of 2011. Tube Supply cost of materials was $95.3 million for the first nine months of 2012. Excluding Tube Supply, cost of materials decreased by $4.2 million. Year-to-date 2012 results were not significantly impacted by commodity hedges compared to a $1.6 million loss in the prior year period. The Metals segment recorded LIFO expense of $1.7 million in the first nine months of 2012 compared to $10.7 million during the prior year period. Material costs for the Plastics segment were 70.5% and 69.7% as a percent of net sales for the first nine months of 2012 and 2011, respectively. Management believes that consolidated material costs as a percentage of net sales will be comparable to first nine months of 2012 levels for the balance of 2012.

On a consolidated basis, operating costs and expenses increased $24.7 million, or 11.8%, compared to the same period last year. Operating costs and expenses were $233.7 million, or 23.5% as a percent of sales, compared to $209.0 million, or 24.6% as a percent of sales last year. Year-to-date 2011 results include a $0.8 million charge for export penalties related to product shipments that occurred from 2005 to 2008.

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