California Steel Industries, Inc. reported a net loss of $5.5 million on net sales of $227.9 million for the fourth quarter, and net income of $25.4 million on net sales of $1.08 billion for the year ended December 31, 2010.
Fourth Quarter Results — The $5.5 million net loss compares with net income of $2.0 million in the previous quarter and a net loss of $2.3 million in the year-ago fourth quarter. Net sales of $227.9 million reflect a 27% decrease from net sales of $313.9 million in the previous quarter, and a 48% increase over fourth quarter 2009's net sales of $153.6 million.
Shipments were 279,641 net tons, 24% lower than shipments of 365,608 net tons in the previous quarter and 26% higher than fourth quarter 2009's shipments of 222,242 net tons. The company recorded $4.6 million for writing down inventory to market value as CSI's inventory values are carried at the lower of cost or market (LCM).
EBITDA (as adjusted) for the quarter was $4.0 million, lower than fourth quarter 2009's adjusted EBITDA of $9.1 million, and also lower than third quarter 2010's adjusted EBITDA of $21.3 million.
Full Year Results — Net income of $25.4 million compares to a net loss of $13.1 million for the year ended December 31, 2009. Net sales of $1.08 billion compare to net sales of $551.8 million in 2009.
For the year, CSI shipped 1,335,256 net tons, 67% higher than 2009's shipments of 800,375 net tons. The company recorded $12.9 million in fiscal 2010 for writing down inventory to market value.
For the year, EBITDA (as adjusted) is $88.2 million, 52% higher than 2009's adjusted EBITDA of $58.2 million.
Management Comments — "Fourth quarter 2010 results are normally impacted by the lower shipment levels we experience during this period each year," said Vicente Wright, President & CEO.
"But rather than focus on a quarter whose results are cyclical and thus typically diminished from the rest of the year, I look at the total results for fiscal 2010, and recognize the tremendous survival measures taken by our team and the resulting turnaround from 2009," he continued.
"The results for 2010 not only indicate an improvement to business conditions in the US, but also can be directly attributed to our Company's efforts to position itself to meet future changing conditions," Wright concluded.
The balance under the company's Revolving Credit Agreement was zero as of December 31, 2010, with availability of $110 million. The company has a cash balance as of December 31, 2010 of $27.7 million.
California Steel Industries is the leading producer of flat rolled steel products in the western United States (the 11 states located west of the Rocky Mountains) based on tonnage billed, with a broad range of products, including hot rolled, cold rolled, and galvanized sheet and electric resistant welded pipe. Located in Fontana, Calif., the company has slightly less than 900 employees.