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ALJ Announces 1st Quarter Earnings
Feb. 18, 2010 ALJ, the parent company of Kentucky Electric, reported a net loss of $153,106 on net sales of $21.03 million for the three months ended December 31, 2009.
The $153,106 net loss ($0.00 per share) compares to net income of a net loss of $198,431 ($0.00 per share) for the comparable year-ago quarter. Net sales of $21.03 million compare to net sales of $39.96 million for the year-ago quarter.
"The first quarter of our fiscal year, which corresponds to the fourth calendar quarter, is typically a tough one in the steel industry due to declining shipments related to customer holiday shutdowns,” commented John Scheel, ALJ’s Chief Executive Officer. “We saw that again this year. The comparative results of this and last year's quarterly results are, however, more revealing about the overall situation than might first be noticed.
"The revenue in the quarter ending December 2009 dropped 47% with shipments dropping about 34% and selling price falling 20% compared to the quarter ending December 2008,” continued Scheel. “We were, however, working off a very high backlog in late 2008 as the marketplace collapsed so that production was actually 18% higher in late 2008 than in 2009. Steel scrap, our primary raw material, was 22% higher in price in the last quarter of 2009 than in the same period of 2008! So scrap is up and our selling price is down. This is due to higher scrap demand in the flat-rolled steel sector, which has begun to recover. Only very recently have we begun to see signs of similar improvement.
“The fact that we achieved similar net income performance in the most recent quarter compared to a year ago when volume, production and selling prices were higher and scrap prices were significantly lower is a testament to our lower cost operating performance,” concluded Scheel. “The bottom line is that, while I am no predictor of the future, I do believe that our recent results do bode well for our future.”
ALJ is the parent company of KES Acquisition Co., which does business as Kentucky Electric Steel, the owner and operator of a steel minimill near Ashland, Ky., producing both merchant bar quality (MBQ) flats, and special bar quality (SBQ) steel flats.