BAYOU STEEL HEADLINESSteel Producers /
Bayou Steel
Bayou Steel Reports Strong Results for Fiscal 2005
Jan. 16, 2006 Jan. 16, 2006 — Bayou Steel Corp. reported net income of $19.3 million on sales of $271.7 million for the fiscal year ending September 30, 2005.
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Bayou Steel emerged from bankruptcy on February 18, 2004.
Financial statements for periods after February 18, 2004, are not directly comparable to periods prior to February 18, 2004.
Fiscal 2004 results reflect results for the company that emerged from bankruptcy as well as results for the predecessor company, rendering the traditional comparison of net income with fiscal 2005 less useful.
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The $271.7 million in sales compares to sales of $240.8 million for fiscal 2004. The increase in sales was due to an $83 per ton (19.0%) increase in the selling price, which was partially offset by a 5.5% decrease in shipments. The selling price increase has generally been related to the sharply escalating prices for scrap and the increasing prices for alloys and fuel during fiscal 2005. The company was successful during the period in passing through several price increases for its products, offsetting its higher costs of scrap, alloys, and energy.
Jerry Pitts, President and CEO of Bayou Steel, commented "Overall, our fiscal 2005 performance was solid, in spite of a variety of challenges including higher natural gas and electricity prices and disruptions in production and shipments directly caused by the hurricanes which battered the Central Gulf Coast Region. Our solid earnings and cash flow performance reflect the continuation of favorable steel market demand, pricing, margins, and improved operating performance. Inventories at steel service centers, our principal customer group, have declined to their lowest level in seven years resulting in stronger order bookings and greater backlog for our products. We are optimistic that shipments will remain strong and that market fundamentals will remain favorable in fiscal 2006."
Mr. Pitts continued, "I am especially proud of the way our employees' performed after hurricane Katrina devastated Louisiana. Our dedicated employees, many of whom suffered significant personal property damage, re-started operations within a week. Everyone worked tirelessly to satisfy customer demand despite the personal, logistical and operational issues caused by the hurricane."
Mr. Pitts concluded, "Our scrap processing division continues to procure and prepare scrap metal at very attractive prices relative to purchasing prepared scrap on the open market. We have opened another scrap processing facility in New Orleans and are pleased with its progress. We will be collecting and processing both ferrous and nonferrous scrap metal. The New Orleans and LaPlace scrap facilities continue to benefit from the availability of scrap metal in the Gulf coast area due to the hurricane. Near term, we expect our scrap processing activities to continue to contribute to strong margins."
Bayou Steel Corp. manufacturers light structural and merchant bar products in LaPlace, La., and Harriman, Tenn. The company also operates three stocking locations along the inland waterway system near Pittsburgh, Chicago, and Tulsa.