California Steel Industries, Inc. reported a net loss of $2.3 million on net sales of $153.6 million for the fourth quarter and a net loss of $13.1 million on net sales of $551.8 million for the full year ended December 31, 2009.
Fourth Quarter Results — The $2.3 million net loss compares with a net loss of $76.1 million in the year-ago fourth quarter. Net sales of $153.6 million compare with net sales of $269.5 million in the year-ago fourth quarter.
Shipments of 222,242 net tons were about 15% higher than fourth quarter 2008. The company recorded $2.7 million for writing down inventory to market value as its inventory values are carried at the lower of cost or market (LCM).
The average selling price for all product lines improved about 15% during fourth quarter 2009 from third quarter 2009 prices; however, average sales prices are 50% lower than fourth quarter 2008.
EBITDA (as adjusted) for the quarter is $9.1 million, lower than third quarter 2009's adjusted EBITDA of $20.2, and lower than fourth quarter 2008's adjusted EBITDA of $21.7 million.
Full Year Results — The $13.1 million net loss compares to net income of $13.3 million for fiscal year 2008. Net sales of $551.8 million were lower than fiscal year 2008's net sales of $1.51 billion.
During the past year, prices fell 33% from 2008's average selling price, and the company shipped 800,375 net tons, 45% less than fiscal 2008 shipments of 1,442,837 net tons. The company also recorded $44.5 million in fiscal 2009 for writing down inventory to market value.
Management Comments — "Considering the economic crisis of the past year, its effect on steel market conditions, and, in particular, its severe impact on the West Coast, we look upon these results as further evidence of the strength of our company and our business model," said Vicente Wright, President & CEO. "The measures we took over the course of the year to further our cost control efforts have positioned CSI as ready to meet improving market conditions as they occur. Our employees do an outstanding job in supporting our Company's goals, and I commend them for their response at these difficult times," he continued.
The company continues its strong liquidity position, with a balance of cash and cash equivalents of $61.7 million as of December 31, 2009. The company has no outstanding balance drawn against its Revolving Credit Agreement as of December 31, 2009, and has availability of more than $108 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.