NEW YORK Quanex Building Products Corp., parent of Nichols Aluminum LLC, said that this years protracted strike hit its fiscal 2012 results, with the Nichols segment recording a $17.1-million operating loss for the year.
Nichols logged an operating loss of $900,000 for the three months ending Oct. 31, down from an operating profit of $3.1 million in the corresponding 2011 quarter. The segment notched sales of $101.3 million for the quarter, down 4.6 percent year-on-year from $106.2 million.
"Shipments increased modestly from the year-ago quarter due primarily to higher demand and improved operational efficiency," the Houston-based company said. "The spread was down 9 cents per pound, or 18 percent from the year-ago quarter, due to a larger reduction in aluminum prices than a reduction in material costs."
Nichols $17.1-million operating loss for the year ended Oct. 31 contrasts with an operating profit of $17.1 million a year earlier. Sales stood at $362.3 million, down 17.8 percent from $440.5 million in the same comparison.
"Results were negatively impacted by the strike and lower spread. ... Nichols Aluminums shipments for the 12 months ended Oct. 31 decreased 8.9 percent compared to the previous 12 months vs. industry shipments, as reported by the Aluminum Association, that were up 8.6 percent over the same period," Quanex said, attributing this to, among other things, the impact of the strike and facility performance issues.
The labor dispute at Nichols Davenport, Iowa, facilities began in January and ran through the end of September, including a three-month strike that forced Nichols to operate at reduced capacity (amm.com, Oct. 1). Meanwhile, Quanex estimated Nichols annual capital expenditure "in a range of $10 million to $13 million over the next several years."
For fiscal 2013, Nichols earnings before interest, taxes, depreciation and amortization (Ebitda) are forecast at $70 million once the spread between sales and material costs returns to "more normalized levels."
Parent Quanex posted a full-year net loss of $16.5 million on sales of nearly $829 million vs. year-earlier net income of $9.1 million on sales of $848.3 million.