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
"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."
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
"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
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