PITTSBURGH ALJ Regional Holdings Inc.s profits expanded as economic strength in the middle of its fiscal year helped offset weaker steel prices in its fiscal fourth quarter.
The Ashland, Ky.-based parent of merchant bar quality and special bar quality (SBQ) flats producer Kentucky Electric Steel posted net income of nearly $13.28 million for the year ended Sept. 30, up 16.3 percent from $11.42 million the previous year despite a 2-percent decline in revenue to $158.78 million.
ALJs net income in its fiscal fourth quarter totaled nearly $5.93 million, up marginally from the same period a year earlier despite revenue tumbling 27.2 percent to $33.39 million.
ALJs fiscal year got off to a slow start due to warm weather and lower sales of steel used for snow removal, as well as typical seasonal weakness, chief executive officer John Scheel said in a statement Wednesday. That period was followed by six months of strength, driven by demand from the cold-drawn bar, energy and agricultural sectors, but that trend reversed course at the end of the fiscal year.
"The (fiscal) fourth quarter saw raw material pricing, which had expanded disproportionately with market demand, come back to Earth, bringing steel prices along (with it)," Scheel said.
The drop in steel prices, along with economic uncertainty, dragged down margins and sales in the fiscal fourth quarter, Scheel said, although an extraordinary gain of nearly $2.7 million related to the write-off of discontinued liabilities helped soften the impact on both annual and quarterly results.