CHICAGO A.M. Castle &
Co. has been trimming inventory, closing branches and
implementing layoffs as part of a widespread cost-cutting
effort that executives first outlined in January (
amm.com, Jan. 17).
"(We have) made significant
progress toward our goals to improve our operating efficiency
... and reduce our costs," president and chief executive
officer Scott J. Dolan said during an earnings conference
"We continued to focus on
inventory-reduction efforts during the first quarter of 2013,"
Dolan said. The companys inventory declined by more than
$33 million on a replacement-cost basis in the first
"We are targeting an additional
decline of $25 million during the second quarter," vice
president and chief financial officer Scott F. Stephens said.
In addition, the company could make $30 million to $40 million
in inventory cuts in the second half. "Markets cycle up and
down, but all things being equal, we think 120 days is the
right level of inventory to run the business," he said.
Castle held 173 days of
inventory in the first quarter of 2013, down 15.2 percent from
204 days at the end of 2012, and the companys goal is to
get to 150 days inventory by the end of the year.
In addition, the Oak Brook,
Ill.-based company has consolidated facilities ahead of
schedule, Dolan said. "During the first quarter, we began the
transition of our distribution fulfillment realignment for all
five of the branches that will be closed before the end of the
Of the planned 10-percent
work-force reductions announced in January, about 50 jobs were
cut during first quarter, Stephens said, and the company
expects to lay off an additional 100 to 150 people during the
"The actions were taking to grow revenue, reduce costs
and optimize inventory position the company well in a flat
demand environment and very well in a recovering market," Dolan
said, noting that the market is unlikely to improve until later
in 2013 or 2014.