Lakeside Steel Inc has reported its financial results for its fiscal 2012 second quarter ended September 30th 2011. For Q2 2012, the company's revenue was USD 47,771,086, down by USD 18,714,773 or 28.1% YoY from revenue of USD 66,485,859 for the fiscal 2011 second quarter ended September 30th 2010. For the six months ended September 30th 2012, the company's revenue was USD 100,799,032, down by USD 27,889,682 or 21.7% YoY from revenue of USD 128,688,724 for the six months ended September 30th 2010.
The company recorded a net loss of USD 7,601,420 during Q2 2012, down by USD 8,801,171 from net income of USD 1,199,751 for Q2 2011. The company reported a loss of USD 0.04 per share for Q2 2012 as compared to earnings of USD 0.02 per share for Q2 2011.
For YTD 2012, the company had a net loss of USD 8,694,479, down by USD 9,085,568 from net income of USD 391,089 for YTD 2011. The company reported a loss of USD 0.05 per share for YTD 2012 as compared to earnings of USD 0.01 per share for YTD 2011.
The company's adjusted EBITDA was USD 6,274,060 in Q2 2012, down by USD 9,870,625 from adjusted EBITDA of USD 3,596,565 for Q2 2011. For YTD 2012, the company's adjusted EBITDA was USD 6,290,129, down by USD 10,455,453 from adjusted EBITDA of USD 4,165,324 for YTD 2011.
During fiscal 2012, customer demand for oil country tubular goods shifted from plain end pipe to thermally treated and end finished products. This shift resulted in customer demand that substantially exceeded available capacity among third party thermal treatment and end finishing processors, leading to extended wait times.
Mr Ron Bedard president & COO of Lakeside Steel Inc said that "The first half of this fiscal year has been a challenge for the company as the rapid and sustained shift in customer demand towards fully finished OCTG products, the constraints in thermal treatment and end finishing capacity in the market, higher cost of goods sold and the presence of low cost overseas imports of plain end products all contributed to an erosion of the company's margins."
He added that "The current lack of sufficient thermal treatment and end finishing capacity in the market illustrates the importance of Lakeside's vertical integration strategy. This strategy will enable Lakeside to become a full service provider of thermally treated and end finished OCTG products."
In Alabama, the company's new casing mill, with an estimated capacity of 192,000 annual tonnes, will begin production in December 2011. The thermal treatment and end finishing facility for tubing products will be completed in January 2012. This facility will add 67,000 annual tonnes of thermal treatment capacity and 55,000 annual tonnes of end finishing capacity for tubing products. The thermal treatment and end finishing facility for casing products will be completed in June 2012. This facility will add 150,000 annual tonnes of thermal treatment capacity and 110,000 annual tonnes of end finishing capacity for casing products. The total remaining capital expenditures for the Alabama facilities are USD 17.8 million. By moving towards self sufficiency in thermal treatment and end finishing, Lakeside anticipates a return to profitability with fully finished products to meet customer demand.
