COLD METAL PRODUCTS Line halt won't cut employment
The steel processor lost $5.8 million during its most recent fiscal year.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Cold Metal Products is closing a production line at its Youngstown plant as it continues to struggle with financial losses.
The closing of the stainless steel processing line will not reduce employment because orders had been falling off for some time and were at low levels, said Drew Munera, divisional general manager for the Youngstown plant.
The line being closed handled annealing and pickling for stainless steel. That work removes impurities from the steel and softens it so it can be processed further. The plant will continue to roll stainless steel.
Munera said the plant has many other processing lines that will continue, including some that handle annealing and pickling for other grades of steel.
The plant has about 120 hourly and salaried workers. When Cold Metal began operations in 1980, it employed 330 workers.
Persistent problem: Raymond Torok, company president and chief executive, said a year ago performance at the plant had been disappointing. Munera said orders continue to be below where they were last year.
"But we're managing to keep our heads above water," he said.
The focus is to put the plant in position to take advantage of a market turnaround, he said.
Products: The plant processes high-quality steel for uses such as automotive bearings and cutting tools.
Sewickley, Pa.-based Cold Metal, which has six plants in the United States and Canada, said Wednesday it lost $3.2 million, or 50 cents a share, in the fourth quarter of its fiscal year, which ended March 31. The loss included an $800,000 accounting charge for restructuring of manufacturing operations. Cold Metal earned $1.4 million, or 22 cents a share, in the same quarter last year.
Sales for last quarter were $46.7 million, which was 17 percent below the figure a year earlier. The decline came despite the acquisition of Alkar Steel Corp. on March 31, 2000. Without that acquisition, sales would have been down about 30 percent.
For the fiscal year, the company lost $5.8 million, or 90 cents a share, compared with earnings of $4.5 million, or 71 cents a share, in the previous year. Special charges this past year amounted to $1.4 million.
Sales for the 2001 fiscal year were $214.5 million, which was up 3 percent. Without the Alkar acquisition, sales would have been down 13 percent.
Cold Metal said its lenders have agreed to adjust terms of its credit agreements because of difficult market conditions.
Salvaging the wreckage: The company said last week it was closing a steel service center in New Britain, Conn., leaving 81 workers without jobs.
It also has streamlined its plant in Hamilton, Ontario, Canada and focused it on the Canadian market. The company last year realigned itself internally into separate organizations to handle manufacturing and processing centers.