Metals service center Ryerson Inc., Chicago, IL, reported profit of $28.1 million on sales of $1.7 billion in the first quarter 2007, up 21% from the same period last year.
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“‘We were pleased with the progress we made in the first quarter of 2007,” said Neil S. Novich, president and CEO. “In the third quarter of 2006, we put in place new supply chain management and improved inventory processes. We saw the result in the first quarter of 2007 with current value of inventory down $241 million, or 15%, from the end of 2006, and we are on track to attain our goal of five turns by year-end 2007.
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“In mid-2006, we also began a project to address the profitability of five, large underperforming service centers. We made substantial progress in the first quarter of 2007 and are on track to attain operating profit improvement of $30 million in 2007. Overall operating expenses are under good control as Integris integration cost savings and productivity gains more than offset inflation. Furthermore, we made progress on our other strategic initiatives, including the upgrade to a single, modern IT platform, and have now successfully converted the first ten Integris service centers.”
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Service center industry volume was below year-ago levels, due in part to softness in certain end markets and high inventories at the customer level.
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Year-over-year, the average selling price per ton increased 18.4%, partially offset by a 3% decline in tons shipped.
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As previously announced, Ryerson’s Board of Directors, with the assistance of its financial advisors, is comparing the company’s current strategic plan with other strategic alternatives which may create additional value.
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“The Board has chosen not to schedule this year’s annual meeting until we are further along in our assessment of strategic alternatives,” Novich said. “We recognize the importance of this process to our shareholders and the need to perform a thorough and comprehensive review of all options.”