WELLAND, ON, Feb. 27, 2012 /CNW/ - Lakeside Steel Inc. (TSX-V: LS) ("Lakeside" or the "Company") today reported its financial results for its fiscal 2012 third quarter ended December 31, 2011 ("Q3 2012"). For Q3 2012, the Company's revenue was $58,085,702, which represents an increase of $4,265,455 or 7.9% from revenue of $53,820,247 for the fiscal 2011 third quarter ended December 31, 2010 ("Q3 2011"). For the nine months ended December 31, 2011 ("YTD 2012"), the Company's revenue was $158,884,734, which represents a decrease of $23,624,237 or 12.9% from revenue of $182,508,971 for the nine months ended December 31, 2010 ("YTD 2011").
The Company recorded a net loss of $9,160,125 during Q3 2012, a decrease of $8,958,786 from a net loss of $201,339 for Q3 2011. The Company reported a loss of $0.05 per share for Q3 2012, compared to a net loss of $0.00 per share for Q3 2011. For YTD 2012, the Company had a net loss of $17,854,604, a decrease of $18,045,174 from net income of $190,570 for YTD 2011. The Company reported a loss of $0.10 per share for YTD 2012, compared to earnings of $0.00 per share for YTD 2011.
The Company's adjusted EBITDA was ($7,680,696) in Q3 2012, a decrease of $9,628,361 from adjusted EBITDA of $1,947,665 for Q3 2011. For YTD 2012, the Company's adjusted EBITDA was ($13,970,825), which represents a decrease of $20,122,845 from adjusted EBITDA of $6,152,020 for YTD 2011.
During fiscal 2012, customer demand for oil country tubular goods ("OCTG") shifted from plain end pipe to thermally treated 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.
In Alabama, the Company's new casing mill, with an estimated capacity of 192,000 annual tons, began production in December 2011. The thermal treatment and end finishing facility, with an estimated capacity of 67,000 annual tons of thermal treatment and 55,000 annual tons of end finishing capacity for tubing products, was completed in January 2012. The thermal treatment and end finishing facility for casing products, with an estimated capacity of 150,000 annual tons of thermal treatment and 110,000 annual tons of end finishing for casing products, will be completed in June 2012.
On January 25, 2012, the Company and JMC Steel Group, Inc. ("JMC Steel") announced that they had entered into a definitive arrangement agreement pursuant to which JMC Steel, through a wholly-owned subsidiary, has agreed to acquire all of the issued and outstanding common shares of Lakeside at a price of $0.2983 per share in cash pursuant to a statutory plan of arrangement under the Business Corporations Act (Ontario). Further information about the proposed transaction will be provided in a management information circular to be sent to shareholders in connection with a special meeting of shareholders for the purpose of considering the transaction. Information about the meeting will follow at such time as it becomes available.
About Lakeside Steel Inc.
Lakeside is a 2011 TSX Venture Exchange 50 company and the parent company of Lakeside Steel Corporation, Lakeside Steel Alabama Inc. and Lakeside Steel Texas Inc. Lakeside has operating facilities located in Welland, Ontario, and Corpus Christi, Texas, and three facilities currently being constructed in Thomasville, Alabama. Lakeside is a diversified steel pipe and tubing manufacturer with a focus on manufacturing and upgrading Oil Country Tubular Goods. Lakeside's list of customers includes large oil and gas end users as well as distributors across North America.
Lakeside Steel Alabama will be a diversified steel pipe manufacturer with thermal treatment and end-finishing capabilities strategically situated in the southern United States on successful completion of construction of the new facilities in Thomasville, Alabama. Construction of the Alabama facilities is currently underway.
This press release may contain forward-looking statements with respect to the Company, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward looking words such as "may", "will", "expect", "estimate", "anticipate", intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of the Company discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under "Risk Factors" in the Management's Discussion, and Analysis, Annual Information Form and Filing Statement of the Company which are available at www.sedar.com. The cautionary statements qualify all forward-looking statements attributable to the Company and persons acting on their behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and the Company has no obligation to update such statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Lakeside was recognized as a TSX Venture 50® company in 2010 and 2011. TSX Venture 50 is a trade-mark of TSX Inc. and is used under license.
For further information:
President and Chief Operating Officer
Lakeside Steel Inc.
e-mail: [email protected]
Chief Financial Officer
Lakeside Steel Inc
e-mail: [email protected]