IMCO Recycling Reports Loss for Quarter, Year

IMCO Recycling Inc. said it recorded net losses in both the fourth quarter and full year of 2001 due in part to the ongoing decline in U.S. industrial production that lowered demand and prices for aluminum and zinc.

In the fourth quarter IMCO had a net loss of $3.4 million. These results include after-tax costs of $2.5 million due to an increase in the reserve for doubtful accounts related to customer bankruptcies, and to the closing of a zinc trading office in Germany at the end of last year.

In the comparable quarter of 2000, IMCO had a net loss of $4.8 million including write-downs of assets and related costs that totaled $3.8 million.

Don Ingram, chairman and chief executive officer, said demand for the company's products and services ``is derived from manufacturing activity, and output from the industrial sector has decreased every month for well over a year. This is the longest series of declines since 1943.

``As a result of this situation, industry shipments of both aluminum and zinc were down in 2001 from the level of the prior year. Excluding write-downs, income from our aluminum segment in both the fourth quarter and full year of 2001 approximated that recorded in the same periods of 2000.

“However, U.S. Zinc Corporation, a wholly owned subsidiary, experienced a loss in the fourth quarter of 2001 compared with a profit in the year-ago period mainly because of a decline in volume and much weaker prices. In fact, the zinc price reached a 16-year low in the fourth quarter. For the year as a whole, U.S. Zinc had a slight loss compared with a significant profit in 2000.''

For the full year of 2001, IMCO recorded a net loss of $2.7 million. In 2000 the company's net earnings from operations were $4.1 million and net earnings were $283,000.

Total aluminum and zinc processing volume in the fourth quarter of 2001 was 651 million pounds, three percent below the 670 million pounds processed in the same period of 2000.

Fourth quarter revenues were $157.8 million, down 18 percent from revenues of $192.2 million in the 2000 quarter because of the decline in volume and lower prices.

Processing volume for the full year of 2001 moved 11 percent lower to 2.55 billion pounds from 2.86 billion pounds processed in the prior year.

Revenues in 2001 totaled $689.3 million, 19 percent below revenues of $846.9 million in 2000.