Imco Reports Dip in Earnings

IMCO Recycling Inc. reported net earnings of $918,000 for the second quarter of 2001.In the same period of last year the company had net earnings of $1.5 million.

Don Ingram, chairman and CEO, said IMCO Recycling's second quarter financial results "declined from those of the year-ago period due to greater natural gas costs and to a 13 percent decline in processing volume resulting from severe weakness in the manufacturing sector of the U.S. economy that includes all of the company's major aluminum and zinc markets."

He noted that U.S. industrial production declined in June for the ninth consecutive month, and that the nation's factories operated at just 77 percent of capacity in that month, the lowest level since 1983.

"I'm pleased that, even with the drop in volume, we were able to become profitable in the second reporting period of the year after incurring net losses in the prior two quarters. This improvement is a result of a company wide cost reduction program that includes greater efficiency in the use of natural gas and restructuring of our overall processing network."

Results from U.S. Zinc Corporation, a wholly owned subsidiary, were down sharply from those of the second quarter of 2000 due to weaker processing volume, to a large decline in zinc prices which reached an eight-year low in July, and to greater natural gas costs.

Equity earnings from VAW-IMCO, the company's joint venture in Germany, increased in both the second quarter and first half of 2001. The joint venture is benefiting from strong customer demand for its products and services and additions to its capacity.

IMCO's Swansea, Wales aluminum recycling facility has also performed well throughout the year because of the recent addition of new customers and greater efficiency in furnace operations.

In the first half of 2001, IMCO Recycling's net earnings totaled $551,000, compared with net earnings of $4.1 million in the same period last year.

Total aluminum and zinc processing volume in 2001's second quarter was 632.2 million pounds, 13 percent lower than volume of 724.4 million pounds recorded in the 2000 quarter.

Revenues in the quarter were $177.5 million, down 21 percent from revenues of $225.8 million in last year's second quarter because of the decline in processing volume.

Processing volume in 2001's first half moved 16 percent lower to 1.25 billion pounds from 1.49 billion pounds in the same period last year.

First half 2001 revenues totaled $364.8 million, 19 percent below revenues of $449.1 million in last year's first half.