IMCO Sees Improvement for Quarter

IMCO Recycling Inc. reported first quarter net earnings of $1.3 million.

In the first quarter of 2002 the company's earnings were $382,000. After the cumulative effect of the accounting change, IMCO recorded a net loss of $58.3 million for the first quarter of 2002.

Don Ingram, chairman and CEO, said: "The improvement in our first quarter profitability was a result of the recent significant expansion of our international operations. We believe this trend will continue throughout the year because we now have full ownership of VAW- IMCO, our former joint venture in Germany, and because our plants in Brazil and Mexico are expected to sharply raise their volume in 2003 from last year's level.

"First quarter income of our aluminum segment was seven percent below that of the same period last year," he said. "We achieved higher volume and better margins in the production and sale of specialty alloys that are provided to vehicle manufacturers and their component suppliers. However, our domestic aluminum recycling volume continues to be negatively affected by the low level of U.S. manufacturing activity. Volume at our U.S. aluminum recycling plants has also been reduced by weak demand from can stock producers, a decline in the beverage can recycling rate, and the continued shutdown of primary smelters in the Pacific Northwest. We are continuing to make progress in reduction of plant operating costs and gains in productivity achieved through installation of technically advanced equipment and processes. While the aluminum segment's total volume declined in the first quarter, its income per pound processed increased slightly."

Ingram said that first quarter income of the company's zinc segment about equaled the levels of the year-ago period even though volume declined slightly and zinc prices were at very low levels.

Total aluminum and zinc processing volume was 663.2 million pounds, eight percent above volume of 611.6 million pounds in 2002's first quarter.

Revenues rose 24 percent to $195.1 million from $157.9 million in the same period last year. This increase resulted from the inclusion of VAW-IMCO's March volume into IMCO Recycling's accounts. The majority of VAW-IMCO's processing volume is based on product sales which include the cost of metal purchased, processed and sold.