IMCO Sees Jump in Earnings for Quarter

IMCO Recycling Inc. reported third quarter net earnings of $2.5 million, a sharp increase from last year’s third quarter earnings of $155,000.

Don Ingram, chairman and CEO, said the increase in the company's third quarter net earnings "was due mainly to the success of our cost reduction program that has improved the profitability of IMCO's specialty alloys and aluminum recycling facilities. Our specialty alloys plants also recorded somewhat higher sales to auto manufacturers and their component suppliers in the third quarter.

"Income from our zinc segment was down in the period because of a decrease in the zinc price which reached an all-time low in August," he said.

"Over the past several years, we have installed new equipment and processes at our facilities that are raising overall productivity by lowering costs and maximizing metal recovery. This is an ongoing effort that will create additional efficiencies in future quarters."

Ingram said processing volume at the company's aluminum recycling and zinc plants "has been well below full capacity for the past 18 months because of the low level of activity in the industrial sector of the U.S. economy. Future improvements in this area are likely to increase the operating rates of these facilities.

"Our total fourth quarter processing volume could decline from that of the third quarter because of traditional holiday shutdowns of operations by auto producers and other customers. "

Ingram also said he expects IMCO's future financial results to benefit from an expansion of international operations that has been carried out in 2002.

A Mexican joint venture formed in 2001 in which IMCO has an 85 percent interest is recycling aluminum dross and scrap under a long-term contract with a major producer of auto engine components. The joint venture recently completed construction of a new production facility that has significantly upgraded its capabilities. In addition, in June the company acquired an aluminum recycling plant in Brazil which is serving that country's only can sheet rolling mill under a long-term contract.

Total aluminum and zinc processing volume in 2002's third quarter was 651.1 million pounds, about equal to volume of 647.8 million pounds in the same 2001 quarter.

Revenues in the third quarter totaled $180.9 million, an 8 percent improvement from revenues of $166.7 million in the same period last year.

Processing volume in the first nine months of 2002 was 1.88 billion pounds, virtually unchanged from the 1.90 billion pounds processed in the same period of 2001.

Revenues in the first three quarters of this year were $519.3 million, two percent below revenues of $531.6 million in the first nine months of 2001.