Keystone Consolidated Industries Inc., parent of Illinois-based wire and wire rod producer Keystone Steel & Wire Co., has reported a $4.4 million loss in the first quarter, due to weak sales activity. The company's first quarter results are a stark departure from the $13.6 million profit it registered in the first quarter of 2008.
Keystone's total sales volume declined from 175,000 nt in the first quarter of 2008 to 58,000 nt in the first quarter of 2009.
The company explained in a news release, "During the first quarter of 2009, customers canceled or postponed certain projects due to an inability to secure the financing in the current credit markets and customers chose to conserve cash by liquidating their inventories and instituting a just-in-time order philosophy.”
The company has not had to permanently lay off any employees due to its downturn in business, and instead continues to operate its Bartonville, Illinois plant on an as-needed basis, resulting in several temporary layoffs over the past two quarters.
The company said it “believes the reduced production schedules have allowed Keystone to somewhat temper the adverse impact of the current business downturn on the company's liquidity,” though the reduced operating schedules meant higher fixed costs per ton of steel produced.