Canadian pipe and tubing producer Lakeside Steel on Thursday reported on its financial performance during the company's fiscal second quarter, which encompass the three months ended September 30, 2009. The results showed a drop in performance compared to a year ago, for which the company cited a drop in demand for the oil country tubular goods (OCTG) products it produces.
The company reported revenue of $17.8 million for the quarter, which is a decline of 69.6 percent compared to the same quarter of last year. Lakeside recorded a net loss for the three months ended September 30 of $3.02 million, which compares to net income of $2.8 million for the same period of 2008.
Lakeside said it its earnings report that demand in the oil and gas sector for the OCTG manufactured by the company has experienced a substantial reduction, as reflected in the performance above. Management believes that this trend will continue into the third quarter of fiscal 2010, but is seeing an increase in orders from Western Canada in OCTG products, and as a result is planning to add an additional shift in its production facilities starting January 2010.
Lakeside has completed the installation of its upsetting, threading, and coupling equipment along with the installation of its three slip rail yard. Upon completion of its API certification, Lakeside will be in a position to end finish its own products (upset, thread and coupled) and then ship the finished product directly to its customers via rail. Currently, this work is being outsourced to a processor Texas. This will reduce the lead time to customers and working capital requirements going forward.
Lakeside Steel, located in Welland, Ontario, is a diversified steel pipe and tubing manufacturer, serving the oil and gas, mining automotive and commercial and industrial supply industries. Lakeside also manufactures pipe and mechanical tubing for the resale market, which is sold to distributors in Eastern Canada and the Northeastern United States. Lakeside manufactures a variety of products for these industries including oil well tubing and casing, mechanical tubing, pressure tubing, automotive tubing, hollows for redraw, line pipe, heating and plumbing pipe, drill rod and specialty tubing. Lakeside serves customers worldwide, either directly or indirectly, in Canada, Australia and the United States.