TimkenSteel today reported 2020 first-quarter net sales of $259.7 million and a net loss of $19.9 million. In the same quarter last year, net sales were $371 million with net income of $3.5 million.
Net sales of $259.7 million decreased $111.3 million or approximately 30 percent compared with the prior-year first quarter. Lower shipment volume, surcharge revenue and base sales per ton all were contributing factors to the decline in net sales. In comparison to the fourth quarter of 2019, net sales increased 14 percent.
Ship tons of 213,400 declined 18 percent from the prior-year first quarter as a result of lower demand across all end markets with the exception of OCTG billets. In comparison to the fourth quarter of 2019, ship tons increased 19 percent.
Surcharge revenue decreased $43.8 million or 49 percent from the prior-year period driven by lower shipment volume coupled with a 38 percent decline in the average surcharge per ton due to lower market prices for scrap and alloys.
Manufacturing cost absorption was negatively impacted by low plant utilization compared with the prior-year first quarter, partially offset by aggressive cost control actions.
TimkenSteel has been designated as an "essential business" by both the Department of Homeland Security and Ohio Governor Mike DeWine and, as such, the company has continued to operate to serve customers and critical end markets. To ensure a safe working environment, the company's cross-functional COVID-19 response team closely follows health and safety guidelines set forth by the Centers for Disease Control and Prevention, US Department of Labor and Ohio Department of Health. Many employees are working remotely and those who cannot are practicing good hygiene and physical distancing and are adhering to enhanced safety precautions such as additional cleaning procedures, health screenings and daily audits of new procedures.