Earnings Down, Ladish Sees Continuing Challenges Ahead

Forging and investment casting group Ladish Co. Inc. has reported 2009 second-quarter sales of $84.7 million, a notable decline versus its Q2 2008 sales of $119 million. The company said its net income during the quarter was $650,000, compared to $6.2 million in the comparable 2008 period. "Ladish results for the second quarter of 2009 reflect the rapid decline in demand in virtually all of the markets we serve,” explained president and CEO Kerry L. Woody. He said the group’s net sales of $84.7 million were 19.9% lower than in Q1 2009, and cited production delays by airframers, schedule adjustments, and inventory destocking from the jet engine manufacturers. He also credited a “significant slowdown in the industrial portion of our business." Woody said that slowing sales placed severe pressure on second quarter earnings and the entire first half. “In the first half of 2009, we have experienced a number of significant challenges to earnings, key of which include a $6.3 million decline in by-product sales, a $2.2 million increase in pension expense, a $1.0 million charge for employment reductions and separations, a $1.1 million increase in depreciation, and $1.5 million in added interest expense. “On a positive note,” Woody added, “through ongoing cost reductions and working capital improvements, we generated approximately $37.2 million in operating cash flow in the first half which allowed us to eliminate $30.6 million of short-term debt." "Looking forward for the remainder of 2009, we expect our markets to remain challenging as world aerospace market demands remain anemic and we work our way through the current recession," remarked Woody. He said Ladish would continue to reduce costs and direct its attentiaon to ”available opportunities.” In a separate announcement, Ladish subsidiary Chen-Tech Industries Inc. announced that it has launched a new website. “Since the company was founded in 1981, Chen-Tech has maintained strong communication with customers to keep them up-to-date about developments,” said Shannon Ko, president. “Our website has been redesigned and expanded to offer more information for all of our stakeholders.” Chen-Tech supplies forging and machining services to aerospace OEMs, primarily in jet-engine and aerospace supply chains.