September 26, 2011

Lakeside Steel of Welland, Ontario reports loss

Lakeside Steel Inc. (TSXV:LS), a Welland, Ontario steel pipe and tubing manufacturer, reported after hours Friday it lost $1.093 million during the three months ending June 30.

Lakeside, which published its financial results for its fiscal 2012 first quarter after the close of trading Friday, said revenues for the quarter were $53 million, down 15 per cent from $62.2 million for the same period in 2010. At that time, it had lost $810,662.

“The higher cost of steel, coupled with flat (oil country tubular goods) prices, resulted in margin erosion,” Lakeside president and chief operating officer Ron Bedard stated in a press release. “The shift in customer demand towards thermal treated products demonstrates the need for the Company's thermal treatment facilities. Furthermore, the continued presence of low-cost overseas imports of plain end product led to a significant constraint in thermal treatment and end-finishing capacity in the market. The Company's vertical integration strategy is expected to alleviate these constraints for Lakeside. “

According to its June 30 financial statements filed on the Canadian Securities Administrator’s website, Lakeside’s bank indebtedness was $33.9 million as of June 30, down from $32.2 million as of March 31.

Although the company used $14.2 million cash in operating activities during the quarter, it had raised $21.44 cash by issuing stock.

DCN DIGITAL MEDIA

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