Paulin Sales Grow Despite Steel Prices

Jason Sandefur

Despite “unusually volatile” economic conditions, H. Paulin & Co. reported sales for the second quarter of 2004 gained 7% to CAD$38.63 million (U.S.$29.7 million). Q2 net income jumped 35% to CAD$1.8 million. Paulin attributed the gains to “new product sales with automotive customers, price increases in the industrial market and higher hardware sales.”
For the first six months of 2004, sales rose 7% to CAD$72.1 million, while net income increased 31% to CAD$2.18 million due to cost-cutting measures. First-half inventories climbed 2.8% to CAD$40 million on higher steel and finished product costs. Steel shortages produced shipment delays in the second quarter. “As a consequence, in order to maintain the company”s high service levels to our customers, a larger portion of its product was sourced locally, which negatively impacted margins,” the company noted.
Q2 sales for manufacturing improved 6.3% to CAD$31.6 million, while distribution sales gained 9.6% to CAD$10.3 million. First half sales for manufacturing grew 4.4% to CAD458 million, while six-month distribution sales increased 8.7% to CAD$20.4 million. First half capital expenditures dropped 33% to CAD$1 million.
Despite the news, Paulin expressed muted expectations for the second half of 2004, as steel costs continue to soar. “Steel price increases have not abated, with further price hikes expected in August,” stated CEO Richard Paulin.””As a result, our domestic costs of manufacturing continue to rise with minimal increases in selling prices. Large inventories of finished product purchased at older, lower costs helped minimize the impact of significant cost increases.” Web: hpaulin.com �2004 FastenerNews.com