Global Fastener News

Steel Hikes Hurt Paulin

Jason Sandefur

H. Paulin & Co. reported third quarter sales increased 12% to $36.1 million, while net income jumped 43% to $1.2 million despite an “extremely volatile market.”
For the first nine months of 2004, revenue rose 8% to $108.3 million, while net income gained 35% to $4.1 million. Paulin said some of its manufacturing divisions “experienced continued downward margin pressures from our automotive customers as a result of rising steel costs.”
Steel hikes have forced Paulin to carry higher inventory levels, as product on hand increased 20% to $40.7 million during the first three quarters of the year. The company said many customers are attempting to “resource their fastener requirements” to handle rising steel costs, causing Paulin to “secure some new business and lose some existing business.”
The company also said its position has been “exacerbated” by the Canadian government’s decision to place preliminary duties on fasteners manufactured in China and Taiwan. The duties amount to a 66% increase in price on Chinese fasteners and a 42% price hike on products from Taiwan. A final decision is expected in early January. “We expect the fourth quarter sales and margins on these fasteners to be very unstable until a final outcome is known.”
Capital expenditures slipped 70% to $234,000 during Q3, while nine-month investment in new equipment dropped 47% to $1.2 million. Web: hpaulin.com �2004 FastenerNews.com