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McDonald Steel Sees Tide Turning
McDONALD, Ohio --McDonald Steel Corp. began to show a profit in June, and is restructuring its management team to provide for future growth, the company announced Wednesday.Tom Kantor, president of McDonald Steel, said the company "is currently turning a profit and operating at a monthly sales level of nearly $2 million." By comparison, four years ago, McDonald Steel was posting monthly sales of $2 million to $3 million per month, he noted. "Then the nation's manufacturing sector took a tremendous hit and our sales activity dropped to less than $1 million per month with an accompanying loss of profitability." In releasing a preliminary report on the company's financial performance in fiscal 2004, which ended June 30, Kantor also announced the hiring of Timothy Egnot as executive vice president and the promotion of Daniel Wargo to chief financial officer.Though McDonald Steel showed a profit during the month of June, it posted a $170,000 loss for fiscal year 2004, which Kantor attributed in part to rising electric and natural gas energy costs and the "soaring price" of semi-finished steel. "Over the past three years, [the cost of] energy doubled from to $80 per ton and semi-finished slabs and billets rose from $200 per ton to $400 per ton," he stated. For fiscal 2005, the company is forecasting "a healthy $22 million in annual sales, and $25 million for the following year," Kantor continued. "While 8-inch-mill products are now moving to market at a minimum, we shipped 18,000 tons of 14-inch mill products in fiscal 2004, up from 13,500 in fiscal 2003, a firm indicator of our recovering national economy."During McDonald Steel's "lean years," Kantor said the company substantially reduced its work force -- from 230 employees in 2000 to 88 hourly employees and 20 salaried personnel. The company also closed its unprofitable 8-inch looping mill, while focusing production on its 14-inch and 12-inch mill. Kantor said sales are being driven by what he termed the "infrastructure industries." McDonald Steel's products are maintaining a "dominant position in the Nafta countries," he added, "as components in systems involving bridge deck, bridge expansion joints, water and gas line couplings, off-road wheel, railroad track sections, freight car suspension components and railroad brake beams." Domestic recovery in these markets is starting to occur, about a year later than most forecasts, he said, with the railroad industry showing the most gains. Pipeline couplings and off-road wheels, as well as rim adapters for trucks, also are showing improvement, according to Kantor.Kantor said the new management team will put McDonald in position to face the challenges ahead.Egnot was hired as executive vice president "with the promise that he will be the leading candidate to replace me several years from now when I retire," Kantor said.Egnot, who lives in Aliquippa, Pa., received a bachelor of science degree in metallurgy from Penn State University. In 1989 he joined McDonald as chief metallurgist, later becoming vice president of commercial and technical services. In 1993 he left McDonald to join J-Pitt Steel, a hot-rolled steel shapes producer, and from 1997 to the present served as chief executive officer of Moltrup Steel Products, BVHT Inc. and MP Steel Corp. Luther Rhine is retiring as chief financial officer and treasurer and will join the company's board of directors, with Wargo succeeding Rhine as chief financial officer and treasurer. Wargo, a native of Levittsburg, is a graduate of Ohio University and has earned three degrees from Youngstown State University including a master's of business administration. He joined McDonald Steel in 1984.Visit McDonald Steel at www.mcdonaldsteel.com"