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ALJ Announces 1st Quarter Earnings and the Repurchase of Its Preferred

^{Published on 2011-02-15 15:05:23 - Market Wire}
 

ASHLAND, Ky.--([ BUSINESS WIRE ])--For the three months ended December 31, 2010, ALJ (Pink Sheets: ALJJ) posted a net profit of $662,510 as compared to a net loss of $153,106 for the three months ended December 31, 2009. ALJ is the parent company of KES Acquisition Company dba Kentucky Electric Steel, the owner and operator of a steel mini-mill near Ashland, Kentucky producing both merchant bar quality flats (MBQ Bar Flats), and special bar quality steel flats (SBQ Bar Flats).

"We continue to utilize our resources to reduce the Companya™s outstanding liabilities to improve our balance sheet and create value for our shareholders."

According to John Scheel, ALJa™s Chief Executive Officer, aThe first quarter of our fiscal year which corresponds to the fourth calendar quarter is typically a tough one in the steel industry due to declining shipments related to customer holiday shutdowns. We saw that once again this year. The comparative results of this and the last two year's quarterly results are, however, more revealing about the overall situation than might first be noticed.

The fourth calendar quarter of 2008 saw the recession start for us and, as a result, our quarterly revenue dropped from $40 million in 2008 to $21 million in 2009 and it has now rebounded to about $33 million in 2010. Net income, which was negative in both the 2008 and 2009 quarters has become strong and positive. The recovery is not about the higher scrap prices or the higher steel prices, which are detrimental to producer and consumer alike. Rather, we are seeing improved demand across almost all product lines as the economy continues its recovery.a

In addition, ALJ announced that it repurchased 69,400 shares of its 4% Series A Preferred Stock, plus accrued dividends thereon for an aggregate consideration of $277,600 (the aStock Repurchasea). The repurchased stock had a face value of $277,600 plus accrued dividends of approximately $147,941. ALJ will realize a savings of $147,941 in connection with the Stock Repurchase. The Stock Repurchase was effected pursuant to stock repurchase agreements between ALJ and the holders of the Repurchased Stock dated February 15, 2011. A portion of ALJa™s Series A Preferred Stock, including 59,244 shares of Repurchased Stock, is held by certain affiliated parties. The terms of the Stock Repurchase were approved by the independent members of the Board of Directors of ALJ.

Regarding the Stock Repurchase, Jess Ravich, ALJa™s Chairman of the Board, stated aWe continue to utilize our resources to reduce the Companya™s outstanding liabilities to improve our balance sheet and create value for our shareholders.a

Full financial reports are available at [ www.pinksheets.com ].