Operating income for the Industrial Materials segment was $8 million in the second quarter of 2013, as compared to $42 million in the second quarter of 2012. The reduction in operating income is largely attributed to lower graphite electrode and needle coke pricing.
Mr. Shular commented, "The environment for our Industrial Materials products remains very difficult as steel production outside of China continues to decline year-over-year. This weakness is further exacerbated by overcapacity in the graphite electrode industry. We will continue to leverage our low-cost business model to optimize our performance in this extremely challenging environment."
Engineered Solutions Segment
Net sales for the Engineered Solutions segment increased 31 percent to $70 million in the second quarter of 2013 compared to $53 million in the second quarter of 2012. Continued success and growth in our advanced consumer electronics product offerings drove the increase in revenue.Operating income for the Engineered Solutions segment was $8 million in the second quarter of 2013, or twelve percent of sales. This compares to operating income of $5 million, or nine percent of sales in the same period in 2012. The increase is due to a more favorable product mix as we penetrate high-growth end markets with attractive margin profiles, offset in part by significant weakness in advanced graphite material products serving industrial sectors including transportation, chemical and metallurgical industries. Mr. Shular commented, "Our Engineered Solutions segment achieved record sales of $70 million in the second quarter, representing nearly 25 percent of total Company revenue. Additionally, the segment delivered double-digit operating income margin performance, ramping from the first quarter of 2013, as the infrastructure investments to support growth are more effectively absorbed at a higher revenue level. As this business continues to gain traction, it is better positioned to provide a sustainable base for diversification in tough steel cycles."