When it comes to corporate turnarounds, John Walker is one of the best operators. Among his accomplishments: He was able to restructure Weirton Steel Corporation, as well as help Delphi Corporation get back to health.
His latest gig? CEO at Global Brass & Copper, a specialty manufacturer of foil, rods and fabricated components for markets like housing, autos and munitions. Since coming on board in 2007, it looks like this has been another success for Walker.
The origins of GBC go back nearly 90 years, with the Olin brand. But after Walker took over in 2008, he quickly took swift actions, such as snagging key assets from Bolton Metal Products Co.’s North American operations.
But Walker knew acquisitions alone would not save GBC, which had to deal with the grueling recession. To this end, he put together a rock-solid strategy. First, he moved the product line to premium offerings to boost margins. Next, there was a “balanced book” approach to help lower overall costs of copper and brass — essentially, this involved shifting more of the risk of metals prices to its customers. He also backed this up with a strong cost discipline, using so-called lean manufacturing techniques.
The result: GBC is a much healthier company. Consider that during the first six months of this year, revenues went from $874.9 million to $966.2 million and operating income came to $59.1 million. Not overwhelming numbers, but an impressive performance in light of the stagnant U.S. economy.
Going forward, GBC might get a lift from some interesting catalysts. Its lead-free brass rod products — which include brands like Green Dot and Eco Brass — should benefit as federal regulations get more stringent (new laws go into effect in January 2014). And GBC might get a boost to its coinage business if the United States transitions to a dollar coin.
GBC also has been an innovator in anti-microbial products. Consider that the EPA has recognized copper as capable of neutralizing harmful viruses and bacteria. The market potential spans many industries, including food service, heating and air conditioning, and health care.
So for a company that has a fairly hum-drum business, these potential opportunities could spark growth and generate some IPO investing excitement.
Tom Taulli runs the InvestorPlace blog “IPOPlaybook,” a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned stocks.