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Olympic Steel Reports 2010 Fourth Quarter and Full Year Financial Results

Thursday, February 24, 2011 6:51 AM


Feb. 24, 2011 (GlobeNewswire) --

CLEVELAND, Feb. 24, 2011 (GLOBE NEWSWIRE) -- Olympic Steel, Inc. (Nasdaq:ZEUS), a national steel service center, today announced its financial results for the fourth quarter and year ended December 31, 2010.

Net sales for the fourth quarter of 2010 increased 55.4% to $215.2 million from $138.5 million for the fourth quarter of 2009. Tons sold in the fourth quarter of 2010 increased 31.0% to 254 thousand from 194 thousand in the fourth quarter of 2009. Fourth quarter 2010 net loss totaled $1.6 million, or $0.15 per diluted share, compared to a net loss of $2.6 million, or $0.24 per diluted share, for last year's fourth quarter.

Net sales for the year ended December 31, 2010 increased by 53.8% to $805.0 million, compared to $523.4 million for 2009. Tons sold in 2010 increased 34.3% to 969 thousand from 721 thousand in 2009. Net income for 2010 was $2.1 million or $0.20 per diluted share, compared to a net loss of $61.2 million, or $5.62 per diluted share, for 2009. The 2010 results included a third quarter $2.1 million pretax bad debt charge related to an unexpected closure of a customer. The 2009 results included $81.1 million of lower of cost or market pretax charges in the aggregate to write down the value of inventory in the first half of 2009.

Commenting on the results, Chairman and Chief Executive Officer Michael D. Siegal stated, "Our 2010 shipments increased by 34% over 2009, which is significantly greater than the total industry growth in steel shipments of 21%, as reported in the Metals Service Center Institute's Market Activity Report. We experienced strong momentum in material demand in the fourth quarter. Along with announced price increases in all of our product lines beginning in November of 2010 and continuing still, our year-end inventory positions present additional opportunities for market share growth and profitability into the coming year."

"Our strong balance sheet, along with our new $125 million, five-year, asset based loan facility, allowed us to strategically invest in growth initiatives during 2010, including ordering a new temper mill and cut-to-length line to be located on United States Steel Corporation's Gary Works site in Indiana, product growth in specialty metals, and additional equipment and geographic expansion with our new location in Mount Sterling, Kentucky, which is expected to begin operating in March 2011. These timely investments bode well for revenue growth and value creation in the recovering economic environment," concluded Mr. Siegal.

Olympic Steel's Board of Directors approved a regular quarterly cash dividend of $0.02 per share to be paid to shareholders of record as of March 1, 2011, and distributed on March 15, 2011.

A simulcast of Olympic Steel's 2010 fourth quarter earnings conference call may be accessed via the Investor Relations section of the Company's website at www.olysteel.com. The simulcast will begin at 10:00 a.m. Eastern Time today and a replay of the call will be available for 14 days thereafter.

Founded in 1954, Olympic Steel is a leading U.S. metals service center focused on the direct sale and distribution of large volumes of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel and aluminum products. Headquartered in Cleveland, Ohio, the Company operates 16 facilities. For further information, visit the Company's web site at http://www.olysteel.com.

The Olympic Steel, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3582.

It is the Company's policy not to endorse any analyst's sales or earnings estimates. Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as "may," "will," "anticipate," "should," "intend," "expect," "believe," "estimate," "project," "plan," "potential," or "continue," as well as the negative of these terms or other similar expressions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those implied by such statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Such risks and uncertainties include, but are not limited to: the ability to successfully finalize an agreement with U.S. Steel for the purchase of the Gary, Indiana facility and to place the facility in operation on the expected timeframe; fluctuations in steel demand and steel pricing; general and global business, economic, financial and political conditions, including the ongoing effects of the global economic recovery; access to capital and global credit markets; competitive factors such as the availability and pricing of metal, industry shipping and inventory levels, and rapid fluctuations in customer demand and metal pricing; the cyclicality and volatility within the metal industry; the ability of our customers (especially those that may be highly leveraged and those with inadequate liquidity) to maintain their credit availability and to honor their agreements related to derivative instruments; customer, supplier, and competitor consolidation, bankruptcy or insolvency; reduced production schedules, layoffs or work stoppages by our own, our suppliers' or our customers' personnel; the availability and costs of transportation and logistical services; equipment installation delays or malfunctions, including the new Gary, Indiana temper mill and cut-to-length line; the amounts, successes and ability to continue our capital investments and strategic growth initiatives and our business information system implementations; the successes of our strategic efforts and initiatives to increase sales volumes, maintain or improve working capital turnover and free cash flows, reduce costs and improve inventory turnover and improve customer service; the timing and outcome of inventory lower of cost or market adjustments; the adequacy of our existing information technology and business system software; the successful implementation of our new information systems; the timing and outcome of our joint venture's efforts and ability to liquidate its remaining real estate; our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; and our ability to generate free cash flow through operations, reduce inventory and repay debt within anticipated time frames, the recently enacted federal healthcare legislation's impact on the healthcare benefits required to be provided by us and the impact of such legislation on our compensation and administrative costs. Further information on these and other risks and uncertainties is provided under Item 1A "Risk Factors" of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which disclosure is incorporated herein by reference, and elsewhere in reports that the Company files or furnishes with the SEC. This release speaks only as of its date and the Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law. You are advised, however, to consult any further disclosures the Company makes on related subjects in its reports filed with or furnished to the SEC.

 
OLYMPIC STEEL
SELECTED FINANCIAL INFORMATION 
         
(in thousands, except per share data and ratios)
         
         
 Three Months Ended
December 31,
Twelve Months Ended
December 31,
 2010200920102009
SUMMARY RESULTS OF OPERATIONS: (audited) (audited)
         
Net sales  $ 215,201  $ 138,497  $ 805,043  $ 523,395
         
Operating income (loss)  (1,535)  (3,944)  6,102  (97,327)
         
Income (loss) before income taxes   (2,211)  (4,300)  3,797  (99,544)
         
Net income (loss)  $ (1,596)  $ (2,612)  $ 2,132  $ (61,228)
         
Earnings per share:        
         
Net income (loss) per share - basic  $ (0.15)  $ (0.24)  $ 0.20  $ (5.62)
         
Net income (loss) per share - diluted  $ (0.15)  $ (0.24)  $ 0.20  $ (5.62)
         
 December 31,    
 20102009    
SUMMARY BALANCE SHEET DATA: (audited)    
         
Accounts receivable, net  $ 82,859  $ 51,269    
         
Inventories, net  200,606  111,663    
         
Net property and equipment  118,234  113,560    
         
Total assets   429,438  338,448    
         
Current liabilities  102,625  66,254    
         
Total debt  55,235  --    
         
Shareholders' equity  261,638  259,612    
         
Shareholders' equity per share  24.01  23.85    
         
Debt-to-equity ratio  .21 to 1   n/a     
         
 Twelve Months Ended
December 31,
   
 20102009    
OTHER DATA: (audited)    
         
Capital expenditures  17,846  11,862    
         
Cash dividends per share  $ 0.08  $ 0.11    
         
         
         
It is the Company's policy not to make quarterly or annual sales or earnings projections
for external use and not to endorse any analyst's sales or earnings estimates.
 
OLYMPIC STEEL
RESULTS OF OPERATIONS
                 
(in thousands, except per share and tonnage data)
                 
 Three Months Ended December 31,Twelve Months Ended December 31,
 2010200920102009
  (audited) (audited)
                 
Tons sold                
Direct  230,594    174,576    878,323    644,752  
Toll  23,712    19,604    90,300    76,226  
                 
   254,306    194,180    968,623    720,978  
% change 31.0%   (15.1%)   34.3%   (38.1%)  
                 
Net sales  $ 215,201    $ 138,497    $ 805,043    $ 523,395  
% change 55.4%   (45.4%)   53.8%   (57.4%)  
                 
Costs and expenses                
                 
Cost of materials sold (exclusive of items shown below, includes $81,063 of inventory lower of cost or market adjustments for the nine months ended September 30, 2009)  176,722 82.1%  111,703 80.7% 650,398 80.8% 502,134 95.9%
Warehouse and processing  14,421 6.7%  10,337 7.5%  51,478 6.4%  39,863 7.6%
Administrative and general  10,633 4.9%  8,773 6.3%  39,233 4.9%  33,956 6.5%
Distribution  5,095 2.4%  4,094 3.0%  19,407 2.4%  15,480 3.0%
Selling  4,957 2.3%  3,143 2.3%  19,802 2.5%  12,114 2.3%
Occupancy  1,380 0.6%  1,297 0.9%  5,320 0.7%  5,500 1.1%
Depreciation  3,528 1.6%  3,094 2.2%  13,303 1.7%  11,675 2.2%
                 
Total costs and expenses  216,736 100.7%  142,441 102.8%  798,941 99.2%  620,722 118.6%
                 
Operating income (loss)  (1,535) (0.7%)  (3,944) (2.8%)  6,102 0.8%  (97,327) (18.6%)
                 
Interest and other expense on debt  676 0.3%  356 0.3%  2,305 0.3%  2,217 0.4%
                 
Income (loss) before income taxes  (2,211) (1.0%)  (4,300) (3.1%)  3,797 0.5%  (99,544) (19.0%)
                 
Income tax provision (benefit)  (615) 27.8%  (1,688) 39.3%  1,665 43.9%  (38,316) 38.5%
                 
Net income (loss)  $ (1,596)    $ (2,612)    $ 2,132    $ (61,228)  
                 
Earnings per share:                
                 
Net income (loss) per share - basic  $ (0.15)    $ (0.24)    $ 0.20    $ (5.62)  
                 
Weighted average shares outstanding - basic  10,913    10,898    10,905    10,887  
                 
Net income (loss) per share - diluted  $ (0.15)    $ (0.24)    $ 0.20    $ (5.62)  
                 
Weighted average shares outstanding - diluted  10,913    10,898    10,918    10,887  
                 
                 
                 
                 
It is the Company's policy not to make quarterly or annual sales or earnings projections
for external use and not to endorse any analyst's sales or earnings estimates.
CONTACT: Richard T. Marabito
         Chief Financial Officer
         Telephone: (216) 292-3800
         Fax: (216) 292-3974

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(Source: PrimeZone )
(Source: Quotemedia)

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