Exhibit 99.1
NEWS CONTACT: RICHARD T. MARABITO
release CHIEF FINANCIAL OFFICER
TELEPHONE: (216) 292-3800
FAX: (216) 682-4065
OLYMPIC STEEL REPORTS 2003 SECOND QUARTER AND FIRST HALF RESULTS
Cleveland, Ohio -- (July 31, 2003) Olympic Steel, Inc., (Nasdaq: ZEUS),
a national steel service center, today announced its financial results for the
second quarter and six months ended June 30, 2003.
Tons sold for the second quarter of 2003 decreased 11.5% to 279
thousand from 315 thousand. Net sales decreased 6.8% to $113.4 million from
$121.7 million in the second quarter of 2002. For the first half of 2003, tons
sold decreased 12.3% to 548 thousand from 624 thousand, and net sales decreased
1.6% to $228.3 million from $232.0 million.
Net loss for the second quarter totaled $554 thousand or $.06 per
share, compared to a net loss of $618 thousand or $.06 per share for the second
quarter of 2002. Net loss for the first half of 2003 was $1.0 million or $.11
per share, compared to a net loss of $2.5 million, or $.26 per share in the
first half of 2002. Results in 2002 included losses from the Company's
discontinued Tubing operation and the cumulative effect of a change in
accounting principle for goodwill.
"Our second quarter financial performance was similar to our first
quarter, with weak customer demand for flat-rolled steel continuing to pressure
gross margins and earnings," stated Michael D. Siegal, Chairman and Chief
Executive Officer. "We continue to aggressively manage our expenses. First half
employment costs are down 11%, and financing costs are down $1.4 million or 40%
compared to the first six months of 2002. We also reduced our inventory and debt
in the first half, while increasing our unused borrowing availability. Market
conditions are not expected to improve in the second half, which is further
impacted by seasonal slowdowns and customer plant shutdowns in July and
December. We expect our results to begin to include the favorable impact of an
improved inventory position, a lower expense base, and our continued efforts to
capture greater sales volume," concluded Mr. Siegal.
A simulcast and replay of Olympic Steel's second quarter conference
call may be accessed at the Company's web site. The simulcast will begin at
approximately 10:00 a.m. Eastern Time today and a replay of the call will be
available through August 8, 2003.
Founded in 1954, Olympic Steel is a North American steel service center
that is experienced in the specialized processing and distribution of large
volumes of flat-rolled carbon and stainless steel products. Headquartered in
Cleveland, Ohio, the Company operates 12 distribution and processing facilities
and participates in two joint ventures in Michigan. For further information
about Olympic Steel, Inc., visit the Company's web site at
http://www.olysteel.com.
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. Forward-looking statements in this release are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements that speak only as of the date hereof. Such risks and
uncertainties include, but are not limited to: general business, economic and
political conditions; competitive factors such as the availability and pricing
of steel and fluctuations in customer demand; layoffs or work stoppages by the
Company's, suppliers', or customers' personnel; equipment installation delays or
malfunctions; customer, supplier, and competitor consolidation or insolvency;
and the Company's ability to realize improved profitability by reducing its
inventory and expenses and increasing its sales volume. Please refer to the
Company's Securities and Exchange Commission filings for further information.
OLYMPICSTEEL
SELECTED FINANCIAL INFORMATION
(in thousands, except per share data and ratios)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ---------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
SUMMARY RESULTS OF OPERATIONS: (unaudited) (unaudited)
Net sales $ 113,401 $ 121,7131 $ 228,281 $ 231,952
Operating income 146 4,217 525 6,487
Income (loss) from continuing operations before income taxes
and cumulative effect of a change in accounting principle (816) 2,884 (1,614) 3,619
Income (loss) from continuing operations before cumulative
effect of a change in accounting principle (554) 1,773 (1,033) 2,225
Loss from discontinued operations, net of income taxes -- (2,391) -- (2,641)
Cumulative effect of a change in accounting principle, net
of income taxes -- -- -- (2,117)
--------- --------- --------- ---------
Net loss $ (554) $ (618) $ (1,033)) $ (2,533)
========= ========= ========= =========
Basic and diluted net income (loss) per share:
Income (loss) from continuing operations $ (0.06) $ 0.19 $ (0.11) $ 0.24
Loss from discontinued operations -- (0.25) -- (0.28)
Cumulative effect of a change in accounting principle -- -- -- (0.22)
--------- --------- --------- ---------
Net loss per share $ (0.06) $ (0.06) $ (0.11) $ (0.26)
========= ========= ========= =========
JUNE 30, DECEMBER 31,
------------------------ ------------
2003 2002 2002
-------- -------- --------
SUMMARY BALANCE SHEET DATA: (unaudited)
Accounts receivable, net $ 59,260 $ 59,937 $ 48,877
Inventories 86,599 75,962 101,837
Net property and equipment 93,347 103,092 97,323
Total assets 249,826 251,834 262,911
Current liabilities 33,480 37,407 43,962
Total debt 102,567 99,630 106,793
Shareholders' equity 114,465 116,597 115,495
Shareholders' equity per share 11.87 12.10 11.98
Debt-to-equity ratio .90 to 1 .85 to 1 .92 to 1
<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-------------------
2003 2002
----- ------
OTHER DATA: (unaudited)
Capital expenditures 237 1,477
EBITDA (a) 4,735 10,771
(a) Defined as operating income plus depreciation.
CERTAIN 2002 AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM TO THE 2003 PRESENTATION.
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.
OLYMPICSTEEL
RESULTS OF OPERATIONS
(in thousands, except per share and tonnage data)
THREE MONTHS ENDED JUNE 30,
--------------------------------------------
2003 2002
---------------- ----------------
(unaudited)
Tons sold
Direct 233,912 273,734
Toll 44,802 41,305
-------- ---------
278,714 315,039
% change (11.5%) 13.5%
Net sales $113,401 $ 121,713
% change (6.8%) 15.1%
Cost of materials sold 89,430 90,159
-------- ---------
Gross profit 23,971 21.1% 31,554 25.9%
Operating expenses
Warehouse and processing 8,147 7.2% 9,767 8.0%
Administrative and general 5,752 5.1% 6,160 5.1%
Distribution 3,990 3.5% 4,744 3.9%
Selling 2,834 2.5% 3,476 2.9%
Occupancy 979 0.9% 1,044 0.9%
Depreciation 2,123 1.9% 2,146 1.8%
-------- ---------
Total operating expenses 23,825 21.0% 27,337 22.5%
-------- ---------
Operating income 146 0.1% 4,217 3.5%
Income (loss) from joint ventures 19 501
-------- ---------
Income before financing costs and income taxes 165 4,718
Interest and other expense on debt 981 0.9% 1,834 1.5%
-------- ---------
Income (loss) from continuing operations before income taxes
and cumulative effect of a change in accounting principle (816) (0.7%) 2,884 2.4%
Income tax benefit (provision) 262 32.1% (1,111) 38.5%
-------- ---------
Income (loss) from continuing operations before cumulative
effect of a change in accounting principle (554) 1,773
Discontinued operations:
Loss from discontinued tube operation, net of 38.5% income
tax benefit - (792)
Loss on disposition of discontinued tube operation, net of
38.5% income tax benefit - (1,599)
-------- ---------
Loss before cumulative effect of a change in accounting principle (554) (618)
Cumulative effect of a change in accounting principle, net of
38.0% income tax benefit - -
-------- ---------
Net loss $ (554) $ (618)
======== =========
Basic and diluted net income (loss) per share:
Income (loss) from continuing operations $ (0.06) $ 0.19
Loss from discontinued operations - (0.25)
Cumulative effect of a change in accounting principle - -
-------- ---------
Net loss per share $ (0.06) $ (0.06)
======== =========
Weighted average shares outstanding 9,645 9,635
SIX MONTHS ENDED JUNE 30,
--------------------------------------------
2003 2002
---------------- ----------------
(unaudited)
Tons sold
Direct 463,413 542,459
Toll 84,236 81,672
-------- --------
547,649 624,131
% change (12.3%) 11.8%
Net sales $228,281 $231,952
% change (1.6%) 5.8%
Cost of materials sold 180,417 172,253
-------- --------
Gross profit 47,864 21.0% 59,699 25.7%
Operating expenses
Warehouse and processing 16,135 7.1% 18,696 8.1%
Administrative and general 11,560 5.1% 12,348 5.3%
Distribution 7,754 3.4% 9,032 3.9%
Selling 5,588 2.4% 6,769 2.9%
Occupancy 2,092 0.9% 2,083 0.9%
Depreciation 4,210 1.8% 4,284 1.8%
-------- --------
Total operating expenses 47,339 20.7% 53,212 22.9%
-------- --------
Operating income 525 0.2% 6,487 2.8%
Income (loss) from joint ventures (10) 693
-------- --------
Income before financing costs and income taxes 515 7,180
Interest and other expense on debt 2,129 0.9% 3,561 1.5%
-------- --------
Income (loss) from continuing operations before income taxes
and cumulative effect of a change in accounting principle (1,614) (0.7%) 3,619 1.6%
Income tax benefit (provision) 581 36.0% (1,394) 38.5%
-------- --------
Income (loss) from continuing operations before cumulative
effect of a change in accounting principle (1,033) 2,225
Discontinued operations:
Loss from discontinued tube operation, net of 38.5% income
tax benefit - (1,042)
Loss on disposition of discontinued tube operation, net of
38.5% income tax benefit - (1,599)
-------- --------
Loss before cumulative effect of a change in accounting principle (1,033) (416)
Cumulative effect of a change in accounting principle, net of
38.0% income tax benefit - (2,117)
-------- --------
Net loss $ (1,033) $ (2,533)
========= =========
Basic and diluted net income (loss) per share:
Income (loss) from continuing operations $ (0.11) $ 0.24
Loss from discontinued operations - (0.28)
Cumulative effect of a change in accounting principle - (0.22)
-------- --------
Net loss per share $ (0.11) $ (0.26)
========= =========
Weighted average shares outstanding 9,644 9,633
CERTAIN 2002 AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM TO THE 2003
PRESENTATION WITH NO EFFECT ON NET LOSS.
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.