Exhibit 99.1
NEWS CONTACT: RICHARD T. MARABITO
RELEASE CHIEF FINANCIAL OFFICER
TELEPHONE: (216) 292-3800
FAX: (216) 292-3974
OLYMPIC STEEL REPORTS 2003 ANNUAL AND FOURTH QUARTER RESULTS
Cleveland, Ohio -- (February 12, 2004) Olympic Steel, Inc., (Nasdaq:
ZEUS), a national steel service center, today announced fourth quarter and year
end results for 2003.
Net sales for the fourth quarter of 2003 increased 15.7% to $128.4
million from $111.0 million in 2002. Tons sold for the fourth quarter of 2003
increased 29.3% to 332 thousand from 257 thousand in the fourth quarter of 2002.
Net loss totaled $2.1 million, or $.22 per share, compared to a net loss of $3.4
million, or $.35 per share, for last year's fourth quarter. The Company's fourth
quarter operating expenses included a $3.6 million, or $.24 per share, bad debt
charge related to receivables, primarily from a customer that filed for
bankruptcy protection in December 2003, deemed uncollectible.
Annual tons sold for 2003 increased 2.0% to 1.18 million from 1.16
million in the prior year, and net sales increased 2.9% to $472.5 million from
$459.4 million in 2002. Net loss for 2003 totaled $3.3 million, or $.34 per
share, compared to a net loss of $5.8 million, or $.60 per share for 2002.
The 2002 fourth quarter results included non-cash, after-tax charges of
$2.3 million or $.24 per share, and the 2002 annual net loss included
non-recurring charges of $.74 per share. As previously reported, the 2002
non-recurring charges included accelerated depreciation and amortization, the
write-off of goodwill, and costs associated with the closure of the Company's
tube processing operation.
"While overall disappointing, 2003 was a pivotal year for the steel
industry, including Olympic Steel. Starting in recession, many events, including
low interest rates, a falling U.S. dollar and low systemic inventories, began to
improve business conditions as the year progressed. Additionally, the
Presidential removal of Section 201 steel tariffs, increased Chinese consumption
of raw materials and metallics, including scrap steel, and increasing domestic
demand further improved the overall business and specific climate by the end of
the year," stated Michael D. Siegal, Chairman and Chief Executive Officer.
"Due to our 2003 operating cost reduction measures and aggressive
inventory management, we believe the Company is well positioned to benefit in
2004," concluded Mr. Siegal.
A simulcast and replay of Olympic Steel's fourth quarter conference call
may be accessed at the Company's web site. The simulcast will begin at
approximately 10:00 AM Eastern Time today and a replay of the call will be
available through February 16, 2004.
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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; and customer, supplier, and competitor consolidation or
insolvency. Please refer to the Company's Securities and Exchange Commission
filings for further information.
PAGE 2 OF 4
OLYMPIC STEEL
SELECTED FINANCIAL INFORMATION
(in thousands, except per share data and ratios)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
----------------------------------------------------------------
2003 2002 2003 2002
----------------------------------------------------------------
SUMMARY RESULTS OF OPERATIONS: (unaudited) (audited)
- ------------------------------
Net sales $128,417 $110,967 $472,548 $459,384
Operating income (loss) (1,850) (2,247) 166 5,838
Loss from continuing operations before income taxes and
cumulative effect of a change in accounting principle (3,241) (5,490) (5,001) (1,627)
Loss from continuing operations before cumulative effect
of a change in accounting principle (2,112) (3,376) (3,260) (1,001)
Loss from discontinued operations, net of income taxes - - - (2,641)
Cumulative effect of a change in accounting principle, net
of income taxes - - - (2,117)
----------------------------------------------------------------
Net loss $(2,112) $(3,376) $(3,260) $(5,759)
================================================================
Basic and diluted net loss per share:
Loss from continuing operations $(0.22) $(0.35) $(0.34) $(0.10)
Loss from discontinued operations - - - (0.28)
Cumulative effect of a change in accounting principle - - - (0.22)
----------------------------------------------------------------
Net loss per share $(0.22) $(0.35) $(0.34) $(0.60)
================================================================
AS OF DECEMBER 31,
----------------------------------
2003 2002
----------------------------------
SUMMARY BALANCE SHEET DATA: (audited)
- ---------------------------
Accounts receivable, net $56,501 $48,877
Inventories 92,775 101,837
Net property and equipment 89,782 97,323
Total assets 249,002 262,911
Current liabilities 42,574 43,962
Total debt 97,797 106,793
Shareholders' equity 112,236 115,495
Shareholders' equity per share 11.63 11.98
Debt-to-equity ratio .87to1 .92to1
TWELVE MONTHS ENDED
DECEMBER 31,
----------------------------------
2003 2002
----------------------------------
OTHER DATA: (audited)
- -----------
Capital expenditures 836 1,490
EBITDA (a) 8,487 15,935
(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.
PAGE 3 OF 4
OLYMPICSTEEL
RESULTS OF OPERATIONS
(in thousands, except per share and tonnage data)
THREE MONTHS ENDED DECEMBER 31,
---------------------------------------------
2003 2002
---------------------------------------------
(unaudited)
Tons sold
Direct 279,859 219,987
Toll 52,001 36,708
-------------- -------------
331,860 256,695
% change 29.3% (0.3%)
Net sales $128,417 $110,967
% change 15.7% 21.2%
Cost of materials sold 101,430 88,272
-------------- -------------
Gross profit 26,987 21.0% 22,695 20.5%
Operating expenses
Warehouse and processing 8,920 6.9% 7,897 7.1%
Administrative and general 5,644 4.4% 5,591 5.0%
Distribution 4,573 3.6% 3,967 3.6%
Selling 6,666 5.2% 2,829 2.5%
Occupancy 960 0.7% 917 0.8%
Depreciation 2,074 1.6% 3,741 3.4%
-------------- -------------
Total operating expenses 28,837 22.5% 24,942 22.5%
-------------- -------------
Operating income (loss) (1,850) (1.4%) (2,247) (2.0%)
Income (loss) from joint ventures (358) (56)
-------------- -------------
Income (loss) before financing costs and income taxes (2,208) (2,303)
Interest and other expense on debt 1,033 0.8% 3,187 2.9%
-------------- -------------
Loss from continuing operations before income taxes and
cumulative effect of a change in accounting principle (3,241) (2.5%) (5,490) (4.9%)
Income tax benefit 1,129 34.8% 2,114 38.5%
-------------- -------------
Loss from continuing operations before cumulative effect
of a change in accounting principle (2,112) (3,376)
Discontinued operations:
Loss from discontinued tube operation, net of income
tax benefit - -
Loss on disposition of discontinued tube operation, net
of income tax benefit - -
-------------- -------------
Loss before cumulative effect of a change in accounting
principle (2,112) (3,376)
Cumulative effect of a change in accounting principle,
net of income tax benefit - -
-------------- -------------
Net loss $(2,112) $(3,376)
============== =============
Basic and diluted net loss per share:
Loss from continuing operations $(0.22) $(0.35)
Loss from discontinued operations - -
Cumulative effect of a change in accounting principle - -
-------------- -------------
Net loss per share $(0.22) $(0.35)
============== =============
Weighted average shares outstanding 9,648 9,642
TWELVE MONTHS ENDED DECEMBER 31,
-----------------------------------------------
2003 2002
-----------------------------------------------
(audited)
Tons sold
Direct 996,609 1,004,406
Toll 184,659 153,922
-------------- --------------
1,181,268 1,158,328
% change 2.0% 8.6%
Net sales $472,548 $459,384
% change 2.9% 13.5%
Cost of materials sold 372,692 349,608
-------------- --------------
Gross profit 99,856 21.1% 109,776 23.9%
Operating expenses
Warehouse and processing 33,127 7.0% 35,686 7.8%
Administrative and general 22,901 4.8% 24,008 5.2%
Distribution 16,538 3.5% 17,319 3.8%
Selling 14,867 3.1% 12,884 2.8%
Occupancy 3,936 0.8% 3,944 0.9%
Depreciation 8,321 1.8% 10,097 2.2%
-------------- --------------
Total operating expenses 99,690 21.1% 103,938 22.6%
-------------- --------------
Operating income (loss) 166 0.0% 5,838 1.3%
Income (loss) from joint ventures (1,012) 606
-------------- --------------
Income (loss) before financing costs and income taxes (846) 6,444
Interest and other expense on debt 4,155 0.9% 8,071 1.8%
-------------- --------------
Loss from continuing operations before income taxes and
cumulative effect of a change in accounting principle (5,001) (1.1%) (1,627) (0.4%)
Income tax benefit 1,741 34.8% 626 38.5%
-------------- --------------
Loss from continuing operations before cumulative effect
of a change in accounting principle (3,260) (1,001)
Discontinued operations:
Loss from discontinued tube operation, net of income
tax benefit - (1,042)
Loss on disposition of discontinued tube operation, net
of income tax benefit - (1,599)
-------------- --------------
Loss before cumulative effect of a change in accounting
principle (3,260) (3,642)
Cumulative effect of a change in accounting principle,
net of income tax benefit - (2,117)
-------------- --------------
Net loss $(3,260) $(5,759)
============== ==============
Basic and diluted net loss per share:
Loss from continuing operations $(0.34) $(0.10)
Loss from discontinued operations - (0.28)
Cumulative effect of a change in accounting principle - (0.22)
-------------- --------------
Net loss per share $(0.34) $(0.60)
============== ==============
Weighted average shares outstanding 9,646 9,637
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.
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