EXHIBIT 99.1
NEWS
RELEASE
CONTACT: RICHARD T. MARABITO
CHIEF FINANCIAL OFFICER
TELEPHONE: (216) 292-3800
FAX: (216) 292-3974
OLYMPIC STEEL REPORTS RECORD SALES AND EARNINGS FOR SECOND
QUARTER AND FIRST HALF OF 2004
Cleveland, Ohio -- (July 29, 2004) Olympic Steel, Inc., (Nasdaq: ZEUS),
a national steel service center, today announced record financial results for
the second quarter and six months ended June 30, 2004.
Net sales for the second quarter of 2004 increased 96.4% to $222.8
million from $113.4 million in the second quarter a year ago. Tons sold
increased 23.4% to 344 thousand from 279 thousand in the second quarter of 2003.
Second quarter 2004 net income was the highest quarterly results in Company
history, totaling $18.5 million, or $1.89 per basic share and $1.82 per diluted
share, compared to a net loss of $(554) thousand, or $(.06) per basic and
diluted share for last year's second quarter.
For the first half of 2004, net sales increased 79.5% to $409.8 million
from $228.3 million. Tons sold increased 33.2% to 729 thousand from 548 thousand
in the first half of 2003. Net income for the first half of 2004 was $29.3
million or $3.01 per basic share and $2.90 per diluted share, compared to a net
loss of $(1.0) million, or $(.11) per basic and diluted share in the first half
of 2003.
"We are pleased to report record sales and earnings. We are most happy
with our continued success in our asset turnover and balance sheet management
during a period of rapidly escalating steel prices," stated Michael D. Siegal,
Chairman and Chief Executive Officer. "We reduced our debt by $7.4 million
during the first half of 2004, while our accounts receivable increased $41.1
million and inventory increased $39.7 million due to strong demand and
significant price increases in the first half."
"We are optimistic about the second half of 2004, based upon our
customers' and suppliers' performance and their favorable outlook for the
remainder of 2004. We see many positive growth opportunities this year for
Olympic Steel, understanding that the back half of the year does have eight less
shipping days than the first half of the year. We expect to take advantage of
this higher risk environment, as we are well positioned in terms of inventory
and liquidity, while maintaining our strict disciplines on working capital, cash
turnover and credit risk management," concluded Mr. Siegal.
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.
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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
OLYMPICSTEEL
SELECTED FINANCIAL INFORMATION
(in thousands, except per share data and ratios)
<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------- -----------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
SUMMARY RESULTS OF OPERATIONS: (unaudited) (unaudited)
Net sales $ 222,773 $ 113,401 $ 409,806 $ 228,281
Operating income 31,747 146 50,582 525
Income (loss) before income taxes 30,814 (816) 48,309 (1,614)
------------- ------------- ------------- -------------
Net income (loss) $ 18,500 $ (554) $ 29,347 $ (1,033)
============= ============= ============= =============
Earnings per share:
Net income (loss) per share - basic $ 1.89 $ (0.06) $ 3.01 $ (0.11)
Net income (loss) per share - diluted $ 1.82 $ (0.06) $ 2.90 $ (0.11)
</Table>
<Table>
<Caption>
JUNE 30, DECEMBER 31,
----------------------------- -------------
2004 2003 2003
------------- ------------- -------------
SUMMARY BALANCE SHEET DATA: (unaudited)
Accounts receivable, net $ 97,606 $ 59,260 $ 56,501
Inventories 132,510 86,599 92,775
Net property and equipment 86,669 93,347 89,782
Total assets 327,358 249,826 249,002
Current liabilities 89,505 33,480 42,574
Total debt 90,387 102,567 97,797
Shareholders' equity 143,106 114,465 112,236
Shareholders' equity per share 14.51 11.87 11.63
Debt-to-equity ratio .63 to 1 .90 to 1 .87 to 1
</Table>
<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-----------------------------
2004 2003
------------- -------------
OTHER DATA: (unaudited)
Capital expenditures 1,064 237
EBITDA (a) 55,216 4,735
</Table>
(a) Defined as operating income plus depreciation plus asset impairment
charge.
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)
<Table>
<Caption>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------------------------- ------------------------------------------
2004 2003 2004 2003
--------------------- --------------------- -------------------- -------------------
(unaudited) (unaudited)
Tons sold
Direct 292,973 233,912 623,068 463,413
Toll 51,096 44,802 106,145 84,236
---------- ---------- ---------- ----------
344,069 278,714 729,213 547,649
% change 23.4% (11.5)% 33.2% (12.3)%
Net sales $ 222,773 $ 113,401 $ 409,806 $ 228,281
% change 96.4% (6.8)% 79.5% (1.6)%
Cost of materials sold 152,247 89,430 285,793 180,417
---------- ---------- ---------- ----------
Gross profit 70,526 31.7% 23,971 21.1% 124,013 30.3% 47,864 21.0%
Operating expenses
Warehouse and processing 11,425 5.1% 8,147 7.2% 22,309 5.4% 16,135 7.1%
Administrative and general 13,360 6.0% 5,752 5.1% 23,037 5.6% 11,560 5.1%
Distribution 4,711 2.1% 3,990 3.5% 9,782 2.4% 7,754 3.4%
Selling 5,764 2.6% 2,834 2.5% 11,080 2.7% 5,588 2.4%
Occupancy 1,256 0.6% 979 0.9% 2,589 0.6% 2,092 0.9%
Depreciation 2,076 0.9% 2,123 1.9% 4,147 1.0% 4,210 1.8%
Asset impairment charge 187 0.1% -- 0.0% 487 0.1% -- 0.0%
---------- ---------- ---------- ----------
Total operating expenses 38,779 17.4% 23,825 21.0% 73,431 17.9% 47,339 20.7%
---------- ---------- ---------- ----------
Operating income 31,747 14.3% 146 0.1% 50,582 12.3% 525 0.2%
Income (loss) from joint ventures 94 19 172 (10)
---------- ---------- ---------- ----------
Income before financing costs
and income taxes 31,841 165 50,754 515
Interest and other expense on debt 1,027 0.5% 981 0.9% 2,445 0.6% 2,129 0.9%
---------- ---------- ---------- ----------
Income (loss) before income taxes 30,814 13.8% (816) (0.7)% 48,309 11.8% (1,614) (0.7)%
Income tax provision (benefit) 12,314 40.0% (262) 32.1% 18,962 39.3% (581) 36.0%
---------- ---------- ---------- ----------
Net income (loss) $ 18,500 $ (554) $ 29,347 $ (1,033)
========== ========== ========== ==========
Earnings per share:
Net income (loss) per
share - basic $ 1.89 $ (0.06) $ 3.01 $ (0.11)
========== ========== ========== ==========
Weighted average shares
outstanding - basic 9,794 9,645 9,734 9,644
========== ========== ========== ==========
Net income (loss) per share
- diluted $ 1.82 $ (0.06) $ 2.90 $ (0.11)
========== ========== ========== ==========
Weighted average shares
outstanding - diluted 10,182 9,645 10,108 9,644
========== ========== ========== ==========
</Table>
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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