EXHIBIT 99.1
CONTACT: RICHARD T. MARABITO
CHIEF FINANCIAL OFFICER
NEWS TELEPHONE: (216) 292-3800
RELEASE FAX: (216) 292-3974
OLYMPIC STEEL REPORTS RECORD RESULTS
FOR 2004 FOURTH QUARTER AND FULL YEAR
Cleveland, Ohio -- (February 22, 2005) Olympic Steel, Inc., (Nasdaq:
ZEUS), a national steel service center, today announced record sales and
earnings results for the fourth quarter and the year ended December 31, 2004.
Net sales for the fourth quarter of 2004 increased 87.1% to $240.2
million from $128.4 million in the fourth quarter a year ago. Tons sold
decreased 8.8% to 303 thousand from 332 thousand in the fourth quarter of 2003.
Fourth quarter 2004 net income totaled $12.2 million, or $1.17 per diluted
share, compared to a net loss of $2.1 million, or $(0.22) per diluted share for
last year's fourth quarter. Fourth quarter results were impacted by $(.03) per
share for an increase in the Company's bad debt reserve for a Tier 1 automotive
supplier's bankruptcy filing in early February 2005.
Annual 2004 net sales increased 89.2% to $894.2 million from $472.5
million in the prior year. Tons sold increased 14.7% to 1.36 million from 1.18
million in 2003. Net income for 2004 was $60.1 million or $5.88 per diluted
share, compared to a net loss of $3.3 million, or $(0.34) per diluted share in
2003.
"We are pleased to report record net sales and earnings," stated
Michael D. Siegal, Chairman and Chief Executive Officer. "Our tons sold in the
fourth quarter were lower, particularly to the service center sector, as a
result of higher inventories in that spot market sector. We expect this
inventory overhang to diminish during the first quarter of 2005, as imports are
decreasing and end use consumers of steel have remained extremely busy."
"We are also pleased that our strong balance sheet and cash management
efforts resulted in a small reduction of debt during 2004, while our working
capital employed increased by $78 million. In addition, we are highly confident
that the extraordinary effort by many will have Olympic Steel in full 404
Sarbanes-Oxley compliance."
"With continuing strong end use demand, high steel-making raw material
and energy costs, and a weak U.S. dollar, our outlook remains favorable for
2005. We are optimistic about our ability to meet our customers' anticipated
increased needs for steel and value added services. We will install two new
laser-processing machines in Cleveland during the first quarter of 2005, and two
others in our Central Region later this year," concluded Mr. Siegal.
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Founded in 1954, Olympic Steel is a leading U.S. steel 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 products.
Headquartered in Cleveland, Ohio, the Company operates 12 facilities and
participates in two joint ventures. For further information, 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 and global business,
economic and political conditions; competitive factors such as the availability
and pricing of steel and fluctuations in customer demand; the ability of
customers to maintain their credit availability in periods of escalating steel
prices; layoffs or work stoppages by the Company's suppliers', or customers'
personnel; equipment installation delays or malfunctions; the successes of the
Company's efforts and initiatives to increase sales volumes, improve cash flows
and reduce debt, maintain or improve inventory turns, and reduce costs; the
successes of the Company's joint ventures; 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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------------- -------------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
SUMMARY RESULTS OF OPERATIONS: (unaudited) (audited)
Net sales $ 240,209 $ 128,417 $ 894,157 $ 472,548
Operating income (loss) 20,644 (1,850) 102,807 166
Income (loss) before income taxes 20,014 (3,241) 98,893 (5,001)
------------- ------------- ------------- -------------
Net income (loss) $ 12,159 $ (2,112) $ 60,078 $ (3,260)
============= ============= ============= =============
Earnings per share:
Net income (loss) per share - basic $ 1.22 $ (0.22) $ 6.12 $ (0.34)
Net income (loss) per share - diluted $ 1.17 $ (0.22) $ 5.88 $ (0.34)
</Table>
<Table>
<Caption>
DECEMBER 31,
-------------------------------
2004 2003
------------- -------------
SUMMARY BALANCE SHEET DATA: (audited)
Accounts receivable, net $ 93,336 $ 56,501
Inventories 186,124 92,775
Net property and equipment 83,571 89,782
Total assets 374,146 249,002
Current liabilities 95,688 42,574
Total debt 96,022 97,797
Shareholders' equity 176,525 112,236
Shareholders' equity per share 17.58 11.63
Debt-to-equity ratio .54 to 1 .87 to 1
</Table>
<Table>
<Caption>
TWELVE MONTHS ENDED
DECEMBER 31,
-------------------------------
2004 2003
------------- -------------
OTHER DATA: (audited)
Capital expenditures $ 2,029 $ 836
EBITDA (a) 111,503 8,487
</Table>
(a) Defined as operating income plus depreciation plus an asset impairment
charge in 2004.
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 DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
-------------------------------------- ---------------------------------------
2004 2003 2004 2003
----------------- ------------------ ----------------- -----------------
(audited) (audited)
Tons sold
Direct 264,766 279,859 1,170,932 996,609
Toll 37,747 52,001 184,224 184,659
---------- ---------- ---------- ---------
302,513 331,860 1,355,156 1,181,268
% change (8.8%) 29.3% 14.7% 2.0%
Net sales $240,209 $128,417 $ 894,157 $472,548
% change 87.1% 15.7% 89.2% 2.9%
Cost of materials sold 187,418 101,430 651,787 372,692
---------- ---------- ---------- ---------
Gross profit 52,791 22.0% 26,987 21.0% 242,370 27.1% 99,856 21.1%
Operating expenses
Warehouse and processing 10,131 4.2% 8,920 6.9% 42,582 4.8% 33,127 7.0%
Administrative and general 10,080 4.2% 5,644 4.4% 44,820 5.0% 22,901 4.8%
Distribution 4,511 1.9% 4,573 3.6% 18,775 2.1% 16,538 3.5%
Selling 4,381 1.8% 6,666 5.2% 19,792 2.2% 14,867 3.1%
Occupancy 981 0.4% 960 0.7% 4,898 0.5% 3,936 0.8%
Depreciation 2,063 0.9% 2,074 1.6% 8,209 0.9% 8,321 1.8%
Asset impairment charge -- 0.0% -- 0.0% 487 0.1% -- 0.0%
---------- ---------- ---------- ---------
Total operating expenses 32,147 13.4% 28,837 22.5% 139,563 15.6% 99,690 21.1%
---------- ---------- ---------- ---------
Operating income (loss) 20,644 8.6% (1,850) (1.4%) 102,807 11.5% 166 0.0%
Income (loss) from joint ventures 511 (358) 741 (1,012)
---------- ---------- ---------- ---------
Income (loss) before financing
costs and income taxes 21,155 (2,208) 103,548 (846)
Interest and other expense on debt 1,141 0.5% 1,033 0.8% 4,655 0.5% 4,155 0.9%
---------- ---------- ---------- ---------
Income (loss) before income taxes 20,014 8.3% (3,241) (2.5%) 98,893 11.1% (5,001) (1.1%)
Income tax provision (benefit) 7,855 39.2% (1,129) 34.8% 38,815 39.2% (1,741) 34.8%
---------- ---------- ---------- ---------
Net income (loss) $ 12,159 $ (2,112) $ 60,078 $ (3,260)
========== ========== ========== =========
Earnings per share:
Net income (loss) per share - basic $ 1.22 $ (0.22) $ 6.12 $ (0.34)
========== ========== ========== =========
Weighted average shares outstanding - basic 9,997 9,648 9,816 9,646
========== ========== ========== =========
Net income (loss) per share - diluted $ 1.17 $ (0.22) $ 5.88 $ (0.34)
========== ========== ========== =========
Weighted average shares outstanding - diluted 10,394 9,648 10,222 9,646
========== ========== ========== =========
</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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