Exhibit 99.1
NEWS CONTACT: RICHARD T. MARABITO
RELEASE CHIEF FINANCIAL OFFICER
TELEPHONE: (216) 292-3800
FAX: (216) 292-3974
OLYMPIC STEEL REPORTS RECORD REVENUES FOR FIRST QUARTER OF 2005
Cleveland, Ohio -- (April 28, 2005) Olympic Steel, Inc., (Nasdaq: ZEUS), a
national steel service center, today announced record sales revenue for the
first quarter ended March 31, 2005.
Net sales for the first quarter of 2005 increased 52.1% to a record $284.6
million from $187.0 million for the first quarter a year ago. Tons sold
decreased 6.6% to 360 thousand from 385 thousand in the first quarter of 2004.
First quarter 2005 net income totaled $9.6 million, or $0.92 per diluted share,
compared to net income of $10.8 million, or $1.09 per diluted share for last
year's first quarter.
"We are pleased to announce that during the first quarter of 2005, our
sales revenue was the highest for any quarter in our history. This reflects high
average selling prices and good volume," stated Michael D. Siegal, Chairman and
Chief Executive Officer.
"Inventories remain higher than expected, particularly at other service
centers. Demand remains good in most markets, with the exception of the domestic
automotive sector and service centers. We believe these factors will make spot
market pricing more competitive, decreasing gross margins in the near term.
Olympic will remain focused on our receivable and inventory turnover and expense
controls to mitigate some of these industry dynamics. Additionally, we continue
investing in high value-added services by adding two new laser-cutting machines
in the first quarter and plan to add others this year to service our customers'
growing outsourcing requirements," concluded Mr. Siegal.
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.
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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, industry inventory levels, and rapid
fluctuations in customer demand and pricing; the cyclicality and volatility
within the steel industry; the ability of customers (especially in the
automotive industry) to maintain their credit availability; 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; the adequacy of our information technology and
business system software; and customer, supplier, and competitor consolidation
or insolvency. Please refer to the Company's Securities and Exchange Commission
filings for further information.
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OLYMPICSTEEL
SELECTED FINANCIAL INFORMATION
(in thousands, except per share data and ratios)
THREE MONTHS ENDED
MARCH 31,
-------------------------
2005 2004
--------- --------
SUMMARY RESULTS OF OPERATIONS: (unaudited)
- ------------------------------
Net sales $ 284,558 $ 187,033
Operating income 16,833 18,835
Income before income taxes 15,768 17,495
--------- --------
Net income $ 9,619 $ 10,847
========= =========
Earnings per share:
Net income per share - basic $ 0.95 $ 1.12
Net income per share - diluted $ 0.92 $ 1.09
MARCH 31,
------------------------ DECEMBER 31,
2005 2004 2004
--------- -------- ------------
SUMMARY BALANCE SHEET DATA: (unaudited)
- ---------------------------
Accounts receivable, net $ 127,511 $ 82,319 $ 93,336
Inventories 181,159 94,739 186,124
Net property and equipment 81,970 87,787 83,571
Total assets 403,985 278,056 374,146
Current liabilities 90,587 51,562 95,688
Total debt 119,921 100,006 96,022
Shareholders' equity 187,743 123,266 176,525
Shareholders' equity per share 18.51 12.77 17.58
Debt-to-equity ratio .64 to 1 .81 to 1 .54 to 1
THREE MONTHS ENDED
MARCH 31,
------------------------
2005 2004
--------- --------
OTHER DATA: (unaudited)
- -----------
Capital expenditures $ 417 $ 107
EBITDA (a) 18,851 21,206
(a) Defined as operating income plus depreciation plus, in 2004, an 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.
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OLYMPICSTEEL
RESULTS OF OPERATIONS
(in thousands, except per share and tonnage data)
THREE MONTHS ENDED MARCH 31,
--------------------------------------------
2005 2004
---------------- -----------------
(unaudited)
Tons sold
Direct 313,888 330,095
Toll 45,965 55,049
-------- --------
359,853 385,144
% change (6.6%) 43.2%
Net sales $284,558 $187,033
% change 52.1% 62.8%
Cost of materials sold 235,135 133,546
-------- --------
Gross profit 49,423 17.4% 53,487 28.6%
Operating expenses
Warehouse and processing 10,628 3.7% 10,884 5.8%
Administrative and general 9,273 3.3% 9,677 5.2%
Distribution 5,135 1.8% 5,071 2.7%
Selling 4,037 1.4% 5,316 2.8%
Occupancy 1,499 0.5% 1,333 0.7%
Depreciation 2,018 0.7% 2,071 1.1%
Asset impairment charge - 0.0% 300 0.2%
-------- --------
Total operating expenses 32,590 11.5% 34,652 18.5%
-------- --------
Operating income 16,833 5.9% 18,835 10.1%
Income from joint ventures 243 78
-------- --------
Income before financing costs and income taxes 17,076 18,913
Interest and other expense on debt 1,308 0.5% 1,418 0.8%
-------- --------
Income before income taxes 15,768 5.5% 17,495 9.4%
Income tax provision 6,149 39.0% 6,648 38.0%
-------- --------
Net income $ 9,619 $ 10,847
======== ========
Earnings per share:
Net income per share - basic $ 0.95 $ 1.12
======== ========
Weighted average shares outstanding - basic 10,080 9,675
======== ========
Net income per share - diluted $ 0.92 $ 1.09
======== ========
Weighted average shares outstanding - diluted 10,455 9,959
======== ========
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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