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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-23320
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OLYMPIC STEEL, INC.
(Exact name of registrant as specified in its charter)
Ohio 34-1245650
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5096 Richmond Road, Bedford Heights, Ohio 44146
----------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 292-3800
---------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No ( )
Indicate the number of shares of each of the issuer's classes of common stock,
as of the latest practicable date:
Class Outstanding as of August 12, 1998
-------------------------------------- ---------------------------------
Common stock, without par value 10,692,000
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OLYMPIC STEEL, INC.
INDEX TO FORM 10-Q
PAGE NO.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets - June 30, 1998 and 3
December 31, 1997
Consolidated Statements of Income - for the three and six
months ended June 30, 1998 and 1997 4
Consolidated Statements of Cash Flows - for the six
months ended June 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6-8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9-15
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 16
ITEM 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
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Part I. FINANCIAL INFORMATION
Olympic Steel, Inc.
Consolidated Balance Sheets
(in thousands)
June 30, December 31,
1998 1997
------------ ------------
(unaudited)
Assets
Cash $ 4,117 $ 1,748
Accounts receivable 13,197 6,417
Inventories 130,918 132,230
Prepaid expenses and other 1,863 1,780
--------- ---------
Total current assets 150,095 142,175
--------- ---------
Property and equipment 138,544 124,292
Accumulated depreciation (23,109) (20,301)
--------- ---------
Net property and equipment 115,435 103,991
--------- ---------
Goodwill 13,210 13,278
Investments in joint ventures 5,808 6,090
--------- ---------
Total assets $ 284,548 $ 265,534
========= =========
Liabilities
Current portion of long-term debt $ 3,147 $ 3,722
Accounts payable 25,260 24,266
Accrued payroll 3,946 3,618
Other accrued liabilities 5,720 5,520
--------- ---------
Total current liabilities 38,073 37,126
--------- ---------
Revolving credit agreement 55,087 48,809
Term loans 27,306 20,148
Industrial revenue bonds 7,140 7,245
--------- ---------
Total long-term debt 89,533 76,202
--------- ---------
Deferred income taxes 6,468 6,032
--------- ---------
Total liabilities 134,074 119,360
--------- ---------
Shareholders' Equity
Preferred stock - -
Common stock 106,319 106,319
Retained earnings 44,155 39,855
--------- ---------
Total shareholders' equity 150,474 146,174
--------- ---------
Total liabilities and shareholders' equity $ 284,548 $ 265,534
========= =========
The accompanying notes are an integral part of these balance sheets.
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Olympic Steel, Inc.
Consolidated Statements of Income
(in thousands, except per share and tonnage data)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
1998 1997 1998 1997
--------- --------- --------- ---------
(unaudited)
Tons sold
Direct 283,025 291,097 572,202 564,434
Toll 80,524 47,665 159,663 90,152
--------- --------- --------- ---------
363,549 338,762 731,865 654,586
========= ========= ========= =========
Net sales $ 152,254 $ 157,595 $ 307,961 $ 307,068
Cost of sales 120,245 125,203 243,654 244,033
--------- --------- --------- ---------
Gross margin 32,009 32,392 64,307 63,035
Operating expenses
Warehouse and processing 8,748 8,588 17,509 16,854
Administrative and general 6,939 6,671 13,870 13,274
Distribution 4,629 4,783 9,218 9,268
Selling 3,703 3,614 7,308 6,949
Occupancy 1,035 1,043 2,161 2,182
Depreciation and amortization 1,701 1,466 3,354 2,755
--------- --------- --------- ---------
Total operating expenses 26,755 26,165 53,420 51,282
--------- --------- --------- ---------
Operating income 5,254 6,227 10,887 11,753
Income (loss) and (start-up costs) from joint ventures (89) 62 (205) 163
--------- --------- --------- ---------
Income before financing costs and taxes 5,165 6,289 10,682 11,916
Interest expense 813 981 1,777 1,898
Receivable securitization expense 1,060 1,004 1,969 1,803
--------- --------- --------- ---------
Income before taxes 3,292 4,304 6,936 8,215
Income taxes 1,251 1,615 2,636 3,081
--------- --------- --------- ---------
Net income $ 2,041 $ 2,689 $ 4,300 $ 5,134
========= ========= ========= =========
Net income per share $ 0.19 $ 0.25 $ 0.40 $ 0.48
========= ========= ========= =========
Weighted average shares outstanding 10,692 10,692 10,692 10,692
========= ========= ========= =========
The accompanying notes are an integral part of these statements.
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Olympic Steel, Inc.
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
(in thousands)
1998 1997
-------- --------
(unaudited)
Cash flows from operating activities:
Net income $ 4,300 $ 5,134
Adjustments to reconcile net income to net
cash from (used for) operating activities-
Depreciation and amortization 3,354 2,755
(Income) loss and start-up costs from joint ventures 205 (163)
Long-term deferred income taxes 436 550
-------- --------
8,295 8,276
Changes in working capital:
Accounts receivable (6,780) (7,020)
Inventories 1,393 (6,462)
Prepaid expenses and other 191 66
Accounts payable 994 7,632
Accrued payroll and other accrued liabilities 251 (978)
-------- --------
(3,951) (6,762)
-------- --------
Net cash from operating activities 4,344 1,514
-------- --------
Cash flows from investing activities:
Acquisition of JNT (net of working capital of $113) (755) -
Acquisition of Southeastern (net of working capital of $422) - (13,734)
Equipment purchases and deposits (6,968) (4,130)
Facility construction and improvements (6,458) (1,979)
Other capital expenditures, net (550) (548)
Investments in joint ventures - (6,091)
-------- --------
Net cash used for investing activities (14,731) (26,482)
-------- --------
Cash flows from financing activities:
Revolving credit agreement 6,278 17,010
Term loans and IRB's 6,478 6,940
-------- --------
Net cash from financing activities 12,756 23,950
-------- --------
Cash:
Net change 2,369 (1,018)
Beginning balance 1,748 2,018
-------- --------
Ending balance $ 4,117 $ 1,000
======== ========
The accompanying notes are an integral part of these statements.
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OLYMPIC STEEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
The accompanying consolidated financial statements have been prepared from the
financial records of Olympic Steel, Inc. (Olympic or the Company) and its
wholly-owned subsidiaries, without audit and reflect all adjustments which are,
in the opinion of management, necessary to fairly present the results of the
interim periods covered by this report. All significant intercompany
transactions and balances have been eliminated in consolidation. Investments in
the Company's three joint ventures are accounted for under the equity method.
Certain amounts in the 1997 consolidated financial statements have been
reclassified to conform to the 1998 presentation.
(1) EARNINGS PER SHARE:
Earnings per share have been calculated based on the weighted average shares
outstanding. Basic and diluted earnings per share are the same, as outstanding
stock options were not dilutive.
(2) ACQUISITION:
Effective June 26, 1998, the Company acquired certain assets and assumed certain
liabilities of JNT Precision Machining, Inc. (JNT), a machining center located
in McConnellsburg, Pennsylvania, which operates lathes, machine centers, drills
and saws.
The preliminary cash purchase price, which is subject to post-closing
adjustments and includes a loan to the sellers, totaled $755 thousand. The
acquisition has been accounted for as a purchase and, accordingly, assets and
liabilities are reflected at estimated fair values. The preliminary purchase
price allocation resulted in goodwill of $108 thousand.
The JNT operation will initially operate from its current facility in
McConnellsburg, until a new facility is constructed in nearby Chambersburg,
Pennsylvania. Olympic plans to initially spend approximately $6.8 million to
construct an 80,000 square foot facility to house the existing JNT operation and
additional plate processing equipment. The new facility is projected to be
operational in the second quarter of 1999.
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(3) ACCOUNTS RECEIVABLE:
As of June 30, 1998, and December 31, 1997, $62 million and $64 million,
respectively, of receivables were sold under the Company's accounts receivable
securitization program. Receivables sold are reflected as a reduction of
accounts receivable in the accompanying consolidated balance sheets.
(4) LONG -TERM DEBT:
Interest rates under the Company's various credit agreements are generally based
on prime or LIBOR plus a premium determined quarterly (each March 1, June 1,
September 1, and December 1), which varies with the Company's operating
performance and financial leverage. Borrowing rates for the first five months of
1998 were prime plus 0% and LIBOR plus 1.0%. Since June 1, 1998, the LIBOR
premium has been 1.25%. The majority of the Company's borrowings are based on
the LIBOR option. The overall effective interest rate for all debt for the three
and six month periods ended June 30, 1998 amounted to 7.0% and 6.9%,
respectively, compared to 6.7% and 6.8%, for the respective periods in 1997.
The Company's bank credit agreement includes a secured $17 million term loan
component to finance the construction and equipping of a new temper mill
facility in Iowa (the Iowa Term Loan). As of June 30, 1998, Iowa Term Loan
borrowings outstanding totaled $13.3 million, and cumulative capitalized
interest has totaled $560 thousand.
Included in the revolving credit balances on the accompanying consolidated
balance sheets are $25.1 million and $5.2 million of checks issued that have not
cleared the bank as of June 30, 1998 and December 31, 1997, respectively.
(5) SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid during the six months ended June 30, 1998 and 1997 totaled $2.3
million and $1.9 million, respectively. Interest paid includes $403 thousand in
1998, and $157 thousand in 1997, which was capitalized relating to the Company's
Iowa temper mill facility project. Income taxes paid during the first half of
1998 and 1997 totaled $3.1 million and $3.2 million, respectively.
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(6) IMPACT OF NEW ACCOUNTING STANDARD:
The Financial Accounting Standards Board has issued Statement of Accounting
Standards No. 130, "Reporting Comprehensive Income," (SFAS No.130), which
requires reporting and display of comprehensive income and its components in a
full set of general purpose financial statements. SFAS No. 130 has no impact on
Olympic, as the Company's comprehensive income consists of net income only.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company's results of operations are affected by numerous external
factors, such as general economic and political conditions, competition, steel
pricing and availability, and work stoppages by automotive manufacturers.
The Company's 1998 first half results include the results of the
Company's Southeastern operation (Southeastern), the net assets of which were
acquired effective June 1, 1997. Southeastern has historically operated as a
metals toll processor, and is located near Atlanta, Georgia. Additionally,
effective June 26, 1998, the Company's consolidated balance sheet reflects the
acquired net assets of JNT Precision Machining, Inc. (JNT), a machining center
located in McConnellsburg, Pennsylvania. JNT's results of operations will be
included in the Company's results commencing in the third quarter of 1998.
Olympic sells a broad range of products, many of which have different
gross margins. Products that have more value-added processing generally have a
greater gross margin. Accordingly, the Company's overall gross margin is
affected by product mix and the amount of processing performed, as well as
volatility in selling prices and material purchase costs. The Company performs
toll processing of customer-owned steel, the majority of which is performed by
its Lafayette Steel and Southeastern operations. Toll processing generally
results in lower selling prices and gross margin dollars per ton but higher
gross margin percentages than the Company's historical direct sales.
The Company's financial statements include the results of its three
joint ventures: Olympic Continental Resources (OCR), a company formed in January
1997 to buy, sell and trade ferrous and non-ferrous metals and alternate iron
products to steel mills and scrap processors; Olympic Laser Processing (OLP), a
company formed in April 1997 to process laser welded sheet steel blanks for the
automotive industry; and Trumark Steel & Processing (TSP), a company formed in
December 1997, to support the flat-rolled steel requirements of the automotive
industry as a Minority Business Enterprise (MBE). Over 13% of OCR's first half
1998 revenues and 22% of its June 30, 1998 accounts receivable are from one of
the Company's joint venture partners, Atlas Iron Processors, Inc. (Atlas) or
affiliates of Atlas. OLP has constructed a new facility and is initially
equipping it with two laser-welding lines. Production is expected to begin in
the second half of 1998. TSP's start-up has been slower than expected, as TSP
continues to await certification as an MBE from the Michigan Minority Business
Development Council.
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Start-up costs for both OLP and TSP are being expensed as incurred, and
are expected to continue through the second half of 1998. The Company guarantees
portions of outstanding debt under the joint venture companies' bank credit
facilities. The Company's 45% interest in OCR, 50% interest in OLP and 49%
interest in TSP are accounted for under the equity method.
Financing costs include interest expense on debt and costs associated
with the Company's accounts receivable securitization program (the Financing
Costs). Interest rates paid by the Company under its credit agreement are
generally based on prime or LIBOR plus a premium (the Premium) determined
quarterly, which varies based on the Company's operating performance and
financial leverage. Receivable securitization costs are based on commercial
paper rates calculated on the amount of receivables sold.
The Company sells certain products internationally, primarily in Mexico
and Puerto Rico. All international sales and payments are made in United States
dollars. These sales historically involve the Company's direct representation of
steel producers and may be covered by letters of credit or trade receivable
insurance. Typically, international sales are more transactional in nature with
lower gross margins than domestic sales. Domestic steel producers generally
supply domestic customers before meeting foreign demand, particularly during
periods of supply constraints.
Approximately 345 of the Company's hourly plant personnel at the
Minneapolis and Lafayette Steel facilities are represented by four separate
collective bargaining units. The two collective bargaining agreements at
Lafayette expired on June 30, 1998, and were extended to July 31, 1998.
Lafayette personnel are currently working without an agreement. However, a
tentative agreement between the Company and the bargaining committee has been
signed and is scheduled for a ratification vote by the employees represented by
the bargaining committee on August 23, 1998. The agreements covering personnel
at the Minneapolis coil and plate processing facilities expire on September 30,
1998 and March 31, 1999, respectively. The Company has never experienced a work
stoppage and believes that its relationship with its employees is good. However,
any prolonged disruption in business arising from work stoppages by Company
personnel represented by collective bargaining units could have a material
adverse effect on the Company's results of operations.
Because the Company conducts its operations generally on the basis of
short-term orders, backlog is not a meaningful indicator of future performance.
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RESULTS OF OPERATIONS
Tons sold increased 7.3% to 364 thousand in the second quarter of 1998
from 339 thousand for the second quarter of 1997, and 11.8% in the first half of
1998 to 732 thousand from 655 thousand in the first half of 1997. Tons sold in
the second quarter of 1998 include 283 thousand from direct sales and 81
thousand from toll processing, compared with 291 thousand direct tons and 48
thousand tolling tons in the comparable period of last year. Tons sold in the
first half of 1998 include 572 thousand from direct sales and 160 thousand from
toll processing, compared to 565 thousand direct tons and 90 thousand tolling
tons in the comparable periods of 1997. The increase in tolling tons is due to
the addition of Southeastern offsetting a reduction attributable to the impact
of the General Motors (GM) strike (the Strike). The decrease in second quarter
direct tons is primarily attributable to the impact of the Strike and a decrease
in international sales to Mexico.
Net sales decreased 3.4% to $152.3 million for the second quarter of
1998 from $157.6 million for 1997. For the first half, net sales increased 0.3%
to $308 million from $307.1 million in the prior year period. Average selling
prices declined 10% and 10.3% for the three and six month periods, respectively,
primarily due to an increase in the proportion of tolling sales in 1998 and
declines in direct average selling prices of 1.5% for the second quarter and
1.8% for the first half. The largest decline in direct selling prices related to
stainless steel products. International sales declined $9.1 million in the first
half of 1998, as a result of declining participation in the Mexican market,
which is expected to continue in the second half of 1998.
The Company's sales to GM decreased by $4.7 million in the first half
of 1998 compared to the same period of 1997, due to the impact of the Strike, as
well as a continued decline in the Company's participation with GM. The
Company's sales to suppliers of GM also declined in the second quarter due to
the Strike. Approximately 22% of the Company's first half 1998 total sales were
made to customers in the automotive industry, and the Company estimates that
approximately 40% of its automotive-related sales are made to GM or its
suppliers. The Company's third quarter 1998 sales and earnings results will also
be adversely impacted by the Strike, as it is expected that GM's return to
production will be staged slowly through August. The Company projects that its
sales volume to GM and its suppliers will return to pre-Strike levels in
September 1998.
As a percentage of net sales, gross margin increased to 21% for the
second quarter of 1998 from 20.6% for 1997, and to 20.9% for the first six
months of 1998 from 20.5% in 1997. The increases reflect the impact of enhanced
margins from the Company's non-automotive sales, an increased proportion of
tolling sales, and a decrease in international sales.
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On a per ton basis, operating expenses decreased to $73.59 for the
second quarter of 1998 from $77.24 for 1997, and $72.99 for the first half of
1998 from $78.34 in 1997. As a percentage of net sales, operating expenses
increased to 17.6% for the second quarter of 1998 from 16.6% for 1997, and to
17.3% for the first six months of 1998 from 16.7% in 1997. The increases as a
percentage of net sales are primarily due to an increased proportion of tolling
sales, lower average selling prices, and start-up costs. Start-up costs included
in operating expenses in the first half of 1998 relating to the $26 million
temper mill and plate processing facility under construction in Bettendorf, Iowa
(the Iowa Facility) and installation, training and down-time related to the new
tube mill in Cleveland totaled $677 thousand compared to $126 thousand in 1997
for the Iowa Facility. Start-up costs for the Iowa Facility are expected to
increase during the second half of 1998 until the facility becomes operational
in the fourth quarter.
The Company also continues to spend increasing amounts on information
technology, including systems programming and expenditures for Year 2000
compliance. The Company expects its software, application and equipment
processing systems will be Year 2000 compliant in the first half of 1999.
Joint venture start-up costs exceeded income by $89 thousand in the
second quarter and $205 thousand in the first half of 1998. In 1997, joint
venture income totaled $62 thousand and $163 thousand for the second quarter and
first half, respectively. Prior year joint venture results reflect OCR only.
Start-up costs related to OLP and TSP are being expensed as incurred in 1998.
As of June 30, 1998, OCR's net receivable from Atlas and affiliates totaled
$5.7 million, a 19% increase from December 31, 1997.
Financing Costs for the second quarter of 1998 decreased to $1.9
million from $2.0 million in 1997, and totaled $3.7 million in both the first
halves of 1998 and 1997. Average borrowings outstanding in the first half of
1998 totaled $72 million (which include $10.1 of average borrowings for the
construction and equipping of the Iowa Facility), compared to $64.5 million in
1997. Interest costs associated with the Iowa Facility are being capitalized.
The Company's effective bank borrowing rate for the second quarter of 1998 was
7.0% compared to 6.7 % in 1997, and 6.9% in the first half of 1998 compared to
6.8% in 1997. The Company's Premium increased to 1.25% on June 1, 1998, and will
continue to be 1.25% through December 1, 1998.
Pretax income for the second quarter of 1998 decreased 23.5% to $3.3
million from $4.3 million for 1997. For the first six months of 1998, pretax
income decreased 15.6% to $6.9 million from $8.2 million in 1997. Income taxes
approximated 38.0% of pretax income in the 1998 periods compared to 37.5% in the
1997 periods. The increase in the income tax percentage is primarily
attributable to the decrease in international sales and an increase in
non-deductible expenses.
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Net income for the second quarter of 1998 totaled $2.0 million, or $.19
per share, compared to $2.7 million, or $.25 per share for 1997. For the first
six months of 1998, net income totaled $4.3 million, or $.40 per share, compared
to $5.1 million, or $.48 per share in 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal capital requirement is to fund its growth,
including strategic acquisitions and joint ventures, the purchase and upgrading
of processing equipment and services, the construction and upgrading of related
facilities, and additional working capital requirements. The Company uses cash
generated from operations, long-term debt obligations, proceeds from the
Company's accounts receivable securitization program, equity offerings, and
leasing transactions to fund these requirements. Historically, the Company has
used revolving credit borrowings under its bank credit facility to finance
working capital requirements.
Net cash from operating activities primarily represents net income plus
non-cash charges for depreciation, amortization and start-up costs / income from
joint ventures, as well as changes in working capital. During the first six
months of 1998, $4.3 million of net cash was provided from operating activities,
consisting of $8.3 million of cash generated from net income and non-cash
charges offset by $4 million of cash used for working capital purposes.
Working capital at June 30, 1998 increased by $7 million or 6.6% since
December 31, 1997. The increase is primarily attributable to a $6.8 million
increase in accounts receivable, a $2.4 million increase in cash and includes
$113 thousand of net working capital acquired from JNT, partially offset by a
$1.4 million decrease in inventory and a $1 million increase in accounts
payable. The accounts receivable increase is the result of traditionally weaker
December sales as compared to other quarter-end months.
As of June 30, 1998, and December 31, 1997, $62 million and $64
million, respectively, of eligible receivables were sold under the Company's
accounts receivable securitization program. The amount of trade receivables sold
by the Company typically changes monthly depending upon the level of defined
eligible receivables available for sale at each month end.
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Net cash used for investing activities in the first half of 1998
totaled $14.7 million, primarily consisting of expenditures for the Iowa
Facility, which is planned to become operational in the fourth quarter of 1998.
The Company also made payments on its new tube mill in Cleveland and new
cut-to-length line in Detroit, which were both installed during the first
quarter of 1998. The cut-to-length line became fully operational in the second
quarter of 1998, while the new tube mill is operational but continues to
experience start-up delays. The Company now expects the new tube mill to be
operating at full capacity in the fourth quarter of 1998. The Company also
commenced a $2.7 million, 35,000 square foot facility expansion and equipment
upgrade project at its Southeastern operation in April, 1998. The facility
expansion and upgraded cut-to-length line are expected to become operational by
the end of 1998.
Cash flows used from financing activities primarily consists of net
borrowings under the Company's revolving credit agreement and term loan draws
for the Iowa Facility, offset by scheduled payments under other existing
long-term debt agreements.
As of June 30, 1998, approximately $20.9 million in unused availability
existed under the Company's revolving credit and accounts receivable
securitization facilities, and $3.7 million was available under the $17 million
Iowa term loan. The Company believes that funds available under its revolving
credit facility, other credit and financing agreements and funds generated from
operations will be sufficient to provide the Company with the liquidity
necessary to fund its anticipated working capital requirements and capital
expenditure requirements over the next 12 months. Capital requirements are
subject to change as business conditions warrant and opportunities arise. In
connection with its internal and external expansion strategies, the Company may
from time to time seek additional funds to finance other new facilities,
acquisitions and significant improvements to processing equipment to respond to
customers' demands.
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FORWARD-LOOKING INFORMATION
This document contains various forward-looking statements and
information that are based on management's beliefs as well as assumptions made
by and information currently available to management. When used in this
document, the words "believe," "estimate," "expect," "plan," "project," and
similar expressions are intended to identify forward-looking statements, which
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks,
uncertainties and assumptions including, but not limited to, general business
and economic conditions; competitive factors such as the availability and
pricing of steel and fluctuations in demand, specifically in the automotive
market; work stoppages by Company personnel or automotive manufacturers;
potential equipment malfunction; equipment installation and facility
construction delays, particularly for the Iowa Facility, the new tube mill, and
the JNT and Southeastern expansion projects; the impact of the Year 2000
problem; successes of the Company's joint ventures; and the continued successes
of its joint venture partners, who are also significant customers of the joint
ventures. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those estimated, expected, planned or projected. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation to
republish revised forward-looking statements to reflect the occurrence of
unanticipated events or circumstances after the date hereof.
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Company's annual meeting of shareholders was held on April 22,
1998.
(b) At the annual meeting, the Company's shareholders elected R. Louis
Schneeberger, Suren A. Hovsepian and Martin H. Elrad as Directors for a
two-year term, which expires at the annual meeting of shareholders in
2000. The term of office of Michael D. Siegal, David A. Wolfort, Thomas
M. Forman and Janice M. Margheret, as Directors, continued after the
1998 meeting; such term expires at the annual shareholders meeting in
1999.
(c) At the annual meeting, the Company's shareholders ratified the
appointment of Arthur Andersen, LLP as auditors of the Company for
1998. The holders of 9,581,990 shares of Common Stock voted to ratify
the appointment, the holders of 9,985 shares voted against the
ratification, and the holders of 18,102 shares abstained.
The following tabulation represents voting for the Directors:
For Withheld Authority
-------------- ------------------
R. Louis Schneeberger 9,362,586 247,483
Suren A. Hovsepian 9,359,125 250,944
Martin H. Elrad 9,396,375 213,694
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27 - Financial Data Schedule
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
OLYMPIC STEEL, INC.
(Registrant)
Date: August 12, 1998 By: /s/ R. LOUIS SCHNEEBERGER
--------------------------
R. LOUIS SCHNEEBERGER
Chief Financial Officer
By: /s/ RICHARD T. MARABITO
--------------------------
RICHARD T. MARABITO
Treasurer and Corporate Controller
(Principal Accounting Officer)
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