Exhibit 99.1
Olympic Steel Reports 2007 Third Quarter Sales and Earnings Results
CLEVELAND--(BUSINESS WIRE)--Nov. 1, 2007--Olympic Steel, Inc.,
(Nasdaq:ZEUS), a national steel service center, today announced its
financial results for the third quarter of 2007.
Net sales for the third quarter of 2007 totaled $256.1 million, a
1.5% decrease from the $259.9 million for the third quarter a year
ago. Third quarter 2007 net income totaled $6.0 million, or $0.56 per
diluted share, compared to net income of $10.9 million, or $1.03 per
diluted share for last year's third quarter. Tons sold decreased 1.4%
to 309 thousand from 313 thousand in the third quarter of 2006.
Net sales for the first nine months of 2007 increased 5.0% to
$792.9 million, compared to last year's nine month net sales of $754.9
million. Net income for the first nine months of 2007 totaled $20.7
million or $1.93 per diluted share, compared to $27.3 million, or
$2.57 per diluted share for the same period last year. Tons sold in
the first nine months decreased 3.8% to 957 thousand from 994 thousand
in the first nine months of 2006, better than the Metals Service
Center Institute statistics of a 7.9% decline in year-over-year steel
shipments for the first nine months of 2007.
Commenting on the results, Chairman and Chief Executive Officer
Michael D. Siegal, stated, "We are pleased with our 2007 performance
in a volatile market. Despite the sliding price environment,
particularly in stainless steel, we were able to gain market share,
control operating expenses, and improve our asset turnover and cash
flow during the quarter. We reported a shipping rate that was 6.2%
better than the service center industry, improved our inventory
turnover rate by 12% to just under 5 times, and paid down $39 million
of debt during the third quarter."
"At present, carbon steel imports remain low, and service center
inventories were reduced for the eleventh consecutive month in
September 2007. Given these circumstances, price increases should
occur when demand is restored from the normal seasonal slowness. With
the strength of our balance sheet and our 0.10 to 1 debt-to-equity
ratio and strong working capital management, we are able to continue
investing in new equipment, facilities and information technologies.
Thus far in 2007, we have invested in a new stretcher leveler for our
Minneapolis Coil facility, added 54,000 square feet to our Iowa
facility, continued the implementation of a new information system,
and purchased several new presses, lasers, and plasma and machining
centers. We anticipate increasing our spending in 2008 to support our
strategies in value-add processing, gross margin expansion, and
location penetration," concluded Mr. Siegal.
Olympic Steel's Board of Directors approved a regular quarterly
cash dividend of $.04 per share to be paid to shareholders of record
as of December 3, 2007, and distributed on December 17, 2007.
A simulcast of Olympic Steel's 2007 third quarter earnings
conference call may be accessed via the Investor Relations section of
the Company's website at www.olysteel.com. The simulcast will begin at
10:00 a.m. Eastern Time today and a replay of the call will be
available for 14 days thereafter.
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 16 facilities. For further information, visit the Company's
web site at http://www.olysteel.com.
It is the Company's policy 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. Forward-looking statements are
typically identified by words or phrases such as "may," "will,"
"should," "expect," "anticipate," "intend," "plan," "believe,"
"estimate," "potential," or "continue," as well as the negative of
these terms or other similar expressions. 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.
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; the availability and
cost of transportation and logistical services; equipment installation
delays or malfunctions; the successes of the Company's capital
investments, efforts and initiatives to increase sales volumes,
improve cash flows and reduce debt, maintain or improve inventory
turnover, and reduce costs; the timing and outcome of efforts and
ability to liquidate OLP's remaining assets; the adequacy of our
existing information technology and business system software and the
success of implementing our new information system; customer,
supplier, and competitor consolidation or insolvency; and the
Company's ability to pay regular quarterly cash dividends. Further
information on these and other risks and uncertainties is provided
under Item 1A "Risk Factors" of the Company's Annual Report on Form
10-K and Quarterly Reports on Form 10-Q, which disclosure is
incorporated herein by reference, and elsewhere in reports that the
Company files or furnishes with the SEC. This release speaks only as
of its date and the Company undertakes no obligation to publicly
update forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent required
by law. You are advised, however, to consult any further disclosures
the Company makes on related subjects in its reports filed with or
furnished to the SEC.
OLYMPIC STEEL
SELECTED FINANCIAL INFORMATION
(in thousands, except per share data and ratios)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ---------------------
2007 2006 2007 2006
--------- --------- ------------ --------
SUMMARY RESULTS OF (unaudited) (unaudited)
OPERATIONS:
- ----------------------------
Net sales $ 256,089 $ 259,917 $ 792,907 $754,943
Operating income 10,678 18,751 35,959 47,627
Income before income taxes 10,038 17,853 33,439 44,093
--------- --------- ------------ --------
Net income $ 6,029 $ 10,935 $ 20,727 $ 27,287
========= ========= ============ ========
Earnings per share:
Net income per share -
basic $ 0.56 $ 1.05 $ 1.96 $ 2.63
Net income per share -
diluted $ 0.56 $ 1.03 $ 1.93 $ 2.57
September 30, December 31,
-------------------
2007 2006 2006
--------- --------- ------------
SUMMARY BALANCE SHEET DATA: (unaudited)
- ----------------------------
Accounts receivable, net $ 109,059 $ 106,911 $ 85,883
Inventories 172,497 214,851 210,738
Net property and equipment 89,102 86,574 87,359
Total assets 399,135 427,952 405,320
Current liabilities 102,901 113,029 92,340
Total debt 25,000 72,592 68,328
Shareholders' equity 259,096 230,779 234,237
Shareholders' equity per
share 24.15 22.13 22.46
Debt-to-equity ratio .10 to 1 .31 to 1 .29 to 1
Nine Months Ended
September,
-------------------
2007 2006
--------- ---------
OTHER DATA: (unaudited)
- ----------------------------
Capital expenditures 8,312 9,255
Cash dividends per share $ 0.10 $ 0.09
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.
OLYMPIC STEEL
RESULTS OF OPERATIONS
(in thousands, except per share and tonnage data)
Three Months Ended September 30,
--------------------------------
2007 2006
----------------- --------------
(unaudited)
Tons sold
Direct 271,716 264,092
Toll 37,241 49,352
----------- --------
308,957 313,444
% change (1.4%) 2.6%
Net sales $ 256,089 $259,917
% change (1.5%) 24.7%
Costs and expenses
Cost of materials sold (exclusive
of depreciation shown below) 205,706 80.3% 201,551 77.5%
Warehouse and processing 15,670 6.1% 16,250 6.3%
Administrative and general 9,893 3.9% 10,631 4.1%
Distribution 6,594 2.6% 6,393 2.5%
Selling 3,890 1.5% 3,009 1.2%
Occupancy 1,483 0.6% 1,240 0.5%
Depreciation 2,175 0.8% 2,092 0.8%
----------- --------
Total costs and expenses 245,411 95.8% 241,166 92.8%
----------- --------
Operating income 10,678 4.2% 18,751 7.2%
Loss from joint ventures - -
Loss from disposition of joint
venture - -
----------- --------
Income before financing costs and
income taxes 10,678 18,751
Interest and other expense on debt 640 0.3% 898 0.3%
----------- --------
Income before income taxes 10,038 3.9% 17,853 6.9%
Income tax provision 4,009 39.9% 6,918 38.7%
----------- --------
Net income $ 6,029 $ 10,935
=========== ========
Earnings per share:
Net income per share - basic $ 0.56 $ 1.05
=========== ========
Weighted average shares
outstanding - basic 10,727 10,429
=========== ========
Net income per share - diluted $ 0.56 $ 1.03
=========== ========
Weighted average shares
outstanding - diluted 10,821 10,663
=========== ========
Nine Months Ended September 30,
-------------------------------
2007 2006
---------------- --------------
(unaudited)
Tons sold
Direct 841,891 833,707
Toll 114,780 160,491
---------- --------
956,671 994,198
% change (3.8%) 1.0%
Net sales $ 792,907 $754,943
% change 5.0% 2.8%
Costs and expenses
Cost of materials sold (exclusive
of depreciation shown below) 639,466 80.6% 596,059 79.0%
Warehouse and processing 43,617 5.5% 41,544 5.5%
Administrative and general 31,428 4.0% 29,678 3.9%
Distribution 19,367 2.4% 19,594 2.6%
Selling 11,856 1.5% 10,042 1.3%
Occupancy 4,687 0.6% 4,203 0.6%
Depreciation 6,527 0.8% 6,196 0.8%
---------- --------
Total costs and expenses 756,948 95.5% 707,316 93.7%
---------- --------
Operating income 35,959 4.5% 47,627 6.3%
Loss from joint ventures - (137)
Loss from disposition of joint venture - (2,000)
---------- --------
Income before financing costs and
income taxes 35,959 45,490
Interest and other expense on debt 2,520 0.3% 1,397 0.2%
---------- --------
Income before income taxes 33,439 4.2% 44,093 5.8%
Income tax provision 12,712 38.0% 16,806 38.1%
---------- --------
Net income $ 20,727 $ 27,287
========== ========
Earnings per share:
Net income per share - basic $ 1.96 $ 2.63
========== ========
Weighted average shares outstanding
- basic 10,595 10,368
========== ========
Net income per share - diluted $ 1.93 $ 2.57
========== ========
Weighted average shares outstanding
- diluted 10,747 10,629
========== ========
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.
CONTACT: Olympic Steel, Inc.
Richard T. Marabito, 216-292-3800
Chief Financial Officer
Fax: 216-292-3974