ZEUS - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Olympic Steel 2017 Full year and Fourth Quarter Results Conference Call. [Operator Instructions] Some statements made on today's call will be predictive and are intended to be made as forward-looking within the safe harbor protections of the Private Securities Litigation Reform Act of 1995 and may not reflect actual results. The company does not undertake to update such statements, changes in assumptions or changes in other factors affecting such forward-looking statements. Important assumptions, risks, uncertainties and other factors that could cause actual results to differ materially are set forth in the company's reports on forms 10-K and 10-Q and press releases filed with the Securities and Exchange Commission.

During today's discussion we will reference adjusted net income per dilute share which is a non-GAAP financial measure. non-GAAP is the release provided issued morning. this GAAP directly that of this measure financial in reconciliation measure most to comparable was A the press on be available Today's archived broadcast Web site. will for live replay Olympic Steel's and to time, Officer, for Executive today's your this Siegal. Steel's At introduce and Olympic Chairman host like I'd Chief Michael call, go Mr. ahead, Please Siegal.

Michael Siegal

results. XXXX Thank to discuss us you, for fourth and all quarter joining operator. Good you morning full year Steels' and improved thank Olympic

segments are Olympic Andrew teams On President, Dedicated by with Officer, to the success Business, most this we morning McNeeley. successful Steel and year in our build sales Officer, XXXX call and Executive Dr. profitable Wolfort; Operating Rick and our of Olympic with President resulted Iron had reporting Greiff; improved all Steel's year execution Vice posting Tube all in President our intend and me on David Financial & our three operations management XXXX, a our XXXX. Chicago Don Marabito; very since results. Chief and in of Chief

in well to market our capitalize improving with superior customer diversified positioned service management and on are We conditions. team products, an energized markets

hand provides the sheet escalating fully strong more levels. the flexible with fund for years. balance terms agreement agreement and capital rising and provide December, credit metal at to new the our market. with working and capacity favorable five borrowing availability us rapidly Our we produced access to In business participate increased The necessary grow inventory exceptionally next domestically price on to an remains to in refinanced our

with faster to flat XXX,XXX prices three increase which net was metals of the higher MSCI X%, average volume, volume products sales consolidated increased activity industry's the shipping that combined XX%. According higher by our the report, of by than higher volume XX% tons. XXXX or During times

highest our net increases other XXXX and to flat products was such XXXX. billion Manufacturing income pipe are and grew financial two in sectors food strengthened as XXXX we in and in from Operating in while was improved rising in products performance versus to years. each XX%. XXXX. all of income by flat XXXX six segments, XXXX, The carbon our specialty $X.X segment sales sales helped generated and by appliances and of in and activities XXXX, $X.X improved agriculture, equipment, our in XX% tubular million billion defense, in in improved metals grow up serve, operating goods So white level demand. in service equipment, $X.X million Year-over-year most transportation expected $XX products, construction,

had income operating Our both operating XXXX. we year We specialty during aluminum of stainless metals tonnage and primarily say, to by organic like would shipped driven – products segment growth. steel as the record in while year another record record generating

Our market products and stainless pipe sheet tube coil generally. business for quarters flat approaching and The lags a share few steel X%. by is cycle now

are segments on financial that already in optimistic XXXX seeing dynamics the aiding impact should product are we positive take make our sector's flat We and this currently results place. that a industry

surge industry any a On seasonally provide The capital XX.X production term, Longer Olympic October for PMI February momentum. the near rose adjusted for bullish the flash the since legislation boost even manufacturing the conditions growth side, to business investments. XXXX. which is GDP tax overall encouraging of in in XXXX. should recent on real in Steel. infrastructure was stage PMI setting is This demand U.S. further, This new acceleration higher orders more February's rebuilding fastest improved progress from will term. in

factors Kelley on imports at her announcement vote due Business mills, the yesterday's of consumption the supporting of governance expert and look in increase to of Director she an the on serve XX% corporate election Kesner members an on company's year Board steel, our in to at and prices, election Subsequent Kesner announced Directors. number disciplined We lower material six. higher raw the we the aluminum, of Dr. annual nomination levels May. and rising board Dean prices. leadership tariffs our to soon imported demand, Dr. XX% of are M&A. Idie all end, abroad, and Independent strong is side, Indiana supply higher forward the as School to of is joining to Board, at independent University's to On Her contributions production meeting and imported and would shareholder upcoming the

year in areas prosperous our with Externally, be are announced we to last that over call with increase and potential another $X.XX we our on can we Directors making payable Internally, XXXX the I assess quarterly the we strategic long-term XX, is share. the expect turn to facility Board financial a declared of We And align continue Also March X. where cash month, will Rick dividend strategy. March for review. to Olympic growth regular acquisitions dividend Steel. investments of The will that equipment holders of yesterday per for record XXXX returns.

Rick Marabito

million shipments Shipping of fourth the our $XXX outpaced Industry Thank was shipments you, and accelerated final year-over-year in basis $XXX in were a Michael all and segments XXXX. strong each quarter of in three over on a was good quarter, million growth up the XXXX's however quarter volume sales of to fourth from our XX% early morning, quarter fourth during XXXX. the quarter the Consolidated net in still and the everyone. year. in that’s industry in quarter. year-over-year increased higher shipping XXXX every There in

was positive grew Compared Our higher XXXX. well XX% prices products even flat and products quarter historical fourth following a the lower center XXXX X% by from below billion were X% trend carbon increased increases, metals in Compounding XX% and XXXX shipments activity to service of our welcome segment, the by increased shipments higher for higher which carbon MSCI quarter $X.X largest segment, XX% year. still back in full the the for in average with in the flat fourth the shipments activity report, According volume sales in shipment XXXX peak boost, though compared selling in the The center was This years up the XX% the flat up back demand XXXX, XX% remains and levels. for all carbon XXXX, XXXX. XX% service of to of the and than to fourth year both net segment quarter for to drove in by prior sales net by periods. XXXX. year, industry

dollars sales due in year and of quarter, tube to totaled continued the up volume prices X% quarter with in sales compared segment. single year. to expense digits the per increases double for declined the resulted to of higher This carbon increasing to in gross all last in in to in $X.X consolidated with with fourth million absolute our per We income per that’s reduced XX% XXXX X% million, $X.X profit in and XXXX. resulted XXXX held XX.X% LIFO pipe quarter Likewise, of for margin swing higher for pipe of from LIFO fourth grew segments XXXX's compared and between year. XXXX during compared our gross products $XXX ton grew of Gross profit operating the our specialty a higher was in borrowings in million specialty up XX% million in sales than ton net Gross capital by Gross ton by Our of that’s LIFO reflects XX% million sales XXXX. and segment as higher of and expense income products XXXX. in year. year XX.X% flat the selling $X.X fourth consolidated XX% This XXXX. specialty quarter metals Operating $X.X the effects in of to for $X.X in of rose for the last margin versus our million expenses $X in recorded $X.X million ton income due and with each fourth compared and LIBOR to our $XXX to ton in XX% working XXXX million with LIFO compared were net XX.X% grew year-over-year million in by higher successfully XXXX. percentage primarily segment selling gross year-over-year products more was borrowing prices for year to were the XXXX per sales $XX $X.X to XXXX. metals support products in income This our We products actually XXXX. totaled per in XX% This of per segment XX% share. fourth $XXX,XXX as quadrupling were compared Interest the flat that’s in years higher by our XXXX This rate. compared $X.XX for growth. a in to the digit the year. in XXXX LIFO $XXX Average in improvement $XXX expense expense profit quarter in XXXX. by both of by the in in and metals XXXX. control margin and from volume compared tube in segment the and in also this Net average quarter and XX.X% diluted in XXXX expense fourth increased swing in

the to $XXX,XXX from X% deferred And from to in X.X% new and averaged agreement fees million, of XXXX. our the expand $XXX refinancing. million associated $XXX up it our $XXX Our million. maturity of financial extended loan December with December Michael borrowing of borrowing up And rate XXXX in our to with write-off increased XXXX, to our indicated, as capacity potential finally

remains if to rate basis LIBOR reduced plus XXX but points plus be basis are conditions that borrowing XXX points Our at could certain met. LIBOR

Our impacted by significant in was XXXX rate onetime items. two effective tax

recall one was fourth share our in adjustment of that associated tax a a deferred and the in passed related with $X.XX diluted quarter million per we net liability revaluation our the Act income. tax You quarter plan, the to we In $X.X deferred $X.X Jobs Tax and may retirement XXXX, to recorded million recorded first December. of also Cuts of which

This site. provides reconciling operating the the and measure. quarter which adjusted and around provide the the enhance financial moving for about in impact XX% the results result full also our rate, reported Since tax year which in period. comparison. by of rate XX% facilitates anticipate tax net refer year this recorded a item $X.XX earnings our items, morning's respective was we and adjustment transparency XXXX's million did results. of Based quarter our reduction, a $X.XX several in we fourth benefit to by a on assessment effective we in that forward. tax earned continuing XX% the the The under fourth press XXXX's clarity law, item diluted added the million. $X.XX Please share on tax XXXX our shows our compared of included per To share, included we Web each XX% unusual which the table diluted results pretax XX% reduced is per release deferred available prior $XX.X in As to share in release were significant we is largest per our to paying the net results the reconciliation non-GAAP to expense is old XXXX tax new be year. of reconciliation on press a our of a net structure. of we year to range LIFO to liability share This per income will performance we initial yet $X.X

of loss on net our negatively off diluted settled write the Adjusting share up the year also quarter per in dispute XXXX, $X.XX had and net the net an $X.XX commercial income for XXXX's of per of net of in per adjusted share. LIFO per the by refinancing the that’s compared impacted $X.XX XXXX. the and a with We quarter share share fees year. the $X.XX and and XXXX our year loss adjusted items was per share full in XXXX deferred and was fourth adjusted impact $X.XX XXXX's income fourth on quarter from these financing finally which loss income net $X.XX adjusted fourth share per Full quarter results

based up our XXXX. the capital availability end slightly in per or XXXX. on increases and to of from share. million, receivable were to $XX.XX market. of and that’s average although accelerating year-over-year excellent. working third products tangible totaled in which accounts at million but capital from quarter $X.X receivables plenty XXXX. turnover $XXX.X total flat X.X end higher higher $XX versus $XXX were a up in was by as that’s and These XXXX $XX Capital XXXX. $XXX compared Now $XX Days year-end this Receivables in both provides equity outstanding million million XXXX, XXXX let's in seasonally averaged increased the during down XXXX both less than expenditures us of tonnage inventory end of $XX.XX the 'XX, The were book value pricing turns the was in of debt level. million year due than of per of down increased higher was At $XX ended remains share third the end days, of sales $XX.X times quality million XXXX with and We million from when and inventory turn Year-end shipments was million $XX million XX the XXXX our X.X were for down was to the balance that the higher the quarter, million. sheet. end you with inventory and Shareholders'

to operating to call XXXX which capital most to cut our later will are year his expansion will Illinois depreciation we million facility. more Schaumburg, lastly, than The in be was Form forecasting XXXX. to is for review. a a investment line provide on file XX,XXX the We are length our today we results. additional significant building turn our since plan house CapEx will details new XXXX which expenditures operating square $XX XX-K And And grow stainless this approximately $XX.X I depreciation. budgeting first now over Total our that million. to in foot annual in XXXX David will in

David Wolfort

you, Rick. Thank

grow of XXXX in years enhance improved presence persisted geographic consecutive markets two to profitability we segments. was as our both and 'XX, Following business our lackluster making conditions, un-cooperative market of investments in we continue earned. well XXXX our in Despite all to

of during We and in enforcement years. stabilized year in genuine concern industry up recovery We reins positive of just the XXXX, synchronized sustained stronger throughout hot-rolled Moreover, narrow business in for inventories. run CRU. and reduced action we hovering customer seeing pro-business as year. a unfairly trade ready There inventory uncertainty prior eased relatively confidence. XXXX, DC. a $XXX and rising and the overseas of line range the even economic volume prices After Now better a recovery the over XXX fourth business bit Section in of traded are in two according the with for to a specific an material our was increase due first and by coil taking prices began generally ton existing of was quarter, Early much regarding markets Washington increased growing to our in of softening laws confidence entering imports recovery demand and year-over-year bottom the recovery, the and efforts results. administration honest in traded forecasting those the intentionally a legislative than anticipation experienced to quarter, with shipping steel demand delayed raw and the which the results the pricing reflected prices as for more first activity XXXX the improved a much

a rolled by end removing more is fourth steel material higher new aluminum section tax tariffs was conclusions on on report's anticipated performing the national dip the short surging U.S. the that February imports aluminum grow Commerce supply ability prices of XX, and defined with our lived forthcoming for and This market $XXX below and circumstances segments. that report $XXX optimism strong us dynamics $XXX and of CRU week However, accelerating on Commerce, strong raw as in coil security' compounded end in continues were as the prices which and a And all and decision hot into Michael XX% market December. ton than the hit a Ross, aluminum the of to of the products around a 'threatened times next by mentioned, domestic long-standing of extending concluded the to impact lead Disclosures the imports. On bringing higher this are The was $XXX quarter ton, the business was XXX. October announced high higher. the XX-week his legislation. Department and of Wilbur impair year Secretary imports relationships with quantities partner impose of highly and steel investigation XX, Olympic base -- week. as February Steel's to afford our into released of to report his yesterday President to enterprise details of steel our around already

of Our are many in job XXXX, team indicating increased of inventory, quickly our superb for has up customer as done growth year. digit double for demand flexing our a this customers

capabilities. prepared We processing new with are growth for also customer

In begin which addition at come line to year. the the to business XXXX. that growing mentioned, operations second in in new will Ohio, to end length cut stainless the dedicated Streetsboro, the Rick is A quarter second scheduled steel of slitter our on this line

We are higher laser tube to also flat investing for meet and those cutting services. in equipment demand new

vision is is by management improving long-term and quality, results. depth our validated Our team demonstrated of the and by financial strength

in is building and our people in home both and of our real benefiting currently are are we forward rejuvenated full to we take accomplishments. of Echoing Steel abroad. recruiting, our XXth with optimistic right training Last the business. GDP recent empowering that year greater With managers grow my become growing Michael's outlook, achieve equipped advantage personally at more to every month energized a place, We and equipped better to XXXX manufacturing sheet have upon the company look Olympic marked recent can growth and even balance I success. level based years to and attest are that from and our and leaders our strong

horizon, tariffs of immediate for impacts potential the Section rebuilding initiatives infrastructure bode future. Steel's well Beyond the and Olympic XXX

that Now, the let's operator, open with for questions. call

Operator

question Jefferies. we will Martin [Operator first Englert Instructions] our with And from take

Martin Englert

if you potential talk share your to gains. wins Do incremental there? XXXX can markets in market contract Maybe a expect you bit in little due anything on any

Michael Siegal

one? take that you don’t why David,

David Wolfort

many XXXX, you, of some shared customers growth Martin Michael. growth, had and up. we some seeing referenced Rick little and been we Thank just has ago. and we of move trucking market January XXXX some statistics, digit with a the are because as moment predicting again but I issues outlined, double place pain in Many we we in sluggish significant expect growth that had, weather our our a are people, of as

Our strong in presence in shape that continue and with XXXX. robust a our puts excellent us domestic suppliers year we to see

Martin Englert

of if expense. for can Thanks provide that business Can trends margin LIFO little there. the volumes you color touch on of a even profitability the down for tubular the accounting there, bit beginning the the Maybe on XXXX. in there color when stepped since the and you

Michael Siegal

I let answer Donald, you will one. that

Don McNeeley

Average in in Again, they up QX it up it as up were fourth were some for over the McNeeley was year. unfolded. selling XX.X% were pickup that, sell quarter, hole at our question. XX% rather was QX but Don Yes. XX.X%. inconsequential, everything up tons notwithstanding momentum. has up as because X% Tube it. Sales report over the suggesting year-over-year momentum prior year. the in we We fourth Iron, We it's great saw a quarter Chicago But price XX% ironically and don’t for prior year was tonnage but year-over-year

which more decided having anticipated we would have focusing gross some to adopt contract a growth, margin. strategy to line by nature are its to we a and focus as margin on modest on some of that that greater really was very We do business, have and top volume fade on

anticipated a of those modest market all pursuit fade margin had notwithstanding which our was So metrics, in share. we

Martin Englert

that type is there was we going be basis things. run a So future pressuring margin on expecting periods in should on similar also cost with rate forward input this of a go that or something the was

Don McNeeley

margin market all do have ability any make going forward. maintain share want it I of gains. that confidence certainly We much margins don’t be but to to in to a attributed pretty the forward No, on forecast degree can our

with One Marabito as is earlier, Mr. our margin have or through things and market trade of gain MAR our share growth we very we identifies which that do association sales report the closely loss. industry track mentioned a

in look to than with we some and the at fact case. compensation margins, if been So that there your has greater be a on market for the ought growing share compression industry that

suspect I or able be share So going our to would forward, to maintaining improve margins. maintain market it us while

are confident able We we be pretty will to that. do

Martin Englert

And helpful. we XXXX there maybe anticipated here. that as be factors move a talk run if inflationary through Okay. bit Thanks. we could SG&A anticipating you this should is If rate. about any That’s little

Rick Marabito

Yes.

for I think, flat. wages. Martin, there to number years of some been inflation have last certain are -- relates the it overall Wages as relatively

any financial of of conditions well that number that business we market is to rising the as kind employees of some looking Now are results seeing the just there improving are benefit for certainly the as particularly company.

having we We pretty the more trucking, seeing offering it are package. are to a drivers also their sector difficulty Amazons truck seeing seeing in haul of their establishment FedEx we amount UPS own think robust targeting and shift drivers. the the a and of freight, only difficulty not environment David long retail is an everybody basically as and are using finding relates beginning increases now as mentioned, weather, In where significant across I is the

are we wage as and are well. inflation inflation seeing we seeing freight some So on

Martin Englert

and On that trucking the assets versus are your you freight remind is delivery us external. of how can drivers Steel and of side Olympic under for much things, internal transportational the logistics company

Rick Marabito

half. about Probaby

Martin Englert

from customer one talking XX:XX, or the elsewhere? there. in is last of for In industrial about of the potential businesses. okay. base Any and their implications customers the kind thoughts I light could, And on downstream question the feedback XXX, what if

Michael Siegal

impact. significant There’s Yes.

way care in been think plays a discussions just desire we by trying availability last since this, inform pricing but activity surprised. have weeks, out, take not this is is is as customer clearly as concerns but and the November, to but it base Let's that Certainly best the question the amount we say robust possible, in of are everybody our there to of I no risen fear have those of there we our appreciably. customers has been, the is having customers

Operator

we And Capital question Phil our with take Markets. from Gibbs will next KeyBanc

Phil Gibbs

measure, you does the I the you the lot is sheet a position right Rick, a given call trying growth with fact done that as couple on you mentioned call. mentioned am the avenues. balance in rising. seemingly to want liquidity it needs of then -- earlier know you networking to availability the the company of that you where have And capital capital clearly on now the call But a times have I just also as mentioned sand that spend

Rick Marabito

Yes.

our So, we of availability million facility. year Phil, with about ended credit the $XXX under

our north December to it. agreement $XX the refinance well year. one of some availability. the expand not we out, got We And did we as $XX inclusive So through but the availability million the anticipating CapEx availability million model $XXX we planned of increased of benefits only the million upsized are spend, of was of off we consistent in of

So we are there. shape in really good

Phil Gibbs

capital for the sort the think through saying that year. that’s we you for are and a average working year the you So liquidity move that liquidity net on what and changes in as the the pickup year should the typical of about with right? Is as

Rick Marabito

Yes.

year-end of bit at point at probably are at XXX. a We higher little

with size needs up the our flexes So up, credit agreement of of use mind availability working that we we see capital have the on that. go is periods in availability. during our time But can a because keep easily

bit You see very pretty will confident but debt a spread availability that certainly comfortable our up we consistent. and remain little will are go

we think I in pretty good there. are shape

Phil Gibbs

strategy forward. terms a in kind union you And the of Michael maybe maybe just moving the state of company from of of

am this, how beyond it that to I fulfill trying the good the looking figure forward. existing out at base need sort the with pickup are of You base are future what business customer to to how and asset in may length just have looking line, cut obviously existing put position at the you the and yourself call But moving share. you vision. you

Michael Siegal

There growth and is two facets. There internal external. is

you Olympic Internal and splitter over the growth. demand specific there by driven much been new focused a -- increased of new line years to a cut internal So going has have to last custom on Olympic maybe seen growth That’s the more and/or be in number there. over length geography. much

We in you see projects. in M&A a invest of side. growth forward lot long is Olympic are aggressive capital would a not internal moving much as probably it looking for term more relates to What

XXs that their think very XXs, say younger all indicated, David When managers. got who we we of the great aggressive have but have diminish we in are to want and a early or of XXs to there I younger, group grow same we group not have people XXs, that are in successful to got want as young that had. late of managers young, us they opportunity

have we So more activity. got pretty aggressive M&A outlook for

Phil Gibbs

to EBITDA it. of or the for debt comfortable taking are that metrics on sort a you those -- if to you to are cap debt appetite or your net potentially were targeting balance you Where along lines. what's that, of sheet Speaking something net

Michael Siegal

very Look, last time. aggressive Yes. over I over the aggressive period mean and been less have our short of we history

been we have exceedingly balance see managing well. As sheet you the

we look have up given We fairly advantageous particularly that there agreement is doing a also no really that don’t than banking all blowing body at anybody that else. exceptionally better

look why stronger, something not different, blow would capital So where than isn't just is market up for materially whole sort that when yourself. better you you structure your at of the

our credit transactions agreements I on base smaller tuck is that to you within scenario. kind So the current see not in of medium can but probably transactions what asset would larger heavy think

Phil Gibbs

Okay. I appreciate that. And then last question for David.

you different have may not by or a lot thinking and infrastructure we the market. sometime the of Just anything couple along heavy end of you end are in tone Obviously on of here what's terms specifically the over in tenure equipment comment or terms perhaps years. but package people of anything could seeing next maybe may markets in whether that an

David Wolfort

Well, the Phil, for thank you question.

I There think was that a a of -- third that or impasse. the leg that’s legislative we think stool.

that was and everyone that that going the looked real. tax market to move real. at through we And that understand which we was quarter consternation it October and for policies I the reform and fourth some complicated as into in pause As was started early for place, gave think was a President's sort of people XXX obviously

think I although stool. still third leg the think I program is infrastructure design is it's that the that of fluid,

is tax the And does of at as embraced get period but growth President here for enough agenda all to some who So very they clarification has clearly the much XXX, some equipment, up growth. I for have customers o'clock is we and is us Olympic and there then Steel, with incentive as tell are are we features him know. what you seen will all you And equipment, in XX support we certainly he has has were President will outlined, Rick time it with that exception yesterday. people very X that, on that and We that very are he much incentives of supports forecasting or that they involved infrastructure equipment enough fulfilling. very legislative from whatever the our of strong that’s Olympic construction. And through Steel, reform see [indiscernible] this needed. heard be the for was. of of and businesses but we filling businesses. construction it beneficial and And with will snuck think to some certainly their waiting their going And we its are benefits at the Obviously, virtually enormously Mexico. business growing

better look XXXX. we we and than it's think at XXXX So

are will deal in the deal side terrific on supply Section side. we supply optimistic this very all legislative customer changes we business for partners we then are and the great with and XXX. and in We about the with think has chain I on and both Olympic Steel will XX a been are And years year. we our we think shape

Operator

And we will our Mazzaferro with question from Mazzaferro take next Aldo Research.

Aldo Mazzaferro

customers that the of was to outlook be volume XX% of year. about up the year up, you to from likely year. the end mentioned up pricing at the On your XX% or some it where and being being XX% of

than quarter I am you what I results real now a know quarter. is you pricing are think with quarter expand that wondering, first little very comment, at the that’s a looking could the just on market right for the different I fourth surprised but bit Dave. in the

think that XXX trailing You the for would I what's but you or orders, the mills mentioned, ask say? price you at the saying so price, current were

Michael Siegal

current the publicized. well north Aldo, on of its' is very basis publicized a ask And think spot I price, and it's XXX.

today. to you So year dynamic look side ton looming are with say. over to and XXX. know that high of the XXX. last collectively start fairly was at embrace a are required. to mean commentary X, the infrastructure. the month I year shy spot CRU cash and Wednesday's dynamics, that are $XXX at XXX mean you very I significant, watermark April on you and here XXX plate and to of at we of price is XXXX being anywhere I had and the we XXX in the We all CRU hot published a as these section March high think we XXX needless published we They rolled the Particularly are X, ended The close tomorrow watermark of we from a know side. XXX

up moment we moving is since here a Phil the moved up, of a the ton to $XXX As that’s noted that’s dynamic year. end just and ago, a over again

benefits good to place. to You enjoy be market capital to have of the structure this have some able

Aldo Mazzaferro

is centers. average now. centers past higher remember say issues than the Yes. your advantage have taken guys in you credit some right I would the of But service trading in other of you service between

Rick Marabito

Good been higher the expectation year. the accelerate maybe just we if Had year little our center of and tell year what the But in bit of with part you constraints our you that is we believe trading believe in at is center morning, service business, rise going trading and service said, capital I credit have be sales. is and lull opening will, that Aldo. end It's of the the this a needs, levels will participating that. a last towards to the you, would Rick. of we working

Aldo Mazzaferro

So I risk of your you being ask think a by big retaliation. more picture one question? greatest kind where other Could question, of is hurt do customers

you that might taking view of they were of against. being your farm what to risk customers the exports, kind customers had that are on say be equipment, overly you or something say, concerning If your you to taking and is retaliated

Michael Siegal

we enough to to certainly and sure is our there is be I a to some deal customers. have you their hard customers am will specific will be what so going But if our trying mean sound here. let with noise, I tremendous out Yes. Aldo, to just to are [flipping] quickly think time individually it I speculative, figure alone don’t ourselves, the is to much we want just customers. going I impact there longer. tremendous impact how it's to trying save, and with needs. this it's some

Aldo Mazzaferro

segment LIFO thing. into, Great. stainless? one did where final pop And it Rick, What it the was was charge? then

Rick Marabito

Aldo, a and is segment and only in segment. of No. segment our that’s pipe LIFO, only on have have inventory tube we our that

segments not are So the LIFO. other on two

Aldo Mazzaferro

that was then? margin gross in So the

Rick Marabito

Correct.

Operator

Jon we Capital. And from our will SG take Evans next with question

Jon Evans

years your or your understand are think I were flat operating X.X%. really you Can just for you lot you up because the all guys trying expenses talked it's to they last if business, you help your at is couple And about drilled. unpack a in can stock Is lot the guess of have why have year-over-year guys through a model. leverage us better, of am I getting over as market only of us and got tons what look XX.XX% you once gets I the understand, maybe

time kind expenses cost in to operating it much did in why Is get you basically of those so one there additional So there? X.X% in more tons. any growth

Rick Marabito

those. exactly with go Those aren't have. I comporting have I to numbers through

increases up than Our our went volume were. in segments the what expense greater

Jon Evans

increases. price tons, of increases move expenses you you But incur aren't right. because Yes, when so tons, price

Rick Marabito

saying No, agreeing... the I the am I volume, tonnage. am

Michael Siegal

we don’t this this walk you I Why to take segment... -- take really want this offline? suggest Can we through just if

Jon Evans

Yes.

Relative be they get totally will give in you ask dollars going etcetera. to share, price Can understand share, drive gross that they and But question think tubular are they for that to for I you more market market That profit. then? to another the I Okay. when a the are pipe, great. most people

your and less guys expenses dollars increased. You drove

a but is market all So that lost drove good you strategy? you Why this year-over-year. money share

Michael Siegal

Donald?

Don McNeeley

your a is is bucks is organic. to market to grow happening reality what's the contributions where and going upper nature percentage margins top need growth, business, a XXXX drive benchmarking But significant top you in One, two, will share. have becomes transactional it still two your to segment higher through business, So, We to the the perform pipe as tube do they I going it's to and, the margin. mention contracts in order line, the is according contract. do very increases business quartile carry bigger industry is by transactional on sector. to line it of But average of in implications their have margins. though, the always organic. There gross association,

Jon Evans

that. bottom Right. That’s the I the day, at make year-over-year you share. to get lost of trying you line market more by money money great. aren't But growing end all to the and

Michael Siegal

No, that was LIFO.

Don McNeeley

LIFO. to mean... Yes, referring I I you think are

Jon Evans

the -- if have out pick there, you expense you would took division? made out LIFO LIFO we if in So that money in

Rick Marabito

is give let me Rick. you, numbers this LIFO again So the -- just

swing million LIFO year-over-year. $X.X a have in We

current... So in the

Jon Evans

tubular, correct, that’s in And fourth in the quarter? the all

Rick Marabito

That’s all tubular.

tube. it's and year income year $X.X $X.X pipe the of year. year. last this for full of million $X.X the million, million all on expense So

it of year. For last million the of fourth expense this was $X.X income quarter, $XXX,XXX year and

a part of LIFO swings the certainly are So it.

where that. XXX% of did you related in can of it reconciliation mind is pipe But, tube and look press that to keep indicated, the I the EPS a As yes, release, in we our impact segment.

Jon Evans

is In then you And have correct? an it. correct? just the just don’t the specialty. last LIFO, It's specialty question relative the pure, Got to

Rick Marabito

Correct.

Jon Evans

Okay.

on margins? the going great So help gross understand, had can you growth us you just there in but what's

Andrew Greiff

a you Well, and grown. tell business would have aluminum. segment is stainless combination There its I of what is,

Don about when would what consistent growth specialty and margins is business and contract As from spot with segments I other to perspective, probably anticipated the talked the were, to our the year. similar for comes metals a spot a was contract say, it our but

weren't we we what with So saw. really surprised

Jon Evans

I guess in fourth But the quarter...

Rick Marabito

are just me make want Let I the to right -- sorry, looking me just numbers. -- let you at sure

of million up earned for that’s $X.X year Our the business specialty $XX.X income, last metals operating million flat from year.

you the with that don’t impression I didn’t. want down, it So went to leave it

Our profit...

Jon Evans

But, the were focused were in Yes. the I up profit XX sales and basis your fourth guess and gross on fourth up quarter dollars I your quarter XX.X% am points.

XX% gross of almost top you grew and get So the even didn’t you X% line line. the profit

Rick Marabito

market margin fourth in little of had and quarter, pressure. place pullback talked the fourth Right, quarter a in was prepared a in and some in In the terms certainly there a the creating David bit lull our comments.

David Wolfort

of on We much in looking don’t anticipate would trend. as That a a specialty year that snapshot We the view of one side. more kind a trend quarter. is profitable

one the We And so of there some of not looking trend market if do circumstances the certain are yes, you in at are quarter, aspects markets, internally. terms growing the the consider profitable years direction money moving. both very this make building And the to significant metals we the we to and the have anticipate year. are not share that side would specialty as

Jon Evans

it. Got

think and on just to are top both the So the expansion? you going you margin going operating go get into on margin the You -- gross that year, are as margins? to this profit we

Michael Siegal

Yes. Rick?

Rick Marabito

Yes.

Michael Siegal

yes. answer Rick? My would be

Rick Marabito

Yes. Absolutely.

Don McNeeley

yes. tube, and Pipe

Rick Marabito

for. are It's planning what we

Operator

time. conference there Siegal, questions any the Mr. this are turn for to appears like you back at It or would further additional closing to no I remark.

Michael Siegal

to soon would Sure. closing like get thank are I circumstances. external operator, remarks. anticipating do as call. everybody being to year I I thank that interesting my on we you, the for the given love as to Obviously, would But an and

terrific Thank you. in to a forward sometime everybody and results we wish look we So spring day. first the issuing quarter our

Operator

your concludes call. you This today's Thank for participation.

You may disconnect.

Olympic Steel (ZEUS) 2 Mar 182017 Q4 Earnings call transcript