EX-99.1 2 l09992aexv99w1.txt EX-99.1 PRESS RELEASE Exhibit 99.1 NEW CONTACT: RICHARD T. MARABITO R E L E A S E CHIEF FINANCIAL OFFICER TELEPHONE: (216) 292-3800 FAX: (216) 292-3974 OLYMPIC STEEL REPORTS RECORD SALES AND NET INCOME FOR THIRD QUARTER AND NINE MONTHS OF 2004 Cleveland, Ohio -- (October 19, 2004) Olympic Steel, Inc., (Nasdaq: ZEUS), a national steel service center, today announced record financial results for the third quarter and nine months ended September 30, 2004. Net sales for the third quarter of 2004 increased 110.7% to $244.1 million from $115.9 million in the third quarter a year ago. Tons sold increased 7.2% to 323 thousand from 302 thousand in the third quarter of 2003. Third quarter 2004 net income was the highest quarterly results in Company history, totaling $18.6 million, or $1.80 per diluted share, compared to a net loss of $115 thousand, or $(0.01) per diluted share for last year's third quarter. For the first nine months of 2004, net sales increased 90.0% to $653.9 million from $344.1 million in the prior year period. Tons sold increased 23.9% to 1.05 million from 849 thousand in the first nine months of 2003. Net income for the first nine months of 2004 was $47.9 million or $4.70 per diluted share, compared to a net loss of $1.1 million, or $(0.12) per diluted share in the first nine months of 2003. "We are again pleased to report record net income and sales," stated Michael D. Siegal, Chairman and Chief Executive Officer. "Our strong focus on balance sheet management has resulted in a decrease in debt during 2004. At the same time, we have invested an additional $52 million in accounts receivable and $55 million in inventory, while improving our days sales in inventory and accounts receivable on a year over year basis. At September 30, 2004, we had approximately $48 million in availability within our increased $110 million bank credit facility." "The continued strong global steel environment, along with the increasing domestic industrial economy, particularly the energy, transportation, farm and construction equipment markets, has also contributed to our strong financial results. With increasing global steel demand, rising energy, transportation and raw material costs, and a more disciplined supply universe, our outlook remains favorable for the fourth quarter and early 2005," 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 about Olympic Steel, Inc., visit the Company's web site at http://www.olysteel.com. PAGE 1 OF 4 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 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 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; 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 OLYMPIC STEEL SELECTED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------- ---------------------------- 2004 2003 2004 2003 -------------- --------------- --------------- ----------- SUMMARY RESULTS OF OPERATIONS: (unaudited) (unaudited) ------------------------------ Net sales $ 244,142 $ 115,850 $ 653,948 $344,131 Operating income 31,581 1,491 82,163 2,016 Income (loss) before income taxes 30,570 (146) 78,879 (1,760) --------- ----- --- -------- -------- Net income (loss) $ 18,572 $ (115) $ 47,919 $ (1,148) ========= ===== === ======== ======== Earnings per share: Net income (loss) per share - basic $ 1.88 $ (0.01) $ 4.89 $ (0.12) Net income (loss) per share - diluted $ 1.80 $ (0.01) $ 4.70 $ (0.12)
SEPTEMBER 30, DECEMBER 31, ------------------------------- --------------- 2004 2003 2003 -------------- --------------- --------------- SUMMARY BALANCE SHEET DATA: (unaudited) -------------------------- Accounts receivable, net $ 108,349 $ 65,925 $ 56,501 Inventories 147,857 82,230 92,775 Net property and equipment 85,304 91,603 89,782 Total assets 350,494 246,909 249,002 Current liabilities 89,152 35,487 42,574 Total debt 93,297 100,437 97,797 Shareholders' equity 163,419 114,346 112,236 Shareholders' equity per share 16.40 11.85 11.63 Debt-to-equity ratio .57 to 1 .88 to 1 .87 to 1
NINE MONTHS ENDED SEPTEMBER 30, ------------------------------- 2004 2003 -------------- --------------- OTHER DATA: (unaudited) ----------- Capital expenditures 1,698 549 EBITDA (a) 88,796 8,263
(a) Defined as operating income plus depreciation plus 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. OLYMPIC STEEL RESULTS OF OPERATIONS (in thousands, except per share and tonnage data)
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, ----------------------------------- -------------------------------------- 2004 2003 2004 2003 ------- ------ -------- -------- (unaudited) (unaudited) Tons sold Direct 283,098 253,337 906,166 716,750 Toll 40,332 48,422 146,477 132,658 ------- ------ -------- -------- 323,430 301,759 1,052,643 849,408 % change 7.2% 8.7% 23.9% (5.8%) Net sales $244,142 $115,850 $ 653,948 $344,131 % change 110.7% (0.5%) 90.0% (1.2%) Cost of materials sold 178,576 90,845 464,369 271,262 ------- ------ -------- -------- Gross profit 65,566 26.9% 25,005 21.6% 189,579 29.0% 72,869 21.2% Operating expenses Warehouse and processing 10,142 4.2% 8,072 7.0% 32,451 5.0% 24,207 7.0% Administrative and general 11,703 4.8% 5,697 4.9% 34,740 5.3% 17,257 5.0% Distribution 4,482 1.8% 4,211 3.6% 14,264 2.2% 11,965 3.5% Selling 4,331 1.8% 2,613 2.3% 15,411 2.4% 8,201 2.4% Occupancy 1,328 0.5% 884 0.8% 3,917 0.6% 2,976 0.9% Depreciation 1,999 0.8% 2,037 1.8% 6,146 0.9% 6,247 1.8% Asset impairment charge - 0.0% - 0.0% 487 0.1% - 0.0% ------- ------ -------- -------- Total operating expenses 33,985 13.9% 23,514 20.3% 107,416 16.4% 70,853 20.6% ------- ------ -------- -------- Operating income 31,581 12.9% 1,491 1.3% 82,163 12.6% 2,016 0.6% Income (loss) from joint ventures 58 (644) 230 (654) ------- ------ -------- -------- Income before financing costs and income taxes 31,639 847 82,393 1,362 Interest and other expense on debt 1,069 0.4% 993 0.9% 3,514 0.5% 3,122 0.9% ------- ------ -------- -------- Income (loss) before income taxes 30,570 12.5% (146) (0.1%) 78,879 12.1% (1,760) (0.5%) Income tax provision (benefit) 11,998 39.2% (31) 21.2% 30,960 39.2% (612) 34.8% ------- ------ -------- -------- Net income (loss) $ 18,572 $ (115) $ 47,919 $ (1,148) ======= ====== ======== ======== Earnings per share: Net income (loss) per share - basic $ 1.88 $ (0.01) $ 4.89 $ (0.12) ======= ====== ======== ======== Weighted average shares outstanding - basic 9,904 9,646 9,791 9,645 ======= ====== ======== ======== Net income (loss) per share - diluted $ 1.80 $ (0.01) $ 4.70 $ (0.12) ======= ====== ======== ======== Weighted average shares outstanding - diluted 10,341 9,646 10,195 9,645 ======= ====== ======== ========
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.