8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 1, 2011

OLYMPIC STEEL, INC.

(Exact name of registrant as specified in its charter)

Ohio	000-23320	34-1245650
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer 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

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

This amendment No. 1 to the Current Report on Form 8-K, which was originally filed with the Securities and Exchange Commission on July 8, 2011 (the “Original 8-K”), amends and restates in its entirety Item 9.01 of the Original 8-K to include the financial statements and pro forma financial information required by Item 9.01 with respect to the acquisition of Chicago Tube and Iron Company (“CTI”) by Olympic Steel, Inc., through a wholly-owned subsidiary, on July 1, 2011. The remainder of the information contained in the Original 8-K is not hereby amended.

Item 9.01 Financial Statements and Exhibits

(a) Financial Statements of Business Acquired.

The following audited financial statements of CTI are filed as Exhibit 99.1 to this Current Report and are incorporated herein by reference:

(1) Balance sheet as of November 30, 2010;

(2) Statement of income for the year ended November 30, 2010;

(3) Statement of cash flows for the year ended November 30, 2010;

(4) Statement of shareholders’ equity for the year ended November 30, 2010; and

(5) Notes to the financial statements.

The following unaudited financial statements of CTI are filed as Exhibit 99.2 to this Current Report and are incorporated herein by reference:

(1) Unaudited balance sheet as of February 28, 2011;

(2) Unaudited statements of income for the three months ended February 28, 2011 and February 28, 2010;

(3) Unaudited statements of cash flows for the three months ended February 28, 2011 and February 28, 2010; and

(4) Notes to the unaudited financial statements.

(b) Pro Forma Financial Information.

The following pro forma financial statements are filed as Exhibit 99.3 to this Current Report and are incorporated herein by reference:

(1) Unaudited pro forma combined balance sheet as of March 31, 2011;

(2) Unaudited pro forma combined statements of operations for the twelve months ended December 31, 2010 and for the three months ended March 31, 2011; and

2

(3) Notes to the unaudited pro forma combined financial information.

(d) Exhibits.

Exhibit   Number	Description
4.22*	Amended and Restated Loan and Security Agreement, dated as of July 1, 2011, by and among Olympic Steel, Inc., Olympic Steel Lafayette, Inc., Olympic Steel Minneapolis, Inc., Olympic Steel Iowa, Inc., Oly Steel Welding, Inc., Oly Steel NC, Inc., Tinsley Group-PS&W, Inc., IS Acquisition, Inc., and OLYAC II, Inc., the various Lenders named therein, Bank of America, N.A., as Agent for the Lenders, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, both as Joint Lead Arrangers and Joint Book Managers, JPMorgan Chase Bank, N.A., as Syndication Agent, and KeyBank National Association, U.S. Bank National Association and Wells Fargo Bank, National Association, each as Co-Documentation Agents.
23.1	Consent of Clifton Gunderson LLP
99.1	Audited financial statements of Chicago Tube and Iron Company as of and for the year ended November 30, 2010
99.2	Unaudited financial statements of Chicago Tube and Iron Company as of and for the three months ended February 28, 2011
99.3	Unaudited pro forma combined balance sheet of Olympic Steel, Inc. and Chicago Tube and Iron Company as of March 31, 2011, unaudited pro forma combined statements of operations for the year ended December 31, 2010, unaudited pro forma combined statements of operations for the three months ended March 31, 2011, and the related notes to the pro forma financial information

* Previously filed

3

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Olympic Steel, Inc.
Date: September 15, 2011	By:	/s/    Richard T. Marabito
	Name:	Richard T. Marabito
	Title:	Chief Financial Officer and Treasurer

4

EXHIBIT INDEX

Exhibit   Number	Description
4.22*	Amended and Restated Loan and Security Agreement, dated as of July 1, 2011, by and among Olympic Steel, Inc., Olympic Steel Lafayette, Inc., Olympic Steel Minneapolis, Inc., Olympic Steel Iowa, Inc., Oly Steel Welding, Inc., Oly Steel NC, Inc., Tinsley Group-PS&W, Inc., IS Acquisition, Inc., and OLYAC II, Inc., the various Lenders named therein, Bank of America, N.A., as Agent for the Lenders, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, both as Joint Lead Arrangers and Joint Book Managers, JPMorgan Chase Bank, N.A., as Syndication Agent, and KeyBank National Association, U.S. Bank National Association and Wells Fargo Bank, National Association, each as Co-Documentation Agents.
23.1	Consent of Clifton Gunderson LLP
99.1	Audited financial statements of Chicago Tube and Iron Company as of and for the year ended November 30, 2010
99.2	Unaudited financial statements of Chicago Tube and Iron Company as of and for the three months ended February 28, 2011
99.3	Unaudited pro forma combined balance sheet of Olympic Steel, Inc. and Chicago Tube and Iron Company as of March 31, 2011, unaudited pro forma combined statements of operations for the year ended December 31, 2010, unaudited pro forma combined statements of operations for the three months ended March 31, 2011, and the related notes to the pro forma financial information

* Previously filed

5

EX-23.1

Exhibit 23.1

Independent Auditor’s Consent

We consent to the incorporation by reference in the following documents:

1. Registration Statement No. 333-162723 on Form S-3 of Olympic Steel, Inc.;

2. Registration Statement No. 333-143900 on Form S-8 pertaining to the Olympic Steel, Inc. 2007 Omnibus Incentive Plan;

3. Registration Statement No. 333-118335 on Form S-8 pertaining to the Olympic Steel, Inc. Stock Option Plan;

4. Registration Statement No. 333-97175 on Form S-8 pertaining to the Olympic Steel, Inc. Employee Stock Purchase Plan; and

5. Registration Statement No. 333-10679 on Form S-8 pertaining to the Olympic Steel, Inc. Stock Option Plan;

of our report dated January 21, 2011, with respect to the consolidated balance sheet of Chicago Tube and Iron Company as of November 30, 2010 and the related consolidated statements of income, shareholders’ equity and cash flows for the year ended November 30, 2010 appearing in Olympic Steel Inc.’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 15, 2011.

/s/ Clifton Gunderson LLP

Peoria, Illinois

September 15, 2011

EX-99.1

Exhibit 99.1

Independent Auditor’s Report

The Shareholders and Board of Directors

Chicago Tube and Iron Company

Romeoville, Illinois

We have audited the accompanying balance sheet of Chicago Tube and Iron Company as of November 30, 2010, and the related statements of income, shareholders’ equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chicago Tube and Iron Company as of November 30, 2010, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Clifton Gunderson, LLP

Peoria, Illinois

January 21, 2011

CHICAGO TUBE AND IRON COMPANY

BALANCE SHEET

AS OF NOVEMBER 30, 2010

	2010
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	9,413,711
Investment securities (Note 3)		8,686,210
Accounts receivable (net of allowance for doubtful accounts of $366,745)		17,481,738
Inventories (Note 4)		29,498,337
Refundable income taxes		777,106
Deferred income taxes (Note 10)		642,164
Assets held for sale (Note 6)		1,159,389
Other current assets		150,378
Total current assets		67,809,033
PROPERTY, PLANT, AND EQUIPMENT (Note 5)		49,484,629
OTHER ASSETS		2,164,384
TOTAL ASSETS	$	119,458,046
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt (Note 8)	$	730,000
Accounts payable		8,811,467
Accrued liabilities		8,272,023
Total current liabilities		17,813,490
LONG-TERM LIABILITIES
Long-term debt, less current maturities (Note 8)		5,880,000
Interest rate swap settlement (Note 8)		488,945
Deferred compensation (Note 12)		1,122,695
Deferred income taxes (Note 10)		8,491,575
Total long-term liabilities		15,983,215
Total liabilities		33,796,705
SHAREHOLDERS’ EQUITY
Common stock (Note 9)		1,882
Additional paid-in capital		2,081,371
Accumulated other comprehensive loss		(308,557	)
Retained earnings		83,886,645
Total shareholders’ equity		85,661,341
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	119,458,046

The accompanying notes are an integral part of the financial statements.

CHICAGO TUBE AND IRON COMPANY

INCOME STATEMENT

YEAR ENDED NOVEMBER 30, 2010

	2010
NET SALES	$	183,266,566
COST OF SALES		135,583,264
Gross margin		47,683,302
OPERATING EXPENSES
Warehousing		8,956,510
Selling		4,931,464
Transportation		6,728,702
General and administrative		20,071,511
Total operating expenses		40,688,187
LOSS ON SALE OF PROPERTY, PLANT, AND EQUIPMENT		(39,378	)
Operating income		6,955,737
OTHER INCOME (EXPENSE)
Interest income		322,950
Other income (expense)		(169,133	)
Interest expense		(295,320	)
Income before income taxes		6,814,234
INCOME TAXES (Note 10)
Current		771,377
Deferred		2,093,060
		2,864,437
NET INCOME	$	3,949,797

The accompanying notes are an integral part of the financial statements.

CHICAGO TUBE AND IRON COMPANY

STATEMENT OF SHAREHOLDERS’ EQUITY

YEAR ENDED NOVEMBER 30, 2010

										Accumulated
							Additional			Other
	Common Stock						Paid-in			Comprehensive			Retained
	Shares			Amount			Capital			Loss			Earnings			Total
BALANCE, NOVEMBER 30, 2009		198,003			1,980			5,028,665			(291,042	)		80,440,505			85,180,108
Comprehensive income (loss):
Net income		—			—			—			—			3,949,797			3,949,797
Other comprehensive loss:
Unrealized loss on interest rate swap agreement, net of tax benefit of $4,613		—			—			—			(7,214	)		—			(7,214	)
Unrealized loss on available-for-sale investment securities, net of tax benefit of $6,585		—			—			—			(10,301	)		—			(10,301	)
Total comprehensive income																	3,932,282
Cash dividends, $2.60 per share		—			—			—			—			(503,657	)		(503,657	)
Repurchase of 9,792 shares		(9,792	)		(98	)		(2,947,294	)		—			—			(2,947,392	)
BALANCE, NOVEMBER 30, 2010		188,211		$	1,882		$	2,081,371		$	(308,557	)	$	83,886,645		$	85,661,341

The accompanying notes are an integral part of the financial statements.

CHICAGO TUBE AND IRON COMPANY

STATEMENT OF CASH FLOWS

YEAR ENDED NOVEMBER 30, 2010

	2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	3,949,797
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		3,880,212
Amortization of debt issuance costs		10,965
Provision for doubtful accounts		242,368
Realized gains from sale of investment securities		(40,053	)
Loss on sale of equipment		39,378
Deferred income taxes		2,093,060
Effects of changes in operating assets and liabilities:
Accounts receivable		(5,722,880	)
Inventories		(6,994,737	)
Refundable income taxes		(81,123	)
Other current assets		42,872
Accounts payable		2,820,869
Other liabilities		662,083
Net cash provided by operating activities		902,811
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other assets		(342,873	)
Proceeds from sale of investment securities		5,200,971
Purchases of investment securities		(13,864,014	)
Proceeds from sale of equipment		20,000
Purchases of property, plant, and equipment		(3,370,911	)
Net cash used in investing activities		(12,356,827	)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt		(705,000	)
Repurchase of common stock		(2,947,392	)
Dividends paid		(503,657	)
Net cash used in financing activities		(4,156,049	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(15,610,065	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		25,023,776
CASH AND CASH EQUIVALENTS, END OF YEAR	$	9,413,711

CHICAGO TUBE AND IRON COMPANY

STATEMENT OF CASH FLOWS

YEAR ENDED NOVEMBER 30, 2010

	2010
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest	$	296,918
Income taxes paid	$	852,500
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES
Fair value adjustment to investment securities	$	10,301
Adjustment to interest rate swap	$	7,214

The accompanying notes are an integral part of the financial statements.

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 1 - NATURE OF BUSINESS

Chicago Tube and Iron Company (the Company) operates in two primary business segments within the metals industry: distribution of steel tubing, cold finished bar, pipe, valves and fittings; and the fabrication of pressure parts supplied to various industrial markets, primarily consisting of power generation specific to electric utilities as well as the waste to energy sectors. The Company’s metals distribution business is regional, supplying Midwest markets. To differentiate itself from competitors, the Company provides a variety of value-added services to its distribution product line. The Company’s fabrication operations serve national markets.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The more significant accounting policies used in the preparation of the financial statements are presented below.

Cash Equivalents

For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Marketable Investment Securities

Management determines the appropriate classification of marketable equity and debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date.

Investment securities are classified as available-for-sale when they are not held for resale in anticipation of short-term (generally 90 days or less) fluctuation in market price. They are stated at fair value and unrealized holding gains and losses are reported as a separate component of shareholders’ equity, net of related deferred income taxes. Realized gains and losses are included in the determination of net income.

Receivables

Trade accounts receivable consist of amounts billed to customers, net of an allowance for doubtful accounts. The Company deems accounts past due based on their contractual terms or based on payment history. There is no interest charged on accounts receivable.

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Receivables (Continued)

The allowance for doubtful accounts is estimated by management and is based on specific information about customer accounts, past loss experience, and general economic conditions. An account is charged off by management when deemed uncollectible, although collection efforts may continue.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined principally by the last-in, first-out (LIFO) method.

Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. Depreciation is computed on accelerated and straight-line methods over the estimated useful lives of the related assets.

Debt Issuance Costs

The costs related to the issuance of debts are capitalized and amortized to interest expense over the life of the related debt. Debt issuance costs are included in other assets on the balance sheets.

Impairment of Long-Lived Assets

Long-lived assets, which consist primarily of property, plant, and equipment, are reviewed by management for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In cases in which undiscounted expected future cash flows are less than the carrying value, an impairment loss is recorded equal to the amount by which the carrying value exceeds the fair value of assets.

Income Taxes

Deferred income taxes are provided on temporary differences between financial statement and income tax reporting. Temporary differences are differences between the amounts of assets and liabilities reported for financial statement purposes and their tax bases.

Deferred tax assets are recognized for temporary differences that will be deductible in future years’ tax returns and for operating loss and tax credit carryforwards. Deferred tax assets are recognized only if it is more likely than not that a tax position will be realized or sustained upon examination by the relevant taxing authority. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information.

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes (Continued)

Deferred tax assets are reduced by a valuation allowance if it is deemed more likely than not that some or all of the deferred tax assets will not be realized. Deferred tax liabilities are recognized for temporary differences that will be taxable in future years.

Revenue Recognition

The Company recognizes revenue upon shipment to third-party customers.

Interest Rate Swaps

The Company entered into an interest rate swap agreement to reduce the impact of changes in interest rates on its long-term debt. The interest rate agreement matures at the same time as the related debt instrument matures. The adjustment to market value for the instrument is reported in accumulated other comprehensive loss in the statements of shareholders’ equity.

Comprehensive Income

Comprehensive income is defined as the change in equity during a period from transactions and other events from nonowner sources. Comprehensive income is the total of net income and other comprehensive income, which for the Company is comprised of unrealized gains and losses on investment in marketable equity securities and the market value for the interest rate swap.

Recent Accounting Pronouncements

On January 1, 2009, the Company adopted the Financial Accounting Standards Board’s new accounting requirements for accounting for uncertain tax positions. Under these new requirements, a tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The Company determined that it was not required to record a liability for unrecognized tax benefits as a result of implementing the new requirements.

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 3 - INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and fair values of available-for-sale securities held at November 30, 2010 are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Mutual Funds	$	8,305,760	$	5,969	$	15,257	$	8,296,472
International Bonds		397,336		4,358		11,956		389,738
Total investment securities	$	8,703,096	$	10,327	$	27,213	$	8,686,210

Proceeds from the sales of available-for sale securities during 2010 were $5,200,971. The realized gains from those sales was $40,053.

The amortized cost and estimated fair value of debt securities at November 30, 2010, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Estimated Fair Value
Due after one year through five years	$	397,336	$	389,738

The following table presents investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of November 30, 2010:

	Investments in a Continuous Unrealized Loss Position
	Less Than 12 Months				12 Months or More				Total
	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value
Mutual Funds	$	15,257	$	2,900,024	$	—	$	—	$	15,257	$	2,900,024
International Bonds	$	11,956	$	284,805	$	—	$	—	$	11,956	$	284,805

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 3 - INVESTMENT SECURITIES (CONTINUED)

There were two international bonds and one mutual fund in an unrealized loss position for less than 12 months. Management considered industry analyst reports, sector credit reports, and volatility in the markets in concluding that the unrealized losses as of November 30, 2010 were primarily the result of customary and expected fluctuations in the bond markets. As a result, all security impairments as of November 30, 2010 were considered temporary.

NOTE 4 - INVENTORIES

Inventories consist of the following:

	2010
Finished goods and purchased products	$	19,911,965
Work in process		9,586,372
	$	29,498,337

If the FIFO cost method had been used, inventories would have been approximately $13,126,000 higher at November 30, 2010.

NOTE 5 - PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consisted of the following at November 30, 2010:

	2010
Land	$	5,971,050
Buildings and improvements		39,007,994
Warehouse equipment		34,755,429
Vehicles and office equipment		11,328,722
Construction in progress		125,228
		91,188,423
Accumulated depreciation		(41,703,794	)
	$	49,484,629

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 6 - ASSETS HELD FOR SALE

The Company’s long-lived assets held for sale are valued on an asset-by-asset basis at the lower of carrying amount or fair value less costs to sell. Depreciation on those assets held for sale has ceased. The assets held for sale are comprised of certain land, buildings, and equipment that are used in the Company’s Wisconsin and North Carolina operations. The assets held for sale are reported at their carrying amount.

NOTE 7 - NOTES PAYABLE

At November 30, 2010, the Company had an unsecured line of credit in the amount of $15,000,000, due May 2, 2011. The line bears interest at one month LIBOR plus one percent. There were no outstanding loans on this line at November 30, 2010.

The provisions of the credit agreement contain a funded debt to EBITDA ratio requirement.

NOTE 8 - LONG-TERM DEBT

The Company obtained financing from an $8 million Industrial Revenue Bond issued through the Stanly County, North Carolina Industrial Revenue and Pollution Control Authority. The proceeds of this bond were used to finance the acquisition of land and construction of a new facility in North Carolina. The bond matures in April 2018 with the option to provide principal payments annually, April 1. Interest is payable monthly, with a variable rate that resets weekly (.40 percent at November 30, 2010). As a security for payment of the bonds, the Company obtained a direct pay letter of credit issued by JPMorgan Chase Bank, N.A. in an original amount of $8 million. The letter of credit reduces annually by the principal reduction amount.

Principal payments on the bonds are optional. It is the Company’s intent to repay the bond as follows:

2011	$	730,000
2012		755,000
2013		785,000
2014		810,000
2015		835,000
2016 and thereafter		2,695,000
		6,610,000
Less current portion		730,000
Total	$	5,880,000

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 8 - LONG-TERM DEBT (CONTINUED)

The Company entered into an interest rate swap agreement to reduce the impact of changes in interest rates on the above Industrial Revenue Bond. At November 30, 2010, the effect of the swap agreement on the bond was to fix the rate at 3.46 percent. The swap agreement matures April 2018, but is reduced annually by the amount of the optional principal payments on the bond. The Company is exposed to credit loss in the event of nonperformance by the other parties to the interest rate swap agreement. However, the Company does not anticipate nonperformance by the counterparties.

NOTE 9 - COMMON STOCK

There were 300,000 shares of $.01 par value common stock authorized at November 30, 2010.

NOTE 10 - INCOME TAXES

Income taxes computed at the statutory federal income tax rate of 34 percent differ from the provision for income taxes reflected in the financial statements. A reconciliation of income taxes computed at the statutory rate with the provision is as follows:

	2010
Income taxes computed at the statutory rate	$	2,316,840
State income taxes, net of federal income tax benefit		457,876
Nondeductible permanent differences		12,178
Other		77,543
	$	2,864,437

The Company files income tax returns in the U.S. federal jurisdiction and eight states. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2007.

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 10 - INCOME TAXES (CONTINUED)

Deferred income tax assets and liabilities consisted of the following at November 30, 2010:

	2010
Deferred tax assets:
Capitalized inventory costs	$	280,428
Accrued vacation		381,367
Allowance for doubtful accounts		143,031
Interest rate swap settlement		190,689
Unrealized loss on investment securities		6,585
Deferred compensation		417,310
Total deferred tax assets		1,419,410
Deferred tax liabilities:
Cash discounts		(131,889	)
Prepaid expenses		(37,358	)
Deferred gain on sale of property, plant, and equipment		(3,141,691	)
Depreciation		(5,957,883	)
Total deferred tax liabilities		(9,268,821	)
Net deferred tax asset (liability)	$	(7,849,411	)

The net deferred tax asset (liability) is presented in the accompanying balance sheet as follows:

	2010
Current deferred income taxes	$	642,164
Noncurrent deferred income taxes		(8,491,575	)
	$	(7,849,411	)

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 11 - LEASES

The Company leases trucks, automobiles, warehouse facilities, and office equipment under operating leases that generally expire over various periods of time ranging from month-to-month to seven years. Rent expense for all Company lease arrangements was $1,827,185 for the year ended November 30, 2010.

Minimum annual lease rentals for the years subsequent to November 30, 2010 for leases expiring beyond one year are as follows:

2011	$	1,524,613
2012		1,404,375
2013		453,883
	$	3,382,871

NOTE 12 - BENEFIT PLANS

The Company has a qualified, contributory profit sharing plan covering full-time employees who are twenty-one years of age and over and who have completed one year of service. The Company’s contribution is a discretionary amount determined annually by the Board of Directors. In addition, the plan provides for matching contributions of 50 percent of each employee’s 401(k) plan deposits up to 3 percent of their respective wages and 20 percent of each employee’s 401(k) plan deposits from 3 percent to 6 percent of their respective wages. Discretionary contributions into the profit sharing portion of the plan for the year ended November 30, 2010 were $300,000. Employer matching contributions to the 401(k) portion of the plan for the year ended November 30, 2010 were $-0-. For the period March 1, 2009 through November 30, 2010, the Company suspended employer matching contributions. The matching contributions were reinstated on January 1, 2011.

The Company contributes to various multi-employer pension plans under collective bargaining agreements. Expense for these plans approximated $84,000 in 2010.

On January 1, 2006, the Company adopted an unfunded, nonqualified deferred compensation plan for a select group of management. The Plan allows for both Company and employee contributions to the Plan. Since inception of the Plan, only employee deferrals have been made. Employee deferrals to the Plan were $260,180 for the year ended November 30, 2010.

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 13 - SELF-INSURANCE

The Company is partially self-insured for medical and prescription drug claims. The Company has purchased stop-loss insurance coverage for individual claims in excess of $100,000 for 2010 and aggregate excess coverage for any losses in excess of approximately $3,550,000 for the year ended November 30, 2010.

NOTE 14 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL STATEMENTS

The Company’s financial instruments consist principally of cash, investments, accounts receivable, accounts payable, long-term debt, and an interest rate swap agreement. There are no significant differences between the carrying value and fair value of any of these financial instruments.

In determining fair value, the Company uses various valuation approaches within the required fair value measurement framework. Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability.

The Company uses a hierarchy for inputs when measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Defined levels within the hierarchy are based on the reliability of inputs as follows:

• Level 1 - Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;

• Level 2 - Valuations based on quoted prices for similar assets or liabilities or identical assets or liabilities in less active markets, such as dealer or broker markets; and

• Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as pricing models, discounted cash flow models, and similar techniques not based on market, exchange, dealer or broker-traded transactions.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, follows:

Investment securities listed on a national market or exchange are valued at the last sales price, or if there is no sale and the market is still considered active, the last transaction price before year-end. Such securities are classified within Level 1 and Level 2 of the valuation hierarchy.

The fair value of the swap agreement is estimated by a third party using a model that builds a yield curve from market data for actively traded securities at various times and maturities and takes into account current interest rates and current credit worthiness of the respective counterparties. The interest rate swap is classified within Level 2 of the valuation hierarchy.

CHICAGO TUBE AND IRON COMPANY

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

NOTE 14 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL STATEMENTS (CONTINUED)

The following tables set forth financial assets and liabilities measured at fair value in the accompanying balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of November 30, 2010:

	November 30, 2010
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Interest rate swap	$	—	$	488,945	$	—	$	488,945
Investment securities:
Mutual funds	$	8,296,472	$	—	$	—	$	8,296,472
International bonds		—		389,738		—		389,738
Total investment securities	$	8,296,472	$	389,738	$	—	$	8,686,210

NOTE 15 - CONCENTRATIONS

The Company maintains its cash accounts with several banks. At November 30, 2010, cash balances were insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor per bank. At times, balances in these accounts may exceed federally insured limits.

NOTE 16 - SUBSEQUENT EVENTS

Management evaluated subsequent events through January 21, 2011, the date the financial statements were available to be issued.

EX-99.2

Exhibit 99.2

UNAUDITED HISTORICAL FINANCIAL STATEMENTS OF

CHICAGO TUBE AND IRON COMPANY

CHICAGO TUBE AND IRON COMPANY

UNAUDITED BALANCE SHEET

AS OF FEBRUARY 28, 2011

	February 28, 2011
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	6,933,790
Investment securities		8,572,174
Accounts receivable (net of allowance for doubtful accounts of $474,180)		23,962,920
Inventories		28,631,018
Deferred income taxes		639,448
Assets held for sale		1,159,389
Other current assets		223,965
Total current assets		70,122,704
PROPERTY, PLANT, AND EQUIPMENT		48,639,675
OTHER ASSETS		2,453,105
TOTAL ASSETS	$	121,215,484
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	730,000
Accounts payable		9,336,621
Accrued liabilities		7,944,164
Total current liabilities		18,010,785
LONG-TERM LIABILITIES
Long-term debt, less current maturities		5,880,000
Interest rate swap settlement		488,945
Deferred compensation		1,476,058
Deferred income taxes		8,491,575
Total long-term liabilities		16,336,578
Total liabilities		34,347,363
SHAREHOLDERS’ EQUITY
Common stock		1,882
Additional paid-in capital		2,081,371
Accumulated other comprehensive loss		(304,307	)
Retained earnings		85,089,175
Total shareholders’ equity		86,868,121
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	121,215,484

CHICAGO TUBE AND IRON COMPANY

UNAUDITED STATEMENTS OF INCOME

THREE MONTHS ENDED FEBRUARY 28, 2011 AND FEBRUARY 28, 2010

	Three Months Ended February 28, 2011			Three Months Ended February 28, 2010
NET SALES	$	52,227,159		$	42,483,703
COST OF SALES		38,389,086			29,931,696
Gross margin		13,838,073			12,552,007
OPERATING EXPENSES
Warehousing		2,145,320			1,942,298
Selling		1,456,457			1,146,989
Transportation		1,794,649			1,499,424
General and administrative		5,930,092			5,483,100
Total operating expenses		11,326,518			10,071,811
Operating income		2,511,555			2,480,196
OTHER INCOME (EXPENSE)
Interest income		5,720			15,242
Other income (expense)		(2,341	)		—
Interest expense		(71,560	)		(79,394	)
Income before income taxes		2,443,374			2,416,044
Income tax expense		977,350			966,417
NET INCOME	$	1,466,024		$	1,449,627

CHICAGO TUBE AND IRON COMPANY

UNAUDITED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED FEBRUARY 28, 2011 AND FEBRUARY 28, 2010

	Three Months Ended February 28, 2011			Three Months Ended February 28, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,466,024		$	1,449,627
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		980,942			946,602
Amortization of debt issuance costs		2,741			2,741
Provision for doubtful accounts		90,000			108,000
Realized losses from sale of investment securities		15,615			—
Loss on sale of equipment		(400	)		—
Effects of changes in operating assets and liabilities:
Accounts receivable		(6,570,911	)		(9,373,254	)
Inventories		867,320			516,333
Refundable income taxes		777,106			695,983
Other current assets		(19,410	)		(41,458	)
Accounts payable		525,154			1,156,452
Other liabilities		(14,766	)		(1,357,573	)
Net cash used in operating activities		(1,880,586	)		(5,896,550	)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other assets		(291,463	)		(206,180	)
Proceeds from sale of equipment		400			—
Proceeds from sale of investment securities		7,927,331			—
Purchases of investment securities		(7,836,121	)		—
Purchases of property, plant, and equipment		(135,987	)		(658,427	)
Net cash used in investing activities		(335,840	)		(864,607	)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid		(263,495	)		(277,204	)
Net cash used in financing activities		(263,495	)		(277,204	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(2,479,921	)		(7,038,361	)
CASH AND CASH EQUIVALENTS, BEGINNING OF THREE MONTH PERIOD		9,413,711			25,023,776
CASH AND CASH EQUIVALENTS, END OF THREE MONTH PERIOD	$	6,933,790		$	17,985,415

CHICAGO TUBE AND IRON COMPANY

NOTES TO UNAUDITED FINANCIAL STATEMENTS

February 28, 2011

NOTE 1 - NATURE OF BUSINESS

Chicago Tube and Iron Company (the Company) operates in two primary business segments within the metals industry: distribution of steel tubing, cold finished bar, pipe, valves and fittings; and the fabrication of pressure parts supplied to various industrial markets, primarily consisting of power generation specific to electric utilities as well as the waste to energy sectors. The Company’s metals distribution business is regional, supplying Midwest markets. To differentiate itself from competitors, the Company provides a variety of value-added services to its distribution product line. The Company’s fabrication operations serve national markets.

NOTE 2 - INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and fair values of available-for-sale securities held at February 28, 2011 are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Equities	$	524,892	$	2,143	$	2,405	$	524,630
Fixed income:
Corporate bonds		2,551,757		—		15,545		2,536,212
International bonds		436,290		6,743		24,362		418,671
Municipal securities		1,816,702		1,417		1,036		1,817,083
Mutual funds		2,927,453		22,407		—		2,949,860
Total fixed income		7,732,202		30,567		40,943		7,721,826
Other		325,000		718		—		325,718
Total investment securities	$	8,582,094	$	33,428	$	43,348	$	8,572,174

Proceeds from the sale of available-for-sale securities during the three months ended February 28, 2011 were $7,927,331. The net realized loss from those sales was $15,615.

CHICAGO TUBE AND IRON COMPANY

NOTES TO UNAUDITED FINANCIAL STATEMENTS

February 28, 2011

NOTE 2 - INVESTMENT SECURITIES (CONTINUED)

The amortized cost and estimated fair value of debt securities at February 28, 2011, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Estimated Fair Value
Due after one year through five years	$	4,334,644	$	4,301,585
Due after five through ten years	$	795,105	$	796,098

The following table presents investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of February 28, 2011:

	Investments in a Continuous Unrealized Loss Position
	Less Than 12 Months				12 Months or More				Total
	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value
Municipal bonds	$	1,036	$	871,695	$	—	$	—	$	1,036	$	871,695
Corporate bonds	$	15,545	$	2,536,212	$	—	$	—	$	15,545	$	2,536,212
International bonds	$	24,362	$	269,947	$	—	$	—	$	24,362	$	269,947

There were two international bonds, two municipal securities and six corporate bonds in an unrealized loss position for less than 12 months. Management considered industry analyst reports, sector credit reports, and volatility in the markets in concluding that the unrealized losses as of February 28, 2011 were primarily the result of customary and expected fluctuations in the bond markets. As a result, all security impairments as of February 28, 2011 were considered temporary.

CHICAGO TUBE AND IRON COMPANY

NOTES TO UNAUDITED FINANCIAL STATEMENTS

February 28, 2011

NOTE 3 - INVENTORIES

Inventories consist of the following:

	February 28, 2011
Finished goods and purchased products	$	21,618,161
Work in process		7,012,857
	$	28,631,018

If the FIFO cost method had been used, inventories would have been approximately $13,467,000 higher at February 28, 2011.

NOTE 4 - PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consisted of the following at February 28, 2011:

	February 28, 2011
Land	$	5,971,050
Buildings and improvements		39,007,994
Warehouse equipment		34,853,871
Vehicles and office equipment		12,390,065
Construction in progress		125,228
		92,348,208
Accumulated depreciation		(43,708,533	)
	$	48,639,675

NOTE 5 - ASSETS HELD FOR SALE

The Company’s long-lived assets held for sale are valued on an asset-by-asset basis at the lower of carrying amount or fair value less costs to sell. Depreciation on those assets held for sale has ceased. The assets held for sale are comprised of certain land, buildings, and equipment that are used in the Company’s Wisconsin and North Carolina operations. The assets held for sale are reported at their carrying amount.

NOTE 6 - NOTES PAYABLE

At February 28, 2011, the Company had an unsecured line of credit in the amount of $15,000,000, due May 2, 2011. The line bears interest at one month LIBOR plus one percent. There were no outstanding loans on this line at February 28, 2011.

The provisions of the credit agreement contain a funded debt to EBITDA ratio requirement.

CHICAGO TUBE AND IRON COMPANY

NOTES TO UNAUDITED FINANCIAL STATEMENTS

February 28, 2011

NOTE 7 - LONG-TERM DEBT

The Company obtained financing from an $8,000,000 Industrial Revenue Bond issued through the Stanly County, North Carolina Industrial Revenue and Pollution Control Authority. The proceeds of this bond were used to finance the acquisition of land and construction of a new facility in North Carolina. The bond matures in April 2018 with the option to provide principal payments annually, April 1. Interest is payable monthly, with a variable rate that resets weekly (.38 percent at February 28, 2011). As a security for payment of the bonds, the Company obtained a direct pay letter of credit issued by JPMorgan Chase Bank, N.A. in an original amount of $8,000,000. The letter of credit reduces annually by the principal reduction amount.

Principal payments on the bonds are optional. It is the Company’s intent to repay the bonds as follows:

2011	$	730,000
2012		755,000
2013		785,000
2014		810,000
2015		835,000
2016 and thereafter		2,695,000
		6,610,000
Less current portion		730,000
Total	$	5,880,000

The Company entered into an interest rate swap agreement to reduce the impact of changes in interest rates on the above Industrial Revenue Bond. At February 28, 2011 the effect of the swap agreement on the bond was to fix the rate at 3.46 percent. The swap agreement matures April 2018, but is reduced annually by the amount of the optional principal payments on the bond. The Company is exposed to credit loss in the event of nonperformance by the other parties to the interest rate swap agreement. However, the Company does not anticipate nonperformance by the counterparties.

NOTE 8 - COMMON STOCK

There were 300,000 shares of $.01 par value common stock authorized at February 28, 2011, of which 188,211 were outstanding. During the three months ended February 28, 2011, the Company paid cash dividends of $263,495, or $1.40 per outstanding share.

NOTE 9 - INCOME TAXES

For the three months ended February 28, 2011, the Company recorded an income tax provision of $977,350, or 40 percent. For the three months ended February 28, 2010, the Company recorded an income tax provision of $966,417, or 40 percent. Income taxes computed at the statutory federal income tax rate of 34 percent differ from the provision for income taxes reflected in the

CHICAGO TUBE AND IRON COMPANY

NOTES TO UNAUDITED FINANCIAL STATEMENTS

February 28, 2011

NOTE 9 - INCOME TAXES (CONTINUED)

financial statements, primarily due to the impact of state income taxes on the federal provision and nondeductible permanent differences.

The Company files income tax returns in the U.S. federal jurisdiction and eight states. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2007.

NOTE 10 - BENEFIT PLANS

The Company contributes to various multi-employer pension plans under collective bargaining agreements. Expense for these plans approximated $19,000 in the three months ended February 28, 2011 and $22,700 in the three months ended February 28, 2010.

NOTE 11 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL STATEMENTS

The Company’s financial instruments consist principally of cash, investments, accounts receivable, accounts payable, long-term debt, and an interest rate swap agreement. There are no significant differences between the carrying value and fair value of any of these financial instruments.

In determining fair value, the Company uses various valuation approaches within the required fair value measurement framework. Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability.

The Company uses a hierarchy for inputs when measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Defined levels within the hierarchy are based on the reliability of inputs as follows:

• Level 1 - Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;

• Level 2 - Valuations based on quoted prices for similar assets or liabilities or identical assets or liabilities in less active markets, such as dealer or broker markets; and

• Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as pricing models, discounted cash flow models, and similar techniques not based on market, exchange, dealer or broker-traded transactions.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, follows:

Investment securities listed on a national market or exchange are valued at the last sales price, or if there is no sale and the market is still considered active, the last transaction price before year-end. Such securities are classified within Level 1 and Level 2 of the valuation hierarchy.

The fair value of the swap agreement is estimated by a third party using a model that builds a yield curve from market data for actively traded securities at various times and maturities and takes into

CHICAGO TUBE AND IRON COMPANY

NOTES TO UNAUDITED FINANCIAL STATEMENTS

February 28, 2011

NOTE 11 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL STATEMENTS (CONTINUED)

account current interest rates and current credit worthiness of the respective counterparties. The interest rate swap is classified within Level 2 of the valuation hierarchy.

The following tables set forth financial assets and liabilities measured at fair value in the accompanying balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of February 28, 2011:

	February 28, 2011
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Interest rate swap	$	—	$	488,945	$	—	$	488,945
Investment securities:
Equities	$	—	$	524,630	$	—	$	524,630
Mutual funds		2,949,860		—		—		2,949,860
Corporate bonds		—		2,536,212		—		2,536,212
International bonds		—		418,671		—		418,671
Municipal bonds		—		1,817,083		—		1,817,083
Other		—		325,718		—		325,718
Total investment securities	$	2,949,860	$	5,622,314	$	—	$	8,572,174

NOTE 12 - CONCENTRATIONS

The Company maintains its cash accounts with several banks. At February 28, 2011 cash balances were insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor per bank. At times, balances in these accounts may exceed federally insured limits.

EX-99.3

Exhibit 99.3

OLYMPIC STEEL, INC.

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined financial information (“Pro Forma Information”) is based on the historical consolidated financial information of Olympic Steel, Inc. (“we” or “Olympic”), which is included in Olympic’s Annual Report on Form 10-K for the year ended December 31, 2010 and Quarterly Report on Form 10-Q for the three months ended March 31, 2011, and the financial information of Chicago Tube and Iron Company (“CTI”), which is included in Exhibits 99.1 and 99.2 to this Current Report on Form 8-K/A, and has been prepared to reflect the acquisition of all of the outstanding common stock of CTI by Olympic (the “Acquisition”).

The unaudited pro forma combined balance sheet combines the historical balance sheets of Olympic as of March 31, 2011 and of CTI as of February 28, 2011, giving effect to the acquisition as if it had been consummated on March 31, 2011. The unaudited pro forma combined statements of earnings combine the historical income statements for Olympic and CTI, giving effect to the acquisition as if it had been consummated on January 1, 2010. The historical financial information of Olympic for the three months ended March 31, 2011 and of CTI for the three months ended February 28, 2011 is unaudited. The historical financial information of Olympic for the year ended December 31, 2010 and of CTI for the twelve months ended November 30, 2010 is derived from the audited financial statements of Olympic and CTI, respectively, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The unaudited pro forma combined financial information was prepared using the acquisition method of accounting. Accordingly, the historical consolidated financial information has been adjusted to give effect to the impact of the consideration issued by Olympic to CTI’s stockholders in connection with the acquisition and the effect of debt financing necessary to complete the transaction. The pro forma adjustments are based on the preliminary information available at the time of the preparation of this Current Report on Form 8-K/A. For purposes of this pro forma financial information, Olympic has made a preliminary allocation of the estimated purchase price to the assets acquired and liabilities assumed based on various estimates of their fair value. These pro forma purchase price allocation adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma combined financial information and are subject to revision based on a final determination of fair value. Final determinations of fair value may differ materially from those presented herein. The unaudited pro forma combined statements of earnings also include certain purchase accounting adjustments, including items expected to have a continuing impact on combined results, such as increased depreciation and amortization expense on acquired assets.

The unaudited pro forma combined financial statements do not reflect the cost of any integration activities or benefits that may result from synergies that may be derived from

integration activities. Therefore, the actual amounts reflected in our statement of unaudited combined operations may differ materially from the information presented in the accompanying pro forma financial statements.

The unaudited pro forma combined financial statements also reflect the impact of Olympic’s debt financing necessary to complete the Acquisition of approximately $154.9 million (see Note (f) to the unaudited pro forma combined statements of operations for discussion of the assumed interest rates). However, it does not reflect any other changes that might occur regarding Olympic’s capital structure.

Certain amounts in the historical CTI financial statements have been reclassified to conform to Olympic’s financial statement presentation. Management expects that there could be additional reclassifications. Based on Olympic’s review of CTI’s summary of significant accounting policies disclosed in CTI’s financial statements, the nature and amount of any adjustments to the financial statements of CTI to conform their accounting policies to those of Olympic are not expected to be significant. Further review of CTI’s accounting policies and financial statements may result in required revisions to CTI’s policies to conform to those of Olympic.

The unaudited pro forma combined financial information is presented for informational purposes only. The pro forma information is not necessarily indicative of what the combined companies’ financial position or results of operations actually would have been had the acquisition been completed at the dates indicated. In addition, the unaudited pro forma combined information does not purport to project the future financial position or operating results of the combined company.

OLYMPIC STEEL, INC.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF MARCH 31, 2011

		Chicago Tube & Iron		Chicago Tube & Iron			Chicago Tube & Iron			Chicago Tube & Iron
	(in thousands)
	Olympic Steel, Inc.		Chicago Tube & Iron			Pro Forma			Pro Forma
	March 31, 2011		February 28, 2011			Adjustments			Combined
Assets
Cash and cash equivalents	$	2,604	$	6,934		$	(5,000	)(j)	$	4,538
Investment securities		—		8,572			—			8,572
Accounts receivable, net		136,904		23,963			—			160,867
Inventories		198,910		28,631			1,153	(c)		242,161
							13,467	(d)
Income taxes receivable and deferred		3,123		639			—			3,762
Assets held for sale		—		1,159			778	(h)		1,937
Prepaid expenses and other		4,970		224			—			5,194
Total current assets		346,511		70,122			10,398			427,031
Property and equipment, net		122,599		48,640			2,113	(e)		173,352
Goodwill		7,083		—			40,094	(b)		47,177
Other intangibles		—		—			36,757	(f)		36,757
Other long-term assets		5,467		2,454			4,071	(j)		11,914
							(78	)(g)
Total assets	$	481,660	$	121,216		$	93,355		$	696,231
Liabilities
Accounts payable	$	98,927	$	9,337		$	—		$	108,264
Current maturities of long-term debt		—		730			—			730
Accrued payroll		6,726		—			2,962	(a)		9,688
Other accrued liabilities		10,561		7,944			(2,962	)(a)		29,374
							3,709	(i)
							4,071	(j)
							6,051	(k)
Total current liabilities		116,214		18,011			13,831			148,056
Credit facility revolver		80,940		—			84,856	(j)		165,796
Other long-term debt		—		5,880			70,000	(j)		75,880
Interest rate swap settlement		—		489			—			489
Other long-term liabilities		6,410		—			1,476	(a)		7,886
Deferred compensation		—		1,476			(1,476	)(a)		—
Deferred income taxes		6,165		8,492			15,245	(k)		29,902
Total liabilities		209,729		34,348			183,932			428,009
Shareholders’ Equity
Preferred stock		—		—			—			—
Common stock		119,164		2			(2	)(l)		119,164
Additional paid-in capital		—		2,081			(2,081	)(l)		—
Accumulated other comprehensive loss		—		(304	)		304	(l)		—
Retained earnings		152,767		85,089			(85,089	)(l)		149,058
							(3,709	)(i)
Total shareholders’ equity		271,931		86,868			(90,577	)		268,222
Total liabilities and shareholders’ equity	$	481,660	$	121,216		$	93,355		$	696,231

The accompanying notes are an integral part of the Pro Forma Information.

OLYMPIC STEEL, INC.

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

TWELVE MONTHS ENDED DECEMBER 31, 2010

		Chicago Tube & Iron		Chicago Tube & Iron			Chicago Tube & Iron			Chicago Tube & Iron
	(in thousands, except per share data)
	Olympic Steel, Inc. Twelve Months Ended December 31, 2010		Chicago Tube & Iron Twelve Months Ended November 30, 2010			Pro Forma Adjustments			Pro Forma Combined
Net sales	$	805,043	$	183,267		$	(847	)(a)	$	987,463
Costs and expenses
Cost of materials sold (excludes items shown separately below)		650,398		135,583			847	(a)		787,981
							1,153	(b)
Warehouse and processing		51,478		8,957			(4,570	)(a)		55,865
Administrative and general		39,233		19,886			(560	)(a)		56,437
							889	(c)
							(3,011	)(d)
Distribution		19,407		6,729			(15	)(a)		26,121
Selling		19,802		4,931			—			24,733
Occupancy		5,320		—			1,613	(a)		6,933
Depreciation		13,303		—			3,582	(a)		17,573
							688	(e)
Loss on sale of property, plant, and equipment		—		39			(39	)(a)		—
Total costs and expenses		798,941		176,124			577			975,642
Operating income		6,102		7,142			270			13,514
Interest expense (income) and other expense on debt, net		2,305		(28	)		4,308	(f)		7,399
							814	(g)
Other income (expense)		—		(169	)		11	(a)		(158	)
Income before income taxes		3,797		7,001			(4,841	)		5,957
Income tax provision		1,665		2,864			(1,903	)(h)		2,626
Net income	$	2,132	$	4,137		$	(2,938	)	$	3,331
Earnings per share:
(i) Net income per share attributable to OSI shareholders - basic	$	0.20							$	0.31
(i) Weighted average shares outstanding - basic		10,905								10,905
(i) Net income per share attributable to OSI shareholders - diluted	$	0.20							$	0.31
(i) Weighted average shares outstanding - diluted		10,918								10,918

The accompanying notes are an integral part of the Pro Forma Information.

OLYMPIC STEEL, INC.

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2011

		Chicago Tube & Iron		Chicago Tube & Iron			Chicago Tube & Iron			Chicago Tube & Iron
	(in thousands, except per share data)
	Olympic Steel, Inc. Three Months Ended March 31, 2011		Chicago Tube & Iron Three Months Ended February 28, 2011			Pro Forma Adjustments			Pro Forma Combined
Net sales	$	294,381	$	52,227		$	(249	)(a)	$	346,359
Costs and expenses
Cost of materials sold (excludes items shown separately below)		230,962		38,389			249	(a)		269,600
Warehouse and processing		15,590		2,145			(1,257	)(a)		16,478
Administrative and general		13,211		5,930			(140	)(a)		17,973
							222	(c)
							(1,250	)(d)
Distribution		6,208		1,795			(87	)(a)		7,916
Selling		5,804		1,456			—			7,260
Occupancy		1,826		—			506	(a)		2,332
Depreciation		3,467		—			981	(a)		4,620
							172	(e)
Total costs and expenses		277,068		49,715			(604	)		326,179
Operating income		17,313		2,512			853			20,678
Interest expense and other expense on debt, net		805		66			1,041	(f)		2,116
							204	(g)
Other income (expense)		—		(2	)		3	(a)		1
Income before income taxes		16,508		2,444			(389	)		18,563
Income tax provision		6,185		977			(153	)(h)		7,009
Net income	$	10,323	$	1,467		$	(236	)	$	11,554
Earnings per share:
(i) Net income per share attributable to OSI shareholders- basic	$	0.94							$	1.06
(i) Weighted average shares outstanding - basic		10,935								10,935
(i) Net income per share attributable to OSI shareholders - diluted	$	0.94							$	1.06
(i) Weighted average shares outstanding - diluted		10,945								10,945

The accompanying notes are an integral part of the Pro Forma Information.

Notes to Unaudited Pro Forma Combined Financial Information

(dollars in millions)

Note 1. Basis of Presentation

On July 1, 2011, we completed the Acquisition in an all-cash transaction, including net debt. The accompanying pro forma combined financial information presents the pro forma combined financial position and results of operations of the combined company based upon the historical financial statements of Olympic and CTI, after giving effect to the Acquisition adjustments described in these notes, and is intended to reflect the impact of the Acquisition on Olympic. Certain amounts in CTI’s historical financial statements have been reclassified to conform to Olympic’s presentation.

The allocation of the purchase price to the assets acquired and liabilities assumed in the pro forma financial information is based on management’s preliminary valuation estimates and are subject to revisions, which may be material.

Note 2. Purchase Price

The estimated total purchase price of the acquisition is $159.9, consisting of the $150.0 base purchase price, the $5.0 McNeeley Purchase Agreement payment, the closing cash payment of $2.8 and the working capital payment of $2.1. The determination of the excess of purchase price over the book values of the assets acquired and liabilities assumed as of March 31, 2011 is as follows:

Total estimated purchase price	$	159.9
Less: book value of CTI assets acquired and liabilities assumed	$	86.9
Excess of purchase price over net book value of net assets acquired	$	73.0

For purposes of the pro forma information presented as of March 31, 2011, the preliminary estimated cash purchase price was estimated to be funded by $5.0 of cash and $154.9 of debt borrowed under our $335.0 Amended and Restated Loan and Security Agreement dated July 1, 2011 (the “Loan and Security Agreement”), consisting of $70.0 related to a new term loan component and $84.9 related to borrowings under our revolving credit facility component.

Note 3. Pro Forma Adjustments

The pro forma information includes the following pro forma adjustments to reflect (1) the effects of additional financing necessary to complete the Acquisition and (2) the allocation of the purchase price, including adjusting assets and liabilities to fair value, with related changes in revenues, costs and expenses.

Combined Balance Sheets Pro Forma Adjustments:

(a) CTI Historical Presentation – Certain reclassifications have been made to CTI’s historical presentation in order to conform to Olympic’s historical presentation.

(b) Goodwill, net – Under the acquisition method of accounting, the total estimated purchase price, as shown in the table above, is allocated to CTI’s net tangible and intangible assets acquired and liabilities assumed based on their estimated fair value as of March 31, 2011. The fair value of these assets and liabilities is preliminary and is subject to change pending additional information that may come to our knowledge in the future. The preliminary adjustments to the assets acquired and liabilities assumed are as follows:

Excess of purchase price over net book value of net assets acquired	$	73.0
Adjustment to goodwill related to:
Assets held for sale	$	(0.8	)
Inventories		(14.6	)
Property and equipment, net		(2.1	)
Other intangible assets		(36.8	)
Other long-term assets		0.1
Deferred tax liabilities		21.3
Total adjustments	$	(32.9	)
Total goodwill	$	40.1

Pursuant to ASC 350, Intangibles – Goodwill and Other, goodwill is not amortized; rather, impairment tests are performed at least annually or more frequently if circumstances indicate an impairment may have occurred. If impairment exists, the goodwill is immediately written down to its fair value through a current charge to earnings. Accordingly, the goodwill arising from the acquisition will be subject to an impairment test at least annually.

(c) Inventories – Represents the pro forma adjustment to reflect CTI’s finished goods and work in process inventory at net realizable value which requires the use of estimated selling prices less the sum of (i) costs of disposal and (ii) a reasonable profit allowance for the selling effort. The work in process inventory also includes an estimate of costs to complete the manufacturing process and a reasonable profit allowance for that process.

(d) Inventories – Represents the elimination of CTI’s historical LIFO inventory reserve. The acquired LIFO inventory is considered a new pool and the cost (fair value allocated in the purchase) of the inventory will be treated as the base inventory value. The historical statements of operations of CTI include

LIFO expense of $0.6 and $0.3 for the twelve months ended November 30, 2010 and the three months ended February 28, 2011, respectively.

(e) Property and equipment, net – Represents the pro forma adjustment to reflect CTI’s property and equipment at fair value based on preliminary appraisal valuations.

(f) Other intangibles – Represents the pro forma adjustment to record CTI’s currently identified other intangible assets, which consist of indefinite-lived tradenames of $23.5 and amortizable customer relationships of $13.3, at fair value. The estimated fair values are based on preliminary evaluation of discounted incremental cash flows.

(g) Other long-term assets – Represents the pro forma adjustment to eliminate CTI’s deferred financing fees.

(h) Assets held for sale – Represents the pro forma adjustment to reflect CTI’s assets held for sale at fair value less costs to sell based on purchase contracts executed after the Acquisition date.

(i) Other accrued liabilities – Represents the pro forma adjustment of approximately $1.4 of acquisition related fees and expenses incurred by Olympic and CTI, which were expensed after March 31, 2011 and which have therefore been reflected as a reduction to Retained earnings. The adjustment also includes $2.3 of payments to be made to CTI employees, including transaction bonuses and change in control payments triggered as a result of the acquisition, which will be expensed after March 31, 2011 and which have therefore been reflected as a reduction to Retained earnings. These costs have not been tax effected for the purposes of this pro forma information as we are continuing to evaluate the deductibility of these expenses. In addition, these costs have not been considered in the pro forma combined income statement.

(j) Credit facility revolver and Other long term debt – Represents the pro forma adjustment to reflect debt financing necessary to complete the acquisition. Olympic utilized $5.0 of its cash on hand with the remaining portion of the purchase price financed through our committed Loan and Security Agreement, consisting of a $70.0 term loan component and $84.9 revolver component. The adjustment also includes the estimated $4.1 of deferred financing fees expected to be incurred by Olympic in connection with the amended credit facility.

(k) Deferred income taxes – Represents the estimated impact to deferred taxes on the allocation of purchase price to acquired assets and liabilities. The net current deferred tax liability represents the estimated impact on the allocation of purchase price to current assets and liabilities. The net non-current deferred tax liability represents the estimated impact on the allocation of

purchase price to noncurrent assets and liabilities. These estimates are based on an estimated prospective statutory rate of approximately 39.3% and could change based on the applicable tax rates and finalization of the combined company’s tax position.

(l) Shareholders’ equity – Represents pro forma adjustments to eliminate the historical shareholders’ equity of CTI.

Combined Statements of Operations Pro Forma Adjustments:

(a) CTI Historical Presentation – Certain reclassifications have been made to CTI’s historical presentation in order to conform to Olympic’s historical presentation. These reclassifications had no impact on the historical income from operations reported by CTI.

(b) Cost of materials sold – Represents the pro forma adjustment required to amortize the fair valuation of CTI’s inventory. This adjustment only impacts the twelve months ended December 31, 2010 as the acquired inventory has been estimated to be sold in 2010.

(c) Administrative and general – Represents the pro forma adjustment required to reflect the net incremental amortization expense resulting from the fair valuation of CTI’s amortizable $13.3 customer relationships (see note (f) to the combined balance sheets pro forma adjustments). For purposes of the pro forma information, the estimated amortization expense was based on a preliminary straight-line amortization period of 15 years.

(d) Administrative and general – Represents the pro forma adjustment required to reflect the impact of the new McNeeley employment agreement and Haigh transition agreement entered into by the two former majority employee shareholders of CTI. These agreements were entered into as part of the acquisition agreement and the contractual terms will have a continuing impact on the statement of operations.

(e) Depreciation – Represents the pro forma adjustment required to reflect the net incremental depreciation expense resulting from the fair valuations of CTI’s property and equipment. The amount of this adjustment is based on preliminary estimates of the fair values and useful lives of the related assets.

(f) Interest expense (income) and other expense on debt, net – Represents the pro forma adjustment to interest expense to reflect estimated interest to be paid on the additional financing incurred by Olympic to complete the acquisition (see note (j) to the combined balance sheets pro forma adjustments). The adjustment assumes that the incremental borrowings are as of January 1, 2010, the earliest unaudited pro forma combined statement of operations presented. The assumed variable rates of interest are approximately 3.0% on

the new term loan component and approximately 2.7% on the amended revolver component and are based on the committed interest rate in effect as of July 1, 2011. The actual interest rate to be paid will be based on a variety of factors including prevailing LIBOR rates. A 1/8% increase or decrease in the assumed interest rate will not have a significant impact on the amount of interest expected to be paid.

(g) Interest expense (income) and other expense on debt, net – Represents the pro forma adjustment required to reflect the net incremental deferred financing fee amortization over the five-year term of the Loan and Security Agreement.

(h) Income tax provision – Represents the pro forma tax effect of the above adjustments determined based on an estimated prospective statutory tax rate of approximately 39.3%. The estimate could change based on changes in the applicable tax rates and finalization of the combined company’s tax position.

(i) Earnings per share and shares outstanding – The pro forma weighted average number of basic and diluted shares outstanding reflect Olympic’s weighted average number of basic and diluted shares of common stock outstanding for the year ended December 31, 2010 and the three months ended March 31, 2011, as applicable. As a result of the acquisition, CTI’s outstanding shares of common stock are wholly owned by Olympic and thus have not been included in the pro forma weighted average number of basic and diluted shares outstanding.

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