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Olympic Steel Nets US$2.5 Million in Second Quarter 2013
08/13/2013 - As it announced financial results for the second quarter and six months ended 30 June 2013, U.S. service center chain Olympic Steel said the first half of 2013 was characterized by lower sales volume and average selling prices compared with last year.
Net sales for the 2013 second quarter totaled US$330.8 million, a 10.0% decrease from the US$367.4 million reported in last year's comparable period. For the six months, net sales declined 10.7% to US$668.9 million, compared with US$749.4 million in the first half of 2012.
For the second quarter, net income totaled US$2.5 million versus net income of US$4.5 million in 2012's comparable quarter. Net income was US$7.7 million for the first half of this year, compared with US$10.8 million in last year's first half.
Chairman and chief executive officer Michael D. Siegal commented, "The first half of 2013 was characterized by lower sales volume and average selling prices compared with last year. However, despite the external headwinds, Olympic Steel successfully improved consolidated gross margin, lowered inventory levels and generated strong free cash flow. A portion of the excess cash has been used to reduce debt by more than US$34 million since the beginning of this year.
"In addition," he continued, "our capital expenditures were only 38% of our first-half budget, coming in at US$3.8 million, which reinforces our commitment to spending less than our annual depreciation. Operating expenses were flat, albeit up as a percentage of sales, compared with last year's first half. We reduced variable expenses, offsetting higher fixed depreciation and occupancy costs related to our growth initiatives.
"Looking to 2013's second half, we have identified more than US$4.0 million in annualized operating cost savings," Siegal added. "We began implementing these reductions at the end of the second quarter, and expect them to be completed by the end of the third quarter."
Founded in 1954, Olympic Steel is a leading U.S. metals 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 and aluminum products. The Company's CTI subsidiary is a leading distributor of steel tubing, bar, pipe, valves and fittings, and fabricates pressure parts for the electric utility industry. Headquartered in Cleveland, Ohio, Olympic Steel currently operates from 34 facilities in North America.
