Olympic Steel Reports 2012 Fourth Quarter and Full Year Results
02/21/2013 - Olympic Steel said 2012 ended with a disappointing quarter as steel demand and pricing declined in tandem with mounting political and fiscal uncertainty masking much of the company's operational headway.
Olympic Steel, Inc., a national metals service center, announced financial results for the fourth quarter and full year ended 31 December 2012.
Net sales for the 2012 fourth quarter totaled US$291.7 million, an 8.8% decrease from the fourth-quarter record of $319.9 million reported in last year's comparable period. For the full year, net sales reached a record $1.4 billion, a 9.7% increase from the Company's previous record of $1.3 billion achieved in 2011.
As a result of its goodwill impairment test conducted in the fourth quarter of 2012, the company has determined that approximately $6.6 million of goodwill related to its flat products Southern region was impaired. The goodwill impairment charge has been recorded as a non-cash expense for periods ended 31 December 2012. Inclusive of the charge, the Company reported a fourth quarter net loss of $10.1 million compared with net income of $0.6 million in the fourth quarter of 2011.
For the full year, including the aforementioned non-cash goodwill charge, net income totaled $2.3 million compared with net income of $25.0 million in 2011.
Chairman and chief executive officer Michael D. Siegal commented, "During 2012, we made significant progress on a variety of growth and development initiatives. We successfully ramped up several new facilities and completed major capital projects to enhance future profitability. However, the year ended with a disappointing quarter as steel demand and pricing declined in tandem with mounting political and fiscal uncertainty—masking much of our operational headway.
"Entering 2013, we are encouraged by recovering demand for steel products," Siegal continued. "Now, the vast majority of cash outlays associated with the multi-year capital expansion projects are behind us and our focus is on harnessing their potential to increase earnings and cash flow."
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 33 facilities in North America.
