Olympic Steel Reports 2nd Quarter 2009 Results
07/31/2009 - Olympic Steel reports a net loss of $33.8 million on net sales of $122.4 million for the second quarter and a net loss of $59.3 million on net sales of $263.3 million for the six months ended June 30, 2009.
Olympic Steel, Inc. reported a net loss of $33.8 million on net sales of $122.4 million for the second quarter and a net loss of $59.3 million on net sales of $263.3 million for the first half ended June 30, 2009.
Second Quarter Results — The $33.8 million net loss ($3.11 per diluted share) compares to net income of $29.6 million ($2.70 per diluted share) for last year’s second quarter. Results include a $50.5 million lower of cost or market pretax charge to write down the value of inventory as of June 30, 2009.
Net sales totaled $122.4 million, a 66.3% decrease from net sales of $363.5 million for the year-ago second quarter. Tons sold, 174,000, reflect a 50.8% decrease from 353,000 in the year-ago second quarter.
Six Month Results — The $59.3 million net loss ($5.45 per diluted share) compares to net income of $42.8 million ($3.93 per diluted share) for last year’s first half. Results include $81.1 million of lower of cost or market pretax charges to write down the value of inventory as of March 31 and June 30, 2009.
Net sales totaled $263.3 million, a 58.8% decrease from the $638.4 million for the first half of 2008. Tons sold, 345,000 reflect a 48.4% decrease from 669,000 in the first half of 2008. The company’s 48.4% decline in sales compares to the Metals Service Center Institute statistics of a 43.9% decline in year-over-year steel shipments for the first half of 2009.
Management Comments — “We are disappointed to report continued demand and price deterioration through the second quarter, which resulted in the required June inventory lower of cost or market accounting adjustment, stated Chairman and CEO Michael D. Siegal, commenting on the results. “We made significant improvements in rightsizing our balance sheet during the quarter, by reducing our inventory tons by 32%, maintaining a strong receivable turnover, and eliminating 64% or $57 million of our debt. We also reduced our second-quarter 2009 operating expenses by 50% compared to second quarter of 2008.
“We expect our results to improve in the second half of 2009, as prices have begun to increase, and the unprecedented inventory liquidation by service centers during the first half of 2009 appears to be ending,” concluded 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 17 facilities.
