Olympic Steel, Inc., announced net income of $3.0 million on net sales of $241.5 million for the second quarter and net income of $12.6 million on net sales of $526.0 million for the six months ended June 30, 2005.

Second Quarter Results—The $3.0 million net income ($0.29 per diluted share) compares to net income of $18.5 million ($1.82 per diluted share) for last year's second quarter. Results included a $1.7 million ($0.10 per diluted share) bad debt charge related to receivables from two customers that filed for bankruptcy protection in June 2005.

Net sales increased 8.4% to $241.5 million from $222.8 million for the second quarter a year ago. Tons sold decreased 7.4% to 319 thousand from 344 thousand in the second quarter of 2004.

Six Month Results—The $12.6 million net income ($1.21 per share) compares to net income of $29.3 million ($2.90 per share) in the first half of 2004. Net sales increased 28.4% to $526.0 million from $409.8 million. Tons sold decreased 7.0% to 678 thousand from 729 thousand in the first half of 2004.

Comments—"While the second quarter was challenging from a carbon flat rolled pricing and customer credit perspective, we are pleased with the results of our balance sheet and expense control management. During the last three months, we accelerated our receivable and inventory turnover rates, allowing us to reduce inventory by $37.3 million and debt by $37.3 million, a 21% decline in inventory and a 31% decline in debt. We also reduced our second quarter operating expenses by $8.7 million or 22.5% as compared to the second quarter of 2004. At June 30, 2005, our debt totaled $82.6 million, or 43% of equity, both lows for Olympic Steel since our IPO in 1994. We expect that our focus on balance sheet and expense management will continue the trends that we have seen so far this year," stated Michael D. Siegal, Chairman and CEO.

"We anticipate some softness to persist in carbon flat rolled pricing during the seasonally slower third quarter. However, we are encouraged to finally see a meaningful drop in the service center industry's June inventory levels, and we anticipate further reductions through July. We believe that the continuation of the inventory correction may allow pricing pressures on carbon steel to subside later this year. We also believe that the currency adjustment by China is a positive development for many of our exporting customers," 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.