Olympic Steel Reports 3rd Quarter Sales and Earnings
11/02/2007 - Olympic Steel reports net income of $6.0 million on net sales of $256.1 million for the third quarter, and net income of $20.7 million on net sales of $792.9 million for the first nine months of 2007.
Olympic Steel, Inc. announced net income of $6.0 million on net sales of $256.1 million for the third quarter, and net income of $20.7 million on net sales of $792.9 million for the first nine months of 2007.
Third Quarter Results—Net income of $6.0 million ($0.56 per diluted share) compares to net income of $10.9 million ($1.03 per diluted share) for last year’s third quarter. Net sales of $256.1 million reflect a 1.5% decrease from net sales of $259.9 million for the third quarter a year ago. Tons sold, 309 thousand, reflect a 1.4% decrease from 313 thousand in the third quarter of 2006.
Nine-Month Results— Net income of $20.7 million ($1.93 per diluted share) compares to net income of $27.3 million ($2.57 per diluted share) for the same period last year. Net sales $792.9 million reflect a 5.0% increase compared to last year’s nine month net sales of $754.9 million.
Tons sold, 957 thousand, reflect a 3.8% decrease from 994 thousand in the first nine months of 2006—better than the Metals Service Center Institute statistics of a 7.9% decline in year-over-year steel shipments for the first nine months of 2007.
Management Comments—“We are pleased with our 2007 performance in a volatile market,” said Chairman and CEO Michael D. Siegal. “Despite the sliding price environment, particularly in stainless steel, we were able to gain market share, control operating expenses, and improve our asset turnover and cash flow during the quarter. We reported a shipping rate that was 6.2% better than the service center industry, improved our inventory turnover rate by 12% to just under 5 times, and paid down $39 million of debt during the third quarter.”
“At present, carbon steel imports remain low, and service center inventories were reduced for the eleventh consecutive month in September 2007. Given these circumstances, price increases should occur when demand is restored from the normal seasonal slowness. With the strength of our balance sheet and our 0.10-to-1 debt-to-equity ratio and strong working capital management, we are able to continue investing in new equipment, facilities and information technologies. Thus far in 2007, we have invested in a new stretcher leveler for our Minneapolis Coil facility, added 54,000 square feet to our Iowa facility, continued the implementation of a new information system, and purchased several new presses, lasers, and plasma and machining centers. We anticipate increasing our spending in 2008 to support our strategies in value-add processing, gross margin expansion, and location penetration,” 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 16 facilities.
