Olympic Steel Reports Record Q4 Sales
02/27/2015 - Olympic Steel Inc., a national metals service center, announced financial results for the fourth quarter and full year ended 31 December 2014.
The company's fourth-quarter 2014 net sales increased 12.5% to a fourth-quarter record of US$326.7 million, compared with US$290.5 million in the fourth quarter last year. Full-year net sales also set a new company record, climbing 13.7% to US$1.4 billion in 2014 versus US$1.3 billion in 2013. The revenue growth in both 2014 periods was due to higher sales volume.
In the fourth quarter of 2014, it was determined that approximately US$23.8 million of goodwill was impaired. The impairment charge was recorded as a non-cash expense for the quarter and year ended 31 December, 2014, and reduced 2014 fourth-quarter and full-year net income by US$2.14 per share. Including the charge, the company reported a net loss of US$26.9 million, or US$2.42 per share, in the fourth quarter of 2014, compared with a net loss of US$1.4 million, or US$0.12 per share, in 2013's fourth quarter.
For the 2014 full year, including the goodwill impairment charge, the reported net loss was US$19.1 million, or US$1.71 per share. This compares with net income of US$7.6 million, or US$0.69 per diluted share in 2013, which benefited from US$3.6 million of LIFO income (US$0.19 per diluted share, net of tax) associated with the tubular and pipe products segment.
"Higher net sales and shipping volume in 2014 resulted from healthy underlying demand and increasing our market share. Unfortunately, metal prices fell sharply, in line with other global commodities, which diminished margins and operating leverage during the year," said chairman and chief executive officer Michael D. Siegal.
"We can enhance profitability and strengthen our balance sheet regardless of market conditions," Siegal added. "As projected, we lowered inventory and paid down more than US$25 million in debt during the fourth quarter, and we expect to achieve similar reductions during the first half of 2015."
"A multi-pronged profit improvement program was also launched in January to cut operating expenses and enhance margins," Siegal said. "This plan includes improving underperforming divisions, lowering distribution costs, variable labor and personnel expenses, as well as transportation and purchasing initiatives."
In the fourth quarter of 2014, it was determined that approximately US$23.8 million of goodwill was impaired. The impairment charge was recorded as a non-cash expense for the quarter and year ended 31 December, 2014, and reduced 2014 fourth-quarter and full-year net income by US$2.14 per share. Including the charge, the company reported a net loss of US$26.9 million, or US$2.42 per share, in the fourth quarter of 2014, compared with a net loss of US$1.4 million, or US$0.12 per share, in 2013's fourth quarter.
For the 2014 full year, including the goodwill impairment charge, the reported net loss was US$19.1 million, or US$1.71 per share. This compares with net income of US$7.6 million, or US$0.69 per diluted share in 2013, which benefited from US$3.6 million of LIFO income (US$0.19 per diluted share, net of tax) associated with the tubular and pipe products segment.
"Higher net sales and shipping volume in 2014 resulted from healthy underlying demand and increasing our market share. Unfortunately, metal prices fell sharply, in line with other global commodities, which diminished margins and operating leverage during the year," said chairman and chief executive officer Michael D. Siegal.
"We can enhance profitability and strengthen our balance sheet regardless of market conditions," Siegal added. "As projected, we lowered inventory and paid down more than US$25 million in debt during the fourth quarter, and we expect to achieve similar reductions during the first half of 2015."
"A multi-pronged profit improvement program was also launched in January to cut operating expenses and enhance margins," Siegal said. "This plan includes improving underperforming divisions, lowering distribution costs, variable labor and personnel expenses, as well as transportation and purchasing initiatives."
