Olympic Steel Reports Record Third Quarter Net Sales
11/09/2011 - Olympic Steel, Inc. reported net income of $6.1 million on record net sales of $348.5 million for the third quarter, and net income of $24.4 million on net sales of $941.9 million for the nine months ended September 30, 2011.
Olympic Steel, Inc. reported net income of $6.1 million on record net sales of $348.5 million for the third quarter, and net income of $24.4 million on net sales of $941.9 million for the nine months ended September 30, 2011.
Third Quarter Results — Net income of $6.1 million ($0.56 per diluted share) compares to a net loss of $1.2 million ($0.11 per diluted share) in last year’s third quarter. Net sales of $348.5 million — the company’s highest ever for a third quarter — reflects a 67% increase from $209.2 million for the year-ago third quarter and a $49.5 million increase over the previous quarter (2Q-2011).
Results include the impact of Chicago Tube and Iron (CTI), which the company acquired on July 1, 2011. CTI’s third quarter sales totaled $61.4 million.
Cost of goods sold includes $1 million related to a CTI purchase price accounting adjustment to write-up the value of certain CTI inventory to fair value at July 1, 2011. The inventory adjustment had a negative impact of $0.06 on third quarter 2011 earnings per share. Additionally, the third quarter 2011 consolidated effective income tax rate was 12.2% as a result of changes in unrecognized tax benefits during the quarter, which had a positive $0.17 impact on third quarter 2011 earnings per share.
Nine Month Results — Net income of $24.4 million ($2.23 per diluted share) reflects a $20.7 million (555%) increase compared to net income of $3.7 million ($0.34 per diluted share) for last year’s first nine months. Net sales of $941.9 million — the company’s second-highest ever nine-month revenue total — reflects a 59.7% increase from net sales of $589.8 million for the first nine months of 2010.
Management Comments — Commenting on the results, Chairman and Chief Executive Officer Michael D. Siegal stated, “Our 2011 financial results and record third quarter sales benefited from strong overall performance and the inclusion of Chicago Tube and Iron, which was acquired on July 1, 2011. CTI accelerates our market share growth, and was immediately accretive to our third-quarter earnings. We also continue to successfully execute on our previously announced strategic investments.
“Through the first nine months of 2011, our capital spending has totaled $25 million, including new equipment, successful information system infrastructure rollouts, and facility startups in Gary, Ind.; Mount Sterling, Ky.; Monterrey, Mexico; Kansas City, Mo.; Roseville, Minn.; and Streetsboro, Ohio. We confidently look forward to our new Gary temper mill facility opening on time and on budget in early 2012, with 150,000 incremental tons of capacity once fully operational. Our balance sheet remains strong with our new five-year, $335 million credit facility providing a foundation for continued growth and value creation.”
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 Chicago Tube and Iron 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 29 facilities in North America.
