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Press Release
Olympic Steel Reports Earnings for the First Quarter of 2000
Cleveland, Ohio -- (April 26, 2000) Olympic Steel, Inc., (Nasdaq: ZEUS), a leading national steel service center, today announced financial results for the first quarter ended March 31, 2000. Tons sold for the first quarter of 2000 increased 11.9% from 304 thousand to 340 thousand and net sales increased 11.8% to $144.7 million from $129.4 million. Earnings totaled $1.5 million, or $.15 per share, compared to $1.3 million, or $.12 per share for last year's first quarter. Operating income totaled $5.0 million, or 3.4% of net sales for the current year quarter, compared to $3.9 million, or 3.0% for the prior year period.
"Our increased volumes reflect the positive trend that is happening in the steel marketplace today. Prices are moving upward and overall demand remains robust," commented Michael D. Siegal, Chairman and Chief Executive Officer.
"Increasing sales volumes, improving quality, service, and inventory turns, while reducing costs remain the primary focus of each of our operations. Expenses per ton and as a percent of sales decreased year over year, even though first quarter operating expenses continued to include costs related to our strategic planning firm and higher distribution expenses, particularly fuel surcharges. We expect the balance of the year to reflect the many efforts we have put in place to control our expenses," continued Mr. Siegal. "First quarter results were also adversely impacted by rising interest rates. As we anticipate a continued rising interest rate environment, we believe strong asset management control will offset this impact going forward."
"Our Iowa operation continues to improve month by month with increased shipping and production results. This operation is expected to be profitable once the agriculture market rebounds and full capacity is achieved," concluded Mr. Siegal.
Founded in 1954, Olympic Steel is a leading North American steel service center that has positioned itself for growth in a consolidating steel industry. It is experienced in the specialized processing and distribution of flat-rolled carbon and stainless steel products, as well as tubular steel products. Headquartered in Cleveland, Ohio, the company has over 1,000 employees in 15 locations serving nine geographic markets. For further information on Olympic Steel, Inc., visit the Company's web site at http://www.olysteel.com.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Such risks and uncertainties include, but are not limited to, general business and economic conditions; competitive factors such as the availability and pricing of steel and fluctuations in demand, specifically in the automotive and agriculture markets; work stoppages by automotive or steel manufacturers; potential equipment installation delays and malfunctions; and the successes of the Company's strategic initiatives. Please refer to the Company's Securities and Exchange Commission filings for further information.
Contact: Cathy S. Kish
Director - Investor Relations
Telephone: (216) 292-3800
Fax: (216) 682-4065
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Earnings
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SUMMARY FINANCIAL INFORMATION |
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| (in thousands, except per share and tonnage data) |
| |
| |
|
Three Months Ended March 31, |
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|
2000 |
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|
|
1999 |
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|
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| SUMMARY |
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(unaudited) |
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|
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| Net sales |
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$144,687 |
|
|
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$129,392 |
|
|
|
| Operating income |
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4,987 |
|
3.4% |
|
3,926 |
|
3.0% |
|
| Net income |
|
1,477 |
|
|
|
1,293 |
|
|
|
| Basic and diluted income per share |
|
$0.15 |
|
|
|
$0.12 |
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|
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| DETAILS |
| Tons sold: |
| Direct |
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289,323 |
|
|
|
251,550 |
|
|
|
| Toll |
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50,675 |
|
|
|
52,424 |
|
|
|
| |
|
339,998 |
|
|
|
303,974 |
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|
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| % increase (decrease) |
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11.9% |
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(11.8%) |
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|
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| Net sales |
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144,687 |
|
|
|
129,392 |
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|
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| % change |
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11.8% |
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|
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(17.1%) |
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|
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| Cost of sales |
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111,078 |
|
|
|
99,031 |
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|
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| Gross margin |
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33,609 |
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23.2% |
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30,361 |
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23.5% |
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| Operating expenses: |
| Warehouse and processing |
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8,469 |
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5.9% |
|
7,974 |
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6.2% |
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| Administrative and general |
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7,757 |
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5.4% |
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7,046 |
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5.4% |
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| Distribution |
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5,485 |
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3.8% |
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4,546 |
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3.5% |
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| Selling |
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3,357 |
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2.3% |
|
3,760 |
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2.9% |
|
| Occupancy |
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1,286 |
|
0.9% |
|
1,233 |
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1.0% |
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| Depreciation and amortization |
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2,268 |
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1.6% |
|
1,876 |
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1.4% |
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| Total operating expenses |
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28,622 |
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19.8% |
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26,435 |
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20.4% |
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| Operating income |
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4,987 |
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3.4% |
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3,926 |
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3.0% |
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| Loss from OLP joint venture |
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(207) |
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|
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(230) |
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|
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| Income (loss) from TSP joint venture |
|
35 |
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|
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(32) |
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|
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| Earnings before interest and taxes |
|
4,815 |
|
|
|
3,664 |
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|
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| Interest expense |
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1,586 |
|
|
|
870 |
|
|
|
| Receivable securitization expense |
|
847 |
|
|
|
692 |
|
|
|
| Financing costs |
|
2,433 |
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1.7% |
|
1,562 |
|
1.2% |
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| Income before taxes |
|
2,382 |
|
1.6% |
|
2,102 |
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1.6% |
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| Income taxes |
|
905 |
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38.0% |
|
809 |
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38.5% |
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| Net income |
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1,477 |
|
|
|
1,293 |
|
|
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| Basic and diluted income per share |
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$0.15 |
|
|
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$0.12 |
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|
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| Weighted average shares outstanding |
|
10,034 |
|
|
|
10,692 |
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|
|
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| Note: Certain 1999 amounts have been reclassified to conform to the 2000 presentation. |
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| It is the Company's policy not to make quarterly or annual sales or earnings projections |
| for external use and not to endorse any analyst's sales or earnings estimates. |
| SUMMARY OTHER FINANCIAL INFORMATION
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| (in thousands, except ratios) |
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March 31,
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December 31, |
| | 2000 | 1999
| 1999 |
| | (unaudited)
| (audited) |
| Accounts receivable |
$17,911 | |
$15,933 | |
$9,802 | |
| Inventories |
123,370 | |
112,517 | |
119,585 | |
| Net property and equipment |
123,063 | |
119,666 | |
124,204 | |
| Total assets |
276,167 | |
259,057 | |
266,965 | |
| Current liabilities |
42,371 | |
44,468 | |
36,248 | |
| Total debt (current & long-term) |
94,981 | |
76,143 | |
93,426 | |
| Shareholders' equity |
137,696 | |
139,036 | |
136,820 | |
| Shareholders' equity per share |
13.83 | |
13.00 | |
13.56 | |
| Debt-to-equity ratio |
.69 to 1 | |
.55 to 1 | |
.68 to 1 | |
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| | Three Months Ended
|
| | March 31, |
| | 2000 | 1999 |
| | (unaudited) |
| Increase in working capital |
$4,382 | |
$1,640 | |
| Capital expenditures, net |
1,084 | |
2,187 | |
| EBITDA |
7,255 | |
5,802 | |
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| It is the Company's policy not to make quarterly or annual sales or earnings projections |
| for external use and not to endorse any analyst's sales or earnings estimates. |
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