|
Press Release
Olympic Steel Reports Second Quarter 2001 Earnings
Cleveland, Ohio -- (July 26, 2001) Olympic Steel, Inc., (Nasdaq: ZEUS), a leading national steel service center, today announced financial results for the second quarter ended June 30, 2001. Tons sold for the second quarter of 2001 decreased 9.7% to 284 thousand and net sales decreased 21.8% to $108.7 million from $139.0 million in the second quarter of 2000. Net income for the second quarter of 2001 was $224 thousand, or $0.02 per share, compared to net income of $163 thousand, or $.02 per share, for last year's second quarter. Operating income totaled $1.8 million, compared to $3.2 million for the prior period.
Tons sold for the first six months of 2001 decreased 12.5% to 573 thousand from 655 thousand, and net sales decreased 20.4% to $225.8 million from $283.6 million. Net loss for the first six months totaled $787 thousand, or $.08 per share, compared to net income of $1.6 million, or $.17 per share, last year. Operating income totaled $2.3 million, or 1.0% of net sales for the first six months of 2001, compared to $8.2 million, or 2.9% last year.
"Our diligent focus on reducing operating expenses and asset management is beginning to yield more favorable results despite depressed market conditions," stated Michael D. Siegal, Chairman and Chief Executive Officer. "The decline in steel consumption continues to adversely impact our sales and earnings. Our ongoing efforts to aggressively reduce costs, manage inventory, and capture market share help to mitigate the market volume decline. The steel industry continues to be a highly competitive environment."
The Company also announced that in June 2001, it entered into a new three-year, $135 million secured bank credit facility. The new loan replaced the Company's existing bank credit and accounts receivable securitization facilities. Although the new credit facility significantly increases the Company's financing costs, it contains less restrictive financial loan covenants.
Improvement in market pricing and steel consumption is not anticipated in the near future. The Company believes its business strategy and exceptionally dedicated employees will continue to favorably impact its performance going forward.
Founded in 1954, Olympic Steel is a leading North American steel service center that 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 approximately 900 employees in 14 locations serving nine geographic markets. For further information about Olympic Steel, Inc., visit the Company's web site at http://www.olysteel.com.
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. 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; the Company's ability to reduce costs, manage inventory, and gain market share; work stoppages by company or automotive or steel manufacturers' personnel; and equipment malfunctions. 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
|
Earnings
|
|
SUMMARY FINANCIAL INFORMATION |
|
|
|
|
| (in thousands, except per share and tonnage data) |
| |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
| |
2001 |
|
2000 |
|
2001 |
|
2000 |
|
| SUMMARY |
(unaudited) |
|
(unaudited) |
|
| Net sales |
$108,707 |
|
$138,962 |
|
$225,827 |
|
$283,649 |
|
| Operating income |
1,845 |
1.7% |
3,216 |
2.3% |
2,318 |
1.0% |
8,203 |
2.9% |
| Net income (loss) |
$224 |
|
$163 |
|
$(787) |
|
$1,640 |
|
| Basic and diluted net income (loss) per share |
$0.02 |
|
$0.02 |
|
$(0.08) |
|
$0.17 |
|
| |
| DETAILS |
| Tons sold: |
| Direct |
251,408 |
|
267,802 |
|
506,204 |
|
557,125 |
|
| Toll |
32,807 |
|
46,949 |
|
66,522 |
|
97,624 |
|
| |
284,215 |
|
314,751 |
|
572,726 |
|
654,749 |
|
| % change |
(9.7%) |
|
(4.2%) |
|
(12.5%) |
|
3.5% |
|
| Net sales |
$108,707 |
|
$138,962 |
|
$225,827 |
|
$283,649 |
|
| % change |
(21.8%) |
|
3.9% |
|
(20.4%) |
|
7.8% |
|
| Cost of sales |
82,007 |
|
108,805 |
|
172,683 |
|
219,883 |
|
| Gross margin |
26,700 |
24.6% |
30,157 |
21.7% |
53,144 |
23.5% |
63,766 |
22.5% |
| Operating expenses: |
| Warehouse and processing |
7,532 |
6.9% |
8,593 |
6.2% |
15,660 |
6.9% |
17,062 |
6.0% |
| Administrative and general |
6,454 |
5.9% |
6,630 |
4.8% |
13,196 |
5.8% |
14,387 |
5.1% |
| Distribution |
4,297 |
4.0% |
5,192 |
3.7% |
8,297 |
3.7% |
10,677 |
3.8% |
| Selling |
3,164 |
2.9% |
3,138 |
2.3% |
6,450 |
2.9% |
6,495 |
2.3% |
| Occupancy |
1,086 |
1.0% |
1,113 |
0.8% |
2,586 |
1.1% |
2,399 |
0.8% |
| Depreciation and amortization |
2,322 |
2.1% |
2,275 |
1.6% |
4,637 |
2.1% |
4,543 |
1.6% |
| Total operating expenses |
24,855 |
22.9% |
26,941 |
19.4% |
50,826 |
22.5% |
55,563 |
19.6% |
| Operating income |
1,845 |
1.7% |
3,216 |
2.3% |
2,318 |
1.0% |
8,203 |
2.9% |
| Income (loss) from OLP joint venture |
48 |
|
(348) |
|
(172) |
|
(555) |
|
| Income from TSP joint venture |
11 |
|
31 |
|
8 |
|
66 |
|
Income before financing costs
and taxes |
1,904 |
|
2,899 |
|
2,154 |
|
7,714 |
|
| Interest expense |
973 |
|
1,649 |
|
2,173 |
|
3,235 |
|
| Receivable securitization expense |
566 |
|
987 |
|
1,260 |
|
1,834 |
|
| Financing costs |
1,539 |
1.4% |
2,636 |
1.9% |
3,433 |
1.5% |
5,069 |
1.8% |
| Income (loss) before taxes |
365 |
0.3% |
263 |
0.2% |
(1,279) |
(0.6%) |
2,645 |
0.9% |
| Income taxes |
141 |
38.6% |
100 |
38.0% |
(492) |
38.5% |
1,005 |
38.0% |
| Net income (loss) |
$224 |
|
$163 |
|
$(787) |
|
$1,640 |
|
| Basic and diluted net income (loss) per share |
$0.02 |
|
$0.02 |
|
$(0.08) |
|
$0.17 |
|
| Weighted average shares outstanding |
9,631 |
|
9,836 |
|
9,545 |
|
9,936 |
|
| |
| 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
|
|
|
| (in thousands, except ratios) |
| |
| |
June 30,
|
December 31, |
| |
2001 |
2000 |
2000 |
| | (unaudited)
| (audited) |
| Accounts receivable (a) |
$51,689 | |
$14,509 | |
$5,260 | |
| Inventories |
80,869 | |
114,509 | |
89,404 | |
| Net property and equipment |
114,780 | |
121,517 | |
117,573 | |
| Total assets |
265,922 | |
262,362 | |
224,929 | |
| Current liabilities |
32,363 | |
29,613 | |
32,672 | |
| Total debt (current & long-term) (a) |
107,539 | |
93,984 | |
68,009 | |
| Shareholders' equity |
124,133 | |
136,682 | |
124,920 | |
| Shareholders' equity per share |
12.89 | |
14.10 | |
13.39 | |
| Debt-to-equity ratio (a) |
.87 to 1 | |
.69 to 1 | |
.54 to 1 | |
| |
| | Six Months Ended
|
| | June 30, |
| | 2001 | 2000 |
| | (unaudited) |
| Change in working capital (a) |
$40,304 | |
$5,650 | |
| Capital expenditures, net |
1,792 | |
1,775 | |
| EBITDA |
6,955 | |
12,746 | |
| |
| (a) Increases are attributable to the termination of the Company's accounts receivable securitization program on June 28, 2001, resulting in the repurchase of $42 million of accounts receivable previously sold. |
| |
| Note: Certain 2000 amounts have been reclassified to conform to the 2001 presentation. |
| |
| 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. |
| |
|
|
|
|
|
olysteel.com