Olympic Steel, Inc. reported net income of $9.4 million on net sales of $277.4 million for the second quarter, and net income of $14.7 million on net sales of $536.8 million for the first six months of 2007.
Second Quarter Results— Net income of $9.4 million ($0.88 per diluted share) compares to net income of $8.4 million ($0.79 per diluted share) for last year’s second quarter. Net sales, $277.4 million, reflect an 8.3% increase over net sales of $256.2 million for the second quarter a year ago. Tons sold decreased 1.9% to 336 thousand from 343 thousand in the second quarter of 2006.
Olympic Steel’s Board of Directors approved a regular quarterly cash dividend of $.04 per share to be paid to shareholders of record as of September 3, 2007, and distributed on September 17, 2007. This represents an increase of $.01 per share from the previous regular quarterly dividends paid by the Company.
Six-Month Results—Net income of $14.7 million ($1.37 per diluted share) compares to net income of $16.4 million ($1.54 per diluted share) for last year’s first half. Net sales of $536.8 million reflect an 8.4% increase compared to last year’s first half net sales of $495.0 million. Tons sold decreased 4.9% to 648 thousand from 681 thousand in the first half of 2006—better than the Metals Service Center Institute statistics of a 8.7% decline in year-over-year flat rolled shipments for the first half of 2007.
Management Comments—“We are pleased to report improved sales and earnings performance over both the first quarter of 2007 and the second quarter of 2006,” commented Chairman and CEO Michael D. Siegal. “Aside from the slowness in domestic automotive steel consumption and in sales to other service centers, where we experienced our entire decline in 2007 volume, we remain optimistic about the steel industry and the opportunities for Olympic Steel to create additional value for our shareholders during the remainder of the year.
“Carbon imports remain low, and service center inventories were reduced for the eighth consecutive month in June 2007, leading to a potentially improving sales and earnings environment when demand is restored from the current seasonal summer slowdown. With the strength of our balance sheet and our 0.25 to 1 debt-to-equity ratio, we are increasing investments in new equipment, facilities and information technology.
“In the first half of 2007, we have spent $5.5 million on capital projects in process, including a new stretcher leveler for our Minneapolis Coil facility, an expansion to our Iowa facility, the implementation of a new information system, and the purchase of several new laser, plasma and machining centers to support our growth in value-add processing and gross margin expansion,” concluded Mr. 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.