Olympic Steel, Inc. reported net income of $4.5 million on net sales of $236.1 million for the fourth quarter and net income of $25.3 million on record net sales of $1.03 billion for the year ended December 31, 2007.
Fourth Quarter Results—Net income of $4.5 million ($0.42 per diluted share) compares to net income of $3.8 million ($0.35 per diluted share) for last year’s fourth quarter. Net sales of $236.1 million represent a 4.4% increase from net sales of $226.1 million for the fourth quarter a year ago. Tons sold, 291,000 represent a 7.1% increase compared to 272,000 in the fourth quarter of 2006.
Full Year Results—Net income of $25.3 million ($2.35 per diluted share) compares to net income of $31.0 million ($2.92 per diluted share) for 2006. Record net sales $1.03 billion reflect a 4.9% increase compared to last year’s net sales of $981 million. Tons sold decreased 1.4% to 1.25 million from 1.27 million in 2006.
Management Comments—“We are excited to report that in 2007 we surpassed the $1 billion threshold in annual sales for the first time in our company’s history,” said Chairman and CEO Michael D. Siegal, commenting on results. “We are pleased with our 2007 accomplishments in a volatile year for the steel market. We were able to gain market share in 2007, maintain better than industry asset turnover and generate strong cash flows to strengthen our balance sheet, achieve our third-most-profitable year in company history, and continue to invest in equipment, facilities and technology—all this, in spite of declining steel industry shipments and prices for most of the year.
“We reported a 2007 shipping rate that was 5.6% better than the service center industry, as reported by the Metals Service Center Institute,” continued Siegel. “We improved our annual inventory turnover rate, and paid down $51.6 million of debt during 2007. We spent $12.5 million in capital expenditures during 2007 and added 54,000 square feet to our Iowa facility, equipped a value-add machining and fabrication operation in Chambersburg, Pa., ordered a stretcher leveler cut-to-length for our Minneapolis coil processing facility that will become operational in the second quarter of 2008, reengineered our North Carolina fabrication operation, and began operating our own fleet of Olympic Steel trucks to better service our customers.”
“We are presently seeing extraordinary increases in steel pricing caused by a lack of inventory in the industrial sectors, rising global steel input costs, freight costs and global demand, as well as a continued weak U.S. dollar. We anticipate these conditions to remain for the foreseeable future,” 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 15 facilities.