Olympic Steel, Inc. announced net income of $13.2 million on net sales of $274.9 million for the first quarter of 2008.
The $13.2 million net income ($1.21 per diluted share) compares to net income of $5.3 million ($0.49 per diluted share) for last year’s first quarter. Net sales of $274.9 million reflect a 6% increase from net sales of $259.4 million for the year-ago first quarter.
Tons sold, 315 thousand, reflect a 1.2% increased from 312 thousand in the first quarter of 2007, better than the Metals Service Center Institute statistics of a 4.8% decline in year-over-year steel shipments for the first quarter of 2008.
Management Comments—“We are pleased to report record first quarter earnings results, while maintaining a strong balance sheet and capital structure, positioning us well for the current market,” stated Chairman and CEO Michael D. Siegal, commenting on the results. “As carbon steel prices and working capital needs are rising to unprecedented levels, we actually reduced outstanding debt by maintaining our strict disciplines over working capital and credit risk management. We enter the second quarter with significant borrowing capacity available under our credit facility, allowing us to fully participate in the high-stakes steel market as liquidity requirements increase dramatically in the second quarter.”
“We are simultaneously investing in near-term elevated working capital needs and future growth initiatives for Olympic Steel,” continued Siegal. “This year, we have capital investment plans of approximately $40 million, which include new satellite processing facilities, like the recently announced expansion in South Carolina, and a new Red Bud stretcher leveler cut-to-length line, expected to become operational in Minneapolis during the second quarter.”
“Our outlook remains favorable, supported by strong global steel demand, a weak U.S. currency, service center inventory at historically low levels, and rapidly rising energy, transportation and steel-making raw material costs. As steel prices continue to escalate and availability of short-term credit tightens through the second quarter, our approach to the market will continue to be guided by our core values of integrity, respect and financial stability. We believe we are appropriately positioned in terms of inventory, value-add processing capabilities, and liquidity to continue performing well through the higher-priced and seasonally stronger second quarter,” concluded 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.