Olympic Steel, Inc. announced net income of $671,000 on net sales of $121.6 million for the third quarter and a net loss of $58.6 million on net sales of $384.9 million for the nine months ended September 30, 2009.
Third Quarter Results — Net income of $671,000 ($.06 per diluted share) compares to net income of $24.2 million ($2.21 per diluted share) for the year-ago third quarter. Net sales of $121.6 million reflect a 63.7% decrease from net sales of $335.2 million for the year-ago third quarter. Tons sold, 181,000, reflect a 32.2% decrease from 268,000 in the third quarter of 2008.
Nine Month Results — Net loss of $58.6 million ($5.39 per diluted share) compares to net income of $66.9 million ($6.13 per diluted share) for last year’s first nine months. Pre-tax results include $81.1 million of lower of cost or market charges to write down the value of inventory as of March 31, 2009 and June 30, 2009.
Net sales totaled $384.9 million, a 60.5% decrease from the $973.6 million for the first nine months of 2008. Tons sold, 527,000, reflect a 43.7% decrease from 937,000 tons soles in 2008.
Management Comments — “We are pleased to return to profitability in the third quarter, and to report an exceptionally strong balance sheet,” said Chairman and CEO Michael D. Siegal, commenting on the results. “Our core discipline of cash flow and balance sheet management allowed us to end the third quarter with only $1.4 million of debt. We have since eliminated debt, and have accumulated a cash balance in October.
“Our inventory is appropriately costed and is again turning at our preferred rate above five times per year,” continued Siegal. “We have avoided any material bad debt losses thus far in 2009, and remain diligent in our credit and collection practices, as liquidity in the supply chain remains constrained. Our continued focus on operating expenses resulted in a 44% decline in costs compared to third quarter of 2008.
“We are benefitting from large OEM customers resourcing to quality suppliers during this economic downturn,” concluded Siegal. “We expect to grow our market share when steel demand recovers by serving our customers from positions of strength.”
Olympic Steel’s Board of Directors approved a regular quarterly cash dividend of $0.02 per share to be paid to shareholders of record as of December 1, 2009, and distributed on December 15, 2009.
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 17 facilities.