Olympic Steel Reports Third-Quarter 2024 Results
Company’s diversification strategy continues to drive results in difficult market conditions
Company has the strategic focus and financial flexibility to further invest in organic and acquisitive growth opportunities
Net income for the third quarter totaled
The Company reported sales totaling
“Olympic Steel’s strategies for diversification enabled all three business segments to deliver EBITDA-positive results despite industry-wide pricing pressure,” said
Marabito continued, “During the third quarter, we reduced our debt by approximately
Marabito concluded, “Overall, we believe the success of our acquisitions and our capital investments in key organic growth areas, has created a stronger and more resilient
The Board of Directors approved a regular quarterly cash dividend of
The table that follows provides a reconciliation of non-GAAP measures to the most directly comparable measures prepared in accordance with GAAP.
Reconciliation of Net Income Per Diluted Share to Adjusted Net Income Per Diluted Share (Figures may not foot due to rounding.) The following table reconciles adjusted net income per diluted share to the most directly comparable GAAP financial measure: |
||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
|||||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
||
Net income per diluted share (GAAP) |
$ |
0.23 |
|
$ |
1.06 |
|
$ |
1.64 |
|
$ |
3.21 |
|
||||
Excluding the following items | ||||||||||||||||
LIFO income |
|
(0.12 |
) |
|
(0.13 |
) |
|
(0.16 |
) |
|
(0.19 |
) |
||||
Acquisition Inventory fair market value adjustment |
|
- |
|
|
- |
|
|
- |
|
|
0.13 |
|
||||
Acquisition related expenses |
|
- |
|
|
- |
|
|
- |
|
|
0.16 |
|
||||
Employee retention credit |
|
- |
|
|
(0.25 |
) |
|
- |
|
|
(0.25 |
) |
||||
Adjusted net income per diluted share (non-GAAP) |
$ |
0.11 |
|
$ |
0.68 |
|
$ |
1.48 |
|
$ |
3.06 |
|
||||
Reconciliation of Net Income to Adjusted EBITDA (in thousands) The following table reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure:
|
||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
|||||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
||
Net income (GAAP): |
$ |
2,734 |
|
$ |
12,230 |
|
$ |
19,091 |
|
$ |
37,121 |
|
||||
Excluding the following items | ||||||||||||||||
Other loss, net |
|
26 |
|
|
28 |
|
|
66 |
|
|
67 |
|
||||
Interest and other expense on debt |
|
3,880 |
|
|
3,953 |
|
|
12,283 |
|
|
12,379 |
|
||||
Income tax provision |
|
1,169 |
|
|
4,674 |
|
|
7,417 |
|
|
14,813 |
|
||||
Depreciation and amortization |
|
7,234 |
|
|
6,185 |
|
|
21,795 |
|
|
18,859 |
|
||||
Earnings before interest, taxes, depreciation and | ||||||||||||||||
amortization (EBITDA) |
|
15,043 |
|
|
27,070 |
|
|
60,652 |
|
|
83,239 |
|
||||
LIFO income |
|
(2,000 |
) |
|
(2,000 |
) |
|
(2,600 |
) |
|
(3,000 |
) |
||||
Acquisition Inventory fair market value adjustment |
|
- |
|
|
- |
|
|
- |
|
|
2,079 |
|
||||
Acquisition related expenses |
|
- |
|
|
- |
|
|
- |
|
|
2,556 |
|
||||
Employee retention credit |
|
- |
|
|
(4,000 |
) |
|
- |
|
|
(4,000 |
) |
||||
Adjusted EBITDA (non-GAAP) |
$ |
13,043 |
|
$ |
21,070 |
|
$ |
58,052 |
|
$ |
80,874 |
|
Conference Call and Webcast
A simulcast of Olympic Steel’s 2024 third-quarter earnings conference call can be accessed via the Investor Relations section of the Company’s website at www.olysteel.com. The live simulcast will begin at
Forward-Looking Statements
It is the Company's policy 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. Forward-looking statements are typically identified by words or phrases such as "may," "will," "anticipate," "should," "intend," "expect," "believe," "estimate," "project," "plan," "potential," and "continue," as well as the negative of these terms or similar expressions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those implied by such statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Such risks and uncertainties include, but are not limited to: risks of falling metals prices and inventory devaluation; general and global business, economic, financial and political conditions, including, but not limited to, recessionary conditions, legislation passed under the current administration and the 2024 U.S. presidential election; reduced production schedules, layoffs or work stoppages by our own, our suppliers’ or customers’ personnel; supply disruptions and inflationary pressures, including the availability and rising costs of transportation, energy, logistical services and labor; reduced availability and productivity of our employees, increased operational risks as a result of remote work arrangements, including the potential effects on internal controls, as well as cybersecurity risks and increased vulnerability to security breaches, information technology disruptions and other similar events; supplier consolidation or addition of new capacity; risks associated with the war in
In addition to financial information prepared in accordance with GAAP, this document also contains adjusted earnings per diluted share and adjusted EBITDA, which are non-GAAP financial measures. Management's view of the Company's performance includes adjusted earnings per share and adjusted EBITDA, and management uses these non-GAAP financial measures internally for planning and forecasting purposes and to measure the performance of the Company. We believe these non-GAAP financial measures provide useful and meaningful information to us and investors because they enhance investors' understanding of the continuing operating performance of our business and facilitate the comparison of performance between past and future periods. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. Additionally, the presentation of these measures may be different from non-GAAP financial measures used by other companies. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures is provided above.
About
Founded in 1954,
For additional information, please visit the Company’s website at www.olysteel.com.
Consolidated Statements of Net Income (in thousands, except per-share data) |
||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
|
|
|||||||||||
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||
Net sales |
$ |
469,996 |
$ |
526,411 |
$ |
1,522,888 |
$ |
1,668,755 |
||||
Costs and expenses | ||||||||||||
Cost of materials sold (excludes items shown separately below) |
|
363,144 |
|
414,480 |
|
1,177,229 |
|
1,308,988 |
||||
Warehouse and processing |
|
31,719 |
|
28,954 |
|
97,855 |
|
91,125 |
||||
Administrative and general |
|
28,226 |
|
26,181 |
|
87,545 |
|
91,047 |
||||
Distribution |
|
16,881 |
|
16,342 |
|
51,101 |
|
51,531 |
||||
Selling |
|
10,721 |
|
9,587 |
|
35,458 |
|
30,373 |
||||
Occupancy |
|
4,262 |
|
3,797 |
|
13,048 |
|
12,452 |
||||
Depreciation |
|
5,740 |
|
5,008 |
|
17,585 |
|
15,330 |
||||
Amortization |
|
1,494 |
|
1,177 |
|
4,210 |
|
3,529 |
||||
Total costs and expenses |
|
462,187 |
|
505,526 |
|
1,484,031 |
|
1,604,375 |
||||
Operating income |
|
7,809 |
|
20,885 |
|
38,857 |
|
64,380 |
||||
Other loss, net |
|
26 |
|
28 |
|
66 |
|
67 |
||||
Income before interest and income taxes |
|
7,783 |
|
20,857 |
|
38,791 |
|
64,313 |
||||
Interest and other expense on debt |
|
3,880 |
|
3,953 |
|
12,283 |
|
12,379 |
||||
Income before income taxes |
|
3,903 |
|
16,904 |
|
26,508 |
|
51,934 |
||||
Income tax provision |
|
1,169 |
|
4,674 |
|
7,417 |
|
14,813 |
||||
Net income |
$ |
2,734 |
$ |
12,230 |
$ |
19,091 |
$ |
37,121 |
||||
Earnings per share: | ||||||||||||
Net income per share - basic |
$ |
0.23 |
$ |
1.06 |
$ |
1.64 |
$ |
3.21 |
||||
Weighted average shares outstanding - basic |
|
11,695 |
|
11,586 |
|
11,673 |
|
11,568 |
||||
Net income per share - diluted |
$ |
0.23 |
$ |
1.06 |
$ |
1.64 |
$ |
3.21 |
||||
Weighted average shares outstanding - diluted |
|
11,695 |
|
11,592 |
|
11,673 |
|
11,571 |
Balance Sheets (in thousands) |
||||||||
As of |
As of |
|||||||
Assets | ||||||||
Cash and cash equivalents |
$ |
11,116 |
|
$ |
13,224 |
|
||
Accounts receivable, net |
|
197,592 |
|
|
191,149 |
|
||
Inventories, net (includes LIFO reserves of |
|
399,394 |
|
|
386,535 |
|
||
Prepaid expenses and other |
|
14,306 |
|
|
12,261 |
|
||
Total current assets |
|
622,408 |
|
|
603,169 |
|
||
Property and equipment, at cost |
|
506,631 |
|
|
483,448 |
|
||
Accumulated depreciation |
|
(313,775 |
) |
|
(297,340 |
) |
||
Net property and equipment |
|
192,856 |
|
|
186,108 |
|
||
|
|
52,091 |
|
|
52,091 |
|
||
Intangible assets, net |
|
89,342 |
|
|
92,621 |
|
||
Other long-term assets |
|
19,642 |
|
|
16,466 |
|
||
Right of use asset, net |
|
35,672 |
|
|
34,380 |
|
||
Total assets |
$ |
1,012,011 |
|
$ |
984,835 |
|
||
Liabilities | ||||||||
Accounts payable |
$ |
125,342 |
|
$ |
119,718 |
|
||
Accrued payroll |
|
23,366 |
|
|
30,113 |
|
||
Other accrued liabilities |
|
22,569 |
|
|
22,593 |
|
||
Current portion of lease liabilities |
|
5,671 |
|
|
7,813 |
|
||
Total current liabilities |
|
176,948 |
|
|
180,237 |
|
||
Credit facility revolver |
|
197,276 |
|
|
190,198 |
|
||
Other long-term liabilities |
|
24,810 |
|
|
20,151 |
|
||
Deferred income taxes |
|
11,571 |
|
|
11,510 |
|
||
Lease liabilities |
|
30,796 |
|
|
27,261 |
|
||
Total liabilities |
|
441,401 |
|
|
429,357 |
|
||
Shareholders' Equity | ||||||||
Preferred stock |
|
- |
|
|
- |
|
||
Common stock |
|
138,040 |
|
|
136,541 |
|
||
Accumulated other comprehensive income (loss) |
|
(408 |
) |
|
41 |
|
||
Retained earnings |
|
432,978 |
|
|
418,896 |
|
||
Total shareholders' equity |
|
570,610 |
|
|
555,478 |
|
||
Total liabilities and shareholders' equity |
$ |
1,012,011 |
|
$ |
984,835 |
|
Segment Financial Information (In thousands, except tonnage and per-ton data. Figures may not foot to consolidated totals due to Corporate expenses.) |
||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||
Carbon Flat Products | Specialty Metals Flat Products | Tubular and Pipe Products | ||||||||||||||||||
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
||||||
Tons sold 1 |
|
204,211 |
|
207,145 |
|
29,738 |
|
27,936 |
|
N/A |
|
|
N/A |
|
||||||
Net sales |
$ |
264,849 |
$ |
304,478 |
$ |
125,693 |
$ |
132,763 |
$ |
79,454 |
|
$ |
89,170 |
|
||||||
Average selling price per ton |
|
1,297 |
|
1,470 |
|
4,227 |
|
4,752 |
|
N/A |
|
|
N/A |
|
||||||
Cost of materials sold |
|
208,093 |
|
242,532 |
|
103,450 |
|
111,622 |
|
51,601 |
|
|
60,326 |
|
||||||
Gross profit |
|
56,756 |
|
61,946 |
|
22,243 |
|
21,141 |
|
27,853 |
|
|
28,844 |
|
||||||
Operating expenses |
|
56,322 |
|
51,997 |
|
17,307 |
|
16,473 |
|
21,377 |
|
|
18,811 |
|
||||||
Operating income |
|
434 |
|
9,949 |
|
4,936 |
|
4,668 |
|
6,476 |
|
|
10,033 |
|
||||||
Depreciation and amortization |
|
4,028 |
|
3,568 |
|
1,005 |
|
871 |
|
2,184 |
|
|
1,729 |
|
||||||
LIFO income |
|
- |
|
- |
|
- |
|
- |
|
(2,000 |
) |
|
(2,000 |
) |
||||||
Nine Months Ended |
||||||||||||||||||||
Carbon Flat Products | Specialty Metals Flat Products | Tubular and Pipe Products | ||||||||||||||||||
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
||||||
Tons sold 1 |
|
652,976 |
|
651,758 |
|
91,336 |
|
89,163 |
|
N/A |
|
|
N/A |
|
||||||
Net sales |
$ |
873,579 |
$ |
940,925 |
$ |
386,100 |
$ |
446,327 |
$ |
263,209 |
|
$ |
281,503 |
|
||||||
Average selling price per ton |
|
1,338 |
|
1,444 |
|
4,227 |
|
5,006 |
|
N/A |
|
|
N/A |
|
||||||
Cost of materials sold |
|
687,704 |
|
744,040 |
|
315,984 |
|
371,935 |
|
173,541 |
|
|
193,013 |
|
||||||
Gross profit |
|
185,875 |
|
196,885 |
|
70,116 |
|
74,392 |
|
89,668 |
|
|
88,490 |
|
||||||
Operating expenses |
|
171,423 |
|
166,295 |
|
53,400 |
|
53,786 |
|
69,068 |
|
|
59,345 |
|
||||||
Operating income |
|
14,452 |
|
30,590 |
|
16,716 |
|
20,606 |
|
20,600 |
|
|
29,145 |
|
||||||
Depreciation and amortization |
|
12,221 |
|
10,891 |
|
2,922 |
|
2,878 |
|
6,600 |
|
|
5,038 |
|
||||||
LIFO income |
|
- |
|
- |
|
- |
|
- |
|
(2,600 |
) |
|
(3,000 |
) |
||||||
1 The Company does not report tons sold for |
||||||||||||||||||||
As of 2024 |
As of 2023 |
|||||||||||||||||||
Assets | ||||||||||||||||||||
Flat-products |
$ |
666,508 |
$ |
649,744 |
||||||||||||||||
Tubular and pipe products |
|
344,289 |
|
333,677 |
||||||||||||||||
Corporate |
|
1,214 |
|
1,414 |
||||||||||||||||
Total assets |
$ |
1,012,011 |
$ |
984,835 |
Other Information (in thousands, except per-share and ratio data) |
||||||
|
As of
|
As of
|
||||
Shareholders' equity per share |
$ |
51.26 |
$ |
49.90 |
||
Debt to equity ratio | 0.35 to 1 | 0.34 to 1 | ||||
Nine Months Ended |
||||||
2024 |
2023 |
|||||
Net cash from operating activities |
$ |
19,114 |
$ |
120,999 |
||
Cash dividends per share |
$ |
0.45 |
$ |
0.38 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030257177/en/
Chief Financial Officer
(216) 672-0522
ir@olysteel.com
Source: