CLEVELAND, Feb. 21, 2013 (GLOBE NEWSWIRE) -- Olympic Steel, Inc. (Nasdaq:ZEUS), a national metals service center, today announced financial results for the fourth quarter and full year ended Dec. 31, 2012.
Net sales for the 2012 fourth quarter totaled $291.7 million, an 8.8% decrease from the fourth-quarter record of $319.9 million reported in last year's comparable period. For the full year, net sales reached a record $1.4 billion, a 9.7% increase from the Company's previous record of $1.3 billion achieved in 2011.
As a result of its goodwill impairment test conducted in the fourth quarter of 2012, the Company has determined that approximately $6.6 million of goodwill related to its flat products Southern region was impaired. The goodwill impairment charge has been recorded as a non-cash expense for periods ended Dec. 31, 2012. Inclusive of the charge, the Company reported a fourth quarter net loss of $10.1 million, or $0.92 per diluted share, compared with net income of $0.6 million, or $0.05 per diluted share, in the fourth quarter of 2011.
For the full year, including the aforementioned non-cash goodwill charge, net income totaled $2.3 million, or $0.21 per diluted share, compared with net income of $25.0 million, or $2.28 per diluted share, in 2011.
Chairman and Chief Executive Officer Michael D. Siegal commented, "During 2012, we made significant progress on a variety of growth and development initiatives. We successfully ramped up several new facilities and completed major capital projects to enhance future profitability. However, the year ended with a disappointing quarter as steel demand and pricing declined in tandem with mounting political and fiscal uncertainty—masking much of our operational headway.
"Entering 2013, we are encouraged by recovering demand for steel products," Siegal continued. "Now, the vast majority of cash outlays associated with the multi-year capital expansion projects are behind us and our focus is on harnessing their potential to increase earnings and cash flow."
Conference Call and Webcast
A simulcast of Olympic Steel's 2012 fourth-quarter and full-year earnings conference call may be accessed via the Investor Relations section of the Company's website at www.olysteel.com. The simulcast will begin at 11:00 a.m. Eastern Time today and a replay of the call will be available for 14 days thereafter.
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," or "continue," as well as the negative of these terms or other 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: general and global business, economic, financial and political conditions, including the ongoing effects of the global economic recovery; access to capital and global credit markets; competitive factors such as the availability and pricing of metal, industry shipping and inventory levels, and rapid fluctuations in customer demand and metal pricing; the cyclicality and volatility within the metals industry; the ability of customers (especially those that may be highly leveraged and those with inadequate liquidity) to maintain their credit availability; the success of our new facility startups in Gary, Ind.; Mount Sterling, Ky.; Monterrey, Mexico; Roseville, Minn.; Kansas City, Mo.; and Streetsboro, Ohio; the ability to successfully integrate the newly leased locations or recently acquired businesses into our operations and achieve expected results; equipment installation delays or malfunctions, including the new Streetsboro, Ohio, facility startup; the ability to comply with the terms of our asset-based credit facility and to make the required term-loan payments; the ability of our customers to honor their agreements related to derivative instruments, including the outcome of the MF Global UK Limited administration process; customer, supplier, and competitor consolidation, bankruptcy or insolvency; reduced production schedules, layoffs or work stoppages by our own, our suppliers' or our customers' personnel; the success of union contract renewals; the availability and costs of transportation and logistical services; the amounts, successes and our ability to continue our capital investments and strategic growth initiatives and our business information system implementations; the successes of our strategic efforts and initiatives to increase sales volumes, maintain or improve working capital turnover and free cash flows, improve inventory turnover and improve our customer service; the timing and outcome of inventory lower of cost or market adjustments; the adequacy of our existing information technology and business system software; our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; our ability to generate free cash flow through operations and decreased future capital expenditures, reduce inventory and repay debt within anticipated timeframes; events or circumstances that could impair or adversely impact the carrying value of any of our assets; risks and uncertainties associated with intangible assets, including potential impairment charges; the recently enacted federal healthcare legislation's impact on the healthcare benefits required to be provided by us and the impact of such legislation on our compensation and administrative costs; and unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters, including any developments that would require an increase in our costs for such contingencies. Further information on these and other risks and uncertainties is provided under Item 1A "Risk Factors" of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which disclosure is incorporated herein by reference, and elsewhere in reports that the Company files or furnishes with the SEC. This release speaks only as of its date and the Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law. You are advised, however, to consult any further disclosures the Company makes on related subjects in its reports filed with or furnished to the SEC.
About Olympic Steel
Founded in 1954, Olympic Steel is a leading U.S. metals 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 and aluminum products. The Company's CTI subsidiary is a leading distributor of steel tubing, bar, pipe, valves and fittings, and fabricates pressure parts for the electric utility industry. Headquartered in Cleveland, Ohio, Olympic Steel currently operates from 33 facilities in North America.
For additional information, please visit the Company's website at http://www.olysteel.com or http://www.b2i.us/profiles/investor/ContactUs.asp?BzID=2195.
The Olympic Steel, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3582
|Olympic Steel, Inc.|
|Results of Operations|
|(in thousands, except per-share data)|
|Three Months Ended Dec. 31,||Twelve Months Ended Dec. 31,|
|Net sales||$ 291,724||$ 319,944||$ 1,383,701||$ 1,261,872|
|Costs and expenses|
|Cost of materials sold (exclusive of items shown below)||234,793||80.5%||257,824||80.6%||1,113,852||80.5%||1,008,462||79.9%|
|Warehouse and processing||20,497||7.0%||20,997||6.6%||84,389||6.1%||72,429||5.7%|
|Administrative and general||15,606||5.3%||15,817||4.9%||68,253||4.9%||59,156||4.7%|
|Total costs and expenses||299,906||102.8%||316,003||98.8%||1,365,252||98.7%||1,217,404||96.5%|
|Operating (loss) income||(8,182)||(2.8%)||3,941||1.2%||18,449||1.3%||44,468||3.5%|
|Asset impairment charge of JV||36||0.0%||953||0.3%||36||0.0%||953||0.1%|
|Other (income) expense, net||7||0.0%||(14)||(0.0%)||(83)||(0.0%)||77||0.0%|
|(Loss) income before financing cost and income taxes||(8,225)||(2.8%)||3,002||0.9%||18,496||1.3%||43,438||3.4%|
|Interest and other expense on debt||1,946||0.7%||2,085||0.7%||8,357||0.6%||5,953||0.5%|
|(Loss) income before income taxes||(10,171)||(3.5%)||917||0.3%||10,139||0.7%||37,485||3.0%|
|Income tax (benefit) expense||(53)||0.5%||352||38.4%||7,862||77.5%||12,515||33.4%|
|Net (loss) income||$ (10,118)||$ 565||$ 2,277||$ 24,970|
|Net loss on interest rate hedge, net of tax||(11)||--||(579)||--|
|Total comprehensive (loss) income||$ (10,129)||$ 565||$ 1,698||$ 24,970|
|Earnings per share:|
|Net (loss) income per share - basic||$ (0.92)||$ 0.05||$ 0.21||$ 2.28|
|Weighted average shares outstanding - basic||10,993||10,941||10,989||10,937|
|Net (loss) income per share - diluted||$ (0.92)||$ 0.05||$ 0.21||$ 2.28|
|Weighted average shares outstanding - diluted||10,993||10,953||10,995||10,951|
|Olympic Steel, Inc.|
|Consolidated Balance Sheets|
|At Dec. 31,|
|Cash and cash equivalents||$7,782||$7,403|
|Accounts receivable, net||112,841||122,579|
|Prepaid expenses and other||11,731||13,112|
|Total current assets||422,377||420,859|
|Property and equipment, at cost||347,935||329,116|
|Net property and equipment||196,327||193,413|
|Intangible assets, net||35,424||36,313|
|Other long-term assets||11,079||9,660|
|Current portion of long-term debt||$10,942||$9,662|
|Other accrued liabilities||14,984||13,875|
|Total current liabilities||138,102||139,575|
|Credit facility revolver||177,575||170,405|
|Other long-term liabilities||11,410||9,580|
|Deferred income taxes||35,856||37,214|
|Accumulated other comprehensive loss||(579)||--|
|Total shareholders' equity||289,857||286,576|
|Total liabilities and shareholders' equity||$705,994||$707,499|
|Olympic Steel, Inc.|
|Segment Financial Information*|
|Three Months Ended||Twelve Months Ended|
|Dec. 31,||Dec. 31,|
|Flat products||$ 234,472||$ 263,190||$ 1,138,063||$ 1,143,708|
|Tubular and pipe products||57,252||56,754||245,638||118,164|
|Total net sales||$ 291,724||$ 319,944||$ 1,383,701||$ 1,261,872|
|Depreciation and amortization|
|Flat products||$ 4,274||$ 3,540||$ 16,065||$ 13,800|
|Tubular and pipe products||1,283||871||4,795||2,246|
|Total depreciation and amortization||$ 5,557||$ 4,411||$ 20,860||$ 16,046|
|Operating (loss) income|
|Flat products||$ (11,297)||$ 288||$ 452||$ 37,262|
|Tubular and pipe products||3,115||3,653||17,997||7,206|
|Total operating (loss) income||$ (8,182)||$ 3,941||$ 18,449||$ 44,468|
|Asset impairment charge of JV||36||953||36||953|
|Other (income) expense, net||7||(14)||(83)||77|
|(Loss) income before financing cost and income taxes||$ (8,225)||$ 3,002||$ 18,496||$ 43,438|
|Interest and other expense on debt||1,946||2,085||8,357||5,953|
|(Loss) income before income taxes||$ (10,171)||$ 917||$ 10,139||$ 37,485|
|Flat products||$ 2,291||$ 14,415||$ 17,004||$ 38,849|
|Tubular and pipe products||795||454||6,369||638|
|Total capital expenditures||$ 3,086||$ 14,869||$ 23,373||$ 39,487|
|At Dec. 31,|
|Flat products||$ 500||$ 7,083|
|Tubular and pipe products||40,287||40,171|
|Total goodwill||$ 40,787||$ 47,254|
|Flat products||$ 480,487||$ 494,179|
|Tubular and pipe products||225,507||213,320|
|Total assets||$ 705,994||$ 707,499|
* The tubular and pipe products segment is a result of the July 1, 2011, acquisition of Chicago Tube & Iron. As a result, the data for the 12 months ended Dec. 31, 2011, only includes six months of tubular and pipe products segment data.
|At Dec. 31,|
|Shareholders' equity per share||$ 26.54||$ 26.28|
|Debt-to-equity ratio||0.83 to 1||0.85 to 1|
|Twelve Months Ended|
|Capital expenditures||$ 23,373||$ 39,487|
|Cash dividends per share||$ 0.08||$ 0.08|
CONTACT: IR Contact: Matthew J. Dennis, CFA Olympic Steel Investor Relations (216) 672-0552
Source:Olympic Steel, Inc.