Olympic Steel, Inc reports highest ever Q4 net sales in 2011

CLEVELAND (Scrap Monster): Olympic Steel, Inc., (Nasdaq:ZEUS), a national metals service center, has reported 48.7% growth in net sales in Q4, 2011 at $319.9 mn compared to $215.2 mn recorded in Q4, 2010. The net sales recorded is also the highest ever for fourth quarter, the company said releasing its results for the fourth quarter and the year ended December 31, 2011.

Fourth quarter 2011 net income totaled $0.6 million, or $0.05 per diluted share, compared to a net loss of $1.6 million, or $0.15 per diluted share, in last year's fourth quarter.

Net sales for the year totaled $1.26 billion in 2011, a record annual revenue total, and increased 56.7% from $805 million in 2010. For 2011, net income increased by $22.9 million to $25.0 million, or $2.28 per diluted share, compared to net income of $2.1 million, or $0.20 per diluted share, for 2010.

The 2011 financial results include the results of Chicago Tube and Iron (CTI), from the July 1, 2011 date of acquisition by the Company.

Fourth quarter 2011 results included a $1.0 million write down of an investment in a former joint venture company, resulting from a decrease in the value of its remaining real estate. The asset impairment charge reduced fourth quarter and full year 2011 earnings per share by $0.05. 2011 cost of goods sold included $1.2 million related to a CTI purchase price accounting adjustment to write-up the value of certain CTI inventory to fair value at the July 1, 2011 acquisition date. The inventory adjustment negatively impacted fourth quarter and full year 2011 earnings per share by $0.01 and $0.07, respectively. Annual 2011 results included $0.9 million of non-recurring pretax expenses related to CTI acquisition related fees, which impacted annual earnings per share by $0.05. Additionally, the 2011 consolidated effective income tax rate was 33.4% as a result of changes in unrecognized tax benefits. The income tax benefit had a positive impact of $0.17 on 2011 annual earnings per share.

Commenting on the results, Chairman and Chief Executive Officer Michael D. Siegal stated, "2011 was a year of significant transformation and growth for Olympic Steel. Our 2011 financial results and record sales benefited from our strong overall flat rolled performance and the inclusion of Chicago Tube and Iron, which was acquired on July 1, 2011. CTI was immediately accretive to our earnings, and accelerated our market share growth and product expansion in tubing. We executed exceptionally well on our previously announced strategic investments, with 2011 capital spending of $39.5 million, including new processing equipment, successful information system infrastructure rollouts, and facility startups. Our largest and most exciting project of 2011 was the successful startup of our third temper mill in Gary, Indiana. We began producing quality tempered sheet from the Gary facility in December 2011, with 150,000 incremental tons of capacity now available to us in the Chicago market as the equipment becomes fully operational. We also opened our first physical facility outside of the United States in 2011 in Monterrey, Mexico to better serve our growing customer base there. Other new facilities were acquired in 2011 in Mount Sterling, Kentucky; Kansas City, Missouri; Roseville, Minnesota; and Streetsboro, Ohio to aggressively expand our geographic footprint and enhance our services to customers. Our balance sheet remains strong with our new five-year, $335 million credit facility providing a foundation for continued growth and value creation."

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.