Olympic Steel reports record third quarter 2021 results | 2021-11-04 | Press release | Warehouse

2021-11-05 06:05:57 By : Mr. Jacky xiao

Sales and profitability exceed record levels in the second quarter

Additional capital from strategic actions is expected to increase returns in pursuit of higher value-added opportunities

Olympic Steel (Nasdaq: ZEUS), a leading national metal service center, today announced record quarterly financial results for the three months ended September 30, 2021. Net income in the third quarter totaled US$44.5 million, or diluted earnings per share of US$3.87, compared to a net loss of US$1.5 million in the third quarter of 2020, or a diluted loss of US$0.13 per share. The results include LIFO's pre-tax expense of US$7 million (per share impact of US$0.45) in the third quarter of 2021, and LIFO's pre-tax income of US$100,000 in the same period last year. Adjusted EBITDA for the third quarter of 2021 was US$70.5 million, compared to US$4.3 million for the third quarter of 2020.

The company reported that sales in the third quarter of 2021 totaled $668 million, while sales in the third quarter of 2020 were $300 million.

"Our financial performance in the third quarter represents the best quarterly performance in Olympic Steel's history. Sales, net income and EBITDA have greatly exceeded the previous records we set in the second quarter of this year," said CEO Richard T. Marabito .

Marabito added: “We continue to execute our long-term strategy to further diversify our business, provide sustained profitability and increase shareholder value. As part of our efforts, we announced the sale of our Detroit business on September 17. The business is mainly focused on the distribution of carbon steel flat products to domestic automakers and their related suppliers. We quickly redeployed part of the proceeds from the sale on October 1 to acquire stainless steel distributors, manufacturers and final product manufacturers Shaw Stainless Steel Alloys Company. The acquisition of Shaw Stainless Steel is expected to replace the revenue stream of the former Detroit business with a fraction of the investment. We also continue to invest in processing equipment and automation to drive growth, operational efficiency and safety results."

Marabito concluded: "Despite the continued disruption of the supply chain, customer demand and our transportation volume are still strong. In the first three quarters of this year, our total shipments surpassed the industry, especially in our products with higher profit margins.​​ In the category. Thanks to the outstanding efforts of our entire team, successful acquisitions, strong balance sheet and commitment to long-term strategy, we maintained a favorable position in the fourth quarter’s strong performance and continued pursuit of higher profit margin growth. Opportunities ."

The board of directors also approved a regular quarterly cash dividend of US$0.02 per share, which will be paid on December 15, 2021 to shareholders of record on December 1, 2021.

The following table provides a reconciliation of non-GAAP measures to the most directly comparable measures prepared under GAAP.

Reconciliation of diluted net income (loss) per share

Adjusted net income (loss) per diluted share

(Due to rounding, the figure may be insufficient.)

The following table compares the adjusted diluted net income per share with the most directly comparable GAAP financial measures:

Net income (loss) and adjusted EBITDA reconciliation

The following table compares adjusted EBITDA with the most directly comparable GAAP financial measures:

The simulcast of Olympic Steel's 2021 third quarter earnings conference call can be accessed through the investor relations section of the company's website www.olysteel.com. The live simulcast will begin at 10 a.m. Eastern Time on November 5, 2021, and a replay will be available approximately 14 days thereafter.

The company’s policy is not to endorse any analyst’s sales or profit forecasts. The forward-looking statements in this press release are made in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identified by words or phrases such as "may", "will", and "expect". "Should", "intend", "anticipate", "believe", "estimate", "project", "plan", "potential" and "continue", as well as the denial of these terms or similar expressions. Such forward-looking statements are subject to certain risks and uncertainties, which may cause actual results to differ materially from those implied by such statements. Readers are cautioned not to rely too much on these forward-looking statements. Such risks and uncertainties include but are not limited to: the risks of falling metal prices and devaluation of inventories; risks related to the supply chain disruption caused by the imbalance of metal supply and end-user demand related to the new coronavirus or COVID-19, and other factors; Supply disruptions and inflationary pressures, including the availability and cost of transportation, logistics services, and labor; increased customer demand without a corresponding increase in metal supply may lead to an inability to meet customer needs, resulting in a decline in sales and profits; and the COVID-19 pandemic Relevant risks, including but not limited to customer closures, decline in sales and profit levels, slower payment of accounts receivable, and possible increase in uncollectible accounts receivable, falling metal prices, which may result in lower costs or lower net realizable value, inventory adjustments And the impairment of intangible assets and long-term assets, the reduced availability and productivity of our employees, increased operational risks due to remote work arrangements, including the potential impact on internal controls, as well as cyber security risks and increased vulnerabilities, security vulnerabilities, information technology Interruptions and other similar events, the negative impact on our liquidity situation, the inability to obtain our traditional financing sources under the same or reasonably similar conditions that were available before the COVID-19 pandemic, and the increased costs and reduced capacity associated therewith. Access to funds under our asset-based credit instruments, or ABL credit instruments and capital markets; general and global business, economic, financial, and political conditions, including legislation passed by the new government; competitive factors, such as the availability of metals and production levels, and global Pricing, industry transportation and inventory levels, as well as rapid fluctuations in customer demand and metal pricing; supplier integration or addition of additional capacity; customer, supplier and competitor mergers, bankruptcies or insolvency; reduction of ourselves, our suppliers or Production plans, layoffs or shutdowns of customer personnel; the level of U.S. imports of steel and the tariffs and tariffs imposed by the U.S. government on exported steel or other products in accordance with Article 232 of the Trade Expansion Act of 1962 in 2018, U.S. trade policies and their impact on the U.S. Manufacturing; the cyclicality and volatility of the metal industry; whether our efforts to mitigate cybersecurity risks and threats are sufficient, especially for employees working remotely due to the COVID-19 pandemic; fluctuations in the value of the U.S. dollar and the impact on foreign steel The impact of pricing, U.S. exports and foreign imports to the U.S.; the success of our efforts and initiatives to improve working capital turnover and cash flow, and to achieve cost savings; we further diversify our business, achieve sustained profitability, and increase shareholder value Abilities, including but not limited to our ability to successfully redeploy the Detroit business and other proceeds from capital sales; our ability to generate free cash flow and repay debt through operations; our ability to sell our common stock under an equity plan in the market; The adequacy of our existing information technology and business system software, including repetitive and secure processes; quantity, success, and our ability to continue capital investment and strategic growth plans, including acquisitions and the implementation of our business information system; we will maximize The ability of recent acquisitions to successfully integrate into our business and the risks inherent in the acquisition to achieve the expected results, including whether the acquisition will increase in value and within the expected time frame; may adversely affect the successful operation of our processing equipment and operations Events or circumstances; interest rate rise and its impact on our variable rate debt; the impact of union organization activities and the success of union contract renewal; changes in laws or regulations or their interpretation or enforcement methods may affect our financial performance and restrict Our ability to operate business or execute strategies; events or circumstances that may damage or adversely affect the book value of any of our assets; risks and uncertainties related to intangible assets, including impairment charges related to intangible assets with uncertain useful lives; Inventory cost or net realizable value adjustment and the time and result of the lower of last in, first out or last in first out, income or expense; inflation or deflation in the metal industry, as well as product mix and existing inventory levels, which may Will affect our cost of materials sold due to fluctuations in the valuation of LIFO inventory; our ability to pay quarterly cash dividends on a regular basis and the amount and timing of any future dividends; our ability to repurchase common stock and the number and timing of repurchases (if any If it is); unexpected developments that may occur in unexpected events such as litigation, arbitration, and environmental issues, including any development that requires us to increase the cost of such unexpected events.

In addition to the financial information prepared in accordance with GAAP, this document also contains adjusted diluted earnings per share and adjusted EBITDA, which are non-GAAP financial measures. Management’s views on the company’s performance include adjusted earnings per share and adjusted EBITDA. Management uses these non-GAAP financial indicators internally for planning and forecasting and measuring the company’s performance. We believe that these non-GAAP financial measures provide us and investors with useful and meaningful information, because they enhance investors’ understanding of our business’s continued operating performance and facilitate comparisons between past and future periods. These non-GAAP financial measures should be considered as supplements to, but not a substitute for, information prepared under GAAP. In addition, the presentation of these measures may differ from the non-GAAP financial measures used by other companies. The above provides a reconciliation of these non-GAAP measures with the most directly comparable GAAP financial measures.

Founded in 1954, Olympic Steel is a leading metal service center in the United States, focusing on direct sales of processed carbon, coated and stainless steel flat-rolled sheets, steel coils and steel plates, aluminum, tin plate, and metal-intensive brand products. The company's CTI subsidiary is a leading distributor of steel pipes, bars, pipes, valves and fittings, as well as manufacturers of value-added components. Olympic Steel is headquartered in Cleveland, Ohio, and has 41 plants in North America.

For more information, please visit the company's website www.olysteel.com.

Consolidated statement of net income (loss)

(In thousands, except per share data)

(In thousands, excluding tonnage and per ton data. Due to company expenses, figures may not be included in the combined total.)

(In thousands, except per share and ratio data)

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