Olympic Steel Inc., a national steel service center headquartered in Cleveland, has announced record sales and earnings results for the fourth quarter and the year ended Dec. 31, 2004.
Net sales for the fourth quarter of 2004 increased 87.1 percent to $240.2 million from $128.4 million in the fourth quarter in 2003. Tons sold decreased 8.8 percent to 303,000 from 332,000 in the fourth quarter of 2003. Fourth quarter 2004 net income totaled $12.2 million, or $1.17 per diluted share, compared to a net loss of $2.1 million, or 22 cents per diluted share for 2003's fourth quarter. Fourth quarter results were impacted by 3 cents per share for an increase in the Olympic's bad debt reserve for a Tier 1 automotive supplier's bankruptcy filing in early February 2005.
Annual 2004 net sales increased 89.2 percent to $894.2 million from $472.5 million in the prior year. Tons sold increased 14.7 percent to 1.36 million from 1.18 million in 2003. Net income for 2004 was $60.1 million, or $5.88 per diluted share, compared to a net loss of $3.3 million, or 34 cents per diluted share in 2003.
"We are pleased to report record net sales and earnings," Michael D. Siegal, Olympic chairman and CEO, says. "Our tons sold in the fourth quarter were lower, particularly to the service center sector, as a result of higher inventories in that spot market sector. We expect this inventory overhang to diminish during the first quarter of 2005, as imports are decreasing and end use consumers of steel have remained extremely busy."
Siegal says the company is also pleased that its balance sheet and cash management efforts helped Olympic to reduce its debt during 2004, while increasing working capital by $78 million. "In addition, we are highly confident that the extraordinary effort by many will have Olympic Steel in full 404 Sarbanes-Oxley compliance" he says.
Seigel predicts a favorable outlook for Olympic in 2005 in light of continuing demand, high raw material and energy costs and a weak U.S. dollar. "We are optimistic about our ability to meet our customers' anticipated increased needs for steel and value added services," he says. "We will install two new laser-processing machines in Cleveland during the first quarter of 2005 and two others in our Central Region later this year."
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. The company operates 12 facilities and participates in two joint ventures.