Olympic Steel, Inc. reported a net loss of $2.6 million on net sales of $138.5 million for the fourth quarter and a net loss of $61.2 million on net sales of $523.4 million for the year ended December 31, 2009.
Fourth Quarter Results — The $2.6 million ($.24 per diluted share) net loss compares to net income of $776,000 ($0.07 per diluted share) for last year’s fourth quarter.
Net sales of $138.5 million reflect a 45.4% decrease from net sales of $253.6 million for the year-ago fourth quarter. Tons sold, 194,000, reflect a 15.1% decrease compared to 229,000 in the fourth quarter of 2008.
Full Year Results — The $61.2 million ($5.62 per diluted share) net loss compares to net income of $67.7 million ($6.21 per diluted share) for 2008.
Net sales for the year ended December 31, 2009 totaled $523.4 million, a 57.4% decrease from $1.23 billion for 2008. Tons sold in 2009 decreased 38.1% to 721 thousand from 1.17 million in 2008.
Results include $81.1 million of pre-tax lower of cost or market charges to write down the value of inventory as of March 31, 2009 and June 30, 2009.
Management Comments — “We are pleased with the progress we made in a very challenging 2009. We enter 2010 from a position of strength,” stated Chairman and CEO Michael D. Siegal, commenting on the results. “We have an exceptionally strong balance sheet, as our core discipline of cash flow and working capital management allowed us to repay all of our bank debt in 2009. Our inventory is once again turning at our preferred rate of five times per year. We avoided any material bad debt losses in 2009, and remain diligent in our credit and collection practices. Our continued focus on operating expenses resulted in a 37% decline in 2009 costs compared to 2008.
“We are benefitting from large OEM customers awarding business to financially strong, quality suppliers during this economic downturn,” continued Siegel. “Our fourth quarter sales volume increased over third quarter, and we expect this trend to continue in the first quarter of 2010. Sales and margins are expected to improve, as steel prices have continued to increase since late fourth quarter of 2009.
“We expect to profitably grow our market share in 2010 by serving our customers from a position of strength,” Siegal concluded.
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. Headquartered in Cleveland, Ohio, the company operates 16 facilities.