Olympic Steel Reports Fourth-Quarter 2024 Results

Rhea-AI Summary

Olympic Steel (NASDAQ: ZEUS) reported Q4 2024 results with net income of $3.9 million ($0.33 per diluted share), down from $7.4 million ($0.64 per diluted share) in Q4 2023. Q4 2024 sales decreased to $419 million from $489 million year-over-year, while Adjusted EBITDA was $14.5 million, showing sequential improvement from Q3 2024 but lower than Q4 2023's $16.7 million.

For full-year 2024, net income was $23.0 million ($1.97 per diluted share), compared to $44.5 million ($3.85 per diluted share) in 2023. Annual sales declined to $1.9 billion from $2.2 billion in 2023. Despite challenging market conditions, all three segments maintained positive EBITDA throughout 2024. The company completed the acquisition of Metal Works and increased its quarterly dividend by 7% to $0.16 per share.

Positive

• Sequential improvement in Q4 2024 profitability from Q3 2024
• All segments achieved positive EBITDA in every quarter of 2024
• Shipping volumes maintained within 1% of 2023 levels despite market challenges
• Quarterly dividend increased by 7% to $0.16 per share
• Successful completion of Metal Works acquisition

Negative

• Q4 2024 net income declined 47% YoY to $3.9M from $7.4M
• Q4 2024 sales decreased 14% YoY to $419M from $489M
• Full-year 2024 net income dropped 48% to $23.0M from $44.5M
• Annual sales declined 14% to $1.9B from $2.2B in 2023
• Adjusted EBITDA for 2024 decreased 26% to $72.5M from $97.6M

Insights

Financial Analyst

Olympic Steel's Q4 2024 results reveal a company successfully navigating industry headwinds through strategic diversification and operational discipline. While net income declined to $3.9 million ($0.33 per share) from $7.4 million YoY, several key metrics demonstrate underlying strength:

The company's ability to maintain shipping volumes within 1% of 2023 levels, despite industry-wide demand decreases, indicates significant market share gains and operational effectiveness. This achievement, coupled with positive EBITDA across all segments throughout 2024, validates the success of their diversification strategy.

The 7% dividend increase, marking the fourth raise since 2022, signals management's confidence in sustainable cash flow generation. This is particularly noteworthy given the challenging market conditions and represents a cumulative increase from $0.02 to $0.16 per share since 2022.

Strategic investments in automation and the Metal Works acquisition reflect a forward-thinking approach to value creation. The automation initiatives should drive operational efficiencies through enhanced throughput and productivity, while the Metal Works acquisition expands the company's presence in higher-margin manufactured products.

The sequential improvement in Q4 profitability, despite industry pressures, demonstrates the effectiveness of Olympic Steel's operational discipline and cost management. Their focus on strategic capital allocation, maintaining market share, and expanding into higher-value products positions them well for potential market recovery.

All three segments deliver EBITDA-positive results every quarter of 2024 despite challenging market conditions

Fourth quarter 2024 Adjusted EBITDA was sequentially higher than third quarter 2024

Company continues to execute on diversification strategy, completing eighth acquisition in the past seven years

Shareholders rewarded with a quarterly dividend increase of 7% from $0.15 to $0.16 per share

CLEVELAND--(BUSINESS WIRE)-- Olympic Steel, Inc. (Nasdaq: ZEUS), a leading national metals service center, today announced results for the three and 12 months ended December 31, 2024.

Fourth-Quarter Results

Net income for the fourth quarter totaled $3.9 million, or $0.33 per diluted share, compared with net income of $7.4 million, or $0.64 per diluted share, in the fourth quarter of 2023. The results include $3.1 million of LIFO pre-tax income in the fourth quarter of 2024, compared with $5.3 million of LIFO pre-tax income in the fourth quarter of 2023. Adjusted EBITDA for the fourth quarter of 2024 was $14.5 million, sequentially higher from the third quarter of 2024, compared with $16.7 million in the fourth quarter of 2023. Sales for the fourth quarter of 2024 totaled $419 million, compared with $489 million in the fourth quarter of 2023.

Full-Year Results

Net income for 2024 totaled $23.0 million, or $1.97 per diluted share, compared with net income of $44.5 million, or $3.85 per diluted share, in 2023. The results included $5.7 million of LIFO pre-tax income in 2024, compared with $8.3 million of LIFO pre-tax income in 2023. Adjusted EBITDA for 2024 was $72.5 million, compared with $97.6 million in 2023. Sales for 2024 totaled $1.9 billion compared with $2.2 billion in 2023.

“Olympic Steel delivered a solid finish to the year with a sequential improvement in profitability in the fourth quarter,” said Richard T. Marabito, Chief Executive Officer. “In a year that was challenging for the metals industry, with demand and pricing both decreasing, we delivered on our strategy to be profitable in all market conditions. We successfully grew market share across our portfolio and outperformed industry shipments, with total annual shipping volumes within 1% of our 2023 levels. Importantly, each of our segments achieved positive EBITDA in every quarter of 2024 – a testament to the success of our diversification strategy, our commitment to operational discipline and the resilience of our team.”

Marabito added, “We continue to make the right investments in our business while closely managing our operating expenses. We made strategic capital investments during 2024, particularly in automation projects, which enable us to enhance throughput, safety and productivity. In addition, during the fourth quarter, we completed the acquisition of Metal Works, a leading metal canopy manufacturer. Metal Works is off to a strong start under Olympic Steel ownership, which further validates our strategy for growth in manufactured metal products.”

Marabito concluded, “As we continue to monitor the macro factors impacting our industry, we are confident in our business, our people and our strategy for sustaining profitability and driving growth. We remain well-positioned to continue investing in organic growth opportunities as well as additional acquisitions that enhance our higher-value product offerings and further support our diversification strategy.”

The Company’s Board of Directors approved a regular quarterly cash dividend of $0.16 per share, which is an increase from the Company’s last quarterly dividend of $0.15 per share. This marks the fourth increase since 2022, cumulatively raising the quarterly dividend from $0.02 per share to $0.16 per share. The dividend is payable on March 17, 2025, to shareholders of record as of March 3, 2025. The Company has paid a regular quarterly dividend since March 2006.

The table that follows provides a reconciliation of non-GAAP measures to the most directly comparable measures prepared in accordance with GAAP.

Olympic Steel, Inc. Reconciliation of Net Income Per Diluted Share to Adjusted Net Income Per Diluted Share (Figures may not foot due to rounding.) The following table reconciles adjusted net income per diluted share to the most directly comparable GAAP financial measure:
		Three Months Ended								Twelve Months Ended
		December 31								December 31
		2024				2023				2024				2023
Net income per diluted share (GAAP)		$	0.33			$	0.64			$	1.97			$	3.85
Excluding the following items
LIFO income			(0.22	)			(0.35	)			(0.36	)			(0.52	)
Acquisition Inventory fair market value adjustment			-				0.01				-				0.14
Acquisition related expenses			0.02				0.06				0.01				0.22
Employee retention credit			-				-				-				(0.25	)
Adjusted net income per diluted share (non-GAAP)		$	0.13			$	0.36			$	1.62			$	3.44

Reconciliation of Net Income to Adjusted EBITDA (in thousands) The following table reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure:
		Three Months Ended								Twelve Months Ended
		December 31								December 31
		2024				2023				2024				2023
Net income (GAAP):		$	3,889			$	7,408			$	22,980			$	44,529
Excluding the following items
Other loss, net			27				11				93				78
Interest and other expense on debt			4,178				3,627				16,461				16,006
Income tax provision			908				2,245				8,325				17,058
Depreciation and amortization			8,335				7,584				30,130				26,443
Earnings before interest, taxes, depreciation and amortization (EBITDA)			17,337				20,875				77,989				104,114
LIFO income			(3,102	)			(5,258	)			(5,702	)			(8,258	)
Acquisition Inventory fair market value adjustment			-				134				-				2,212
Acquisition related expenses			218				947				218				3,503
Employee retention credit			-				-				-				(4,000	)
Adjusted EBITDA (non-GAAP)		$	14,453			$	16,698			$	72,505			$	97,571

Conference Call and Webcast

A simulcast of Olympic Steel’s 2024 fourth-quarter earnings conference call can be accessed via the Investor Relations section of the Company’s website at www.olysteel.com. The live simulcast will begin at 10 a.m. ET on February 21, 2025, and a replay will be available for approximately 14 days thereafter.

Forward-Looking Statements

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,” and “continue,” as well as the negative of these terms or 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: supply disruptions and inflationary pressures, including the availability and rising costs of labor and energy; risks associated with shortages of skilled labor, increased labor costs and our ability to attract and retain qualified personnel; risks of volatile metals prices and inventory devaluation; rising interest rates and their impacts on our variable interest rate debt; supplier consolidation or addition of new capacity; the levels of imported steel in the United States, imposed tariffs and duties on imported or exported steel or other products, U.S. trade policy and its impact on the U.S. manufacturing industry; risks associated with economic sanctions, and current global conflicts, or additional war, military conflict, or hostilities could adversely affect global metals supply and pricing; general and global business, economic, financial and political conditions, including, but not limited to, recessionary conditions and legislation passed under the current administration; reduced production schedules, layoffs or work stoppages by our own, our suppliers’ or customers’ personnel; our ability to successfully integrate recent acquisitions, including CTB, Metal-Fab and Metal Works, into our business and risks inherent with the acquisitions in the achievement of expected results, including whether the acquisition will be accretive and within the expected timeframe; the adequacy of our existing information technology and business system software, including duplication and security processes; the inflation or deflation existing within the metals industry, as well as product mix and inventory levels on hand, which can impact our cost of materials sold as a result of the fluctuations in the last-in, first-out, or LIFO, inventory valuation; competitive factors such as the availability, and global pricing of metals and production levels, industry shipping and inventory levels and rapid fluctuations in customer demand and metals pricing; risks associated with the infectious disease outbreaks, including, but not limited to customer closures, reduced sales and profit levels, slower payment of accounts receivable and potential increases in uncollectible accounts receivable, falling metals prices that could lead to lower of cost or net realizable value inventory adjustments and the impairment of intangible and long-lived assets, negative impacts on our liquidity position, inability to access our traditional financing sources and increased costs associated with and less ability to access funds under our asset-based credit facility, or ABL Credit Facility, and the capital markets; increased customer demand without corresponding increase in metal supply could lead to an inability to meet customer demand and result in lower sales and profits; cyclicality and volatility within the metals industry; customer, supplier and competitor consolidation, bankruptcy or insolvency; the timing and outcomes of inventory lower of cost or net realizable value adjustments and LIFO income or expense; fluctuations in the value of the U.S. dollar and the related impact on foreign steel pricing, U.S. exports, and foreign imports to the United States; reduced availability and productivity of our employees, increased operational risks as a result of remote work arrangements, including the potential effects on internal controls, as well as cybersecurity risks and increased vulnerability to security breaches, information technology disruptions and other similar events; the successes of our efforts and initiatives to improve working capital turnover and cash flows, and achieve cost savings; risks and uncertainties associated with intangible assets, including impairment charges related to indefinite lived intangible assets; our ability to generate free cash flow through operations and repay debt; the impacts of union organizing activities and the success of union contract renewals; the amounts, successes and our ability to continue our capital investments and strategic growth initiatives, including acquisitions and our business information system implementations; events or circumstances that could adversely impact the successful operation of our processing equipment and operations; changes in laws or regulations or the manner of their interpretation or enforcement could impact our financial performance and restrict our ability to operate our business or execute our strategies; events or circumstances that could impair or adversely impact the carrying value of any of our assets; our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; our ability to repurchase shares of our common stock and the amounts and timing of repurchases, if any; our ability to sell shares of our common stock under the at-the-market equity program; and unanticipated developments that could occur with respect to contingencies such as litigation, arbitration and environmental matters, including any developments that would require any increase in our costs for such contingencies.

In addition to financial information prepared in accordance with GAAP, this document also contains adjusted earnings per diluted share and adjusted EBITDA, which are non-GAAP financial measures. Management’s view of the Company’s performance includes adjusted earnings per share and adjusted EBITDA, and management uses these non-GAAP financial measures internally for planning and forecasting purposes and to measure the performance of the Company. We believe these non-GAAP financial measures provide useful and meaningful information to us and investors because they enhance investors’ understanding of the continuing operating performance of our business and facilitate the comparison of performance between past and future periods. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. Additionally, the presentation of these measures may be different from non-GAAP financial measures used by other companies. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures is provided above.

About Olympic Steel

Founded in 1954, Olympic Steel (NASDAQ: ZEUS) is a leading U.S. metals service center focused on the direct sale and value-added processing of carbon and coated sheet, plate, and coil steel products; stainless steel sheet, plate, bar and coil; aluminum sheet, plate and coil; pipe, tube, bar, valves and fittings; tin plate and metal-intensive end-use products, including water treatment systems; commercial, residential and industrial venting and air filtration systems; Wright^® brand self-dumping hoppers; metal canopy components; and EZ-Dumper^® dump inserts. Headquartered in Cleveland, Ohio, Olympic Steel operates from 48 facilities.

For additional information, please visit the Company’s website at www.olysteel.com.

Olympic Steel, Inc. Consolidated Statements of Net Income (in thousands, except per-share data)
		Three Months Ended						Twelve Months Ended
		December 31,						December 31,
		2024			2023			2024			2023
Net sales		$	418,784		$	489,408		$	1,941,672		$	2,158,163
Costs and expenses
Cost of materials sold (excludes items shown separately below)			313,262			375,675			1,490,491			1,684,663
Warehouse and processing			30,915			31,087			128,770			122,212
Administrative and general			25,499			31,192			113,044			122,239
Distribution			16,366			15,448			67,467			66,979
Selling			11,185			11,063			46,643			41,436
Occupancy			4,220			4,068			17,268			16,520
Depreciation			6,963			6,215			24,548			21,545
Amortization			1,372			1,369			5,582			4,898
Total costs and expenses			409,782			476,117			1,893,813			2,080,492
Operating income			9,002			13,291			47,859			77,671
Other loss, net			27			11			93			78
Income before interest and income taxes			8,975			13,280			47,766			77,593
Interest and other expense on debt			4,178			3,627			16,461			16,006
Income before income taxes			4,797			9,653			31,305			61,587
Income tax provision			908			2,245			8,325			17,058
Net income		$	3,889		$	7,408		$	22,980		$	44,529
Earnings per share:
Net income per share - basic		$	0.33		$	0.64		$	1.97		$	3.85
Weighted average shares outstanding - basic			11,694			11,578			11,677			11,573
Net income per share - diluted		$	0.33		$	0.64		$	1.97		$	3.85
Weighted average shares outstanding - diluted			11,694			11,587			11,677			11,578

Olympic Steel, Inc. Balance Sheets (in thousands)
		As of December 31, 2024				As of December 31, 2023
Assets
Cash and cash equivalents		$	11,912			$	13,224
Accounts receivable, net			166,149				191,149
Inventories, net (includes LIFO reserves of $6,341 and $12,043 as of December 31, 2024 and December 31, 2023, respectively)			390,626				386,535
Prepaid expenses and other			11,904				12,261
Total current assets			580,591				603,169
Property and equipment, at cost			519,702				483,448
Accumulated depreciation			(315,866	)			(297,340	)
Net property and equipment			203,836				186,108
Goodwill			83,818				52,091
Intangible assets, net			118,111				92,621
Other long-term assets			21,204				16,466
Right of use asset, net			36,936				34,380
Total assets		$	1,044,496			$	984,835
Liabilities
Accounts payable		$	80,743			$	119,718
Accrued payroll			24,184				30,113
Other accrued liabilities			21,846				22,593
Current portion of lease liabilities			5,865				7,813
Total current liabilities			132,638				180,237
Credit facility revolver			272,456				190,198
Other long-term liabilities			22,484				20,151
Deferred income taxes			11,049				11,510
Lease liabilities			31,945				27,261
Total liabilities			470,572				429,357
Shareholders' Equity
Preferred stock			-				-
Common stock			138,538				136,541
Accumulated other comprehensive loss			190				41
Retained earnings			435,196				418,896
Total shareholders' equity			573,924				555,478
Total liabilities and shareholders' equity		$	1,044,496			$	984,835

Olympic Steel, Inc. Segment Financial Information (In thousands, except tonnage and per-ton data. Figures may not foot to consolidated totals due to Corporate expenses.)
		Three Months Ended December 31,
		Carbon Flat Products						Specialty Metals Flat Products						Tubular and Pipe Products
		2024			2023			2024			2023			2024				2023
Tons sold 1			186,723			202,434			26,172			26,424			N/A				N/A
Net sales		$	235,521		$	280,169		$	110,754		$	121,400		$	72,509			$	87,839
Average selling price per ton			1,261			1,384			4,232			4,594			N/A				N/A
Cost of materials sold			176,886			219,627			90,245			101,849			46,131				54,199
Gross profit			58,635			60,542			20,509			19,551			26,378				33,640
Operating expenses			56,672			56,549			17,497			17,274			18,169				22,093
Operating income			1,963			3,993			3,012			2,277			8,209				11,547
Depreciation and amortization			5,208			3,871			997			1,051			2,112				2,644
LIFO (income) / expense			-			-			-			-			(3,102	)			(5,258	)
		Twelve Months Ended December 31,
		Carbon Flat Products						Specialty Metals Flat Products						Tubular and Pipe Products
		2024			2023			2024			2023			2024				2023
Tons sold 1			839,699			854,192			117,508			115,587			N/A				N/A
Net sales		$	1,109,100		$	1,221,093		$	496,854		$	567,728		$	335,718			$	369,342
Average selling price per ton			1,321			1,430			4,228			4,912			N/A				N/A
Cost of materials sold			864,590			963,667			406,229			473,784			219,672				247,212
Gross profit			244,510			257,426			90,625			93,944			116,046				122,130
Operating expenses			228,095			222,844			70,897			71,060			87,237				81,438
Operating income			16,415			34,582			19,728			22,884			28,809				40,692
Depreciation and amortization			17,429			14,762			3,919			3,929			8,712				7,682
LIFO (income) / expense			-			-			-			-			(5,702	)			(8,258	)
1 The Company does not report tons sold for McCullough Industries, EZ-Dumper, Metal-Fab, or Metal Works in the Carbon Flat Products Segment, Shaw Stainless in the Specialty Metals Flat Products Segment or for the entire Tubular and Pipe Products Segment.
		As of December 31, 2024			As of December 31, 2023
Assets
Flat-products		$	695,881		$	649,744
Tubular and pipe products			347,468			333,677
Corporate			1,147			1,414
Total assets		$	1,044,496		$	984,835

Other Information (in thousands, except per-share and ratio data)
		As of December 31, 2024			As of December 31, 2023
Shareholders' equity per share		$	51.54		$	49.90
Debt to equity ratio		0.47 to 1			0.34 to 1
		Twelve Months Ended December 31,
		2024			2023
Net cash from (used for) operating activities		$	33,679		$	175,159
Cash dividends per share		$	0.60		$	0.50

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250219468665/en/

Richard A. Manson

Chief Financial Officer

(216) 672-0522

ir@olysteel.com

Source: Olympic Steel, Inc.

FAQ

What was Olympic Steel's (ZEUS) earnings per share in Q4 2024?

Olympic Steel reported earnings of $0.33 per diluted share in Q4 2024, compared to $0.64 per diluted share in Q4 2023.

How much did ZEUS revenue decline in Q4 2024?

ZEUS revenue declined by 14% to $419 million in Q4 2024 from $489 million in Q4 2023.

What is the new quarterly dividend for Olympic Steel (ZEUS)?

Olympic Steel increased its quarterly dividend by 7% from $0.15 to $0.16 per share, payable on March 17, 2025.

How did ZEUS perform in full-year 2024 compared to 2023?

ZEUS reported full-year 2024 net income of $23.0 million ($1.97 per share) compared to $44.5 million ($3.85 per share) in 2023, with sales declining from $2.2 billion to $1.9 billion.

What was Olympic Steel's (ZEUS) Adjusted EBITDA for Q4 2024?

ZEUS reported Q4 2024 Adjusted EBITDA of $14.5 million, which was higher than Q3 2024 but lower than Q4 2023's $16.7 million.