Olympic Steel Reports Second-Quarter 2024 Results
Olympic Steel (Nasdaq: ZEUS) reported Q2 2024 financial results, with net income of $7.7 million ($0.66 per diluted share), compared to $15.0 million ($1.30 per diluted share) in Q2 2023. Adjusted EBITDA was $21.3 million, down from $31.2 million in Q2 2023. Sales decreased to $526 million from $569 million year-over-year, despite higher shipping volumes. The company's diversification strategy helped maintain profitability across all three business segments despite challenging market conditions, including a 22% drop in hot-rolled index pricing during Q2. Olympic Steel declared a quarterly dividend of $0.15 per share and reported over $340 million in borrowing availability, positioning it for potential growth opportunities.
Olympic Steel (Nasdaq: ZEUS) ha riportato i risultati finanziari del secondo trimestre 2024, con un utile netto di 7,7 milioni di dollari (0,66 dollari per azione diluita), rispetto ai 15,0 milioni di dollari (1,30 dollari per azione diluita) del secondo trimestre 2023. L'EBITDA rettificato è stato di 21,3 milioni di dollari, in calo rispetto ai 31,2 milioni di dollari del secondo trimestre 2023. Le vendite sono diminuite a 526 milioni di dollari rispetto ai 569 milioni di dollari dell’anno precedente, nonostante l’aumento dei volumi di spedizione. La strategia di diversificazione dell'azienda ha contribuito a mantenere la redditività in tutti e tre i segmenti di business nonostante le difficili condizioni di mercato, tra cui un calo del 22% nei prezzi dell'indice di prodotti laminati a caldo durante il secondo trimestre. Olympic Steel ha dichiarato un dividendo trimestrale di 0,15 dollari per azione e ha riportato oltre 340 milioni di dollari di disponibilità per prestiti, posizionandosi per potenziali opportunità di crescita.
Olympic Steel (Nasdaq: ZEUS) informó los resultados financieros del segundo trimestre de 2024, con un ingreso neto de 7,7 millones de dólares (0,66 dólares por acción diluida), en comparación con 15,0 millones de dólares (1,30 dólares por acción diluida) en el segundo trimestre de 2023. El EBITDA ajustado fue de 21,3 millones de dólares, por debajo de los 31,2 millones de dólares en el segundo trimestre de 2023. Las ventas cayeron a 526 millones de dólares desde 569 millones de dólares en el año anterior, a pesar de un mayor volumen de envíos. La estrategia de diversificación de la compañía ayudó a mantener la rentabilidad en los tres segmentos de negocio a pesar de las desafiantes condiciones del mercado, incluido un descenso del 22% en los precios del índice de productos laminados en caliente durante el segundo trimestre. Olympic Steel declaró un dividendo trimestral de 0,15 dólares por acción e informó más de 340 millones de dólares en disponibilidad de crédito, posicionándose para oportunidades de crecimiento potenciales.
올림픽 스틸 (Nasdaq: ZEUS)은 2024년 2분기 재무 결과를 발표하며, 순이익이 770만 달러 (희석 주당 0.66달러)로, 2023년 2분기 1,500만 달러 (희석 주당 1.30달러)와 비교되었다. 조정된 EBITDA는 2130만 달러로, 2023년 2분기 3120만 달러에서 감소했다. 매출은 5억 2600만 달러로, 전년 대비 5억 6900만 달러에서 감소했지만, 발송량은 증가했다. 이 회사의 다각화 전략은 어려운 시장 상황에도 불구하고 세 가지 사업 부문에서 모두 수익성을 유지하는 데 도움이 되었다. 2분기 동안 열간압연 지수 가격이 22% 떨어진 것을 포함하여 말이다. 올림픽 스틸은 주당 0.15달러의 분기 배당금을 선언했으며, 3억 4000만 달러 이상의 차입 가능성을 보고하여 잠재적 성장 기회를 위해 준비하고 있다.
Olympic Steel (Nasdaq: ZEUS) a annoncé ses résultats financiers pour le deuxième trimestre 2024, avec un bénéfice net de 7,7 millions de dollars (0,66 dollar par action diluée), contre 15,0 millions de dollars (1,30 dollar par action diluée) au deuxième trimestre 2023. L'EBITDA ajusté était de 21,3 millions de dollars, en baisse par rapport à 31,2 millions de dollars au deuxième trimestre 2023. Les ventes ont diminué à 526 millions de dollars contre 569 millions de dollars l'année précédente, malgré des volumes d'expédition plus élevés. La stratégie de diversification de l'entreprise a permis de maintenir la rentabilité dans les trois segments d'activité, malgré des conditions de marché difficiles, y compris une baisse de 22 % des prix de l'indice des produits laminés à chaud au cours du deuxième trimestre. Olympic Steel a déclaré un dividende trimestriel de 0,15 dollar par action et a signalé plus de 340 millions de dollars de disponibilités d'emprunt, se positionnant pour des opportunités de croissance potentielles.
Olympic Steel (Nasdaq: ZEUS) hat die finanziellen Ergebnisse des zweiten Quartals 2024 veröffentlicht, mit einem Nettogewinn von 7,7 Millionen Dollar (0,66 Dollar pro verwässerter Aktie), verglichen mit 15,0 Millionen Dollar (1,30 Dollar pro verwässerter Aktie) im zweiten Quartal 2023. Das bereinigte EBITDA betrug 21,3 Millionen Dollar, im Vergleich zu 31,2 Millionen Dollar im zweiten Quartal 2023. Der Umsatz fiel auf 526 Millionen Dollar von 569 Millionen Dollar im Vorjahr, trotz höherer Versandmengen. Die Diversifikationsstrategie des Unternehmens half dabei, die Rentabilität in allen drei Geschäftsbereichen trotz herausfordernder Marktbedingungen aufrechtzuerhalten, einschließlich eines Rückgangs von 22 % bei den Preisen des heißgewalzten Index im zweiten Quartal. Olympic Steel hat eine vierteljährliche Dividende von 0,15 Dollar pro Aktie erklärt und berichtete über 340 Millionen Dollar an verfügbaren Kreditlinien, was es für potenzielle Wachstumschancen positioniert.
- Maintained profitability across all three business segments despite challenging market conditions
- Higher year-over-year shipping volumes
- Strong balance sheet with over $340 million in borrowing availability
- Declared regular quarterly dividend of $0.15 per share
- Ordered new equipment to expand coated and specialty metals product lines
- Net income decreased to $7.7 million from $15.0 million year-over-year
- Adjusted EBITDA declined to $21.3 million from $31.2 million year-over-year
- Sales decreased to $526 million from $569 million year-over-year
- Hot-rolled index pricing fell 22% in Q2 and 39% since the beginning of the year
Insights
Olympic Steel's Q2 2024 results reveal a company navigating challenging market conditions with resilience. Despite a 22% drop in hot-rolled index pricing during the quarter and a 39% decline year-to-date, the company managed to maintain profitability across all three business segments. This achievement underscores the effectiveness of their diversification strategy.
Key financial highlights include:
- Net income of
$7.7 million ($0.66 per diluted share), down from$15.0 million ($1.30 per diluted share) in Q2 2023 - Adjusted EBITDA of
$21.3 million , compared to$31.2 million in Q2 2023 - Sales of
$526 million , down from$569 million in Q2 2023
The company's focus on end products, higher-margin flat-rolled products and expanded fabrication capabilities has proven important in maintaining profitability amidst pricing pressures. With over
The declaration of a
Olympic Steel's Q2 2024 performance offers valuable insights into the current state of the metals industry. The
Despite these headwinds, Olympic Steel's ability to maintain profitability across all segments highlights the importance of diversification in the metals service center business. The company's strategic focus on end products and higher-margin offerings has created a more resilient business model, better equipped to weather market volatility.
The investment in new cut-to-length lines and a high-speed slitter indicates a proactive approach to expanding capabilities in coated and specialty metals. This move could potentially open up new market opportunities and further insulate the company from commodity price fluctuations.
Looking ahead, the company's cautious outlook for the second half of 2024 suggests that the challenging pricing environment may persist. However, Olympic Steel's strong balance sheet and focus on operational efficiency position it well to navigate these challenges and potentially capitalize on market opportunities that may arise from industry consolidation or competitor weakness.
Diversified offerings in end products, higher-margin mix of flat-rolled products and additional fabrication capabilities drive profitability in a challenging pricing market
Net income for the second quarter totaled
The Company reported higher year-over-year shipping volumes on sales of
“Olympic Steel’s ability to capitalize on our diversification strategy was critical to delivering profitability across all three business segments in the second quarter,” said Richard T. Marabito, Chief Executive Officer. “During the second quarter of 2024, hot-rolled index pricing fell
Marabito continued, “We are in an excellent financial position with a strong balance sheet and more than
Marabito concluded, “As we move into the second half of 2024, we remain committed to driving profitability and delivering on our disciplines around working capital and operating efficiencies. While we expect market conditions to remain challenging in the near term, we are confident that Olympic Steel is well-positioned to navigate these pressures to deliver consistent results for our shareholders.”
The Board of Directors approved a regular quarterly cash dividend of
The table that follows provides a reconciliation of certain non-GAAP measures to the most directly comparable measures prepared in accordance with GAAP. Additional reconciliations can be found in the Segment Financial Information table which also follows.
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 |
|
Six Months Ended |
||||||||||||||
June 30, |
|
June 30, |
||||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
||
Net income per diluted share (GAAP) | $ |
0.66 |
|
$ |
1.30 |
|
$ |
1.40 |
|
$ |
2.15 |
|
||||
Excluding the following items | ||||||||||||||||
LIFO income |
|
(0.06 |
) |
|
(0.06 |
) |
|
(0.04 |
) |
|
(0.06 |
) |
||||
Acquisition Inventory fair market value adjustment |
|
- |
|
|
- |
|
|
- |
|
|
0.13 |
|
||||
Acquisition related expenses |
|
- |
|
|
- |
|
|
- |
|
|
0.16 |
|
||||
Adjusted net income per diluted share (non-GAAP) | $ |
0.60 |
|
$ |
1.24 |
|
$ |
1.36 |
|
$ |
2.38 |
|
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 | Six Months Ended | |||||||||||||||
6/30/2024 | 6/30/2023 | 6/30/2024 | 6/30/2023 | |||||||||||||
Net income (GAAP): | $ |
7,660 |
|
$ |
15,019 |
|
$ |
16,357 |
|
$ |
24,891 |
|
||||
Excluding the following items | ||||||||||||||||
Other loss, net |
|
21 |
|
|
28 |
|
|
40 |
|
|
39 |
|
||||
Interest and other expense on debt |
|
4,393 |
|
|
4,203 |
|
|
8,403 |
|
|
8,426 |
|
||||
Income tax provision |
|
3,036 |
|
|
6,522 |
|
|
6,248 |
|
|
10,139 |
|
||||
Depreciation and amortization |
|
7,227 |
|
|
6,473 |
|
|
14,561 |
|
|
12,674 |
|
||||
Earnings before interest, taxes, depreciation and | ||||||||||||||||
amortization (EBITDA) |
|
22,337 |
|
|
32,245 |
|
|
45,609 |
|
|
56,169 |
|
||||
LIFO income |
|
(1,000 |
) |
|
(1,000 |
) |
|
(600 |
) |
|
(1,000 |
) |
||||
Acquisition Inventory fair market value adjustment |
|
- |
|
|
- |
|
|
- |
|
|
2,079 |
|
||||
Acquisition related expenses |
|
- |
|
|
- |
|
|
- |
|
|
2,556 |
|
||||
Adjusted EBITDA (non-GAAP) | $ |
21,337 |
|
$ |
31,245 |
|
$ |
45,009 |
|
$ |
59,804 |
|
Conference Call and Webcast
A simulcast of Olympic Steel’s 2024 second-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 August 2, 2024, 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: risks of falling metals prices and inventory devaluation; supply disruptions and inflationary pressures, including the availability and rising costs of transportation, energy, logistical services and labor; risks associated with shortages of skilled labor, increased labor costs and our ability to attract and retain qualified personnel; supplier consolidation or addition of new capacity; rising interest rates and their impacts on our variable interest rate debt; risks associated with the invasion of
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
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 |
|
Six Months Ended |
||||||||||
June 30, |
|
June 30, |
||||||||||
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||
Net sales | $ |
526,250 |
$ |
569,268 |
$ |
1,052,892 |
$ |
1,142,344 |
||||
Costs and expenses | ||||||||||||
Cost of materials sold (excludes items shown separately below) |
|
406,547 |
|
441,872 |
|
814,085 |
|
894,508 |
||||
Warehouse and processing |
|
33,243 |
|
31,522 |
|
66,136 |
|
62,171 |
||||
Administrative and general |
|
29,167 |
|
31,681 |
|
59,319 |
|
64,866 |
||||
Distribution |
|
17,462 |
|
17,448 |
|
34,220 |
|
35,189 |
||||
Selling |
|
13,201 |
|
10,389 |
|
24,737 |
|
20,786 |
||||
Occupancy |
|
4,293 |
|
4,111 |
|
8,786 |
|
8,655 |
||||
Depreciation |
|
5,839 |
|
5,245 |
|
11,845 |
|
10,322 |
||||
Amortization |
|
1,388 |
|
1,228 |
|
2,716 |
|
2,352 |
||||
Total costs and expenses |
|
511,140 |
|
543,496 |
|
1,021,844 |
|
1,098,849 |
||||
Operating income |
|
15,110 |
|
25,772 |
|
31,048 |
|
43,495 |
||||
Other loss, net |
|
21 |
|
28 |
|
40 |
|
39 |
||||
Income before interest and income taxes |
|
15,089 |
|
25,744 |
|
31,008 |
|
43,456 |
||||
Interest and other expense on debt |
|
4,393 |
|
4,203 |
|
8,403 |
|
8,426 |
||||
Income before income taxes |
|
10,696 |
|
21,541 |
|
22,605 |
|
35,030 |
||||
Income tax provision |
|
3,036 |
|
6,522 |
|
6,248 |
|
10,139 |
||||
Net income | $ |
7,660 |
$ |
15,019 |
$ |
16,357 |
$ |
24,891 |
||||
Earnings per share: | ||||||||||||
Net income per share - basic | $ |
0.66 |
$ |
1.30 |
$ |
1.40 |
$ |
2.15 |
||||
Weighted average shares outstanding - basic |
|
11,662 |
|
11,569 |
|
11,663 |
|
11,570 |
||||
Net income per share - diluted | $ |
0.66 |
$ |
1.30 |
$ |
1.40 |
$ |
2.15 |
||||
Weighted average shares outstanding - diluted |
|
11,662 |
|
11,572 |
|
11,663 |
|
11,572 |
Olympic Steel, Inc. Balance Sheets (in thousands) |
||||||||
As of June 30, 2024 |
As of December 31, 2023 |
|||||||
Assets | ||||||||
Cash and cash equivalents | $ |
9,443 |
|
$ |
13,224 |
|
||
Accounts receivable, net |
|
216,682 |
|
|
191,149 |
|
||
Inventories, net (includes LIFO reserves of |
|
386,240 |
|
|
386,535 |
|
||
Prepaid expenses and other |
|
10,725 |
|
|
12,261 |
|
||
Total current assets |
|
623,090 |
|
|
603,169 |
|
||
Property and equipment, at cost |
|
495,879 |
|
|
483,448 |
|
||
Accumulated depreciation |
|
(308,685 |
) |
|
(297,340 |
) |
||
Net property and equipment |
|
187,194 |
|
|
186,108 |
|
||
Goodwill |
|
52,091 |
|
|
52,091 |
|
||
Intangible assets, net |
|
90,474 |
|
|
92,621 |
|
||
Other long-term assets |
|
19,150 |
|
|
16,466 |
|
||
Right of use asset, net |
|
34,297 |
|
|
34,380 |
|
||
Total assets | $ |
1,006,296 |
|
$ |
984,835 |
|
||
Liabilities | ||||||||
Accounts payable | $ |
119,104 |
|
$ |
119,718 |
|
||
Accrued payroll |
|
20,545 |
|
|
30,113 |
|
||
Other accrued liabilities |
|
19,084 |
|
|
22,593 |
|
||
Current portion of lease liabilities |
|
6,582 |
|
|
7,813 |
|
||
Total current liabilities |
|
165,315 |
|
|
180,237 |
|
||
Credit facility revolver |
|
209,186 |
|
|
190,198 |
|
||
Other long-term liabilities |
|
23,281 |
|
|
20,151 |
|
||
Deferred income taxes |
|
10,613 |
|
|
11,510 |
|
||
Lease liabilities |
|
28,448 |
|
|
27,261 |
|
||
Total liabilities |
|
436,843 |
|
|
429,357 |
|
||
Shareholders' Equity | ||||||||
Preferred stock |
|
- |
|
|
- |
|
||
Common stock |
|
137,541 |
|
|
136,541 |
|
||
Accumulated other comprehensive loss |
|
- |
|
|
41 |
|
||
Retained earnings |
|
431,912 |
|
|
418,896 |
|
||
Total shareholders' equity |
|
569,453 |
|
|
555,478 |
|
||
Total liabilities and shareholders' equity | $ |
1,006,296 |
|
$ |
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 June 30, | ||||||||||||||||||||
Carbon Flat Products | Specialty Metals Flat Products | Tubular and Pipe Products | ||||||||||||||||||
2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
|||||||||||||||
Tons sold 1 |
|
229,090 |
|
226,275 |
|
31,695 |
|
28,711 |
|
N/A |
|
|
N/A |
|
||||||
Net sales | $ |
307,755 |
$ |
326,629 |
$ |
130,873 |
$ |
147,000 |
$ |
87,622 |
|
$ |
95,639 |
|
||||||
Average selling price per ton |
|
1,343 |
|
1,444 |
|
4,129 |
|
5,120 |
|
N/A |
|
|
N/A |
|
||||||
Cost of materials sold |
|
243,996 |
|
253,072 |
|
104,944 |
|
122,600 |
|
57,607 |
|
|
66,200 |
|
||||||
Gross profit |
|
63,759 |
|
73,557 |
|
25,929 |
|
24,400 |
|
30,015 |
|
|
29,439 |
|
||||||
Operating expenses |
|
58,398 |
|
58,862 |
|
18,080 |
|
17,721 |
|
23,518 |
|
|
20,068 |
|
||||||
Operating income |
|
5,361 |
|
14,695 |
|
7,849 |
|
6,679 |
|
6,497 |
|
|
9,371 |
|
||||||
Depreciation and amortization |
|
4,112 |
|
3,716 |
|
929 |
|
1,023 |
|
2,168 |
|
|
1,716 |
|
||||||
LIFO (income) / expense |
|
- |
|
- |
|
- |
|
- |
|
(1,000 |
) |
|
(1,000 |
) |
||||||
Six Months Ended June 30, | ||||||||||||||||||||
Carbon Flat Products | Specialty Metals Flat Products | Tubular and Pipe Products | ||||||||||||||||||
2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
|||||||||||||||
Tons sold 1 |
|
448,765 |
|
444,613 |
|
61,598 |
|
61,227 |
|
N/A |
|
|
N/A |
|
||||||
Net sales | $ |
608,730 |
$ |
636,447 |
$ |
260,407 |
$ |
313,564 |
$ |
183,755 |
|
$ |
192,333 |
|
||||||
Average selling price per ton |
|
1,356 |
|
1,431 |
|
4,228 |
|
5,121 |
|
N/A |
|
|
N/A |
|
||||||
Cost of materials sold |
|
479,611 |
|
501,508 |
|
212,534 |
|
260,313 |
|
121,940 |
|
|
132,687 |
|
||||||
Gross profit |
|
129,119 |
|
134,939 |
|
47,873 |
|
53,251 |
|
61,815 |
|
|
59,646 |
|
||||||
Operating expenses |
|
115,101 |
|
114,298 |
|
36,093 |
|
37,313 |
|
47,691 |
|
|
40,534 |
|
||||||
Operating income |
|
14,018 |
|
20,641 |
|
11,780 |
|
15,938 |
|
14,124 |
|
|
19,112 |
|
||||||
Depreciation and amortization |
|
8,193 |
|
7,323 |
|
1,917 |
|
2,007 |
|
4,416 |
|
|
3,309 |
|
||||||
LIFO (income) / expense |
|
- |
|
- |
|
- |
|
- |
|
(600 |
) |
|
(1,000 |
) |
||||||
1 The Company does not report tons sold for McCullough Industries, EZ Dumper, or Metal-Fab in the Carbon Flat Products Segment, Shaw Stainless in the Specialty Metals Flat Products Segment or for the entire Tubular and Pipe Products Segment. |
Other Information (in thousands, except per-share and ratio data) |
|||||||
As of June 30, 2024 |
As of December 31, 2023 |
||||||
Assets | |||||||
Flat-products | $ |
665,840 |
|
$ |
649,744 |
||
Tubular and pipe products |
|
339,175 |
|
|
333,677 |
||
Corporate |
|
1,281 |
|
|
1,414 |
||
Total assets | $ |
1,006,296 |
|
$ |
984,835 |
||
Other information | |||||||
As of June 30, 2024 |
As of December 31, 2023 |
||||||
Shareholders' equity per share | $ |
51.15 |
|
$ |
49.90 |
||
Debt to equity ratio | 0.37 to 1 | 0.34 to 1 | |||||
Six Months Ended June 30, | |||||||
2024 |
2023 |
||||||
Net cash from (used for) operating activities | $ |
(5,512 |
) |
$ |
79,196 |
||
Cash dividends per share | $ |
0.30 |
|
$ |
0.25 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240731141949/en/
Richard A. Manson
Chief Financial Officer
(216) 672-0522
ir@olysteel.com
Source: Olympic Steel, Inc.
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