Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2024

Olympic Steel, Inc.

(Exact name of registrant as specified in its charter)

Ohio	000-23320	34-1245650
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

22901 Millcreek Boulevard, Suite 650, Highland Hills, Ohio	44112
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (216) 292-3800

________________________________________________________________________________
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, without par value	ZEUS	The NASDAQ Stock Market, LLC.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On August 1, 2024, Olympic Steel, Inc. issued a press release reporting its operating results for the second quarter ended June 30, 2024. The press release is attached hereto as Exhibit 99.1.

The information included in this report, including exhibit 99.1, is furnished pursuant to Item 2.02 of Form 8-K, is not to be considered "filed" under the Securities Exchange Act of 1934, as amended ("Exchange Act"), and shall not be incorporated by reference into any of Olympic Steel, Inc.'s previous or future filings under the Securities Act of 1933, as amended, or the Exchange Act except as otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.

99.1 Press release dated August 1, 2024.

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Olympic Steel, Inc.

		(Registrant)

August 1, 2024		/s/ RICHARD A. MANSON

(Date)		Richard A. Manson Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit Index

99.1 Press Release dated August 1, 2024

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

EXHIBIT 99.1

NEWS RELEASE

Olympic Steel Reports Second-Quarter 2024 Results

Diversified offerings in end products, higher-margin mix of flat-rolled products and additional fabrication capabilities drive profitability in a challenging pricing market

CLEVELAND — August 1, 2024 — Olympic Steel, Inc. (Nasdaq: ZEUS), a leading national metals service center, today announced financial results for the three months ended June 30, 2024.

Net income for the second quarter totaled $7.7 million, or $0.66 per diluted share, compared with net income of $15.0 million, or $1.30 per diluted share, in the second quarter of 2023. The results include $1.0 million of LIFO pre-tax income in both the second quarter of 2024 and 2023. Adjusted EBITDA for the second quarter of 2024 was $21.3 million, compared with $31.2 million in the second quarter of 2023.

The Company reported higher year-over-year shipping volumes on sales of $526 million in the second quarter of 2024, compared with $569 million in the second quarter of 2023.

“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 22% and has fallen 39% since the beginning of the year. Our efforts to grow and expand in end products, higher-margin flat-rolled products including coated products, and additional fabrication capabilities have strengthened our business and make us more resilient in challenging pricing environments. Our second-quarter results are a testament to this strategy, as well as to the dedication of our team to drive profitability in all market conditions.”

Marabito continued, “We are in an excellent financial position with a strong balance sheet and more than $340 million of borrowing availability. This access to capital gives us flexibility to grow organically and through acquisition. We recently ordered two new cut-to-length lines and one high-speed slitter to further expand our efforts in our coated and specialty metals product lines.”

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 $0.15 per share, which is payable on September 16, 2024, to shareholders of record on September 2, 2024. The Company has paid a regular quarterly dividend since March 2006, increasing the dividend in each of the last three years.

Olympic Steel, Inc. • 22901 Millcreek Blvd., Suite 650 • Highland Hills, OH 44122

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 Ukraine, including economic sanctions, and the conflicts in the Middle East, 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, legislation passed under the current administration and the 2024 U.S. presidential election; reduced production schedules, layoffs or work stoppages by our own, our suppliers' or customers' personnel; risks associated with supply chain disruption resulting from the imbalance of metal supply and end-user demands, including additional shutdowns as a result of infectious disease outbreaks in large markets, such as China, and other factors; our ability to successfully integrate recent acquisitions 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 levels of imported steel in the United States and the tariffs initiated by the U.S. government in 2018 under Section 232 of the Trade Expansion Act of 1962 and imposed tariffs and duties on exported steel or other products, U.S. trade policy and its impact on the U.S. manufacturing industry; 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; risks associated with 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; 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; 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; 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; cyclicality and volatility within the metals industry; 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; 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 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; the impacts of union organizing activities and the success of union contract renewals; 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 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; and EZ-Dumper® dump inserts. Headquartered in Cleveland, Ohio, Olympic Steel operates from 47 facilities.

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

Contact:

Richard A. Manson

Chief Financial Officer

(216) 672-0522

ir@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 $11,443 and $12,043 as of June 30, 2024 and December 31, 2023, respectively)		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

0.34

	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

Document And Entity Information	Aug. 01, 2024
Document Information [Line Items]
Entity, Registrant Name	Olympic Steel, Inc.
Document, Type	8-K
Document, Period End Date	Aug. 01, 2024
Entity, Incorporation, State or Country Code	OH
Entity, File Number	000-23320
Entity, Tax Identification Number	34-1245650
Entity, Address, Address Line One	22901 Millcreek Boulevard
Entity, Address, Address Line Two	Suite 650
Entity, Address, City or Town	Highland Hills
Entity, Address, State or Province	OH
Entity, Address, Postal Zip Code	44112
City Area Code	216
Local Phone Number	292-3800
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock
Trading Symbol	ZEUS
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000917470