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Olympic Steel Reports 2016 Fourth-Quarter and Full-Year Results
Market Share Increases to Record High
CLEVELAND--(BUSINESS WIRE)--March 02, 2017--
Olympic Steel Inc., (Nasdaq: ZEUS), a national metals service center, today announced financial results for the fourth quarter and full year ended Dec. 31, 2016.
Net sales in the 2016 fourth quarter increased 7.3%, to $254.9 million, up from $237.5 million in the same quarter of the prior year. Full-year 2016 net sales declined 10.2%, to $1.1 billion, compared with $1.2 billion in 2015. LIFO income was $0.8 million in the final quarter of 2016, versus $1.6 million in the comparable quarter in 2015. Full-year reported results benefited from $1.5 million of LIFO income in 2016, which was down from $3.3 million of LIFO income recorded in 2015.
For the fourth quarter of 2016, the Company reported a net loss of $2.1 million, or $0.19 per share. This compares with a net loss of $5.0 million, or $0.45 per share, in 2015's comparable quarter. For the full-year period, a net loss of $1.1 million, or $0.10 per share was recorded in 2016, versus a net loss of $26.8 million, or $2.39 per share, in 2015. Results in 2015 were negatively impacted by goodwill and intangible asset impairment charges totaling $25.0 million, or $1.93 per share.
"Despite another challenging year, we observed a definitive market swing during the fourth quarter," said Chairman and Chief Executive Officer Michael D. Siegal. "Pricing, demand and customer sentiment all improved as the quarter progressed."
"Our commitment to customer performance earned us record market share during 2016, per MSCI data," Siegal added. "At the same time, our emphasis on continuous improvement led to reducing operating expenses by 3%, or $7 million, excluding 2015's impairment charges."
"The positive industry trends that began in last year's fourth quarter have continued in the first quarter of 2017, validating optimism for the first half of this year," Siegal concluded.
Conference Call and Webcast
A simulcast of Olympic Steel's 2016 fourth-quarter and full-year earnings conference call can be accessed via the Investor Relations section of the Company's website at www.olysteel.com. The simulcast will begin at 10 a.m. ET today, March 2, and a replay of the call 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: general and global business, economic, financial and political conditions; competitive factors such as the availability, global production levels and pricing of metals, industry shipping and inventory levels and rapid fluctuations in customer demand and metals pricing; cyclicality and volatility within the metals industry; the strengthening of the U.S. dollar and the related impact on foreign steel pricing, U.S. exports, and foreign imports to the United States; the levels of imported steel in the United States and any associated tariffs and duties; the availability and costs of transportation and logistical services; the successes of our strategic efforts and initiatives to increase sales volumes, maintain or improve working capital turnover and free cash flows, improve our customer service, and achieve cost savings, including our efforts to improve earnings; our ability to generate free cash flow through operations and repay debt within anticipated time frames; events or circumstances that could impair or adversely impact the carrying value of any of our assets; risks and uncertainties associated with intangible assets, including additional impairment charges related to indefinite lived intangible assets; events or circumstances that could adversely impact the successful operation of our processing equipment and operations; the amounts, successes and our ability to continue our capital investments and strategic growth initiatives, including our business information system implementations; the successes of our operational initiatives to improve our operating, cultural and management systems and reduce our costs; the ability to comply with the terms of our asset-based credit facility; the ability of our customers and third parties to honor their agreements related to derivative instruments; customer, supplier and competitor consolidation, bankruptcy or insolvency; reduced production schedules, layoffs or work stoppages by our own, our suppliers' or customers' personnel; the impacts of union organizing activities and the success of union contract renewals; the timing and outcomes of inventory lower of cost or market adjustments and last-in, first-out, or LIFO, income, especially during periods of declining market pricing; the ability of our customers (especially those that may be highly leveraged, and those with inadequate liquidity) to maintain their credit availability; the inflation or deflation existing within the metals industry, as well as our product mix and inventory levels on hand, which can impact our cost of materials sold as a result of the fluctuations in the LIFO inventory valuation; the adequacy of our existing information technology and business system software, including duplication and security processes; the adequacy of our efforts to mitigate cyber security risks and threats; access to capital and global credit markets; 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; 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; and 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.
About Olympic Steel
Founded in 1954, Olympic Steel is a leading U.S. metals 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 and aluminum products. The Company's CTI subsidiary is a leading distributor of steel tubing, bar, pipe, valves and fittings, and fabricates pressure parts for the electric utility industry. Headquartered in Cleveland, Ohio, Olympic Steel operates from 32 facilities in North America.
For additional information, please visit the Company's website at www.olysteel.com or www.b2i.us/profiles/investor/ContactUs.asp?BzID=2195
-Financial Tables Follow-
Olympic Steel, Inc.
Consolidated Statements of Comprehensive Income
(in thousands, except per-share data)
Three Months Ended Twelve Months Ended Dec.
Dec. 31, 31,
-------------------- --------------------------
2016 2015 2016 2015
--------- --------- ----------- -------------
(unaudited) (audited)
Net sales $254,904 $237,505 $1,055,116 $1,175,543
Costs and expenses
Cost of materials
sold (excludes
items shown
separately
below) 203,494 188,265 820,040 942,214
Warehouse and
processing 17,960 19,891 79,521 85,411
Administrative and
general 15,001 15,701 63,054 64,987
Distribution 8,728 8,254 36,490 36,073
Selling 5,699 5,051 23,060 21,158
Occupancy 2,088 2,280 8,718 9,492
Depreciation 4,365 4,520 17,596 18,147
Amortization 222 222 889 889
Goodwill and
intangible asset
impairment - 500 - 24,951
------- ------- --------- ---------
Total costs and
expenses 257,557 244,684 1,049,368 1,203,322
------- ------- --------- ---------
Operating income
(loss) (2,653) (7,179) 5,748 (27,779)
Other income (loss),
net (13) 16 (55) (125)
------- ------- --------- ---------
Income (loss)
before interest
and income taxes (2,666) (7,163) 5,693 (27,904)
Interest and other
expense on debt 1,378 1,251 5,273 5,690
------- ------- --------- ---------
Income (loss)
before income
taxes (4,044) (8,414) 420 (33,594)
Income tax provision
(benefit) (1,940) (3,426) 1,498 (6,817)
------- ------- --------- ---------
Net loss $ (2,104) $ (4,988) $ (1,078) $ (26,777)
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Earnings per share:
Net loss per share
(MORE TO FOLLOW) Dow Jones Newswires
March 02, 2017 05:45 ET (10:45 GMT)
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