Olympic Steel Reports Significantly Improved Third-Quarter Results

Olympic Steel Inc. (Nasdaq: ZEUS), a leading national metals service center, today announced significantly improved financial results for the third quarter and nine-month period ended Sept. 30, 2017.

Third-quarter net sales in 2017 increased 24% over last year’s same quarter to $331.4 million. Year-to-date 2017 net sales rose 28%, reaching $1.0 billion, versus $800.2 million in the comparable period of 2016. The significant increase in net sales for both 2017 periods was due to sharply higher shipping volume and higher average selling prices.

"We continued to grow our shipping volumes in a recovering metals market,” said Chairman and Chief Executive Officer Michael D. Siegal. "Through the first nine months of 2017, our 13% increase in shipping volume has resulted in improved profitability.”

Net income rose to $2.3 million, or $0.20 per diluted share, in the third quarter of 2017, compared to a net loss of $1.8 million, or $0.16 per share in last year’s third quarter. LIFO expense of $0.7 million was recorded in the third quarter of 2017, which reduced net income by $0.04 per diluted share. In the third quarter of 2016, operating income was positively impacted by $0.7 million of LIFO income.

Year-to-date 2017 net income increased to $14.8 million, or $1.30 per diluted share, up substantially from $1.0 million, or $0.09 per diluted share in the nine-month period of 2016. LIFO expenses recorded in 2017 reduced year-to-date net income by $1.5 million, or $0.08 per diluted share. LIFO income of $0.7 million recorded in 2016, improved net income by $0.04 per diluted share in the comparable period last year.

"Demand for metal products and processing services remains strong across all three of our business segments,” Siegal said. "Looking ahead, we are encouraged by both the positive demand trends our customers are projecting for 2018, and by the market’s outlook for improved metal pricing.”

The Company’s Board of Directors also approved a regular quarterly cash dividend of $0.02 per share, which is payable on Dec. 15, 2017, to shareholders of record on Dec. 1, 2017.

Conference Call and Webcast

A simulcast of Olympic Steel’s 2017 third-quarter 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 on Nov. 8, 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; 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 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 efforts and initiatives to increase sales and earnings, maintain or improve working capital turnover and free cash flows, improve our customer service, and achieve cost savings; 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 lower of cost or market adjustments and last-in, first-out, or LIFO, income or expense; 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 30 facilities in North America.

For additional information, please visit the Company’s website at www.olysteel.com or http://ir.olysteel.com/Contact_Us?BzID=2195

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