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March 5, 2014

Olympic Reports Profitable 2013

Olympic Steel Inc., Cleveland, reported net income of $7.6 million for full-year 2013, more than triple its figure from the previous year. Net sales declined 8.7 percent to $1.3 billion.

In the fourth quarter, Olympic posted a net loss of $1.4 million, still an improvement on the $10.1 million loss from the same period a year earlier. Net sales during the quarter declined less than 1 percent to $290.5 million.

For the full year, Olympic shipped 1.1 million tons on the flat-rolled side of the business, 4.7 percent lower than in 2012. Weaknesses in the mining and defense sectors were cited for the decline.

"As expected, cash flow from operating activities rose sharply, nearly doubling to $55 million in 2013," Chairman and CEO Michael D. Siegal told investors and analysts during the company’s quarterly conference call. "This reflects inventory and other working capital improvements and allowed us to strengthen our balance sheet by further reducing debt. We also lowered costs during the year, while aligning our management and operating teams to support strategic growth.”

Among the developments in 2013, Olympic’s sales of specialty metals reached $160 million, growing from 1 percent market share to 4.3 percent. "We're gaining specialty market share by bundling our processing services and providing one-stop shopping. That reduces transportation costs, reduces lead times and improves quality and service," Siegal said.

Olympic has wrapped up an ambitious investment program in the previous three years, and is now targeting its efforts at improving operating efficiencies and sales volumes.

"The next phase of our mission has already begun. Olympic Steel's geographic reach and processing and distribution capabilities are better than ever. We are now focused on execution, enhancing operational excellence and increasing sales volumes to drive more profit to the bottom line," Siegal said.

Siegal believes the much-discussed reshoring trend is legitimate, and a movement that will benefit companies such as Olympic. He cited a Fortune 100 company that has located near Olympic's Winder, Ga., facility, making mini hydraulic excavators formerly produced overseas.

"Other industry frontrunners have also taken advantage of the economic benefits of reshoring. This is a growing trend, and one definite winner is industrial manufacturing and those capable of serving their needs," he said.

Looking ahead, executives said 2014 has gotten off to a promising start. "As the year came to a close, lead times were extending and slack in the distribution channel was being absorbed. Our OEMs returned to the market in December and January, and despite relatively higher prices order activity has improved since start of year," said David Wolfort, president.

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Tuesday, July 29, 2014