Aug. 20, 2014
Olympic Sets Quarterly Sales Record
Olympic Steel Inc. reported net sales of $386.0 million in the second quarter, a quarterly record for the Cleveland-based service center company. Sales increased by 16.7 percent over the prior-year quarter. For the first half of 2014, Olympic’s net sales grew by 10 percent to $733.0 million.
Net income in the quarter totaled $3.5 million, an increase from the $2.5 million posted during the same quarter last year. Through the first half, Olympic's net income totaled $6.3 million, down slightly from 2013.
"Sales volume of flat products increased 10 percent sequentially from the first quarter and by 17 percent compared with last year's second quarter," said Chairman and CEO Michael D. Siegal. "This resulted from successfully executing on our strategy of aggressively growing sales volume to improve capacity utilization and gain market share."
Flat-product volumes increased by more than 17 percent during the quarter to 330,000 tons. That represented the highest-volume quarter for the flat-rolled products division since early 2008. For the first half of 2014, flat-product volumes increased 10 percent to 630,000 tons.
Siegal is encouraged by recent price increases that the industry has absorbed, following a long run of hikes that didn't hold. He believes this reflects a truly expanding economy, rather than the start-and-stop condition that has characterized recent years.
Olympic sees continuing growth in most of its end markets, led by industrial machinery. The only markets showing softness are military spending and mining, executives said.
"The backdrop of healthy underlying demand in a number of manufacturing sectors is the real story in 2014. We're currently seeing more market resilience, particularly in the traditionally slower summer months, than we have seen since prior to 2008," said David Wolfort, president and chief operating officer.
Imports coming into the United States are not disrupting the supply-demand balance, Siegal added. "The fact of the matter is inventories are actually down. We're not seeing an imbalance in the inventories even with this influx of imports. In essence, this is needed supply to just feed a market that’s growing pretty strong."
Olympic expects more of the same in the second half. "The second quarter ended on a high note, with June being our best month in the first half," Siegal said. "Entering this year's second half, customer demand and metal prices have remained at elevated levels. In addition, further consolidation of steel producers, combined with recent trade case rulings imposing additional duties on certain steel imports, signifies an improving steel market moving forward."