Aug. 19, 2015
Olympic Reports Quarterly Loss
Olympic Steel, Inc., Cleveland, reported a net loss of $22.3 million in the second quarter, compared to second-quarter 2014 net income of $3.5 million. For the first half, the company posted a loss of $21.2 million, down from net income of $6.3 million in the first six months last year.
Olympic’s second-quarter net sales totaled $315.3 million, a decrease of 18.3 percent from the record sales figure reported in the same quarter of 2014. First-half net sales declined 9.8 percent to $666.1 million. The company attributed the revenue decrease in both periods to a decline in industry-wide shipments and lower average selling prices.
"Global metal markets have been challenged throughout 2015. Olympic Steel has not been immune to these factors," said Chairman and CEO Michael D. Siegal during the company’s quarterly conference call with investors and analysts. "Our stated objectives of reducing operating costs, debt reduction and enhancing cash flow, while retaining market share, are reflected in our results."
Olympic’s sales declined across the board, with carbon flat-rolled products down 20.5 percent to $209 million. Pipe and tube products declined 19.0 percent to $53 million, while specialty metals flat product sales fell 7.5 percent to $52 million during the quarter.
“Historically low costs for inputs, combined with a strong U.S. dollar, resulted in consistent downward pressure on metals prices. Those factors are not expected to disappear any time soon,” Siegal said.
Olympic continued the inventory reduction efforts it began in the first quarter, with stocks declining by $37 million in the second. Operating expenses fell by more than $8 million in the quarter, and were down $11 million for the year.
“Waiting for the market to improve is never an option,” Siegal said. “We saw what was happening in the market and took action to get ahead of it."
Executives are encouraged that carbon flat-rolled prices have been firming since May, but they remain cautious. “While we hope the cycle’s bottom is truly behind us, we won’t know with any certainty until after the seasonal summer slowdowns,” Siegal said.