Olympic Steel, Cleveland, reported net sales of $384 million in the third quarter, a 16 percent decrease from the same quarter in 2018. The decline was attributed to lower year-over-year shipping volumes and declining carbon steel pricing.
Despite the decrease, the company said its specialty metals flat products segment continued to profitably grow its market share, while tubular and pipe products sales outperformed the market.
Net income in the quarter was $591,000, well behind the $11.6 million reported in third-quarter 2018.
For the year to date, Olympic’s net sales totaled $1.26 billion, down 2 percent from 2018. Year-to-date net income of $4.7 million was well behind the $35 million posted in the first three quarters of the prior year.
"While we anticipated the third quarter would be softer than the first half of the year, we are encouraged by the positive impact we are seeing from our strategy to diversify the business. Our specialty metals and pipe and tube businesses remained resilient in a challenging market environment,” said CEO Richard T. Marabito.
During the quarter, Olympic’s carbon flat products segment sold 248,000 tons of steel, an 11.6 percent decline, while the average price per ton declined from $1,006 to $867. Net sales in the segment declined 23.7 percent to $215 million. In contrast, specialty metals tons sold increased 4.4 percent to 38,213, resulting in a 5.9 percent increase in net sales to $97.6 million.
Tubular and pipe products sales were down 12 percent to $71.2 million.
Also during the quarter, Olympic acquired EZ Dumper, a manufacturer of hydraulic dump inserts. “We also furthered our strategy of vertical integration during the third quarter through the acquisition of EZ Dumper. This is our second acquisition in 2019 of manufacturers of higher-margin, metal-intensive branded products, which offer a countercyclical offset to the pricing dynamics of the steel distribution business,” Marabito said.