Olympic Steel Inc., Cleveland, reported net sales of $429 million in the second quarter, a 5 percent decline compared with the same quarter in 2018. First-half net sales were up 5.6 percent to $875 million.
Company executives said net sales were negatively affected by an industry-wide decline in shipping volumes, which was partially offset by year-over-year higher selling prices.
"The second quarter ran contrary to the traditionally stronger seasonality of the steel market, as both industry sales volumes and steel pricing declined. The decrease in volume and pricing led to margin compression, particularly in carbon flat products. While we cannot control the market price of steel or U.S. trade and tariff policies, we have taken action to best position us for future success," said CEO Richard T. Marabito.
Second-quarter net income totaled $2 million, down from the $15.8 million reported in the same quarter in 2018. First-half net income of $4.1 million was down 82.3 percent.
The company saw relatively stable quarters out of its specialty metals and pipe and tube segments, each reporting comparable sales figures with the second quarter of 2018. However, the company’s carbon products division experienced a decline of 12.2 percent to 267,202 tons. Net sales in the segment declined 8.3 percent to $255,870.
Marabito said the company expects to announce a small acquisition of a metal-intensive manufacturing business in the second half. That would mark its second downstream deal of the year, following the January acquisition of McCullough Industries.
"As we look ahead to the second half of the year, steel prices are rising after reaching a low in early July. We are focused on maintaining five inventory turns, continuing our cash flow generation, reducing our operating expenses and actively evaluating additional opportunities to grow our metal-intensive branded products portfolio," Marabito said.