Olympic Steel Reports Fourth-Quarter and Full-Year 2023 Results
Strong finish to the year led by Pipe and Tube segment delivering its second most profitable year ever
Shareholders rewarded with a quarterly dividend increase of 20% from
Company enters 2024 in position of strength due to success of diversification strategy and operational disciplines
Fourth-Quarter Results
Net income for the fourth quarter totaled
Full-Year Results
Net income for 2023 totaled
“Olympic Steel’s strong performance in the fourth quarter and for the full year reflects the success of our strategy to build a more diversified company that delivers results and creates shareholder value even under challenging market conditions,” said
Marabito said, “All three of our business segments positively impacted Olympic Steel’s results for the fourth quarter and full year. Our Pipe and Tube business delivered its second most profitable year ever, and our Carbon business showed its resiliency in navigating the pricing pressures of 2023. While Specialty Metals faced industry-wide stainless steel pricing headwinds, this segment contributed consistent positive EBITDA for both the fourth quarter and the full year.”
Marabito continued, “Our inventory management and strong cash flow have fortified our balance sheet. During 2023, we invested
The Company’s Board of Directors approved a regular first quarter 2024 cash dividend of
Marabito concluded, “As we head into 2024,
The table that follows provides a reconciliation of non-GAAP measures to the most directly comparable measures prepared in accordance with GAAP.
|
||||||||||||||||
Reconciliation of Net Income Per Diluted Share to |
||||||||||||||||
Adjusted Net Income Per Diluted Share |
||||||||||||||||
(Figures may not foot due to rounding.) |
||||||||||||||||
The following table reconciles adjusted net income per diluted share to the most directly comparable GAAP |
||||||||||||||||
financial measure: |
||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
|
|
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Net income per diluted share (GAAP) |
$ |
0.64 |
|
$ |
0.34 |
|
$ |
3.85 |
|
$ |
7.87 |
|
||||
Excluding the following items | ||||||||||||||||
LIFO (income) / expense |
|
(0.35 |
) |
|
(0.07 |
) |
|
(0.52 |
) |
|
0.04 |
|
||||
Acquisition inventory fair market value adjustment |
|
0.01 |
|
|
- |
|
|
0.14 |
|
|
- |
|
||||
Acquisition related expenses |
|
0.06 |
|
|
- |
|
|
0.22 |
|
|
- |
|
||||
Gain on sale of warehouse |
|
- |
|
|
- |
|
|
- |
|
|
(0.13 |
) |
||||
Employee retention credit |
|
- |
|
|
- |
|
|
(0.25 |
) |
|
- |
|
||||
Adjusted net income per diluted share (non-GAAP) |
$ |
0.36 |
|
$ |
0.28 |
|
$ |
3.44 |
|
$ |
7.77 |
|
Reconciliation of Net Income to Adjusted EBITDA |
||||||||||||||||
(in thousands) |
||||||||||||||||
The following table reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure: |
||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
|
|
|
|
|||||||||||||
Net income (GAAP): |
$ |
7,408 |
|
$ |
3,959 |
|
$ |
44,529 |
|
$ |
90,931 |
|
||||
Excluding the following items | ||||||||||||||||
Foreign exchange loss included in net income |
|
11 |
|
|
7 |
|
|
78 |
|
|
45 |
|
||||
Interest and other expense on debt |
|
3,627 |
|
|
2,804 |
|
|
16,006 |
|
|
10,080 |
|
||||
Income tax provision |
|
2,245 |
|
|
904 |
|
|
17,058 |
|
|
32,691 |
|
||||
Depreciation and amortization |
|
7,584 |
|
|
5,144 |
|
|
26,443 |
|
|
19,738 |
|
||||
Earnings before interest, taxes, depreciation and | ||||||||||||||||
amortization (EBITDA) |
|
20,875 |
|
|
12,818 |
|
|
104,114 |
|
|
153,485 |
|
||||
LIFO (income) / expense |
|
(5,258 |
) |
|
(935 |
) |
|
(8,258 |
) |
|
565 |
|
||||
Acquisition inventory fair market value adjustment |
|
134 |
|
|
- |
|
|
2,212 |
|
|
- |
|
||||
Acquisition related expenses |
|
947 |
|
|
- |
|
|
3,503 |
|
|
- |
|
||||
Gain on sale of warehouse |
|
- |
|
|
- |
|
|
- |
|
|
(2,083 |
) |
||||
Employee retention credit |
|
- |
|
|
- |
|
|
(4,000 |
) |
|
- |
|
||||
Adjusted EBITDA (non-GAAP) |
$ |
16,698 |
|
$ |
11,883 |
|
$ |
97,571 |
|
$ |
151,967 |
|
Conference Call and Webcast
A simulcast of Olympic Steel’s 2023 fourth-quarter earnings conference call can be accessed via the Investor Relations section of the Company’s website at www.olysteel.com. The live simulcast will begin at
Forward-Looking Statements
It is the Company’s policy not to endorse any analyst’s sales or earnings estimates. Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “may,” “will,” “anticipate,” “should,” “intend,” “expect,” “believe,” “estimate,” “project,” “plan,” “potential,” and “continue,” as well as the negative of these terms or similar expressions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those implied by such statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Such risks and uncertainties include, but are not limited to: risks of falling metals prices and inventory devaluation; supply disruptions and inflationary pressures, including the availability and rising costs of labor and energy; risks associated with shortages of skilled labor, increased labor costs and our ability to attract and retain qualified personnel; rising interest rates and their impacts on our variable interest rate debt; supplier consolidation or addition of new capacity; risks associated with the invasion of
In addition to financial information prepared in accordance with GAAP, this document also contains adjusted earnings per diluted share and adjusted EBITDA, which are non-GAAP financial measures. Management’s view of the Company’s performance includes adjusted earnings per share and adjusted EBITDA, and management uses these non-GAAP financial measures internally for planning and forecasting purposes and to measure the performance of the Company. We believe these non-GAAP financial measures provide useful and meaningful information to us and investors because they enhance investors’ understanding of the continuing operating performance of our business and facilitate the comparison of performance between past and future periods. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. Additionally, the presentation of these measures may be different from non-GAAP financial measures used by other companies. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures is provided above.
About
Founded in 1954,
For additional information, please visit the Company’s website at www.olysteel.com.
|
||||||||||||
Consolidated Statements of Net Income |
||||||||||||
(in thousands, except per-share data) |
||||||||||||
Three months ended | Twelve months ended | |||||||||||
|
|
|||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||
Net sales |
$ |
489,408 |
$ |
520,044 |
$ |
2,158,163 |
$ |
2,559,990 |
||||
Costs and expenses | ||||||||||||
Cost of materials sold (excludes items shown separately below) |
|
375,675 |
|
430,811 |
|
1,684,663 |
|
2,073,930 |
||||
Warehouse and processing |
|
31,087 |
|
25,599 |
|
122,212 |
|
104,668 |
||||
Administrative and general |
|
31,192 |
|
25,484 |
|
122,239 |
|
114,004 |
||||
Distribution |
|
15,448 |
|
13,916 |
|
66,979 |
|
60,529 |
||||
Selling |
|
11,063 |
|
8,269 |
|
41,436 |
|
40,174 |
||||
Occupancy |
|
4,068 |
|
3,147 |
|
16,520 |
|
13,200 |
||||
Depreciation |
|
6,215 |
|
4,519 |
|
21,545 |
|
17,285 |
||||
Amortization |
|
1,369 |
|
625 |
|
4,898 |
|
2,453 |
||||
Total costs and expenses |
|
476,117 |
|
512,370 |
|
2,080,492 |
|
2,426,243 |
||||
Operating income |
|
13,291 |
|
7,674 |
|
77,671 |
|
133,747 |
||||
Other loss, net |
|
11 |
|
7 |
|
78 |
|
45 |
||||
Income before interest and income taxes |
|
13,280 |
|
7,667 |
|
77,593 |
|
133,702 |
||||
Interest and other expense on debt |
|
3,627 |
|
2,804 |
|
16,006 |
|
10,080 |
||||
Income before income taxes |
|
9,653 |
|
4,863 |
|
61,587 |
|
123,622 |
||||
Income tax provision |
|
2,245 |
|
904 |
|
17,058 |
|
32,691 |
||||
Net income |
$ |
7,408 |
$ |
3,959 |
$ |
44,529 |
$ |
90,931 |
||||
Earnings per share: | ||||||||||||
Net income per share - basic |
$ |
0.64 |
$ |
0.34 |
$ |
3.85 |
$ |
7.87 |
||||
Weighted average shares outstanding - basic |
|
11,578 |
|
11,554 |
|
11,573 |
|
11,551 |
||||
Net income per share - diluted |
$ |
0.64 |
$ |
0.34 |
$ |
3.85 |
$ |
7.87 |
||||
Weighted average shares outstanding - diluted |
|
11,587 |
|
11,567 |
|
11,578 |
|
11,559 |
|
||||||||
Balance Sheets |
||||||||
(in thousands) |
||||||||
As of 2023 |
As of 2022 |
|||||||
Assets | ||||||||
Cash and cash equivalents |
$ |
13,224 |
|
$ |
12,189 |
|
||
Accounts receivable, net |
|
191,149 |
|
|
219,789 |
|
||
Inventories, net (includes LIFO reserves of |
|
386,535 |
|
|
416,931 |
|
||
Prepaid expenses and other |
|
12,261 |
|
|
9,197 |
|
||
Total current assets |
|
603,169 |
|
|
658,106 |
|
||
Property and equipment, at cost |
|
483,448 |
|
|
429,810 |
|
||
Accumulated depreciation |
|
(297,340 |
) |
|
(281,478 |
) |
||
Net property and equipment |
|
186,108 |
|
|
148,332 |
|
||
|
|
52,091 |
|
|
10,496 |
|
||
Intangible assets, net |
|
92,621 |
|
|
32,035 |
|
||
Other long-term assets |
|
16,466 |
|
|
14,434 |
|
||
Right of use asset, net |
|
34,380 |
|
|
28,224 |
|
||
Total assets |
$ |
984,835 |
|
$ |
891,627 |
|
||
Liabilities | ||||||||
Accounts payable |
$ |
119,718 |
|
$ |
101,446 |
|
||
Accrued payroll |
|
30,113 |
|
|
40,334 |
|
||
Other accrued liabilities |
|
22,593 |
|
|
16,824 |
|
||
Current portion of lease liabilities |
|
7,813 |
|
|
6,098 |
|
||
Total current liabilities |
|
180,237 |
|
|
164,702 |
|
||
Credit facility revolver |
|
190,198 |
|
|
165,658 |
|
||
Other long-term liabilities |
|
20,151 |
|
|
12,619 |
|
||
Deferred income taxes |
|
11,510 |
|
|
10,025 |
|
||
Lease liabilities |
|
27,261 |
|
|
22,655 |
|
||
Total liabilities |
|
429,357 |
|
|
375,659 |
|
||
Shareholders' Equity | ||||||||
Preferred stock |
|
- |
|
|
- |
|
||
Common stock |
|
136,541 |
|
|
134,724 |
|
||
Accumulated other comprehensive loss |
|
41 |
|
|
1,311 |
|
||
Retained earnings |
|
418,896 |
|
|
379,933 |
|
||
Total shareholders' equity |
|
555,478 |
|
|
515,968 |
|
||
Total liabilities and shareholders' equity |
$ |
984,835 |
|
$ |
891,627 |
|
|
||||||||||||||||||||
Segment Financial Information |
||||||||||||||||||||
(In thousands, except tonnage and per-ton data. Figures may not foot to consolidated totals due to Corporate expenses.) |
||||||||||||||||||||
Three months ended |
||||||||||||||||||||
Carbon Flat Products |
Specialty Metals Flat Products |
Tubular and Pipe Products |
||||||||||||||||||
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||
Tons sold 1 |
|
202,434 |
|
187,110 |
|
|
26,424 |
|
31,073 |
|
N/A |
|
N/A |
|
||||||
Net sales |
$ |
280,169 |
$ |
270,132 |
|
$ |
121,400 |
$ |
161,278 |
$ |
87,839 |
$ |
88,634 |
|
||||||
Average selling price per ton |
|
1,384 |
|
1,444 |
|
|
4,594 |
|
5,190 |
|
N/A |
|
N/A |
|
||||||
Cost of materials sold |
|
219,627 |
|
232,615 |
|
|
101,849 |
|
133,495 |
|
54,199 |
|
64,701 |
|
||||||
Gross profit |
|
60,542 |
|
37,517 |
|
|
19,551 |
|
27,783 |
|
33,640 |
|
23,933 |
|
||||||
Operating expenses |
|
56,549 |
|
39,727 |
|
|
17,274 |
|
19,750 |
|
22,093 |
|
18,054 |
|
||||||
Operating income | $ |
3,993 |
$ |
(2,210 |
) |
$ |
2,277 |
$ |
8,033 |
$ |
11,547 |
$ |
5,879 |
|
||||||
Depreciation and amortization |
|
3,871 |
|
2,810 |
|
|
1,051 |
|
1,023 |
|
2,644 |
|
1,293 |
|
||||||
LIFO income / (expense) |
|
- |
|
- |
|
|
- |
|
- |
|
5,258 |
|
935 |
|
||||||
Twelve months ended |
||||||||||||||||||||
Carbon Flat Products |
Specialty Metals Flat Products |
Tubular and Pipe Products |
||||||||||||||||||
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||
Tons sold 1 |
|
854,192 |
|
806,919 |
|
|
115,587 |
|
142,092 |
|
N/A |
|
N/A |
|
||||||
Net sales |
$ |
1,221,093 |
$ |
1,356,605 |
|
$ |
567,728 |
$ |
776,022 |
$ |
369,342 |
$ |
427,363 |
|
||||||
Average selling price per ton |
|
1,430 |
|
1,681 |
|
|
4,912 |
|
5,461 |
|
N/A |
|
N/A |
|
||||||
Cost of materials sold |
|
963,667 |
|
1,164,459 |
|
|
473,784 |
|
589,472 |
|
247,212 |
|
319,999 |
|
||||||
Gross profit |
|
257,426 |
|
192,146 |
|
|
93,944 |
|
186,550 |
|
122,130 |
|
107,364 |
|
||||||
Operating expenses |
|
222,844 |
|
167,131 |
|
|
71,060 |
|
92,888 |
|
81,438 |
|
72,508 |
|
||||||
Operating income | $ |
34,582 |
$ |
25,015 |
|
$ |
22,884 |
$ |
93,662 |
$ |
40,692 |
$ |
34,856 |
|
||||||
Depreciation and amortization |
|
14,762 |
|
10,695 |
|
|
3,929 |
|
4,060 |
|
7,682 |
|
4,913 |
|
||||||
LIFO income / (expense) |
|
- |
|
- |
|
|
- |
|
- |
|
8,258 |
|
(565 |
) |
1 The Company does not report tons sold for |
As of 2023 |
As of 2022 |
|||||||||||||
Assets | ||||||||||||||
Flat-products |
$ |
649,744 |
$ |
631,607 |
||||||||||
Tubular and pipe products |
|
333,677 |
|
258,412 |
||||||||||
Corporate |
|
1,414 |
|
1,608 |
||||||||||
Total assets |
$ |
984,835 |
$ |
891,627 |
Other Information |
||||||
(in thousands, except per-share and ratio data) |
||||||
As of 2023 |
As of 2022 |
|||||
Shareholders' equity per share |
$ |
49.90 |
$ |
46.36 |
||
Debt to equity ratio |
0.34 to 1 |
0.32 to 1 |
||||
Twelve Months Ended |
||||||
2023 |
2022 |
|||||
Net cash from operating activities |
$ |
175,159 |
$ |
185,853 |
||
Cash dividends per share |
$ |
0.50 |
$ |
0.36 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221524711/en/
Chief Financial Officer
(216) 672-0522
ir@olysteel.com
Source: