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» Olympic Steel, Inc. Q1 2010 Earnings Call Transcript
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As you may have noted earlier today, we reported our financial results for the second quarter and the first half of 2010. We are pleased with our results and the sequential improvements in sales and earnings over the first quarter.Second quarter 2010 net income totaled $3.3 million, or $0.30 per diluted share, compared to a net loss of $33.8 million, or $3.11 per diluted share for last year's second quarter. The 2009 results included a $50.5 million lower of costs or market pre-tax charge to write down the value of the inventory as of June 30 th, 2009. Net sales for the second quarter of 2010 totaled $212.8 million, a 73.8% increase from the $122.4 million from the second quarter of 2009. Our shipments in the second quarter of 2010 increased by 78,000 tons or 45.2% to 252,000 from 174,000 in the second quarter of 2009. Our shipments also improved sequentially over the first quarter of 2010 by 31,000 tons or 14%. Our sales volume has been sequentially stronger for three consecutive quarters and shipments in each successive months of the first half. First half 2010 net income totaled $5 million or $0.45 per diluted share, compared to a net loss of $59.3 million or $5.45 per diluted share for the first six months of last year. The first half 2009 results included an $81.1 million of inventory lower of costs or market pre-tax charge. Net sales for the first half of 2010 totaled $380.7 million, or a 44.6% increase from the $263.3 million from the first half of the previous year. Our shipments in the first half 2010 increased by 129,000 tons to 474,000 tons from 345,000 tons in 2009. A 37.2% increase in shipments nearly doubled the 19.1% market increase in total shipments for the first half as reported by the Metal Service Center Institute Metals Activity Report.
We are being awarded new business by large OEM customers seeking financially strong, quality suppliers like ourselves, as well as benefiting from improved customer demand, as the economy has slowly recovered. Our recent investments in our specialty metals businesses are also producing growth in our stainless steel and aluminum products.Our balance sheet remains exceptionally strong. In April, we received our $38 million 2009 Federal income tax refund. And on June 30 th, we closed on a new $125 million five-year asset base loan facility with Bank of America as the agent bank. The new facility, together with our $200 million three-year self registration filed with the SEC in 2009, provides us with a favorable capital structure to grow our business through new geographic locations and acquisition opportunities. We expect to announce on some of these opportunities in the second half of 2010. Despite the normal summer seasonal market softness and the accompanying price pressure that has been well documented by others, we remain confident in our growth and profit initiative. Today, we also reported that Olympic Board of Directors approved a regular quarterly cash dividend of $0.02 per share to be paid on September 15 th, 2010 to shareholders of record on September 1 st, 2010. And, yesterday, we announced that our Board elected the Honorable Dirk A. Kempthorne as a Director of the company. Governor Kempthorne has served as the Mayor of Boise, Idaho and as a United States Senator from Idaho. He was also a two-term Governor of Idaho, and most recently served as the 49 th Secretary of the US Department of Interior from 2006 to January of 2009. We are extremely pleased that Dirk has joined our Board of Directors. His commitment to public service and recognized national leadership will enable Dirk to provide unique wisdom contributions and insights for Olympic Steel and its shareholders. We look forward to Dirk’s guidance as a Director. Read the rest of this transcript for free on seekingalpha.com