Previous Statements by ZEUS
» Olympic Steel, Inc. Q2 2010 Earnings Call Transcript
» Olympic Steel, Inc. Q1 2010 Earnings Call Transcript
» Olympic Steel Q4 2009 Earnings Call Transcript
» Olympic Steel, Inc. Q3 2009 Earnings Call Transcript
Earlier today we reported our financial results for the third quarter and first nine months of 2010. Net sales for the third quarter of 2010 totaled $209.2 million, a 72% increase from the 121.6 million of net sales in the third quarter of 2009. Our shipments in the third quarter of 2010 increased by 59,000 tons or 33% to 240,000 from 181,000 tons in the third quarter of 2009.After incurring an unexpected, really unexpected, $2.1 million bad debt charge in September for the abrupt and unannounced closure of a private equity owned rock manufacturing customer, we experienced a third quarter 2010 net loss of 1.2 million or $0.11 per share. While the market proved to be highly competitive and is likely to remain so in the near term, we were profitable in the third quarter of 2010 prior to the non-recurring bad debt cost. In the third quarter of 2009, net income totaled 671,000 or $0.06 per share. For the first nine months of 2010, net income totaled $3.7 million or $0.34 per share compared to a net loss of 58.6 million or $5.39 per diluted share for the first nine months of last year. The 2009 results included the 81.1 million of inventory lower cost to market pretax charges incurred in the first half of the prior year. Net sales for the first nine months of 2010 totaled 589.8 million, a 53.2% increase from the 384.9 million in 2009. Our shipments in the first nine months of 2010 increased by 188,000 tons to 714,000 tons from the 527,000 in 2009. Our 36% increase in 2010 shipments is significantly higher than the 20% market share increase in total steel shipments the first nine months as reported by the Metal Service Center Institute’s Metals Activity Report. As we have stated previously, we are continually being awarded businesses – or business by large OEM customers seeking financially strong, quality suppliers like Olympic Steel, as well as aggressively winning new business as customer demand improves as the economy slowly recovers. Recent investments in the specialty metals business are also producing growth, and our stainless steel and aluminum products. Additionally, our automotive sales have been strong and represent a larger portion of our total sales than in the past.
Our balance sheet remains exceptionally strong. As previously announced on June 30, 2010, we closed the new 125 million five-year asset-based loan facility with Bank of America as agent. The new facility which can be upsized by an additional $50 million to the terms of its accordion feature, together with our $200 million three-year self-registration filed with the SEC in 2009, provides us with plenty of financing availability and a favorable capital structure to grow our business. As indicated in our release this morning, we are putting a piece of this capital to work on a major new growth initiative.We are most pleased to announce this morning our third and our largest growth project of 2010. In addition to the acquisition of Integrity Stainless in the first quarter and the purchase of land and a facility in Mount Sterling, Kentucky in the third quarter, we are extremely excited to announce our intent to locate Olympic Steel’s third temper mill operation on U.S. Steel’s Gary, Indiana site. We have selected an existing 150,000 square-foot facility on the U.S. Steel Gary Works facility to house a new Olympic Steel temper mill and cut-to-length line. The purchase agreements were signed this week with Butech, Inc. for the cut-to-length line and with I2S, LLC for the new temper mill. The total project is estimated to cost approximately $25 million and the equipment is expected to be installed and operational in the first half of 2012. Once fully operational, the new equipment will add somewhere between 150,000 to 180,000 tons of new tempering capacity for Olympic Steel. And David will expand the new temper mill project later in the call. Read the rest of this transcript for free on seekingalpha.com