A prominent national metals service center has announced its financial results for the quarter ending September 30, 2024. For the third quarter, the company reported a net income of $2.7 million, or $0.23 per diluted share, a decrease from net income of $12.2 million, or $1.06 per diluted share, in the same quarter of 2023. EBITDA for Q3 2024 was $15.0 million, down from $27.1 million in Q3 2023. Notably, both periods included $2.0 million in LIFO pretax income.
Sales for the third quarter of 2024 reached $470 million, compared to $526 million in the same period last year, largely due to declines in metal pricing year over year.
“Olympic Steel’s diversification strategies have enabled all three of our business segments to achieve EBITDA-positive results despite prevailing pricing pressures in the industry,” said Richard T. Marabito, Chief Executive Officer. “Macroeconomic trends during the quarter led to reduced overall demand from OEMs, affecting margins across all segments. However, we have maintained profitability through our focus on counter-cyclical, steel-intensive end products and by pursuing higher-margin opportunities, such as flat-rolled coated products, as well as enhancing our fabrication capabilities.”
Marabito added, “In the third quarter, we reduced our debt by approximately $12 million to $197 million, entering the fourth quarter with around $304 million in available credit. In light of the ongoing economic uncertainty, we are diligently managing our operating expenses while continuing to invest in automation and processing equipment to drive efficiency and productivity for future growth.”
He concluded, “We believe that our strategic acquisitions and capital investments in key areas have strengthened Olympic Steel and enhanced our resilience. As demonstrated in the third quarter, we are capable of delivering profitable results even amid challenges. We remain focused and financially flexible to invest further in organic and acquisition-driven growth opportunities in steel-intensive end products, fabrication, and automation to improve our throughput, quality, safety, and profitability. While we face near-term market challenges, we are optimistic about the long-term outlook for both Olympic Steel and the broader industry.”
The Board of Directors has approved a regular quarterly cash dividend of $0.15 per share, payable on December 16, 2024, to shareholders on record as of December 2, 2024. The company has consistently paid a quarterly dividend since March 2006.
The following table provides a reconciliation of non-GAAP measures to the most comparable GAAP measures.
Olympic Steel, Inc.
Reconciliation of Net Income Per Diluted Share to Adjusted Net Income Per Diluted Share
(Figures may not total due to rounding.)
The table below reconciles adjusted net income per diluted share to the most comparable GAAP financial measure:
| Three Months Ended | Nine Months Ended |
|---|---|
| September 30, 2024 | September 30, 2023 |
| Net income per diluted share (GAAP) | $0.23 |
| Excluding the following items | |
| LIFO income | (0.12) |
| Acquisition inventory fair market value adjustment | – |
| Acquisition-related expenses | – |
| Employee retention credit | – |
| Adjusted net income per diluted share (non-GAAP) | $0.11 |
Reconciliation of Net Income to Adjusted EBITDA
(in thousands)
The table below reconciles adjusted EBITDA to the most comparable GAAP financial measure:
| Three Months Ended | Nine Months Ended |
|---|---|
| September 30, 2024 | September 30, 2023 |
| Net income (GAAP): | $2,734 |
| Excluding the following items | |
| Other loss, net | 26 |
| Interest and other expense on debt | 3,880 |
| Income tax provision | 1,169 |
| Depreciation and amortization | 7,234 |
| EBITDA | $15,043 |
| LIFO income | (2,000) |
| Acquisition inventory fair market value adjustment | – |
| Acquisition-related expenses | – |
| Employee retention credit | – |
| Adjusted EBITDA (non-GAAP) | $13,043 |
Conference Call and Webcast
A simulcast of Olympic Steel’s Q3 2024 earnings conference call will be available via the Investor Relations section of the Company’s website at www.olysteel.com. The live event will start at 10 a.m. ET on November 1, 2024, with a replay accessible for about 14 days thereafter.
Forward-Looking Statements
The Company does not endorse any analyst’s sales or earnings estimates. Forward-looking statements in this release are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements often use terms like “may,” “will,” “anticipate,” “should,” “intend,” “expect,” “believe,” “estimate,” “project,” “plan,” “potential,” and “continue,” as well as their negatives or similar expressions. Such statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Readers are advised not to place undue reliance on these forward-looking statements. Risks include fluctuating metals prices, economic conditions, production disruptions, supply chain issues, and geopolitical tensions that may affect the metals supply and pricing.
In addition to GAAP financial information, this document includes adjusted earnings per diluted share and adjusted EBITDA, which are non-GAAP financial measures. Management considers these measures for internal planning, forecasting, and performance assessment. They provide meaningful insights into the ongoing operational performance of the business and enable comparisons across periods. These non-GAAP measures should be viewed as complementary to GAAP information, not as substitutes. The presentation of these measures may differ from those used by other companies. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is provided above.
