Olympic Steel Reports 2009 Second Quarter Results

CLEVELAND--(Business Wire)--
Olympic Steel, Inc., (Nasdaq: ZEUS), a national steel service center, today
announced its financial results for its second quarter and first half ended June
30, 2009.

Net sales for the second quarter of 2009 totaled $122.4 million, a 66.3%
decrease from the $363.5 million for the second quarter of 2008. Tons sold in
the second quarter of 2009 decreased 50.8% to 174 thousand from 353 thousand in
the second quarter of 2008. Second quarter 2009 net loss totaled $33.8 million,
or $3.11 per diluted share, compared to net income of $29.6 million, or $2.70
per diluted share for last year`s second quarter. The 2009 second quarter
results include a $50.5 million lower of cost or market pretax charge to write
down the value of inventory as of June 30, 2009.

Net sales for the first half of 2009 totaled $263.3 million, a 58.8% decrease
from the $638.4 million for the first half of 2008. Tons sold in the first half
of 2009 decreased 48.4% to 345 thousand from 669 thousand in the first half of
2008, compared to the Metals Service Center Institute statistics of a 43.9%
decline in year-over-year steel shipments for the first half of 2009. First half
2009 net loss totaled $59.3 million, or $5.45 per diluted share, compared to net
income of $42.8 million, or $3.93 per diluted share for last year`s first half.
The 2009 results include $81.1 million of lower of cost or market pretax charges
to write down the value of inventory as of March 31 and June 30, 2009.

Commenting on the results, Chairman and Chief Executive Officer Michael D.
Siegal, stated, "We are disappointed to report continued demand and price
deterioration through the second quarter, which resulted in the required June
inventory lower of cost or market accounting adjustment. We made significant
improvements in rightsizing our balance sheet during the quarter, by reducing
our inventory tons by 32%, maintaining a strong receivable turnover, and
eliminating 64% or $57 million of our debt. We also reduced our second quarter
2009 operating expenses by 50% compared to second quarter of 2008. We expect our
results to improve in the second half of 2009, as prices have begun to increase,
and the unprecedented inventory liquidation by service centers during the first
half of 2009 appears to be ending," concluded Mr. Siegal.

Olympic Steel`s Board of Directors approved a regular quarterly cash dividend of
$0.02 per share to be paid to shareholders of record as of September 1, 2009,
and distributed on September 15, 2009.

A simulcast of Olympic Steel`s 2009 second quarter earnings conference call may
be accessed via the Investor Relations section of the Company`s website at
www.olysteel.com. The simulcast will begin at 10:00 a.m. Eastern Time today and
a replay of the call will be available for 14 days thereafter.

Founded in 1954, Olympic Steel is a leading U.S. steel service center focused on
the direct sale and distribution of large volumes of processed carbon, coated
and stainless flat-rolled sheet, coil and plate steel products. Headquartered in
Cleveland, Ohio, the Company operates 17 facilities. For further information,
visit the Company`s web site at http://www.olysteel.com.

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," "should," "expect," "anticipate," "intend," "plan," "believe,"
"estimate," "project," "plan," "potential," or "continue," as well as the
negative of these terms or other similar expressions. Such forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected. Readers are cautioned
not to place undue reliance on these forward-looking statements. Such risks and
uncertainties include, but are not limited to: further deterioration of steel
demand and steel pricing; general and global business, economic, financial and
political conditions, including the ongoing effects of the global credit crisis;
access to capital and global credit markets; competitive factors such as the
availability and pricing of steel, industry shipping and inventory levels, and
rapid fluctuations in customer demand and steel pricing; the cyclicality and
volatility within the steel industry; the ability of customers (especially those
that may be highly leveraged, those in the domestic automotive industry and
those with inadequate liquidity) to maintain their credit availability;
customer, supplier, and competitor consolidation, bankruptcy or insolvency,
especially those in the domestic auto industry; reduced production schedules,
layoffs or work stoppages by our own, our suppliers` or our customers`
personnel; the availability and costs of transportation and logistical services;
equipment installation delays or malfunctions; the amounts, successes and
ability to continue our capital investments and our business information system
project; the successes of our strategic efforts and initiatives to increase
sales volumes, maintain or improve working capital turnover and free cash flows,
reduce costs, inventory and debt in a declining market, while improving customer
service; the timing and outcome of inventory lower of cost or market
adjustments; the timing and outcome of OLP`s efforts and ability to liquidate
its remaining assets; the adequacy of our existing information technology and
business system software and the success of implementing our new enterprise-wide
information system; our ability to pay regular quarterly cash dividends and the
amounts and timing of any future dividends; and our ability to generate free
cash flow through operations, reduce inventory and repay debt within anticipated
timeframes. Further information on these and other risks and uncertainties is
provided under Item 1A "Risk Factors" of our Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q, which disclosure is incorporated herein by
reference, and elsewhere in reports that the Company files or furnishes with the
SEC. This release speaks only as of its date and the Company undertakes no
obligation to publicly update forward-looking statements, whether as a result of
new information, future events or otherwise, except to the extent required by
law. You are advised, however, to consult any further disclosures the Company
makes on related subjects in its reports filed with or furnished to the SEC.

OLYMPIC STEEL
SELECTED FINANCIAL INFORMATION

(in thousands, except per share data and ratios)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
SUMMARY RESULTS OF OPERATIONS: (unaudited) (unaudited)

Net sales $ 122,426 $ 363,514 $ 263,299 $ 638,389

Operating income (loss) (53,272 ) 47,329 (95,242 ) 68,556

Income (loss) before income taxes (54,323 ) 47,169 (96,536 ) 68,369

Net income (loss) $ (33,832 ) $ 29,598 $ (59,287 ) $ 42,759

Earnings per share:

Net income (loss) per share - basic $ (3.11 ) $ 2.73 $ (5.45 ) $ 3.95

Net income (loss) per share - diluted $ (3.11 ) $ 2.70 $ (5.45 ) $ 3.93

June 30, December 31,
2009 2008 2008
SUMMARY BALANCE SHEET DATA: (unaudited) (audited)

Accounts receivable, net $ 47,420 $ 135,706 $ 77,737

Inventories, net 123,619 237,237 255,300

Net property and equipment 117,476 98,753 113,505

Total assets 346,831 493,098 474,247

Current liabilities 40,345 136,452 95,280

Total debt 32,565 32,023 40,198

Shareholders' equity 262,603 309,125 322,958

Shareholders' equity per share 24.16 28.46 29.73

Debt-to-equity ratio .12 to 1 .10 to 1 .12 to 1

Six Months Ended
June 30,
2009 2008
OTHER DATA: (unaudited)

Capital expenditures 9,514 13,975

Cash dividends per share $ 0.07 $ 0.08

It is the Company's policy not to make quarterly or annual sales or earnings projections
for external use and not to endorse any analyst's sales or earnings estimates.

OLYMPIC STEEL
RESULTS OF OPERATIONS

(in thousands, except per share and tonnage data)

Three Months Ended June 30, Six Months Ended June 30,
2009 2008 2009 2008
(unaudited) (unaudited)

Tons sold
Direct 157,145 320,076 308,418 600,079
Toll 16,785 33,338 36,952 68,759

173,930 353,414 345,370 668,838
% change (50.8 %) 5.1 % (48.4 %) 3.3 %

Net sales $ 122,426 $ 363,514 $ 263,299 $ 638,389
% change (66.3 %) 31.0 % (58.8 %) 18.9 %

Costs and expenses

Cost of materials sold (exclusive of items shown below) 97,661 79.8 % 260,581 71.7 % 217,977 82.8 % 469,188 73.5 %
Inventory lower of cost or market adjustments 50,454 41.2 % - 0.0 % 81,063 30.8 % - 0.0 %
Warehouse and processing 9,436 7.7 % 17,651 4.9 % 19,778 7.5 % 33,415 5.2 %
Administrative and general 7,383 6.0 % 19,242 5.3 % 17,328 6.6 % 32,351 5.1 %
Distribution 3,906 3.2 % 8,634 2.4 % 7,580 2.9 % 15,676 2.5 %
Selling 2,594 2.1 % 5,899 1.6 % 6,116 2.3 % 10,789 1.7 %
Occupancy 1,299 1.1 % 1,862 0.5 % 3,015 1.1 % 3,814 0.6 %
Depreciation 2,965 2.4 % 2,316 0.6 % 5,684 2.2 % 4,600 0.7 %

Total costs and expenses 175,698 143.5 % 316,185 87.0 % 358,541 136.2 % 569,833 89.3 %

Operating income (loss) (53,272 ) (43.5 %) 47,329 13.0 % (95,242 ) (36.2 %) 68,556 10.7 %

Interest and other expense on debt 1,051 0.9 % 160 0.0 % 1,294 0.5 % 187 0.0 %

Income (loss) before income taxes (54,323 ) (44.4 %) 47,169 13.0 % (96,536 ) (36.7 %) 68,369 10.7 %

Income tax provision (benefit) (20,491 ) 37.7 % 17,571 37.3 % (37,249 ) 38.6 % 25,610 37.5 %

Net income (loss) $ (33,832 ) $ 29,598 $ (59,287 ) $ 42,759

Earnings per share:

Net income (loss) per share - basic $ (3.11 ) $ 2.73 $ (5.45 ) $ 3.95

Weighted average shares outstanding - basic 10,882 10,857 10,879 10,814

Net income (loss) per share - diluted $ (3.11 ) $ 2.70 $ (5.45 ) $ 3.93

Weighted average shares outstanding - diluted 10,882 10,946 10,879 10,894

It is the Company's policy not to make quarterly or annual sales or earnings projections
for external use and not to endorse any analyst's sales or earnings estimates.

Olympic Steel, Inc.
Richard T. Marabito, Chief Financial Officer, 216-292-3800
Fax: 216-292-3974

Copyright Business Wire 2009

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