• Total Sales: $1.9 billion for the year 2024.
• Net Income: $23.0 million for the year 2024.
• Adjusted EBITDA: $72.5 million for the year 2024.
• Fourth Quarter Net Income: $3.9 million compared to $7.4 million in Q4 2023.
• Fourth Quarter Adjusted EBITDA: $14.5 million compared to $16.7 million in Q4 2023.
• Operating Expenses: $96.5 million in Q4 2024 compared to $100.4 million in Q4 2023.
• Total Debt: Approximately $272 million at the end of Q4 2024.
• Capital Expenditures: $29.5 million for the full year 2024, expected to be $35 million in 2025.
• Dividend Increase: Quarterly dividend increased from $0.15 to $0.16 per share.
• Effective Income Tax Rate: 18.9% in Q4 2024 compared to 23.3% in Q4 2023.

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Release Date: February 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Olympic Steel Inc (NASDAQ:ZEUS) achieved sequential improvement in fourth quarter 2024 earnings versus the third quarter, despite a challenging metals environment.
• The company successfully grew market share across its portfolio, maintaining shipping volumes within 1% of 2023 levels, outperforming industry shipment levels.
• Olympic Steel Inc (NASDAQ:ZEUS) executed a profitable strategy in all market conditions, with each segment earning positive EBITDA in every quarter of 2024.
• The acquisition of Metalworks in November 2024 was immediately accretive, enhancing the company's position in manufactured metal products.
• The board increased the quarterly dividend by 7%, reflecting a commitment to returning capital to shareholders.

Negative Points

• The metals industry faced macroeconomic challenges, including a significant decline in hot roll carbon pricing and low nickel prices, impacting stainless surcharges.
• Net income for the fourth quarter of 2024 was $3.9 million, down from $7.4 million in the fourth quarter of 2023.
• The company experienced lower demand from contractual OEM customers in the carbon segment, particularly in the heavy equipment sector.
• Total debt increased by $82 million from the third quarter due to the Metalworks acquisition, raising concerns about leverage.
• Operating expenses per ton appeared higher year over year due to the inclusion of Metalworks, which does not reflect tons sold.

Q & A Highlights

Q: What drove the impressive gross profit per ton in the carbon flat segment during the fourth quarter? A: Richard Manson, CFO, explained that the increase in gross profit was due to the expansion of end-use metal products companies like Metalworks and Metal Fab, which do not report tons sold. This expansion, along with a focus on growing the fabrication business and increased galvanized participation, contributed to the higher gross profit per ton.

Q: How is the pipe and tube segment expected to perform in the first quarter of 2025? A: Andrew Greiff, President and COO, stated that the first quarter is expected to be traditional, with new customer acquisitions and a shift towards greater fabrication. The segment aims for a 50/50 mix between distribution and fabrication, with investments in tube blazers supporting this growth.

Q: How will the increase in the Midwest transaction premium for aluminum impact the specialty metals segment? A: Andrew Greiff noted that while spot prices have increased due to tariffs, most of their aluminum business is contractual. The segment continues to grow, with most opportunities being on the contractual side, which helps mitigate the impact of spot price fluctuations.

Q: What synergies are anticipated from the Metalworks acquisition? A: Richard Marabito, CEO, highlighted that the main synergies include integration into Olympic Steel's supply chain, sourcing relationships, and first-stage processing capabilities. Additionally, Metalworks will be integrated into Olympic's systems and back-office operations, enhancing efficiency.

Q: How are tariffs expected to affect the metals industry and Olympic Steel's profitability? A: Richard Manson mentioned that while tariffs have led to price increases in the supply chain, their impact on profitability will likely be seen in late Q1 or early Q2. The company is monitoring developments closely, and any significant changes will depend on the implementation of tariffs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.