Core Insights - Olympic Steel reported Q2 2025 GAAP revenue of $496 million, exceeding analyst estimates of $491.13 million, but down 5.7% year-over-year from $526 million [1][2] - Non-GAAP earnings per share were $0.50, surpassing the consensus of $0.40, although down 16.7% from $0.60 in Q2 2024 [1][2] - The company is facing margin pressure and softening demand in the overall metals market despite successful integration of acquisitions [1][5] Financial Performance - GAAP net income for Q2 2025 was $5.2 million, a decline of 32.5% from $7.7 million in Q2 2024 [2] - Adjusted EBITDA decreased by 4.7% to $20.3 million compared to $21.3 million in the previous year [2] - The Carbon Flat Products segment saw tons sold drop by 6.2% to 214,894, with net sales down 8.2% year-over-year, although gross profit increased [7] Business Strategy - The company focuses on growth through targeted acquisitions, with plans to pursue at least one acquisition per year [4][6] - Recent acquisition of Metal Works has led to higher operating expenses but also expanded sales contributions [6] - Investments in automation and technology are aimed at enhancing operational efficiency, with approximately $35 million planned for capital expenditures in 2025 [8] Operational Developments - Olympic Steel has reduced inventory balances by 5.8% from December 31, 2024, to June 30, 2025, and generated net cash from operating activities of $64.9 million for the first half of 2025 [8] - Cash on hand was reported at $14.8 million as of June 30, 2025, with a reduction in credit facility revolver balance by $39.3 million during the same period [8] Market Outlook - Management indicated a positive outlook for increased demand in value-added products and fabrication services due to new U.S. tariffs on imported stainless steel and aluminum [9] - There is a trend of rising inquiries for fabrication projects attributed to manufacturers adjusting to tariff changes [9] - The company did not provide formal revenue or earnings guidance for the remainder of fiscal 2025 [9]

[Part I. FINANCIAL INFORMATION](index=4&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) This section provides unaudited consolidated financial statements, management's discussion, market risk disclosures, and controls and procedures [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, income, cash flows, and equity, with detailed accounting notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section details the company's financial position, presenting assets, liabilities, and shareholders' equity as of June 30, 2025 Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $596,765 | $580,591 | | **Total Assets** | **$1,074,910** | **$1,044,496** | | **Total Current Liabilities** | $194,338 | $132,638 | | Credit facility revolver | $233,198 | $272,456 | | **Total Liabilities** | **$496,707** | **$470,572** | | **Total Shareholders' Equity** | **$578,203** | **$573,924** | - Total assets increased to **$1.07 billion** as of June 30, 2025, from **$1.04 billion** at year-end 2024, primarily driven by an increase in accounts receivable[9](index=9&type=chunk) - Total liabilities rose to **$496.7 million**, mainly due to a significant increase in accounts payable, while borrowings under the credit facility revolver decreased[9](index=9&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's financial performance, detailing net sales, operating income, net income, and diluted EPS Financial Performance Summary (in thousands, except per share data) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $496,483 | $526,250 | $989,424 | $1,052,892 | | **Operating Income** | $11,373 | $15,110 | $19,166 | $31,048 | | **Net Income** | $5,237 | $7,660 | $7,746 | $16,357 | | **Diluted EPS** | $0.45 | $0.66 | $0.66 | $1.40 | - Net sales and net income declined year-over-year for both the second quarter and the first six months of 2025, with Q2 2025 net income at **$5.2 million**, down from **$7.7 million** in Q2 2024[11](index=11&type=chunk) - Dividends declared per share increased to **$0.16** in Q2 2025 from **$0.15** in Q2 2024[11](index=11&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash generation and usage across operating, investing, and financing activities Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Net cash provided by (used for) operating activities** | $64,925 | $(5,512) | | **Net cash used for investing activities** | $(17,460) | $(13,206) | | **Net cash provided by (used for) financing activities** | $(44,562) | $14,937 | - The company generated **$64.9 million** in cash from operations in the first six months of 2025, a significant improvement from a **$5.5 million** use of cash in the same period of 2024, primarily due to favorable changes in working capital, especially a large increase in accounts payable[14](index=14&type=chunk) - Cash used for financing activities was **$44.6 million**, driven by net repayments on the credit facility revolver, compared to cash provided by financing of **$14.9 million** in the prior year period[14](index=14&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations of accounting policies, revenue recognition, and segment information supporting the financial statements - The company operates in three reportable segments: specialty metals flat products, carbon flat products, and tubular and pipe products[23](index=23&type=chunk) Disaggregated Revenue by Segment (Six Months Ended June 30, 2025) | Segment | % of Total Revenue | | :--- | :--- | | Carbon flat products | 57.5% | | Specialty metals flat products | 26.7% | | Tubular and pipe products | 15.8% | Segment Operating Income (Six Months Ended June 30, 2025, in thousands) | Segment | Operating Income (in thousands) | | :--- | :--- | | Carbon flat products | $13,218 | | Tubular and pipe products | $8,010 | | Specialty metals flat products | $7,556 | | Corporate (Other) | $(9,618) | | **Total** | **$19,166** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses declining sales and net income, improved gross margin, increased operating expenses, segment performance, and strong liquidity [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes consolidated net sales, gross profit margin, and operating expenses for the second quarter and first half of 2025 - Consolidated net sales for Q2 2025 decreased **5.7%** YoY to **$496.5 million**, driven by a **5.3%** decrease in sales volume[100](index=100&type=chunk) - For the first six months of 2025, net sales decreased **6.0%** YoY to **$1.0 billion**, due to a **5.1%** decrease in average selling prices[101](index=101&type=chunk) - Gross profit margin increased to **24.5%** in Q2 2025 from **22.7%** in Q2 2024, as the average cost of inventory decreased more than average selling prices[103](index=103&type=chunk) - Operating expenses increased **5.6%** in Q2 2025, primarily due to the inclusion of operating expenses from the MetalWorks acquisition[104](index=104&type=chunk) [Segment Operations](index=34&type=section&id=Segment%20Operations) This section analyzes the operating income and gross profit margins for the Specialty Metals, Carbon Flat, and Tubular and Pipe segments - **Specialty Metals Flat Products:** Q2 2025 operating income fell to **$4.9 million** from **$7.9 million** YoY, as gross profit margin contracted from **19.8%** to **17.8%**[111](index=111&type=chunk)[115](index=115&type=chunk)[118](index=118&type=chunk) - **Carbon Flat Products:** Q2 2025 operating income increased to **$7.4 million** from **$5.4 million** YoY, driven by a significant gross profit margin expansion to **25.8%** from **20.7%**[119](index=119&type=chunk)[124](index=124&type=chunk)[127](index=127&type=chunk) - **Tubular and Pipe Products:** Q2 2025 operating income decreased to **$3.9 million** from **$6.5 million** YoY, impacted by a **9.3%** drop in shipping volume and lower gross margins[128](index=128&type=chunk)[129](index=129&type=chunk)[135](index=135&type=chunk) [Liquidity, Capital Resources and Cash Flows](index=38&type=section&id=Liquidity,%20Capital%20Resources%20and%20Cash%20Flows) This section reviews cash flow generation, the amended ABL Credit Facility, available liquidity, and dividend declarations - Generated **$64.9 million** in cash from operations in the first six months of 2025, a significant improvement from a **$5.5 million** use of cash in the prior-year period[140](index=140&type=chunk) - On April 17, 2025, the company amended its **ABL Credit Facility**, extending the maturity date to **April 17, 2030**[43](index=43&type=chunk)[148](index=148&type=chunk) - As of June 30, 2025, the company had approximately **$305 million** of availability under its **ABL Credit Facility** and was in compliance with all covenants[45](index=45&type=chunk)[151](index=151&type=chunk) - The Board of Directors approved a regular quarterly dividend of **$0.16 per share**, payable in September 2025[145](index=145&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from volatile metals prices and interest rate fluctuations, mitigated by metals swaps and interest rate hedges - The company is exposed to cyclical and volatile metals pricing, which affects raw material costs, sales prices, and inventory valuation[157](index=157&type=chunk)[158](index=158&type=chunk) - To manage interest rate risk on its variable-rate ABL Credit Facility, the company entered into a two-year forward starting interest rate hedge on **$75 million** of its debt, fixing the rate at **3.82%**[163](index=163&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during Q2 2025 - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were **effective**[164](index=164&type=chunk) - **No material changes** were made to the internal control over financial reporting during the second quarter of 2025[165](index=165&type=chunk) [Part II. OTHER INFORMATION](index=43&type=section&id=Part%20II.%20OTHER%20INFORMATION) This section includes other required disclosures, such as director and officer trading arrangements and a list of exhibits [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) This section confirms no director or officer adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025 - **No director or officer adopted or terminated** a Rule 10b5-1 trading arrangement during the second quarter of 2025[168](index=168&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the Form 10-Q, including the amended Loan and Security Agreement and SOX certifications - Key exhibits filed include the **Ninth Amendment to the company's Loan and Security Agreement** and **Sarbanes-Oxley Act certifications** from the Principal Executive Officer and Principal Financial Officer[169](index=169&type=chunk)

Financial Data and Key Metrics Changes - The company reported sales of $496 million and net income of $5.2 million for the second quarter of 2025, compared to $7.7 million in the same period of 2024 [5][16] - Adjusted EBITDA for the quarter was $20.3 million, a 26% increase compared to the first quarter of 2025, but down from $21.3 million in the prior year period [6][17] - Consolidated operating expenses totaled $110.4 million, up from $104.6 million in 2024, reflecting the addition of Metalworks [17][18] - The company reduced its total debt to $233 million, which is $39 million lower than year-end levels [18] Business Segment Data and Key Metrics Changes - The Carbon segment recorded second quarter EBITDA of $12.5 million, while the Pipe and Tube segment achieved adjusted EBITDA of $6.7 million [12] - The Specialty Metals Group saw EBITDA of $5.9 million, representing over 60% improvement from the first quarter [12] - All three business segments continued to deliver positive EBITDA, indicating resilience despite market challenges [7] Market Data and Key Metrics Changes - Shipping data indicated that service center shipping rates in 2025 are below those of 2024, yet the company's flat roll shipments for the first half of 2025 remained above the same period in 2024 [10] - The company gained market share across its stainless and aluminum product lines, benefiting from increased domestic mill price increases following tariff adjustments [13] Company Strategy and Development Direction - The company is focused on diversifying into higher value metal-intensive products and expanding fabricating capabilities [7] - A robust capital expenditure plan for 2025 includes $35 million primarily for organic growth opportunities, with several new processing and automation projects scheduled to enhance productivity [13][19] - The company aims to capitalize on trends towards increased U.S. manufacturing and fabrication services, particularly among OEMs [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment due to tariffs and market uncertainties but expressed optimism about emerging trends and potential demand growth [9][14] - The company expects the third quarter to be seasonally slower, with typical declines of 5% to 6% sequentially from the second quarter [31] - Management highlighted the importance of resolving uncertainties related to tariffs and tax legislation as potential tailwinds for future growth [40][46] Other Important Information - The effective tax rate for the second quarter was approximately 28%, with expectations for the full year to be between 28% and 29% [19] - The company has paid regular quarterly dividends since February 2006, with a current dividend of $0.16 per share [19][20] Q&A Session Summary Question: Details on new processing and automation equipment - Management discussed the benefits of new high-speed lasers and automation systems aimed at improving safety and efficiency [22][23] Question: Insights on Pipe and Tube segment profitability - Management noted strong growth in the data center sector and increased interest from OEMs for fabrication services [30] Question: Trends in July and August demand - Management indicated that July is typically slow due to holidays, but they expect a normal pickup in August [31] Question: Drivers of flat roll margin improvements - Margin improvements were attributed to changes in index pricing and a better product mix, including more coated products and value-added work [36][37] Question: Outlook for pricing and working capital - Management expects a flattish outlook for working capital in Q3, with potential for cash flow improvements in Q4 depending on pricing trends [64] Question: M&A opportunities - Management confirmed that they are actively looking for acquisition opportunities and have seen an increase in potential candidates [68]

Financial Data and Key Metrics Changes - The company reported sales of $496 million and net income of $5.2 million for the second quarter of 2025, compared to $7.7 million in the same period of 2024 [6][18] - Adjusted EBITDA for the quarter was $20.3 million, a 26% increase compared to the first quarter of 2025, but down from $21.3 million in the prior year period [7][19] - Consolidated operating expenses totaled $110.4 million, up from $104.6 million in 2024, reflecting the addition of Metalworks [20] Business Segment Data and Key Metrics Changes - The Carbon segment achieved second quarter EBITDA of $12.5 million, while the Pipe and Tube segment recorded adjusted EBITDA of $6.7 million [13] - The Specialty Metals Group saw EBITDA of $5.9 million, representing over 60% improvement from the first quarter [14] - All three business segments continued to deliver positive EBITDA despite challenging market conditions [7] Market Data and Key Metrics Changes - Shipping data indicated that service center shipping rates in 2025 are below those of 2024, yet the company's flat roll shipments for the first half of 2025 remained above the same period in 2024 [11][12] - The company gained market share across its stainless and aluminum product lines, driven by increased demand following tariff adjustments [14] Company Strategy and Development Direction - The company is focused on diversifying into higher value metal-intensive products and expanding fabricating capabilities [7] - A robust capital expenditure plan for 2025 includes $35 million primarily for organic growth opportunities and automation [14] - The company has completed eight acquisitions in the last seven years, with the integration of Metalworks contributing positively to earnings [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing uncertainty in the manufacturing industry due to tariffs but expressed optimism about emerging trends such as the resolution of reciprocal tariffs and new tax legislation [10] - The company expects the environment to remain challenging in the second half of the year but sees potential for growth in U.S. manufacturing and fabrication services [15][16] Other Important Information - The effective tax rate for the second quarter was lower than the previous year, with expectations for the 2025 tax rate to approximate 28% to 29% [21] - The company has maintained a quarterly dividend of $0.16 per share, continuing a history of regular dividends since February 2006 [22] Q&A Session Summary Question: Can you elaborate on the new processing and automation equipment? - The new equipment includes high-speed lasers and a casto system to improve safety and efficiency, with benefits expected to materialize as operations ramp up [24][25] Question: What are the drivers behind the flat roll margin improvements? - Margin improvements were driven by changes in index pricing and a strategic focus on higher-margin products and fabrication [38][39] Question: How do you see the pricing for hot rolled steel in the second half of the year? - Pricing is expected to stabilize unless there are changes to tariffs, which could introduce pressure [56] Question: Are there still acquisition opportunities available? - The company is actively looking at more acquisition candidates, with a recent increase in opportunities compared to earlier in the year [67][68]

Financial Performance Overview [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Olympic Steel reported a year-over-year decline in sales and net income for the second quarter of 2025, with sales dropping to $496 million from $526 million and net income falling to $5.2 million from $7.7 million, while Adjusted EBITDA remained relatively stable at $20.3 million and showed a sequential increase Q2 2025 vs Q2 2024 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $496 million | $526 million | | Net Income | $5.2 million | $7.7 million | | Diluted EPS | $0.45 | $0.66 | | Adjusted EBITDA | $20.3 million | $21.3 million | - The company's Q2 2025 results included a LIFO pre-tax expense of **$0.8 million**, contrasting with a LIFO pre-tax income of **$1.0 million** in Q2 2024[2](index=2&type=chunk)[3](index=3&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management emphasized the company's ability to achieve profitability despite macroeconomic uncertainty and declining metal market demand, actively investing in organic growth and pursuing strategic acquisitions with a strong balance sheet and over $300 million in borrowing availability - The company delivered a sequential increase in Adjusted EBITDA despite declining market demand for metals, with all three segments contributing positive EBITDA for the quarter and six-month period[4](index=4&type=chunk) - Strategic focus remains on investing in growth initiatives, including new processing and automation equipment from the 2025 capital expenditure plan and pursuing complementary acquisitions[4](index=4&type=chunk) - Management is encouraged by positive trends in stainless and aluminum pricing following a June tariff announcement, which has also led to increased inquiries for outsourced fabrication work[4](index=4&type=chunk) [Capital Allocation](index=2&type=section&id=Capital%20Allocation) The Board of Directors approved a regular quarterly cash dividend of $0.16 per share, continuing an uninterrupted dividend payment history since March 2006 and marking the third consecutive year the company has increased its dividend - A quarterly cash dividend of **$0.16 per share** was approved, payable on September 15, 2025, to shareholders of record on September 2, 2025[5](index=5&type=chunk) - The company has consistently paid a quarterly dividend since March 2006 and has increased it in each of the last three years[5](index=5&type=chunk) Financial Statements and Reconciliations [Non-GAAP Reconciliations](index=2&type=section&id=Non-GAAP%20Reconciliations) The company provided reconciliations for non-GAAP measures to their GAAP equivalents, with Adjusted Net Income per diluted share at $0.50 for Q2 2025 compared to GAAP's $0.45, and Adjusted EBITDA at $20.3 million reconciled from a GAAP Net Income of $5.2 million Reconciliation of Net Income Per Diluted Share to Adjusted (Non-GAAP) | Period | GAAP Net Income Per Share (USD) | LIFO Impact (USD) | Adjusted Net Income Per Share (Non-GAAP, USD) | | :--- | :--- | :--- | :--- | | **Q2 2025** | $0.45 | $0.05 | $0.50 | | **Q2 2024** | $0.66 | ($0.06) | $0.60 | Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Period | Net Income (GAAP, USD thousands) | Adjustments (Interest, Taxes, D&A, etc., USD thousands) | LIFO Expense/(Income) (USD thousands) | Adjusted EBITDA (Non-GAAP, USD thousands) | | :--- | :--- | :--- | :--- | :--- | | **Q2 2025** | $5,237 | $14,351 | $750 | $20,338 | | **Q2 2024** | $7,660 | $14,677 | ($1,000) | $21,337 | [Consolidated Statements of Net Income](index=5&type=section&id=Consolidated%20Statements%20of%20Net%20Income) For the three months ended June 30, 2025, Olympic Steel's net sales decreased to $496.5 million from $526.3 million year-over-year, with operating income falling to $11.4 million from $15.1 million, resulting in a net income of $5.2 million, down from $7.7 million in Q2 2024 Consolidated Income Statement Highlights (in thousands) | Account | Three Months Ended June 30, 2025 (USD thousands) | Three Months Ended June 30, 2024 (USD thousands) | | :--- | :--- | :--- | | Net sales | $496,483 | $526,250 | | Total costs and expenses | $485,110 | $511,140 | | Operating income | $11,373 | $15,110 | | Net income | $5,237 | $7,660 | Earnings Per Share | Metric | Three Months Ended June 30, 2025 (USD) | Three Months Ended June 30, 2024 (USD) | | :--- | :--- | :--- | | Net income per share - basic | $0.45 | $0.66 | | Net income per share - diluted | $0.45 | $0.66 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Olympic Steel's total assets increased to $1.075 billion from $1.044 billion at year-end 2024, with total liabilities rising to $496.7 million from $470.6 million, and shareholders' equity seeing a slight increase to $578.2 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 (USD thousands) | December 31, 2024 (USD thousands) | | :--- | :--- | :--- | | Total current assets | $596,765 | $580,591 | | **Total assets** | **$1,074,910** | **$1,044,496** | | Total current liabilities | $194,338 | $132,638 | | **Total liabilities** | **$496,707** | **$470,572** | | **Total shareholders' equity** | **$578,203** | **$573,924** | - Key changes in assets include an increase in Accounts Receivable to **$203.7 million** and a decrease in Inventories to **$368.0 million**, while on the liability side, Accounts Payable increased significantly to **$144.6 million** and the Credit facility revolver was reduced to **$233.2 million**[19](index=19&type=chunk) [Segment Financial Information](index=7&type=section&id=Segment%20Financial%20Information) In Q2 2025, the Carbon Flat Products segment saw net sales of $282.5 million, down from $307.8 million YoY, though operating income increased, while the Specialty Metals Flat Products segment reported a slight increase in sales to $134.7 million but a decrease in operating income, and the Tubular and Pipe Products segment experienced a decline in both net sales and operating income Q2 2025 Segment Performance (in thousands) | Segment | Net Sales (USD thousands) | Operating Income (USD thousands) | | :--- | :--- | :--- | | Carbon Flat Products | $282,543 | $7,393 | | Specialty Metals Flat Products | $134,706 | $4,926 | | Tubular and Pipe Products | $79,234 | $3,865 | Q2 2024 Segment Performance (in thousands) | Segment | Net Sales (USD thousands) | Operating Income (USD thousands) | | :--- | :--- | :--- | | Carbon Flat Products | $307,755 | $5,361 | | Specialty Metals Flat Products | $130,873 | $7,849 | | Tubular and Pipe Products | $87,622 | $6,497 | - Total assets for flat-products increased to **$716.8 million** as of June 30, 2025, from **$695.9 million** at the end of 2024, while tubular and pipe products assets also grew to **$357.1 million**[22](index=22&type=chunk) [Other Key Financial Metrics](index=8&type=section&id=Other%20Key%20Financial%20Metrics) The company's financial health indicators show a stronger position, with the debt-to-equity ratio improving to 0.40 to 1 as of June 30, 2025, from 0.47 to 1 at year-end 2024, and net cash from operating activities for the first six months of 2025 was a positive $64.9 million, a significant turnaround from a cash use of $5.5 million in the same period of 2024 Key Ratios and Metrics | Metric | As of June 30, 2025 | As of Dec 31, 2024 | | :--- | :--- | :--- | | Shareholders' equity per share | $51.64 | $51.54 | | Debt to equity ratio | 0.40 to 1 | 0.47 to 1 | Cash Flow and Dividends | Metric | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | | :--- | :--- | :--- | | Net cash from operating activities | $64,925 thousand | $(5,512) thousand | | Cash dividends per share | $0.32 | $0.30 | Disclosures and Company Information [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains standard safe harbor language, cautioning readers that forward-looking statements are subject to numerous risks and uncertainties, including impacts from steel import levels, tariffs, economic conditions, supply disruptions, interest rates, and global conflicts, which could cause actual results to differ materially from projections - The release includes forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[11](index=11&type=chunk) - Key risks highlighted include U.S. trade policy, supply disruptions, inflationary pressures, volatile metals prices, rising interest rates, and the ability to integrate recent acquisitions[11](index=11&type=chunk) [About Olympic Steel](index=4&type=section&id=About%20Olympic%20Steel) Founded in 1954 and headquartered in Cleveland, Ohio, Olympic Steel is a leading U.S. metals service center, focusing on the direct sale and value-added processing of a wide range of metal products, including carbon and stainless steel, aluminum, pipe, and tube, operating from 54 facilities - Olympic Steel (NASDAQ: ZEUS) is a U.S. metals service center founded in 1954[13](index=13&type=chunk) - The company's business includes direct sale and value-added processing of carbon, coated, and stainless steel, aluminum, pipe, tube, and various metal-intensive end-use products[13](index=13&type=chunk)

Company Overview - Olympic Steel's 2024 revenue reached $1.9 billion[5] - The company operates with approximately 2,100 employees[5] - The company has 54 sales and warehouse locations spanning over 4.4 million square feet[5] - The company's revenue mix in 2025 is comprised of Carbon Flat Products (58%), Specialty Metals Flat Products (26%), and Tubular & Pipe Products (16%)[5] Growth Strategy & Capital Allocation - The company focuses on investing in higher-return growth opportunities[6] - The company is returning cash to shareholders[6] - The company has access to a $625 million Asset Based Loan (ABL) maturing in June 2030, with a $200 million accordion feature[27] - The company has access to S-3 shelf filing up to $200 million through debt or stock offerings, including $50 million At-The-Market (ATM) program[27] Financial Performance - For the three months ended March 31, 2025, net sales were $492.941 million, compared to $526.642 million for the same period in 2024[31] - Net income for the three months ended March 31, 2025, was $2.509 million, compared to $8.697 million for the same period in 2024[31] - EBITDA for the three months ended March 31, 2025, was $16.090 million, compared to $23.272 million for the same period in 2024[31]

Core Viewpoint - NANO Nuclear Energy Inc. has filed six new utility patent applications for its ZEUS™ microreactor, emphasizing its commitment to enhancing its intellectual property portfolio and advancing the nuclear reactor industry [1][5]. Company Overview - NANO Nuclear Energy Inc. is a publicly listed advanced technology-driven nuclear energy company in the U.S., focusing on five business lines: portable microreactor technologies, nuclear fuel fabrication, transportation, applications for space, and consulting services [6]. Product Development - The ZEUS™ microreactor is designed as a solid-core battery reactor with a fully sealed core, utilizing a highly conductive moderator matrix to dissipate fission heat, which minimizes risks associated with coolant accidents [2][4]. - The design allows the reactor and support systems to fit within a standard shipping container, enhancing transportability to areas without conventional energy infrastructure [4]. Strategic Goals - The patent applications aim to protect key processes and components of the ZEUS™ microreactor, which will benefit both the company's program and the broader advanced nuclear reactor industry [5]. - The company is working towards commercializing next-generation microreactors, with a focus on transitioning from development to market readiness [5]. Subsidiaries and Future Plans - Advanced Fuel Transportation Inc. (AFT), a subsidiary, aims to build a North American transportation company for HALEU fuel, targeting small modular reactors and national laboratories [8]. - HALEU Energy Fuel Inc. (HEF) is focused on developing a domestic source for HALEU fuel fabrication for NANO Nuclear's microreactors and the advanced nuclear industry [9]. - NANO Nuclear Space Inc. (NNS) is exploring commercial applications of micronuclear reactor technology in space, including power systems for extraterrestrial projects [10].

[Part I. FINANCIAL INFORMATION](index=4&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) For the first quarter ended March 31, 2025, Olympic Steel reported net sales of $492.9 million, a decrease from $526.6 million in the prior year period, primarily due to lower average selling prices, with net income significantly declining to $2.5 million from $8.7 million year-over-year, while total assets increased slightly to $1.06 billion and the company generated $49.4 million in cash from operations, a strong reversal from the $2.6 million used in the same period last year [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) | Balance Sheet Items (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $595,586 | $580,591 | | Inventories, net | $360,148 | $390,626 | | **Total Assets** | **$1,064,722** | **$1,044,496** | | **Total Current Liabilities** | $188,485 | $132,638 | | Credit facility revolver | $235,360 | $272,456 | | **Total Liabilities** | **$490,537** | **$470,572** | | **Total Shareholders' Equity** | **$574,185** | **$573,924** | - Total assets increased to **$1.06 billion** as of March 31, 2025, from **$1.04 billion** at year-end 2024. The change was driven by a rise in accounts receivable, offset by a decrease in inventories. Total liabilities also increased, primarily due to a significant rise in accounts payable[9](index=9&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) | Income Statement (in thousands, except per share) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Sales** | **$492,941** | **$526,642** | | Cost of materials sold | $374,500 | $407,538 | | **Operating Income** | **$7,793** | **$15,938** | | Income before income taxes | $3,590 | $11,909 | | **Net Income** | **$2,509** | **$8,697** | | **Net Income Per Share - Diluted** | **$0.21** | **$0.75** | | Dividends declared per share | $0.16 | $0.15 | - Net sales decreased by **6.4%** year-over-year, while operating income fell by **51.1%** in Q1 2025 compared to Q1 2024. This resulted in a significant drop in diluted EPS from **$0.75** to **$0.21**[11](index=11&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activities (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net cash from operating activities** | **$49,418** | **($2,608)** | | Net cash used for investing activities | ($8,831) | ($4,818) | | Net cash (used for) from financing activities | ($39,237) | $4,542 | | **Net change in cash** | **$1,350** | **($2,884)** | - The company generated significant cash from operations (**$49.4 million**) in Q1 2025, a major improvement from a cash use of **$2.6 million** in Q1 2024, primarily driven by favorable changes in working capital, including a large increase in accounts payable and a decrease in inventories[13](index=13&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) - The company operates in three reportable segments: specialty metals flat products, carbon flat products, and tubular and pipe products. The carbon flat products segment is the largest, accounting for **58.0%** of total revenue in Q1 2025[23](index=23&type=chunk)[32](index=32&type=chunk) - As of March 31, 2025, the company had **$235.4 million** outstanding on its asset-based revolving credit facility and had approximately **$254 million** of availability[42](index=42&type=chunk)[44](index=44&type=chunk) - In April 2025, subsequent to the quarter end, the company amended its ABL Credit Facility, extending the maturity date to April 17, 2030, and increasing availability[75](index=75&type=chunk) [Management's Discussion and Analysis (MD&A)](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 6.4% decrease in Q1 2025 net sales to a 10.2% decline in average selling prices, partially offset by a 4.3% increase in sales volume; despite the sales drop, gross profit margin improved to 24.0% from 22.6% year-over-year, as the average cost of inventory decreased more than selling prices, however, a 7.3% increase in operating expenses, partly due to the MetalWorks acquisition, led to a significant decline in operating income and net income, while the company maintains strong liquidity with $254 million available under its credit facility, which was recently extended to 2030 [Results of Operations](index=30&type=section&id=Results%20of%20Operations) | Consolidated Operations (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net sales** | **$492,941** | **$526,642** | | Gross profit | $118,441 | $119,104 | | *Gross Profit %* | *24.0%* | *22.6%* | | Operating income | $7,793 | $15,938 | | *Operating Margin %* | *1.6%* | *3.0%* | | Net income | $2,509 | $8,697 | - The decrease in net sales was driven by a **10.2%** decrease in average selling prices, partially offset by a **4.3%** increase in sales volume[100](index=100&type=chunk) - Operating expenses increased by **$7.5 million** (**7.3%**), primarily due to the inclusion of operating expenses from the recently acquired MetalWorks and higher variable costs from increased sales volume[103](index=103&type=chunk) [Segment Operations](index=32&type=section&id=Segment%20Operations) | Segment Performance (Q1 2025 vs Q1 2024) | Net Sales (in millions) | Operating Income (in millions) | | :--- | :--- | :--- | | **Specialty Metals Flat Products** | $129.5 (flat) | $2.6 (down from $3.9) | | **Carbon Flat Products** | $286.2 (down 4.9%) | $5.8 (down from $8.7) | | **Tubular and Pipe Products** | $77.2 (down 19.7%) | $4.1 (down from $7.6) | - The Carbon Flat Products segment's sales decrease was caused by a **10.3%** drop in average selling prices, despite a **6.0%** increase in tons sold[117](index=117&type=chunk)[118](index=118&type=chunk) - The Tubular and Pipe Products segment experienced the sharpest decline, with net sales falling **19.7%** due to decreases in both average selling prices (**9.2%**) and shipping volume (**11.6%**)[125](index=125&type=chunk) [Liquidity, Capital Resources and Cash Flows](index=35&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Cash%20Flows) - The company generated **$49.4 million** of net cash from operations in Q1 2025, compared to using **$2.6 million** in Q1 2024, mainly due to positive working capital changes[133](index=133&type=chunk) - Financing activities used **$39.2 million** in cash, primarily for **$37.1 million** in net repayments on the ABL Credit Facility and **$1.8 million** in dividend payments[137](index=137&type=chunk) - The company's **$625 million** ABL Credit Facility was amended in April 2025 to extend the maturity to 2030. As of March 31, 2025, availability was approximately **$254 million**[142](index=142&type=chunk)[143](index=143&type=chunk)[145](index=145&type=chunk) - No shares were repurchased under the stock repurchase program or sold under the at-the-market (ATM) equity program during the first quarter of 2025[140](index=140&type=chunk)[141](index=141&type=chunk) [Market Risk Disclosures](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies its primary market risks as volatility in metals pricing, which impacts revenue, costs, and inventory valuation, and interest rate risk on its variable-rate debt, with the metals industry being cyclical and factors like import levels, tariffs, and economic conditions significantly affecting material costs, and to mitigate interest rate risk, the company entered into an interest rate hedge on $75 million of its debt, fixing the rate at 3.82% - The company's primary market risk is the cyclical and volatile nature of metals pricing, which can significantly affect net sales, gross profits, and inventory values[151](index=151&type=chunk)[152](index=152&type=chunk) - To manage interest rate risk on its variable-rate ABL Credit Facility, the company entered into a two-year forward starting interest rate hedge on **$75 million** of borrowings, fixing the rate at **3.82%**[157](index=157&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded that they were effective as of March 31, 2025, with no material changes to the company's internal control over financial reporting during the first quarter - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[158](index=158&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[159](index=159&type=chunk) [Part II. OTHER INFORMATION](index=40&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) During the quarter ended March 31, 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the first quarter of 2025[162](index=162&type=chunk) [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 and the Inline XBRL financial data files - The exhibits filed with this report include certifications from the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[163](index=163&type=chunk)

Financial Data and Key Metrics Changes - The company reported first quarter sales of $493 million with a net income of $2.5 million, a decrease from $8.7 million in the same period last year [7][17] - EBITDA for the first quarter was $16.1 million compared to $23.3 million in the prior year [17] - Operating expenses increased to $110.6 million from $103.2 million year-over-year, influenced by the acquisition of Metalworks [18][19] - The effective tax rate for the first quarter was 30.1%, up from 27% in the same period last year [20] Business Segment Data and Key Metrics Changes - The Carbon segment reported EBITDA of $10.9 million, driven by increased shipping volumes and growth in coated carbon steel products [13] - The Pipe and Tube segment delivered EBITDA of $6.4 million, experiencing slower OEM orders but maintaining positive results [14] - The Specialty Metals segment reported EBITDA of $3.6 million, with ongoing investments in growth and expansion [15] Market Data and Key Metrics Changes - Flat roll shipping volumes increased by 24% sequentially and 6% year-over-year, reaching the highest levels since Q3 2021 [7][12] - Hot roll pricing escalated by more than 30% during the quarter due to the announced tariffs [12] Company Strategy and Development Direction - The company is focused on building a stronger, more resilient Olympic Steel, diversifying into metal-intensive end markets, and expanding fabrication capabilities [7][8] - The recent acquisition of Metalworks is expected to bolster growth and has already proven accretive to results [8] - The company remains committed to M&A as a source of growth, having completed eight acquisitions over the past seven years [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive profitable growth regardless of market conditions [11] - The company is well-positioned to support increased manufacturing in the U.S., with over 90% of metal supply and nearly all sales domestically based [10] - Management noted that tariffs have dominated the macroeconomic conversation but believe they can navigate these challenges effectively [10] Other Important Information - The company announced a five-year extension of its $625 million asset-based revolving credit facility, providing flexible capital for growth [10][19] - Capital expenditures for the first quarter totaled $8.8 million, with an estimated $35 million for the full year [19] Q&A Session Summary Question: How much of the first quarter volume boost is due to pull forward demand? - Management indicated that a significant portion of the increase was due to stronger spot sales, with traditional sales being 65% contract and 35% spot [26][27] Question: What is the outlook for the Pipe and Tube segment? - Management expects a more traditional year for Pipe and Tube, with opportunities in onshoring and data centers driving growth [40] Question: What is the current appetite for M&A? - Management confirmed that M&A remains a key part of the growth strategy, with a return of potential sellers noted in April [30][31] Question: How are operating expenses being managed? - The increase in operating expenses was attributed to the acquisition of Metalworks and higher shipping volumes, but inflation-adjusted expenses are being managed well [52][53] Question: Will tariffs increase competition for acquisitions? - Management believes that tariffs may lead to increased competition for acquisitions as companies look to grow through M&A rather than capital expenditures [57]

Financial Data and Key Metrics Changes - The company reported first quarter sales of $493 million with net income of $2.5 million, a decrease from $8.7 million in the same period last year [6][16] - EBITDA for the first quarter was $16.1 million compared to $23.3 million in the prior year [16] - Consolidated operating expenses totaled $110.6 million, up from $103.2 million year-over-year [17] - The effective tax rate for the first quarter was 30.1%, compared to 27% in the same period last year [19] Business Segment Data and Key Metrics Changes - Flat roll shipping volumes increased by 24% sequentially and 6% year-over-year, reaching the highest levels since Q3 2021 [6][11] - The Carbon segment reported EBITDA of $10.9 million, driven by increased shipping levels and growth in coated carbon steel products [12] - The Pipe and Tube segment delivered EBITDA of $6.4 million, although it experienced slower OEM orders [13] - The Specialty Metals segment reported EBITDA of $3.6 million, with continued investments in growth and expansion [14] Market Data and Key Metrics Changes - Hot roll pricing increased by more than 30% during the quarter following the announcement of 25% tariffs on steel and aluminum imports [11] - Over 90% of the company's metal supply and nearly all sales are domestically based, positioning the company well in the current tariff environment [9] Company Strategy and Development Direction - The company is focused on building a stronger, more resilient Olympic Steel, diversifying into metal-intensive end markets, and expanding fabrication capabilities [6][7] - The recent acquisition of Metalworks is expected to bolster growth and has already proven accretive to results [7] - The company remains committed to M&A as a source of growth, having completed eight acquisitions over the past seven years [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive profitable growth regardless of market conditions [10] - The company is well-positioned to support increased manufacturing in the U.S. and is prepared for potential onshoring opportunities [9][40] - Management noted that while tariffs have impacted the macroeconomic environment, they do not foresee a direct impact on their M&A strategy [53] Other Important Information - The company announced a five-year extension of its $625 million asset-based revolving credit facility, providing flexible, low-cost capital for growth [9][18] - Capital expenditures for the first quarter totaled $8.8 million, with an estimated $35 million for the full year [18] Q&A Session Summary Question: How much of the first quarter volume boost is due to pull forward demand? - Management indicated that a significant portion of the increase was due to stronger spot sales, with traditional sales being 65% contract and 35% spot [25][26] Question: What is the outlook for the Pipe and Tube segment? - Management noted that the Pipe and Tube segment did not see the same sales increase as the Carbon segment and is expected to follow a more traditional year [27][40] Question: What is the current appetite for M&A? - Management confirmed that M&A remains a key part of their growth strategy, with a return of potential sellers observed in April [29][30] Question: How are operating expenses being managed? - Management attributed the increase in operating expenses to the acquisition of Metalworks and higher shipping volumes, while maintaining that inflation-adjusted expenses are being managed well [51][52] Question: How are tariffs affecting the M&A strategy? - Management stated that tariffs have a greater impact on the core business rather than directly affecting M&A, and they continue to seek domestic acquisition opportunities [53][54]