Financial Data and Key Metrics Changes - Olympic Steel reported fourth quarter sales of $489 million, net income of $7.4 million, and EBITDA of $20.9 million, showing a significant performance despite market challenges [9][24] - Adjusted EBITDA for the fourth quarter was $16.7 million compared to $11.9 million in the prior year period, indicating a strong year-over-year improvement [24] - The company’s total debt increased by only $25 million to $190 million at year-end, with availability of approximately $339 million, maintaining a solid financial position [12][28] Business Segment Performance Changes - The pipe and tube segment achieved its second most profitable year ever, with adjusted EBITDA of $40.3 million, reflecting a focus on value-added products [17][10] - The carbon segment earned adjusted EBITDA of $7.9 million in the fourth quarter, with shipments up 8% year-over-year, demonstrating resilience amid pricing pressures [20][19] - Specialty metals recorded its third most profitable full year despite facing industry-wide stainless steel headwinds, contributing consistent positive EBITDA [20][10] Market Data and Key Metrics Changes - In early 2024, strong demand is observed from industrial OEMs, food equipment, truck trailer, storage tank, HVAC, and appliance customers, particularly in industrial fabrication for data centers [21] - The carbon pricing index saw a 65% increase in the fourth quarter, leading to advanced purchases by customers in anticipation of further price increases [19] - The company expects first quarter growth in tonnage to be in the 10% to 12% range compared to the fourth quarter, indicating a positive outlook for demand [42][43] Company Strategy and Industry Competition - Olympic Steel is committed to managing working capital, operating expenses, cash flow, and debt while seeking opportunities for higher-return, higher-value-add products through organic growth and acquisitions [15][10] - The company has successfully integrated six acquisitions over the past five years, enhancing its portfolio and diversifying its offerings [10][11] - The recent acquisition of Central Tube & Bar is expected to strengthen the pipe and tube segment and expand value-added processing capabilities [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to build on its success in 2024, driving profitable growth and creating shareholder value [15][13] - The company noted that inflationary pressures were negligible during the fourth quarter and the second half of 2023, which may positively impact margins going forward [27][30] - Management anticipates a tax rate of approximately 27.5% to 28.5% for 2024, reflecting changes in the operating environment [30] Other Important Information - The Board of Directors approved a 20% increase in the quarterly dividend, reflecting the company's strong financial position and commitment to shareholder value [13][30] - Capital expenditures for 2023 totaled $21.3 million, with an estimated $35 million planned for 2024 to support investments in automation and fabrication [29][30] Q&A Session Summary Question: How does the Central Tube acquisition fit within the existing pipe and tube franchise? - Management indicated that Central Tube fits well under the Chicago Tube and Iron segment, enhancing growth in fabricated tubes and expanding geographic reach [34] Question: What is the focus on value-added components in the business? - The focus is on gross margin rather than revenue, with a target of 50% of gross margin generated from value-added work in the pipe and tube segment [36] Question: What are the expectations for demand in 2024? - Management noted that while some sectors may see softer volumes, new business and fabrication growth are expected to offset these declines, leading to a positive outlook for the first quarter [41][43] Question: What is the company's M&A outlook? - Management confirmed a balanced approach to growth through acquisitions across all three business segments, with a focus on high-return companies [48][49] Question: What are the inventory levels at the mills and their impact on demand? - Lead times from carbon mills have shortened, indicating a stable supply environment, which is factored into demand considerations for 2024 [50]

Exhibit 99.1 NEWS RELEASE CLEVELAND — February 22, 2024 — Olympic Steel, Inc. (Nasdaq: ZEUS), a leading national metals service center, today announced results for the three and 12 months ended December 31, 2023. Fourth-Quarter Results Net income for the fourth quarter totaled $7.4 million, or $0.64 per diluted share, compared with net income of $4.0 million, or $0.34 per diluted share, in the fourth quarter of 2022. The results include $5.3 million of LIFO pre-tax income in the fourth quarter of 2023, comp ...

[Part I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the three and nine months ended September 30, 2023, and 2022, including balance sheets, income statements, cash flows, and shareholder equity Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$992,806** | **$891,627** | | Total Current Assets | $641,900 | $658,106 | | Goodwill | $43,690 | $10,496 | | Intangible assets, net | $84,028 | $32,035 | | **Total Liabilities** | **$443,485** | **$375,659** | | Credit facility revolver | $196,527 | $165,658 | | **Total Shareholders' Equity** | **$549,321** | **$515,968** | Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $526,411 | $634,437 | $1,668,755 | $2,039,946 | | Operating Income | $20,885 | $19,086 | $64,380 | $126,073 | | Net Income | $12,230 | $12,046 | $37,121 | $86,972 | | Diluted EPS | $1.06 | $1.04 | $3.21 | $7.53 | - For the nine months ended Sep 30, 2023, net cash from operating activities was **$121.0 million**, compared to **$98.3 million** for the same period in 2022[13](index=13&type=chunk) - Net cash used for investing activities was **$148.9 million**, largely due to the **$129.5 million** Metal-Fab acquisition[13](index=13&type=chunk) - On January 3, 2023, the company acquired Metal-Fab for a cash purchase price of **$131.2 million**[33](index=33&type=chunk) - On October 2, 2023, the company acquired Central Tube and Bar, Inc. (CTB) for **$37.8 million**[91](index=91&type=chunk) - For the nine months ended Sep 30, 2023, carbon flat products contributed the most to net sales (**$940.9M**), followed by specialty metals (**$446.3M**) and tubular/pipe products (**$281.5M**)[85](index=85&type=chunk)[88](index=88&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion provides perspective on the company's financial condition and operational results, detailing segment performance, liquidity, capital resources, debt arrangements, and critical accounting policies - Q3 2023 net sales decreased **17.0%** YoY to **$526.4M**, driven by a **16.2%** decrease in average selling prices, while gross profit margin expanded to **21.3%** from **16.9%** in Q3 2022[116](index=116&type=chunk)[120](index=120&type=chunk) - The acquisition of Metal-Fab on January 3, 2023, contributed to sales and increased operating expenses within the carbon flat products segment[116](index=116&type=chunk)[121](index=121&type=chunk) - The company recorded a **$4.0 million** employee retention credit in Q3 2023, which reduced operating expenses across various categories[31](index=31&type=chunk)[174](index=174&type=chunk) - As of September 30, 2023, the company had approximately **$375 million** of availability under its ABL Credit Facility, which was upsized to **$625 million** in January 2023 to fund the Metal-Fab acquisition[59](index=59&type=chunk)[165](index=165&type=chunk)[169](index=169&type=chunk) [Consolidated Operations](index=29&type=section&id=Consolidated%20Operations) Consolidated net sales for Q3 2023 decreased by 17.0% to $526.4 million, primarily due to a 16.2% drop in average selling prices, though gross profit margin expanded to 21.3% Q3 2023 vs Q3 2022 Performance (in thousands) | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $526,411 | $634,437 | -17.0% | | Gross Profit | $111,931 | $106,971 | +4.6% | | Gross Margin | 21.3% | 16.9% | +4.4 p.p. | | Operating Income | $20,885 | $19,086 | +9.4% | | Net Income | $12,230 | $12,046 | +1.7% | Nine Months 2023 vs 2022 Performance (in thousands) | Metric | 9M 2023 | 9M 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,668,755 | $2,039,946 | -18.2% | | Gross Profit | $359,767 | $396,827 | -9.3% | | Gross Margin | 21.6% | 19.5% | +2.1 p.p. | | Operating Income | $64,380 | $126,073 | -49.0% | | Net Income | $37,121 | $86,972 | -57.4% | - Operating expenses increased by **3.6%** in Q3 2023 YoY, mainly due to Metal-Fab's expenses, partially offset by lower performance-based compensation and a **$4.0 million** employee retention credit[121](index=121&type=chunk)[31](index=31&type=chunk) - Interest expense increased to **$4.0 million** in Q3 2023 from **$3.0 million** in Q3 2022 due to a higher effective borrowing rate (**5.9%** in 9M 2023 vs **2.9%** in 9M 2022)[123](index=123&type=chunk) [Segment Operations](index=32&type=section&id=Segment%20Operations) This section breaks down the performance of the three business segments, highlighting declines in Specialty Metals, improved margins and acquisition contributions in Carbon Flat Products, and LIFO income benefits in Tubular and Pipe Products - Specialty Metals Flat Products: Q3 2023 net sales fell **29.5%** YoY to **$132.8M**, with operating income dropping to **$4.7M** from **$15.1M**, driven by an **18.3%** decrease in tons sold and a **13.7%** decrease in average selling price per ton[128](index=128&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) - Carbon Flat Products: Q3 2023 net sales decreased **9.5%** YoY to **$304.5M**, but operating income surged to **$9.9M** from **$1.7M**, driven by a higher gross margin (**20.3%** vs **12.7%**) and Metal-Fab acquisition contributions[137](index=137&type=chunk)[139](index=139&type=chunk)[142](index=142&type=chunk)[144](index=144&type=chunk) - Tubular and Pipe Products: Q3 2023 net sales declined **18.8%** YoY to **$89.2M**, while operating income increased to **$10.0M** from **$7.1M**, aided by **$2.0M** in LIFO income and a gross margin expansion to **32.3%** from **24.1%**[145](index=145&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk) - Corporate expenses decreased by **21.8%** in Q3 2023 to **$3.8 million**, primarily due to lower performance-based compensation and employee retention credits, offsetting acquisition-related costs[152](index=152&type=chunk) [Liquidity, Capital Resources and Cash Flows](index=37&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Cash%20Flows) The company maintains strong liquidity with $121.0 million in cash from operations and $375 million available under its ABL Credit Facility, which was increased to fund the Metal-Fab acquisition - Generated **$121.0M** from operations in the first nine months of 2023, compared to **$98.3M** in the same period of 2022[155](index=155&type=chunk) - Used **$148.9M** for investing activities, primarily for the **$129.5M** Metal-Fab acquisition and **$19.6M** in capital expenditures[158](index=158&type=chunk)[159](index=159&type=chunk) - Generated **$24.8M** from financing activities, mainly from **$30.9M** in net borrowings under the ABL facility[160](index=160&type=chunk) - The ABL Credit Facility was amended and increased to **$625 million** in January 2023, with **$375 million** of availability as of September 30, 2023, and compliance with all covenants[165](index=165&type=chunk)[169](index=169&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 fluctuating metals prices and interest rates, which are partially mitigated by an interest rate hedge and occasional nickel swaps - The company's results are significantly impacted by the cyclical and volatile nature of metals pricing, affecting revenue, gross profit, and inventory valuation[176](index=176&type=chunk)[177](index=177&type=chunk) - Primary interest rate risk from variable-rate debt under the ABL Credit Facility is partially mitigated by a five-year fixed-rate interest rate hedge on **$75 million** of borrowings, amended to **2.42%** (based on SOFR) in January 2023[182](index=182&type=chunk) - Inflation increases costs for wages, transportation, energy, and materials, and while not material recently, it may become a significant factor in the future[180](index=180&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during Q3 2023 - The Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2023, the company's disclosure controls and procedures were effective[183](index=183&type=chunk) - No changes occurred in internal control over financial reporting during the third quarter of 2023 that have materially affected, or are reasonably likely to materially affect, the company's internal control[184](index=184&type=chunk) [Part II. OTHER INFORMATION](index=43&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) This section reports no Rule 10b5-1 trading arrangements by directors or officers and discloses the adoption of the Key Employee Severance Benefit Plan on November 2, 2023 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended September 30, 2023[187](index=187&type=chunk) - On November 2, 2023, the company's Board of Directors approved the Olympic Steel, Inc. Key Employee Severance Benefit Plan to streamline severance protection for key employees[188](index=188&type=chunk)[189](index=189&type=chunk) - The Severance Plan outlines predetermined payments and benefits for qualifying terminations, including termination without cause, termination following a change in control, or in the event of death or disability[190](index=190&type=chunk)[191](index=191&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Seventh Amendment to the Loan and Security Agreement, the new Key Employee Severance Benefit Plan, and CEO/CFO certifications - Lists filed exhibits, including the Joinder and Seventh Amendment to the Third Amended and Restated Loan and Security Agreement[194](index=194&type=chunk) - Exhibit 10.43 is the newly adopted Key Employee Severance Benefit Plan[194](index=194&type=chunk) - Includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[194](index=194&type=chunk) [Signatures](index=46&type=section&id=SIGNATURES) The report was duly signed and authorized by the Chief Executive Officer and Chief Financial Officer on November 3, 2023 - The report was duly signed and authorized by the Chief Executive Officer, Richard T Marabito, and the Chief Financial Officer, Richard A Manson, on November 3, 2023[196](index=196&type=chunk)

Olympic Steel, Inc. (NASDAQ:ZEUS) Q3 2023 Earnings Conference Call November 3, 2023 10:00 AM ET Company Participants Rich Manson - Chief Financial Officer Rick Marabito - Chief Executive Officer Andrew Greiff - President & Chief Operating Officer Conference Call Participants Samuel McKinney - KeyBanc Capital Markets Dave Storms - Stonegate Chris Sakai - Singular Research Operator Good morning, and welcome to the Olympic Steel 2003 Third Quarter Financial Results Conference Call. At this time, all participa ...

Company Overview - The company operates in three reportable segments: specialty metals flat products, carbon flat products, and tubular and pipe products[95]. - At June 30, 2023, the company employed approximately 2,038 people, with 203 hourly plant personnel represented by collective bargaining units[98]. - The company has 36 strategically-located processing and distribution facilities in the U.S. and one in Monterrey, Mexico, allowing for regional and national customer focus[106]. Product Offerings - The carbon flat products segment expanded its offerings with the acquisition of Metal-Fab on January 3, 2023, adding venting, micro air, and clean air products[104]. - The specialty metals flat products segment has enhanced its product offerings through recent acquisitions, including stainless steel and aluminum products[95]. - Approximately 51% of consolidated net sales during the first six months of 2023 were directly related to industrial machinery and equipment manufacturers[174]. Financial Performance - Net sales decreased by $140 million, or 19.7%, to $569.3 million in Q2 2023 from $709.2 million in Q2 2022, with a consolidated 21.0% decrease in average selling prices[113]. - Net sales for the first six months of 2023 decreased by $263 million, or 18.7%, to $1.1 billion from $1.4 billion in the first six months of 2022[114]. - Specialty metals flat products segment net sales decreased by $80 million, or 35.2%, to $147 million in Q2 2023, driven by a 25.2% decrease in sales volume[127]. - Net income for Q2 2023 totaled $15.0 million, or $1.30 per share, compared to $37.6 million, or $3.26 per share, in Q2 2022[122]. Cost and Profitability - The gross profit as a percentage of net sales is generally higher in the carbon flat products and tubular and pipe products segments compared to the specialty metals flat products segment[102]. - Gross profit as a percentage of net sales increased to 22.4% in Q2 2023 from 21.0% in Q2 2022, attributed to a decrease in average cost of inventory[116]. - Operating income for Q2 2023 was $25.8 million, down from $53.9 million in Q2 2022, reflecting the impact of lower sales and increased operating expenses[111]. - Gross profit as a percentage of net sales decreased to 16.6% in Q2 2023 from 27.5% in Q2 2022, and to 17.0% in the first six months of 2023 from 28.4% in the same period of 2022[130]. Expenses and Costs - Operating expenses increased by $6.9 million, or 7.2%, to $101.6 million in Q2 2023, with operating expenses as a percentage of net sales rising to 17.9% from 13.4% in Q2 2022[117]. - Cost of materials sold decreased by $119 million, or 21.2%, to $441.9 million in Q2 2023, reflecting lower metals pricing[115]. - Cost of materials sold in the specialty metals flat products segment decreased by $41.8 million, or 25.4%, to $122.6 million in Q2 2023 from $164.4 million in Q2 2022[129]. Liquidity and Capital Resources - Liquidity and capital resources are primarily funded through cash generated from operations and borrowings under the ABL Credit Facility[149]. - For the six months ended June 30, 2023, the company generated $79.2 million of net cash from operations, an increase of 66.2% compared to $47.7 million for the same period in 2022[151]. - Net cash from operating activities for the first six months of 2023 was $45.8 million, primarily driven by net income of $24.9 million and non-cash depreciation and amortization of $13.0 million[152]. - Working capital as of June 30, 2023, totaled $481.8 million, reflecting a decrease of $11.6 million from December 31, 2022, primarily due to a $28.2 million decrease in inventories[153]. Investment and Financing Activities - Net cash used for investing activities was $144.5 million for the six months ended June 30, 2023, significantly higher than $6.7 million for the same period in 2022, mainly due to the $129.5 million acquisition of Metal-Fab[154]. - The company generated $68.3 million from financing activities in the first six months of 2023, primarily from $72.6 million of net borrowings under the ABL Credit Facility[157]. - Dividends paid increased to $2.8 million for the six months ended June 30, 2023, compared to $2.0 million for the same period in 2022[158]. - As of June 30, 2023, the company had approximately $343 million of availability under the ABL Credit Facility, which was increased to $625 million following an amendment[166][162]. Risk Factors - The company faces risks from supply chain disruptions, rising interest rates, and inflationary pressures that could impact financial performance[93]. - The company does not have long-term, fixed-price metals purchase contracts, which exposes it to market price fluctuations[97]. - The company entered into a five-year fixed rate interest rate hedge to manage interest rate risk, with the fixed rate updated to 2.42% as of January 3, 2023[177].

Financial Data and Key Metrics Changes - Olympic Steel reported second quarter sales of $569 million, net income of $15 million, and adjusted EBITDA of $31.2 million, indicating a decline from $37.6 million in net income and $58.8 million in adjusted EBITDA in the same quarter of 2022 [6][22]. - Consolidated operating expenses totaled $101.6 million, up from $94.8 million year-over-year, with operating expenses as a percentage of sales increasing to 17.9% from 13.4% [23][24]. - The company reduced debt by $21 million during the quarter, bringing total debt to $238 million, with cumulative debt reduction of $59 million since the Metal-Fab acquisition [25][11]. Business Line Data and Key Metrics Changes - The Carbon segment generated $18.4 million of adjusted EBITDA, benefiting from the integration of the Metal-Fab acquisition [15]. - The Pipe and Tube segment achieved adjusted EBITDA of $10.1 million, marking its fourth strongest quarter of profitability, driven by margin improvement and demand for value-added processing [16]. - Specialty Metals earned $7.7 million of adjusted EBITDA despite facing soft market conditions [17]. Market Data and Key Metrics Changes - The company faced a 24% decline in hot-rolled index pricing and a 10% reduction in Grade 304 surcharges, impacting the carbon steel market [7][12]. - Demand from OEMs is expected to remain steady in the third quarter, with a solid outlook for the domestic steel market supported by government spending and tariffs [12][13]. Company Strategy and Development Direction - Olympic Steel continues to focus on diversification and investments in enhanced processing capabilities, with plans to expand into higher-return value-added products [10][28]. - The company is optimistic about the future of the domestic metals industry and aims to reduce the impact of market cyclicality on its business [13][29]. - Capital expenditures for 2023 are estimated to be in the $30 million range, with ongoing investments in automation and safety [26][20]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver consistent results despite market challenges, highlighting the successful integration of Metal-Fab and ongoing capital projects [8][21]. - The effective tax rate increased to 30.3% due to higher Mexican transactional sales, with expectations for the rate to approximate 28% to 29% for the remainder of 2023 [27]. Other Important Information - The company continues to pay a quarterly dividend of $0.125 per share, maintaining a record of 73 consecutive quarters of dividend payments [11][28]. - The new fabrication facility in Bartlett, Illinois is expected to be fully operational by the end of the third quarter, enhancing capacity for carbon and white metals fabrication [9][18]. Q&A Session Summary Question: Regarding the strong margins in the pipe and tube segment - Management indicated that margins are expected to continue improving, with value-added processing representing 34% to 35% of sales, aiming for closer to 40% by year-end [30]. Question: On carbon flat segment pricing outlook - Management noted that while lead times remain steady, pricing may face challenges due to increased capacity, but overall consistency is expected [31]. Question: Impact of falling inventory levels in specialty metals - Management acknowledged that inventory levels are higher than desired, with import pressures affecting the market, but demand remains relatively flat [32]. Question: Changes in revenue composition due to diversification efforts - Management confirmed that the increase in carbon flat products' revenue share is partly due to the Metal-Fab acquisition and slower stainless sales industry-wide [35]. Question: Seasonal factors expected in the second half of 2023 - Management anticipates typical seasonal declines of 3% to 5% in Q3 due to fewer effective shipping days [37]. Question: Labor market conditions and hiring challenges - Management reported some relief in hiring conditions compared to previous years, but low unemployment remains a challenge [38]. Question: Demand and material costs in specialty metals flat - Management indicated that nickel prices are stable, with expectations for steady pricing in the specialty metals segment for the remainder of the year [40][41]. Question: Opportunities in fabrication - Management highlighted the growing demand for value-added and fabricated parts, emphasizing ongoing investments in downstream equipment and the creation of new leadership roles to drive growth [42][43].

Investor Presentation May 2023 Forward-Looking Statements 2 | --- | --- | |-----------------------------------------------------------------------------------------------------------------------------------------------------|-------| | | | | Statements contained in this presentation that are not historical facts are forward-looking statements, which involve risks and uncertainties that | | | could cause actual results to differ materially from those expressed in the | | | forward-looking statements. Such fo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ____________ Commission File Number 0-23320 OLYMPIC STEEL, INC. (Exact name of registrant as specified in its charter) | Ohio | 34-1245650 | | --- | --- | | ( ...

Financial Data and Key Metrics Changes - Olympic Steel reported sales of $573 million for Q1 2023, with adjusted EBITDA of $28.6 million, reflecting a steady customer demand and a 3% increase in metal distribution shipments year-over-year, and a significant 15% increase from the previous quarter [7] - Net income for the quarter totaled $9.8 million, a decrease from $37.3 million in Q1 2022, with no LIFO adjustment recorded for either quarter [22] - Total debt at the end of Q1 was $258 million, an increase of $93 million since year-end 2022, primarily due to the $131 million acquisition of Metal Fab [23] Business Segment Performance - The Carbon segment contributed adjusted EBITDA of $11.6 million, with shipments rising 6% year-over-year, excluding Metal Fab [15] - The Pipe and Tube segment had its second most profitable quarter ever, contributing EBITDA of $11.3 million, driven by margin improvement and fabricated product growth [16] - Specialty Metals earned EBITDA of $10.2 million despite facing industry-wide stainless steel headwinds, with a focus on organic growth in aluminum [18] Market Data and Key Metrics Changes - Hot rolled index pricing increased by 74% from the beginning of 2023, following six months of declining steel prices [8] - Demand from industrial OEMs remained steady, with expectations for Q2 to mirror Q1 performance, particularly in the Food Equipment and Appliance segments [13][19] Company Strategy and Industry Competition - The acquisition of Metal Fab in January 2023 was highlighted as a significant step in diversifying and strengthening the company, broadening product offerings and geographic reach [9][10] - The company is well-positioned to pursue additional acquisition opportunities, supported by a strong balance sheet and increased credit availability [12][20] - The company continues to focus on strategic acquisitions as a growth driver, alongside organic growth initiatives [45][46] Management's Comments on Operating Environment and Future Outlook - Management acknowledged an unsettled near-term macroeconomic picture but expressed confidence in the company's resilience and ability to navigate market cyclicality [13] - The second quarter is expected to reflect the full strength of Metal Fab's earnings, with synergies anticipated in the second half of 2023 [22][28] Other Important Information - Capital expenditures for Q1 2023 totaled $7.4 million, with expectations for total capital expenditures in 2023 to reach $30 million [26] - The company increased its quarterly dividend by 39% to $0.125 per share, maintaining a consistent dividend payment record for 72 consecutive quarters [27] Q&A Session Summary Question: Expectations for pricing for carbon in Q2 - Management anticipates some softness in pricing but expects margins to hold through Q2 due to a lag in contract pricing [30] Question: Specialty metals dynamics in Q1 and expectations for Q2 - Management noted high inventory levels at service centers but expects volume to improve in Q2 due to customer demand from food equipment and truck trailer sectors [32] Question: Impact of Metal Fab earnings and synergies - Management indicated that the second quarter will not include onetime charges from the acquisition, leading to improved financial results [34][35] Question: Expansion in Iowa and associated downtime - Management confirmed that the expansion will not cause any downtime and is expected to be operational by year-end [37] Question: Industry-wide capacity outlook - Management expects more product availability in the second half of the year, with domestic mills performing well [41] Question: Margin expansion in pipe and tube - Management attributed margin expansion to investments in fabrication capabilities and growth in the stainless portion of the business [44] Question: Appetite for more acquisitions - Management confirmed ongoing interest in strategic acquisitions, supported by a strong balance sheet and record availability [46]

[Part I](index=5&type=section&id=Part%20I) [Business Overview](index=5&type=section&id=Item%201.%20Business) **Olympic Steel** is a leading U.S. **metals service center** operating in **three segments**, focusing on **value-added processing** and **distribution**, with growth driven by **strategic acquisitions** - The company operates through **three reportable segments**: **specialty metals flat products**, **carbon flat products**, and **tubular and pipe products**[15](index=15&type=chunk) - **Strategic growth** is a key focus, achieved through **acquisitions** (e.g., **Shaw Stainless**, **Action Stainless**, **Metal-Fab**), investments in higher **value-added processing equipment**, and expansion of product offerings[21](index=21&type=chunk)[24](index=24&type=chunk)[28](index=28&type=chunk) - The company serves a diverse customer base, with the **industrial machinery and equipment sector** being the largest, accounting for **52%** of **net sales** in 2022[49](index=49&type=chunk)[51](index=51&type=chunk) - **Olympic Steel** relies on a **concentrated supplier base**, with its **top three suppliers** accounting for approximately **39%** of total metal purchases in 2022[58](index=58&type=chunk) Net Sales by Industry (2020-2022) | Industry | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Industrial machinery and equipment manufacturers and their fabricators | 52% | 47% | 47% | | Metals service centers | 9% | 11% | 11% | | Residential and commercial construction | 7% | 8% | 8% | | Automobile manufacturers and their suppliers | 2% | 7% | 7% | | Transportation equipment manufacturers | 8% | 6% | 6% | | All others <5% | 22% | 21% | 21% | [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces key risks from **volatile metals prices**, **supply chain disruptions**, **transportation** and **labor dependency**, **cyclical customer industries**, **variable rate debt**, and **regulatory changes** - **Volatile metals prices** are a **primary risk**, affecting sales, gross profit, and **inventory valuation**; declining prices can lead to lower sale prices and inventory write-downs[87](index=87&type=chunk)[88](index=88&type=chunk) - The business is dependent on **transportation and skilled labor**; increased costs or decreased availability in these areas could adversely affect operations and profitability[89](index=89&type=chunk)[91](index=91&type=chunk) - **Supply chain disruptions**, **inflationary pressures**, and reliance on a **concentrated number of suppliers** (**top three** provided **39%** of metals in 2022) pose significant operational risks[96](index=96&type=chunk)[100](index=100&type=chunk) - The company is exposed to risks from its **variable rate debt**, with a **100 basis point** increase in interest rates projected to increase annual **interest expense** by approximately **$0.9 million**[124](index=124&type=chunk) - **Government actions**, such as the imposition or removal of **tariffs and quotas** on steel and aluminum, can cause significant fluctuations in operating results[127](index=127&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company operates numerous **strategically located processing**, **distribution**, and **manufacturing facilities** across the U.S. and Mexico, with most key facilities owned - The company's facilities are **strategically situated** in major metals consumption markets, with most customers located within a **250-mile radius** of a processing facility[145](index=145&type=chunk) - The company **owns and leases** a wide range of properties for **corporate offices**, **coil and plate processing**, **fabrication**, and **distribution**, servicing its **three business segments**[146](index=146&type=chunk)[148](index=148&type=chunk) - A warehouse in Cleveland, Ohio is leased from an entity in which the **Executive Chairman of the Board** owns a **50%** interest; the lease expires on December 31, 2023, with renewal options[149](index=149&type=chunk)[351](index=351&type=chunk) [Executive Officers](index=31&type=section&id=Information%20About%20Our%20Executive%20Officers) An experienced executive team, including **Michael D. Siegal** as **Executive Chairman** and **Richard T. Marabito** as **CEO**, leads the company with extensive industry tenure - **Michael D. Siegal** serves as **Executive Chairman of the Board**, having previously been **CEO** from 1984 to 2018[153](index=153&type=chunk) - **Richard T. Marabito** has been the **Chief Executive Officer** since January 2019, previously serving as **CFO** since 2000[154](index=154&type=chunk) - **Richard A. Manson** has served as **Chief Financial Officer** since January 2019, having been with the company since 1996 in various roles[155](index=155&type=chunk) - **Andrew S. Greiff** has served as **President and Chief Operating Officer** since January 2020, having joined the company in 2009[156](index=156&type=chunk) [Part II](index=32&type=section&id=Part%20II) [Common Stock and Shareholder Matters](index=32&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) **Olympic Steel's** common stock trades on **Nasdaq** under **ZEUS**, with regular **quarterly dividends** and an active **stock repurchase program** - The company's **common stock** trades on the **Nasdaq Global Select Market** under the symbol "**ZEUS**"[159](index=159&type=chunk) - **Regular quarterly dividends** are expected to continue; dividends declared were **$0.36 per share** in 2022, a significant increase from **$0.08 per share** in 2021[160](index=160&type=chunk)[284](index=284&type=chunk) - A **stock repurchase program** is authorized for up to **550,000 shares**; as of December 31, 2022, **360,212 shares** remain authorized for repurchase, with no shares purchased in Q4 2022[161](index=161&type=chunk)[162](index=162&type=chunk) [Management's Discussion and Analysis (MD&A)](index=34&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The **MD&A** reviews **2022 financial performance**, highlighting **sales growth**, **net income decline**, **margin compression**, strong **cash flow**, and **debt reduction** [Consolidated Results of Operations](index=37&type=section&id=Consolidated%20Operations) **Consolidated net sales** increased **10.7%** to **$2.6 billion** in 2022 due to higher prices, but **gross profit margin** declined to **19.0%**, leading to a **24.9%** decrease in **net income** Consolidated Financial Highlights (2022 vs. 2021) | Metric (in thousands) | 2022 | 2021 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $2,559,990 | $2,312,253 | $247,737 | 10.7% | | Gross Profit | $486,060 | $510,201 | ($24,141) | -4.7% | | Gross Margin | 19.0% | 22.1% | -3.1 p.p. | - | | Operating Income | $133,747 | $172,466 | ($38,719) | -22.4% | | Net Income | $90,931 | $121,051 | ($30,120) | -24.9% | - The increase in **net sales** was driven by a **26.0%** increase in consolidated **average selling prices**, which rose to **$2,448 per ton** in 2022 from **$1,942 per ton** in 2021[185](index=185&type=chunk) - **Gross profit margin** decreased from **22.1%** to **19.0%** due to the **average cost of inventory** increasing more rapidly than **average selling prices**[187](index=187&type=chunk) - **Net income** for 2022 was **$90.9 million**, or **$7.87 per diluted share**, compared to **$121.1 million**, or **$10.52 per diluted share**, in 2021[191](index=191&type=chunk) [Segment Results of Operations](index=38&type=section&id=Segment%20Results%20of%20Operations) **Specialty Metals** saw **operating income** rise, while **Carbon Flat Products** experienced a sharp decline, and **Tubular and Pipe Products** significantly increased **operating income** Specialty Metals Flat Products Performance (2022 vs. 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Sales | $776.0M | $585.8M | | Tons Sold | 142,092 | 157,807 | | Avg. Selling Price/ton | $5,461 | $3,712 | | Operating Income | $93.7M | $70.5M | Carbon Flat Products Performance (2022 vs. 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Sales | $1,356.6M | $1,344.2M | | Tons Sold | 806,919 | 921,295 | | Gross Profit % | 14.2% | 21.2% | | Operating Income | $25.0M | $110.1M | Tubular and Pipe Products Performance (2022 vs. 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Sales | $427.4M | $382.4M | | LIFO Expense | $0.6M | $21.9M | | Gross Profit % | 25.1% | 21.4% | | Operating Income | $34.9M | $7.4M | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity,%20Capital%20Resources%20and%20Cash%20Flows) Strong **cash from operations** of **$185.9 million** in 2022 significantly improved **liquidity** and enabled **debt reduction**, with the **Metal-Fab** acquisition in 2023 funded by an expanded **credit facility** - Generated **$185.9 million** of **cash from operations** in 2022, compared to using **$146.4 million** in 2021; the improvement was largely due to a **$71.7 million** decrease in **working capital**[218](index=218&type=chunk)[219](index=219&type=chunk) - Used **cash from operations** for **net repayments** of **$162.1 million** under the **ABL Credit Facility** during 2022[221](index=221&type=chunk) - As of December 31, 2022, the company had **$165.7 million** in **borrowings outstanding** and approximately **$305.6 million** of availability under its **ABL Credit Facility**[229](index=229&type=chunk)[356](index=356&type=chunk) - In January 2023, the company acquired **Metal-Fab** for **$131.0 million**, funded by borrowings under its **ABL Credit Facility**, which was increased from **$475 million** to **$625 million** to support the transaction[223](index=223&type=chunk)[405](index=405&type=chunk) [Market Risk Disclosures](index=46&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include **volatile metals prices** impacting **profitability** and **inventory valuation**, and **fluctuating interest rates** on **variable-rate debt**, partially mitigated by an **interest rate swap** - The company is exposed to **market risk** from **volatile metals prices**, which can significantly affect **net sales**, **gross profits**, and **inventory valuation**[249](index=249&type=chunk)[250](index=250&type=chunk) - The primary **interest rate risk exposure** is from **variable rate debt**; a **100 basis point** (**1.0%**) increase in rates from December 31, 2022 levels would increase annual **interest expense** by approximately **$0.9 million**[255](index=255&type=chunk) - The company utilizes a **five-year interest rate swap** to fix the interest rate at **2.567%** on **$75 million** of its **revolving debt**, mitigating some of its exposure to rising rates[256](index=256&type=chunk) [Financial Statements and Supplementary Data](index=47&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The **consolidated financial statements** for 2022 received an **unqualified opinion** from **Grant Thornton LLP**, with **Inventory Valuation** noted as a **critical audit matter**, and key financial results detailed - The independent registered public accounting firm, **Grant Thornton LLP**, issued an **unqualified opinion** on the **consolidated financial statements** and the effectiveness of **internal control over financial reporting**[261](index=261&type=chunk)[271](index=271&type=chunk) - The **critical audit matter** identified by the auditor was **Inventory Valuation**, due to the subjective judgment required in estimating **net realizable value**, which is affected by future economic and market conditions[266](index=266&type=chunk)[267](index=267&type=chunk) Key Financial Statement Data (in thousands) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Income Statement** | | | | | Net Sales | $2,559,990 | $2,312,253 | $1,234,144 | | Net Income (Loss) | $90,931 | $121,051 | $(5,595) | | **Balance Sheet (Year-End)** | | | | | Total Assets | $891,627 | $1,023,572 | N/A | | Total Liabilities | $375,659 | $599,133 | N/A | | Total Shareholders' Equity | $515,968 | $424,439 | N/A | | **Cash Flow Statement** | | | | | Net Cash from Operating Activities | $185,853 | $(146,374) | $61,652 | [Controls and Procedures](index=80&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that **disclosure controls** and **internal control over financial reporting** were **effective** as of December 31, 2022, with **no material changes** during Q4 - The **CEO** and **CFO** concluded that the company's **disclosure controls and procedures** were **effective** as of December 31, 2022[411](index=411&type=chunk) - Management's assessment concluded that **internal control over financial reporting** was **effective** as of December 31, 2022, based on the **COSO framework**; this assessment was audited by **Grant Thornton LLP**[280](index=280&type=chunk)[412](index=412&type=chunk) - **No changes** in **internal control over financial reporting** occurred during the fourth quarter of 2022 that materially affected, or are reasonably likely to materially affect, these controls[413](index=413&type=chunk) [Part III](index=81&type=section&id=Part%20III) [Directors, Executive Compensation, and Corporate Governance](index=81&type=section&id=Items%2010-14) Information for these items is **incorporated by reference** from the **2023 Annual Meeting of Shareholders** **definitive proxy statement**, with executive officer details in Part I - Information regarding **Directors**, **Executive Compensation**, **Security Ownership**, **Certain Relationships and Related Transactions**, and **Principal Accountant Fees and Services** is **incorporated by reference** from the **definitive proxy statement** for the **2023 Annual Meeting of Shareholders**[418](index=418&type=chunk)[419](index=419&type=chunk)[420](index=420&type=chunk) [Part IV](index=82&type=section&id=Part%20IV) [Exhibits and Financial Statement Schedules](index=82&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all filed **financial statements**, **schedules**, and **exhibits**, including agreements for the **Metal-Fab acquisition** and **loan facility amendments** - The filing includes the **Consolidated Financial Statements** and **Schedule II – Valuation and Qualifying Accounts**[425](index=425&type=chunk)[426](index=426&type=chunk) - Key exhibits filed include the **Stock Purchase Agreement** for the **Metal-Fab acquisition** (Exhibit 2.2) and the **Joinder and Sixth Amendment** to the **Loan and Security Agreement** (Exhibit 4.32), which increased the **credit facility** and updated the reference rate to **SOFR**[428](index=428&type=chunk)[429](index=429&type=chunk)