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 June 30, 2022 ☐ 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 (State or other jurisdicti ...

For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 transition period from __________ to ____________ Commission File Number 0-23320 OLYMPIC STEEL, INC. (Exact name of registrant as specified in its charter) Ohio 34-1245650 (State or other jurisdi ...

Olympic Steel, Inc. (NASDAQ:ZEUS) Q1 2022 Earnings Conference Call May 6, 2022 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 Marco Rodriguez - Stonegate Capital Markets Phil Gibbs - KeyBanc Capital Markets Chris Sakai - Singular Research Operator Good morning and welcome to the Olympic Steel 2022 First Quarter Financial Results Conference Call. At this time, all p ...

Investor Presentation February 2022 Forward-Looking Statements 2 | --- | --- | |-----------------------------------------------------------------------------------------------------------------------------------------------------|-------| | | | | 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 forward-looking statements are made | | | pursuant to the safe harbor provision ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Year Ended December 31, 2021 ☐ 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 | | --- | --- | | (State or other jurisdiction of incor ...

Olympic Steel, Inc. (NASDAQ:ZEUS) Q4 2021 Earnings Conference Call February 25, 2022 10:00 AM ET Company Participants Richard Marabito - CEO Richard Manson - CFO Andrew Greiff - President & COO Conference Call Participants Marco Rodriguez - Stonegate Capital Markets Philip Gibbs - KeyBanc Capital Markets Chris Sakai - Singular Research Alan Weber - Robotti Advisors Phil Gibbs - KeyBanc Capital Markets Operator Good morning and welcome to the Olympic Steel 2021 Fourth Quarter Financial Results Conference Cal ...

Part I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents the unaudited consolidated financial statements and related notes for the period ended September 30, 2021 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2021, total assets increased significantly to $971.3 million from $640.6 million at year-end 2020, primarily driven by higher inventories and accounts receivable amid rising metal prices Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $748,817 | $402,204 | | Inventories, net | $417,979 | $240,001 | | Accounts receivable, net | $303,236 | $151,601 | | **Total assets** | **$971,306** | **$640,605** | | **Total current liabilities** | $229,434 | $126,725 | | Credit facility revolver | $297,880 | $160,609 | | **Total liabilities** | **$572,591** | **$339,595** | | **Total shareholders' equity** | **$398,715** | **$301,010** | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The company demonstrated a significant financial turnaround, reporting a net income of $44.5 million for Q3 2021, compared to a $1.5 million loss in Q3 2020 Performance Summary (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $668,466 | $299,921 | $1,687,667 | $902,597 | | Operating income (loss) | $62,160 | $(363) | $136,186 | $(4,797) | | Net income (loss) | $44,533 | $(1,520) | $96,190 | $(7,381) | | Diluted EPS | $3.87 | $(0.13) | $8.36 | $(0.64) | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first nine months of 2021, the company used $126.9 million in cash for operating activities, a major shift from the $28.7 million generated in the same period of 2020 Cash Flow Summary for the Nine Months Ended Sep 30 (in thousands) | Cash Flow Category | 2021 | 2020 | | :--- | :--- | :--- | | Net cash from (used for) operating activities | $(126,937) | $28,653 | | Net cash from (used for) investing activities | $1,800 | $(6,818) | | Net cash from (used for) financing activities | $134,747 | $(22,433) | | **Net change in cash** | **$9,610** | **$(598)** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Details the basis of presentation, key accounting policies, and significant events including asset sales, acquisitions, LIFO expense, and credit facility amendments - The company operates in three reportable segments: **carbon flat products, specialty metals flat products, and tubular and pipe products**[23](index=23&type=chunk) - On September 17, 2021, the company sold its Detroit operation for **$58.4 million** plus a working capital adjustment, resulting in a net gain of **$3.5 million**[79](index=79&type=chunk) - Subsequent to the quarter end, on October 1, 2021, the company acquired Shaw Stainless & Alloy, Inc. for **$12.0 million**[80](index=80&type=chunk) - Due to rising metals prices, the company recorded LIFO expense of **$12.0 million** for the nine months ended September 30, 2021, compared to LIFO income of **$1.1 million** in the prior-year period[35](index=35&type=chunk) - On June 16, 2021, the company amended and extended its ABL Credit Facility, increasing the total facility to **$475 million** with a maturity date of June 16, 2026[43](index=43&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the record financial results in Q3 and the first nine months of 2021 to surging metals prices and strong end-market demand, detailing performance, liquidity, and capital allocation [Overview](index=26&type=section&id=Overview) The company is a metals service center operating in three segments, with performance highly dependent on external factors like metals pricing, demand, and supply chain dynamics - The company's business is organized into three reportable segments: **carbon flat products, specialty metals flat products, and tubular and pipe products**[87](index=87&type=chunk)[92](index=92&type=chunk) - Results are significantly affected by external factors such as **metals pricing, supply chain disruptions, customer demand, and U.S. trade policy**[85](index=85&type=chunk)[88](index=88&type=chunk) - On September 17, 2021, the company sold its Detroit operation, which primarily served domestic automotive manufacturers and was part of the carbon flat-rolled segment[87](index=87&type=chunk) [Results of Operations - Consolidated](index=29&type=section&id=Results%20of%20Operations%20-%20Consolidated) Consolidated net sales for Q3 2021 increased 122.9% year-over-year to $668.5 million, driven by higher prices and volume, leading to a significant shift to operating income Consolidated Operations Summary (in thousands) | Metric | Q3 2021 | Q3 2020 | | :--- | :--- | :--- | | Net sales | $668,466 | $299,921 | | Gross profit | $147,600 | $59,954 | | Gross profit % | 22.1% | 20.0% | | Operating income (loss) | $62,160 | $(363) | - The increase in net sales was driven by a **98.9% increase in consolidated average selling prices** and a **12.0% increase in consolidated volume** in Q3 2021 vs Q3 2020[105](index=105&type=chunk) - The pricing environment was exceptionally strong, with hot rolled coil index prices **226% higher** in Q3 2021 compared to Q3 2020[101](index=101&type=chunk) [Results of Operations - Specialty Metals Flat Products](index=31&type=section&id=Results%20of%20Operations%20-%20Specialty%20Metals%20Flat%20Products) The specialty metals segment's net sales grew 102.9% to $164.2 million in Q3 2021, propelled by increased prices and tons sold, boosting operating income more than tenfold Specialty Metals Segment Q3 Performance | Metric | Q3 2021 | Q3 2020 | | :--- | :--- | :--- | | Net Sales | $164,179 | $80,904 | | Total Tons Sold | 41,203 | 33,735 | | Avg. Selling Price/Ton | $3,985 | $2,398 | | Gross Profit % | 26.8% | 13.7% | | Operating Income | $24,663 | $2,448 | - The increase in tons sold was attributed to the **acquisition of Action Stainless** and the **recovery of customer demand** from COVID-19 pandemic levels[117](index=117&type=chunk) [Results of Operations - Carbon Flat Products](index=32&type=section&id=Results%20of%20Operations%20-%20Carbon%20Flat%20Products) The carbon flat products segment's net sales surged 140.9% to $404.6 million in Q3 2021, driven by higher prices and volume, achieving a significant turnaround to operating income Carbon Flat Products Segment Q3 Performance | Metric | Q3 2021 | Q3 2020 | | :--- | :--- | :--- | | Net Sales | $404,596 | $167,948 | | Total Tons Sold | 244,519 | 224,199 | | Avg. Selling Price/Ton | $1,655 | $749 | | Gross Profit % | 20.7% | 19.7% | | Operating Income (Loss) | $37,164 | $(1,604) | - Tons sold increased **9.1%** year-over-year despite the negative impact from the sale of the Detroit operation on September 17, 2021[126](index=126&type=chunk) [Results of Operations - Tubular and Pipe Products](index=33&type=section&id=Results%20of%20Operations%20-%20Tubular%20and%20Pipe%20Products) Net sales for the tubular and pipe segment rose 95.2% to $99.7 million in Q3 2021, reflecting higher prices and volume, though gross margin contracted due to a significant LIFO expense Tubular and Pipe Products Segment Q3 Performance | Metric | Q3 2021 | Q3 2020 | | :--- | :--- | :--- | | Net Sales | $99,691 | $51,069 | | Gross Profit | $20,057 | $15,737 | | Gross Profit % | 20.1% | 30.8% | | Operating Income | $2,354 | $744 | - The segment recorded a **$7.0 million LIFO expense** in Q3 2021 versus a **$0.1 million LIFO income** in Q3 2020, which significantly impacted the gross profit percentage[137](index=137&type=chunk) [Liquidity, Capital Resources and Cash Flows](index=34&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Cash%20Flows) The company's liquidity was primarily supported by its ABL Credit Facility, funding increased working capital, with enhanced financial flexibility from an upsizing of the facility and a new equity program - For the nine months ended Sep 30, 2021, net cash used for operating activities was **$126.9 million**, compared to **$28.7 million generated** in the prior-year period[144](index=144&type=chunk) - Working capital increased by **$243.9 million** since year-end 2020, mainly from a **$178.0 million increase in inventories** and a **$151.6 million increase in accounts receivable**[146](index=146&type=chunk) - As of September 30, 2021, the company had approximately **$173 million of availability** under its **$475 million ABL Credit Facility**[47](index=47&type=chunk)[155](index=155&type=chunk) - On September 3, 2021, the company commenced a **$50 million at-the-market (ATM) equity program**, though no shares were sold during the quarter[152](index=152&type=chunk) [Critical Accounting Policies](index=36&type=section&id=Critical%20Accounting%20Policies) Management confirms that the company's critical accounting policies, which involve significant judgments and estimates, have not changed from those disclosed in the 2020 Annual Report on Form 10-K - The company's critical accounting policies are detailed in its Annual Report on Form 10-K for the year ended December 31, 2020, and there have been **no changes**[159](index=159&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies its primary market risks as the volatility of metals prices and changes in interest rates, with interest rate risk partially mitigated by a five-year interest rate swap - The company's principal market risks stem from the **cyclical and volatile nature of metals pricing** and **interest rate fluctuations on its debt**[160](index=160&type=chunk)[165](index=165&type=chunk) - Declining metals prices can adversely affect gross profits and may lead to inventory impairment, while rising prices increase working capital requirements[161](index=161&type=chunk)[162](index=162&type=chunk) - To manage interest rate risk, the company entered into a five-year interest rate swap that fixed the rate at **2.57%** on **$75 million** of its revolving debt[166](index=166&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on management's evaluation, the company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2021[167](index=167&type=chunk) - There were **no material changes** in internal control over financial reporting during the third quarter of 2021[168](index=168&type=chunk) Part II. OTHER INFORMATION [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed concurrently with the Form 10-Q, including key agreements, certifications, and financial data in Inline XBRL format - Filed exhibits include the **Asset Purchase Agreement** for the Detroit operation sale, **CEO/CFO certifications (Sections 302 and 906)**, and **Inline XBRL data files**[171](index=171&type=chunk)[173](index=173&type=chunk)

Olympic Steel, Inc. (NASDAQ:ZEUS) Q3 2021 Earnings Conference Call November 5, 2021 10:00 AM ET Company Participants Richard Manson - CFO Richard Marabito - CEO & Director Andrew Greiff - President & COO Conference Call Participants Marco Rodriguez - Stonegate Capital Markets Alan Weber - Robotti Advisors Philip Gibbs - KeyBanc Capital Markets Christopher Sakai - Singular Research Operator Good morning, and welcome to Olympic Steel 2021 Third Quarter Financial Results Conference Call. [Operator Instructions ...

Olympic Steel, Inc. (NASDAQ:ZEUS) Q2 2021 Earnings Conference Call August 6, 2021 10:00 AM ET Company Participants Richard Manson - CFO Richard Marabito - CEO & Director Andrew Greiff - President & COO Conference Call Participants Marco Rodriguez - Stonegate Capital Markets Michael Leshock - KeyBanc Capital Markets Chris Sakai - Singular Research Operator Hello, and welcome to the Olympic Steel 2021 Second Quarter Financial Results Conference Call and Webcast. [Operator Instructions]. As a reminder, this co ...

[Part I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements, including balance sheets, income, cash flows, equity, and notes, detailing financial position and performance [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | Change (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | Total Assets | $887,689 | $640,605 | +$247,084 | | Total Liabilities | $533,869 | $339,595 | +$194,274 | | Total Shareholders' Equity | $353,820 | $301,010 | +$52,810 | - Significant increases in current assets, particularly accounts receivable (+$112.85 million) and inventories (+$133.28 million), and a substantial rise in credit facility revolver borrowings (+$108.37 million) were key drivers of balance sheet changes[10](index=10&type=chunk)[143](index=143&type=chunk)[145](index=145&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) | Metric | Three Months Ended June 30, 2021 (in thousands) | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :------------------------------------ | :------------------------------------ | | Net sales | $556,077 | $248,296 | $1,019,201 | $602,676 | | Operating income (loss) | $42,437 | $(7,485) | $74,026 | $(4,434) | | Net income (loss) | $29,649 | $(6,454) | $51,657 | $(5,861) | | Basic EPS | $2.58 | $(0.56) | $4.50 | $(0.51) | | Diluted EPS | $2.58 | $(0.56) | $4.49 | $(0.51) | | Gross profit as % of net sales | 22.9% | 21.0% | 23.1% | 20.6% | - Net sales increased by **124.0%** in Q2 2021 and **69.1%** in H1 2021 year-over-year, primarily due to a **63.4%** increase in average selling prices and a **37.1%** increase in consolidated volume in Q2 2021[100](index=100&type=chunk)[101](index=101&type=chunk) - The company swung from a net loss in 2020 to significant net income in 2021, with gross profit as a percentage of net sales improving due to rapidly increasing average selling prices outpacing inventory cost increases[103](index=103&type=chunk)[109](index=109&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash from (used for) operating activities | $(95,744) | $3,512 | | Net cash used for investing activities | $(4,556) | $(5,583) | | Net cash from financing activities | $106,403 | $3,434 | | Net change in cash | $6,103 | $1,363 | - Operating activities used **$95.7 million** in cash during H1 2021, primarily due to a **$162.2 million** increase in working capital, driven by higher inventories (+$133.3 million) and accounts receivable (+$112.9 million)[140](index=140&type=chunk)[143](index=143&type=chunk) - Financing activities provided **$106.4 million** in cash in H1 2021, mainly from **$108.4 million** in net borrowings under the ABL Credit Facility[145](index=145&type=chunk) [Supplemental Disclosures of Cash Flow Information](index=7&type=section&id=Supplemental%20Disclosures%20of%20Cash%20Flow%20Information) | Metric | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :------------- | :-------------------------------------------- | :-------------------------------------------- | | Interest paid | $3,240 | $3,959 | | Income taxes paid | $10,578 | $67 | - No new financing lease obligations were incurred during the six months ended June 30, 2021, compared to **$1.0 million** in the prior year period[18](index=18&type=chunk) [Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Total Shareholders' Equity | $353,820 | $301,010 | | Retained Earnings | $224,057 | $172,843 | | Accumulated Other Comprehensive Loss | $(3,153) | $(4,215) | - The increase in total shareholders' equity was primarily driven by **net income of $51.7 million** and a positive change in the fair value of hedges, net of tax, of **$1.06 million** during the first six months of 2021[21](index=21&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) [1. Basis of Presentation](index=10&type=section&id=1.%20Basis%20of%20Presentation) - The company operates in three reportable segments: carbon flat products, specialty metals flat products, and tubular and pipe products, with certain assets and resources shared between the flat products segments[25](index=25&type=chunk) - Acquisitions like Action Stainless & Alloys, Inc. (Dec 2020) expanded the specialty metals segment, while McCullough Industries and EZ Dumper® (2019) expanded the carbon flat products segment[25](index=25&type=chunk) - The company is an essential business and continues to monitor the uncertain impact of the COVID-19 pandemic on its financial condition[27](index=27&type=chunk) [2. Revenue Recognition](index=10&type=section&id=2.%20Revenue%20Recognition) - Revenue for substantially all sales is recognized at a point in time upon shipment or delivery when control transfers to the customer[30](index=30&type=chunk) | Segment | Q2 2021 Revenue % | H1 2021 Revenue % | | :-------------------------- | :---------------- | :---------------- | | Carbon flat products | 58.6% | 56.1% | | Specialty metals flat products | 24.8% | 25.9% | | Tubular and pipe products | 16.6% | 18.0% | [3. Accounts Receivable](index=12&type=section&id=3.%20Accounts%20Receivable) | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Accounts receivable, net | $264,451 | $151,601 | | Allowance for credit losses and unissued credits | $4,400 | $3,600 | [4. Inventories](index=12&type=section&id=4.%20Inventories) | Inventory Type | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--------------- | :----------------------------- | :------------------------------- | | Unprocessed | $300,693 | $194,614 | | Processed and finished | $72,584 | $45,387 | | Total Inventories | $373,277 | $240,001 | - The company recorded LIFO expense of **$4.0 million** for Q2 2021 and **$5.0 million** for H1 2021, compared to LIFO income in the prior year periods, due to anticipated increases in metals prices[36](index=36&type=chunk) - Approximately **13.4%** of consolidated inventory (**$50.1 million**) was reported under the LIFO method as of June 30, 2021[35](index=35&type=chunk) [5. Goodwill and Intangible Assets](index=12&type=section&id=5.%20Goodwill%20and%20Intangible%20Assets) | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------- | :----------------------------- | :------------------------------- | | Goodwill | $5,234 | $5,123 | | Intangible assets, net | $31,666 | $32,593 | - Goodwill increased by **$111 thousand** due to adjustments to the preliminary purchase price allocation of the Action Stainless acquisition[40](index=40&type=chunk)[41](index=41&type=chunk) - Estimated amortization expense for intangible assets subject to amortization is approximately **$1.5 million** per year for the next two years[41](index=41&type=chunk) [6. Leases](index=15&type=section&id=6.%20Leases) | Lease Type | H1 2021 Cost (in thousands) | H1 2020 Cost (in thousands) | | :----------- | :-------------------------- | :-------------------------- | | Operating lease cost | $3,415 | $3,555 | | Finance lease cost | $477 | $146 | | Lease Type | June 30, 2021 Weighted Average Remaining Lease Term (years) | June 30, 2021 Weighted Average Discount Rate | | :----------- | :-------------------------------------------------------- | :------------------------------------------- | | Operating leases | 6 | 3.74% | | Finance leases | 4 | 3.50% | [7. Debt](index=17&type=section&id=7.%20Debt) | Debt Component | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Asset-based revolving credit facility due June 16, 2026 | $268,975 | - | | Asset-based revolving credit facility due December 8, 2022 | - | $160,609 | | Total debt | $268,975 | $160,609 | - The company amended and extended its ABL Credit Facility to **$475 million**, maturing on June 16, 2026[44](index=44&type=chunk) - As of June 30, 2021, the company was in compliance with its debt covenants and had approximately **$202 million** of availability under the ABL Credit Facility[48](index=48&type=chunk) [8. Derivative Instruments](index=17&type=section&id=8.%20Derivative%20Instruments) - The company uses nickel swaps to mitigate customer risk of metals price volatility, which are not designated as hedging instruments[50](index=50&type=chunk)[51](index=51&type=chunk) - A five-year forward starting fixed rate interest rate hedge (**2.57%**) is in place for **$75 million** of LIBOR-based borrowings under the ABL Credit Facility[52](index=52&type=chunk)[153](index=153&type=chunk) | Derivative Type | H1 2021 Net Gain (Loss) (in thousands) | H1 2020 Net Gain (Loss) (in thousands) | | :---------------------- | :------------------------------------- | :------------------------------------- | | Fixed interest rate hedge | $(931) | $(596) | | Metals swaps | $228 | $(27) | | Embedded customer derivatives | $(228) | $27 | | Total loss | $(931) | $(596) | [9. Fair Value of Assets and Liabilities](index=18&type=section&id=9.%20Fair%20Value%20of%20Assets%20and%20Liabilities) | Item | June 30, 2021 Fair Value (in thousands) | | :-------------------------- | :------------------------------------ | | Assets: Metal Swaps | $131 | | Liabilities: Embedded customer derivative | $131 | | Liabilities: Fixed interest rate hedge | $4,204 | - All fair value measurements for these items are classified as **Level 2**, indicating valuation techniques using observable inputs other than quoted prices[55](index=55&type=chunk) [10. Accumulated Other Comprehensive Loss](index=19&type=section&id=10.%20Accumulated%20Other%20Comprehensive%20Loss) - The fair value of the interest rate hedge, net of tax, amounting to **$4.2 million**, is included in 'Accumulated other comprehensive loss' on the Consolidated Balance Sheets as of June 30, 2021[58](index=58&type=chunk) [11. Equity Plans](index=19&type=section&id=11.%20Equity%20Plans) | Metric | H1 2021 (in thousands) | H1 2020 (in thousands) | | :---------------------- | :--------------------- | :--------------------- | | RSU expense before taxes | $520 | $687 | - The company grants Restricted Stock Units (RSUs) to non-employee directors and executive officers, with vesting periods typically ranging from one to five years[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - Outstanding RSUs at June 30, 2021, totaled **623,636 shares** with a weighted average granted price of **$18.43**[64](index=64&type=chunk) [12. Income Taxes](index=20&type=section&id=12.%20Income%20Taxes) | Metric | Q2 2021 (in thousands) | Q2 2020 (in thousands) | H1 2021 (in thousands) | H1 2020 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Income tax provision (benefit) | $10,772 | $(2,948) | $18,689 | $(2,746) | | Effective tax rate | 26.7% | 31.4% (benefit) | 26.6% | 31.9% (benefit) | - The tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, with quarterly updates and cumulative adjustments[66](index=66&type=chunk) [13. Shares Outstanding and Earnings Per Share](index=20&type=section&id=13.%20Shares%20Outstanding%20and%20Earnings%20Per%20Share) | Metric | Q2 2021 (in thousands) | Q2 2020 (in thousands) | H1 2021 (in thousands) | H1 2020 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Weighted average basic shares outstanding | 11,492 | 11,446 | 11,491 | 11,445 | | Basic earnings per share | $2.58 | $(0.56) | $4.50 | $(0.51) | | Diluted earnings per share | $2.58 | $(0.56) | $4.49 | $(0.51) | [14. Stock Repurchase Program](index=21&type=section&id=14.%20Stock%20Repurchase%20Program) - The Board of Directors authorized a stock repurchase program for up to **550,000 shares** of common stock[69](index=69&type=chunk) - As of June 30, 2021, **360,212 shares** remain authorized for repurchase under the program[70](index=70&type=chunk) - No shares were repurchased during the three or six months ended June 30, 2021[70](index=70&type=chunk) [15. Segment Information](index=21&type=section&id=15.%20Segment%20Information) - The company operates in three reportable segments: specialty metals flat products, carbon flat products, and tubular and pipe products, with performance evaluated primarily by operating income[72](index=72&type=chunk)[71](index=71&type=chunk) | Segment | H1 2021 Net Sales (in thousands) | H1 2020 Net Sales (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Specialty metals flat products | $264,354 | $142,983 | | Carbon flat products | $571,884 | $343,778 | | Tubular and pipe products | $182,963 | $115,915 | | Total net sales | $1,019,201 | $602,676 | | Segment | H1 2021 Operating Income (Loss) (in thousands) | H1 2020 Operating Income (Loss) (in thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Specialty metals flat products | $21,724 | $4,726 | | Carbon flat products | $51,633 | $(10,774) | | Tubular and pipe products | $9,359 | $6,530 | | Corporate expenses | $(8,690) | $(4,916) | | Total operating income (loss) | $74,026 | $(4,434) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial condition and operations, covering performance drivers, segment results, liquidity, capital resources, and critical accounting policies [Forward-Looking Information](index=24&type=section&id=Forward-Looking%20Information) - The report contains forward-looking statements subject to risks and uncertainties, including those related to COVID-19, metals prices, supply chain disruptions, and economic conditions[80](index=80&type=chunk)[81](index=81&type=chunk) - Factors that could cause actual results to differ materially include supply chain disruption, falling metals prices, inflationary pressures, and global economic conditions[81](index=81&type=chunk) [Overview](index=25&type=section&id=Overview) - Olympic Steel is a leading metals service center operating in three reportable segments, providing processing and distribution services for a wide range of customers[83](index=83&type=chunk) - Results are significantly affected by external factors such as general economic conditions, metals pricing, demand, availability, transportation costs, and global supply chain dynamics[84](index=84&type=chunk) - The company maintains substantial metals inventories and uses nickel swaps and metals hedges to mitigate price volatility, but cannot guarantee passing on future price increases to customers[85](index=85&type=chunk) [Reportable Segments](index=26&type=section&id=Reportable%20Segments) - The company operates in three reportable segments: carbon flat products, specialty metals flat products, and tubular and pipe products, with performance assessed primarily by operating income[88](index=88&type=chunk)[89](index=89&type=chunk) - There are significant differences in average selling prices and gross profit percentages across segments; the tubular and pipe products segment generally has the highest average selling price and gross profit percentage[90](index=90&type=chunk) - The LIFO inventory valuation method used for certain tubular and pipe products can impact the segment's gross margin[90](index=90&type=chunk) [Specialty metals flat products](index=27&type=section&id=Specialty%20metals%20flat%20products_segment) - This segment focuses on processed stainless and aluminum flat-rolled sheet and coil products, flat bar, and fabricated parts[91](index=91&type=chunk) - Serves industries such as food service, commercial appliances, agriculture equipment, transportation, and automotive equipment[91](index=91&type=chunk) [Carbon flat products](index=27&type=section&id=Carbon%20flat%20products_segment) - This segment focuses on large volumes of processed carbon and coated flat-rolled sheet, coil, and plate products, and fabricated parts[92](index=92&type=chunk) - Serves a wide range of metals-consuming industries, including transportation, construction, farm machinery, and energy generation equipment[92](index=92&type=chunk) - Operates **27 processing and distribution facilities** in the U.S. and one in Monterrey, Mexico[93](index=93&type=chunk) [Tubular and pipe products](index=27&type=section&id=Tubular%20and%20pipe%20products_segment) - This segment, consisting of the Chicago Tube and Iron (CTI) business, distributes metal tubing, pipe, bar, valves, and fittings[94](index=94&type=chunk) - It also fabricates pressure parts supplied to various industrial markets from **eight locations** in the Midwestern and southeastern United States[94](index=94&type=chunk) [Corporate expenses](index=27&type=section&id=Corporate%20expenses_segment) - Corporate expenses include unallocated costs for managing the entire company, such as payroll for certain personnel, board of directors' expenses, and audit fees[95](index=95&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) - Metals prices have continuously increased since August 2020, reaching record levels in Q2 2021, with hot rolled coil index prices **249% higher** than Q2 2020[96](index=96&type=chunk) - The increased pricing is attributed to supply chain disruptions, rising raw material costs, supply shortages, increased transportation costs, and recovering demand post-COVID-19[96](index=96&type=chunk) - Sales volumes were negatively impacted by supply chain disruptions, but net sales and profitability were positively impacted by price increases[97](index=97&type=chunk) [Consolidated Operations](index=28&type=section&id=Consolidated%20Operations) | Metric | Q2 2021 (in thousands) | Q2 2020 (in thousands) | H1 2021 (in thousands) | H1 2020 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net sales | $556,077 | $248,296 | $1,019,201 | $602,676 | | Gross profit | $127,373 | $52,059 | $235,833 | $123,917 | | Operating income (loss) | $42,437 | $(7,485) | $74,026 | $(4,434) | | Net income (loss) | $29,649 | $(6,454) | $51,657 | $(5,861) | - Net sales increased by **124.0%** in Q2 2021 and **69.1%** in H1 2021 year-over-year, driven by a **63.4%** increase in average selling prices and a **37.1%** increase in consolidated volume in Q2 2021[100](index=100&type=chunk)[101](index=101&type=chunk) - Gross profit as a percentage of net sales improved to **22.9%** in Q2 2021 (from 21.0%) and **23.1%** in H1 2021 (from 20.6%) due to rapidly increasing average selling prices[103](index=103&type=chunk) - Operating expenses increased by **$25.4 million** (**42.6%**) in Q2 2021 but decreased as a percentage of net sales to **15.3%** (from 24.0%)[104](index=104&type=chunk) [Segment Operations](index=30&type=section&id=Segment%20Operations) [Specialty metals flat products](index=30&type=section&id=Specialty%20metals%20flat%20products_results) | Metric | Q2 2021 (in thousands) | Q2 2020 (in thousands) | H1 2021 (in thousands) | H1 2020 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net sales | $138,035 | $54,495 | $264,354 | $142,983 | | Total tons sold | 40,188 | 24,337 | 82,075 | 58,907 | | Average selling price per ton | $3,435 | $2,239 | $3,221 | $2,427 | | Operating income | $13,702 | $1,991 | $21,724 | $4,726 | - Net sales increased by **153.3%** in Q2 2021, driven by a **65.1%** increase in sales volume and a **53.4%** increase in average selling prices, reflecting recovery from COVID-19 impacts and increased industry metals pricing[113](index=113&type=chunk)[114](index=114&type=chunk) - Gross profit as a percentage of net sales increased to **22.1%** in Q2 2021 (from 17.3%) due to rapidly increasing average selling prices[117](index=117&type=chunk) [Carbon flat products](index=31&type=section&id=Carbon%20flat%20products_results) | Metric | Q2 2021 (in thousands) | Q2 2020 (in thousands) | H1 2021 (in thousands) | H1 2020 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net sales | $325,511 | $140,811 | $571,884 | $343,778 | | Total tons sold | 244,383 | 184,824 | 484,231 | 447,934 | | Average selling price per ton | $1,332 | $762 | $1,181 | $767 | | Operating income (loss) | $30,434 | $(9,428) | $51,633 | $(10,774) | - Net sales increased by **131.2%** in Q2 2021, driven by a **74.8%** increase in average selling prices and a **32.2%** increase in tons sold, reflecting a strong market recovery[122](index=122&type=chunk)[123](index=123&type=chunk) - The segment turned an operating loss of **$9.4 million** in Q2 2020 into an operating income of **$30.4 million** in Q2 2021[128](index=128&type=chunk) [Tubular and pipe products](index=32&type=section&id=Tubular%20and%20pipe%20products_results) | Metric | Q2 2021 (in thousands) | Q2 2020 (in thousands) | H1 2021 (in thousands) | H1 2020 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net sales | $92,531 | $52,990 | $182,963 | $115,915 | | Gross profit | $21,348 | $16,761 | $44,822 | $36,536 | | Operating income | $3,039 | $2,225 | $9,359 | $6,530 | - Net sales increased by **74.6%** in Q2 2021, driven by a **48.9%** increase in shipping volume and a **17.3%** increase in average selling prices[131](index=131&type=chunk) - Gross profit as a percentage of net sales decreased to **23.1%** in Q2 2021 (from 31.6%) due to a **$4.0 million** LIFO expense recorded in the quarter[133](index=133&type=chunk)[134](index=134&type=chunk) [Corporate expenses](index=33&type=section&id=Corporate%20expenses_results) | Metric | Q2 2021 (in thousands) | Q2 2020 (in thousands) | H1 2021 (in thousands) | H1 2020 (in thousands) | | :--------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Corporate expenses | $4,738 | $2,273 | $8,690 | $4,916 | - Corporate expenses increased by **108.4%** in Q2 2021 and **76.8%** in H1 2021, primarily due to increased performance-based incentive compensation[137](index=137&type=chunk) [Liquidity, Capital Resources and Cash Flows](index=33&type=section&id=Liquidity,%20Capital%20Resources%20and%20Cash%20Flows) - The company's principal capital requirements include funding working capital, purchasing equipment, making acquisitions, and paying dividends, primarily funded by cash from operations and its ABL Credit Facility[138](index=138&type=chunk) - Management believes available funds from the ABL Credit Facility and operations will provide sufficient liquidity for at least the next 12 months[139](index=139&type=chunk) [Operating Activities](index=33&type=section&id=Operating%20Activities) - Net cash used for operations was **$95.7 million** in H1 2021, a significant shift from **$3.5 million** generated in H1 2020[140](index=140&type=chunk) - This was primarily due to a **$162.2 million** use for working capital, driven by a **$133.3 million** increase in inventories and a **$112.9 million** increase in accounts receivable[140](index=140&type=chunk)[143](index=143&type=chunk) [Investing Activities](index=35&type=section&id=Investing%20Activities) - Net cash used for investing activities totaled **$4.6 million** in H1 2021, a slight decrease from **$5.6 million** in H1 2020[144](index=144&type=chunk) - Capital expenditures in both periods were primarily for additional processing equipment at existing facilities[144](index=144&type=chunk) [Financing Activities](index=35&type=section&id=Financing%20Activities) - Financing activities generated **$106.4 million** in cash during H1 2021, mainly from **$108.4 million** in net borrowings under the ABL Credit Facility[145](index=145&type=chunk) - Dividends paid were **$0.4 million** for both H1 2021 and H1 2020[146](index=146&type=chunk) [Stock Repurchase Program](index=35&type=section&id=Stock%20Repurchase%20Program_liquidity) - The company has an authorized stock repurchase program for up to **550,000 shares**, with **360,212 shares** remaining authorized as of June 30, 2021[147](index=147&type=chunk) - No shares were repurchased during the three or six months ended June 30, 2021[148](index=148&type=chunk) - Repurchases are subject to ABL Credit Facility covenants, including a **$5.0 million** annual aggregate limit with dividends[147](index=147&type=chunk) [Debt Arrangements](index=35&type=section&id=Debt%20Arrangements_liquidity) - The ABL Credit Facility was amended and extended on June 16, 2021, providing a **$475 million** revolving credit facility that matures on June 16, 2026[149](index=149&type=chunk) - As of June 30, 2021, the company was in compliance with its covenants and had approximately **$202 million** of availability under the ABL Credit Facility[151](index=151&type=chunk) - A five-year interest rate hedge fixes the rate at **2.57%** on **$75 million** of LIBOR-based borrowings[153](index=153&type=chunk) [Critical Accounting Policies](index=36&type=section&id=Critical%20Accounting%20Policies) - The financial statements are prepared in conformity with GAAP, requiring management to make estimates and assumptions that affect reported amounts[154](index=154&type=chunk) - The company reviews its financial reporting and accounting practices quarterly to ensure accuracy and transparency[155](index=155&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details exposure to market risks from fluctuating metals prices and interest rates, explaining their impact on sales, profitability, and working capital - The company is exposed to market risks from volatile metals prices (carbon, coated, stainless steel, aluminum, pipe, and tube) due to cyclical industry conditions and external factors[156](index=156&type=chunk) - Rising metals prices increase working capital requirements and influence the ability to pass on costs, while declining prices can lead to lower sales, gross profits, and potential impairment charges[158](index=158&type=chunk)[159](index=159&type=chunk) - Primary interest rate risk stems from variable rate debt, partially mitigated by a five-year interest rate swap that fixed the rate at **2.57%** on **$75 million** of revolving debt[163](index=163&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures and reports no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2021[164](index=164&type=chunk) - No changes in internal control over financial reporting occurred during Q2 2021 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[165](index=165&type=chunk) - The company is continuously monitoring and assessing the COVID-19 pandemic's impact on its internal controls[165](index=165&type=chunk) [Part II. OTHER INFORMATION](index=33&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) Lists all documents filed as exhibits to the Form 10-Q, including corporate amendments, credit facility details, and required certifications - Key exhibits include the Fourth Amendment to Third Amended and Restated Loan and Security Agreement (ABL Credit Facility) and certifications from the Principal Executive Officer and Principal Financial Officer[167](index=167&type=chunk) [SIGNATURES](index=35&type=section&id=SIGNATURES) Contains official signatures of the Chief Executive Officer and Chief Financial Officer, certifying the submission of the Quarterly Report on Form 10-Q - The report is signed by Richard T. Marabito, Chief Executive Officer, and Richard A. Manson, Chief Financial Officer[169](index=169&type=chunk)