Cleveland, Ohio-based service center Olympic Steel, Inc. announced Thursday its financial results for Q3 2010 and first nine months ended September 30, 2010.
Net sales for Q3 2010 totaled $209.2 million, a 72 percent increase from the $121.6 million in Q3 2009. Tons sold in Q3 2010 increased 32.5 percent to 240 thousand from 181 thousand in Q3 2009. Q3 2010 net loss totaled $1.2 million, compared to net income of $0.7 million for last year's third quarter.
Net sales for the first nine months of 2010 totaled $589.8 million, a 53.2 percent increase from the $384.9 million for the first nine months of 2009. Tons sold in the first nine months of 2010 increased 35.6 percent to 714 thousand from 527 thousand in the first nine months of 2009. Net income for the first nine months 2010 totaled $3.7 million compared to a net loss of $58.6 million for last year's comparable period.
Commenting on the results, Chairman and Chief Executive Officer Michael D. Siegal stated, "while we are pleased with the continued growth in our tons sold and sales in the third quarter, and our ability to be profitable prior to incurring the unexpected bad debt cost, the market proved to be highly competitive and is likely to remain so in the near term. Our shipments in the first nine months of 2010 increased year over year by 35.6 percent, which is significantly greater than the market increase in total steel shipments of 19.8 percent, as reported in the Metals Service Center Institute's Market Activity Report."
In a separate statement Thursday, Olympic announced that it has signed agreements to purchase a new temper mill and cut-to-length line, and plans to locate it on US Steel's Gary Works facility in Gary, Indiana. Terms of the agreement with US Steel are being finalized and are subject to change.
The company expects to invest approximately $25 million in the new temper mill project. The project includes the purchase of an existing approximate 150,000 square foot facility to house a Butech cut-to-length line, a four-high temper mill supplied by I2S, LLC, and multiple pieces of plate burning equipment. The temper mill equipment is expected to be operational in the first half of 2012, and Olympic has an option with the equipment manufacturers to purchase a second temper mill and cut-to-length line.
Commenting on the project, Chairman and Chief Executive Officer Michael D. Siegal stated that "we are thrilled to announce this strategic growth initiative and its prime location on the US Steel Gary Works site. Once fully operational, the new equipment, depending on the steel processed, annually adds 150,000 to 180,000 new tons of high quality tempered sheet capacity for Olympic Steel."