• Revenue: $493 million in first quarter sales.

• Net Income: $2.5 million for the first quarter.

• EBITDA: $16.1 million in the first quarter.

• Flat Roll Shipping Volumes: Up 24% sequentially and 6% year-over-year.

• Carbon Segment EBITDA: $10.9 million.

• Pipe and Tube Segment EBITDA: $6.4 million.

• Specialty Metal Segment EBITDA: $3.6 million.

• Operating Expenses: $110.6 million in the first quarter.

• Debt Reduction: $37 million reduction in debt during the quarter.

• Total Debt: $235 million at the end of the first quarter.

• Capital Expenditures: $8.8 million in the first quarter.

• Effective Tax Rate: 30.1% for the first quarter.

• Dividend: $0.16 per share paid in the first quarter.

• Warning! GuruFocus has detected 3 Warning Signs with ZEUS.

Release Date: May 02, 2025

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

Positive Points

• Olympic Steel Inc (NASDAQ:ZEUS) reported strong first quarter sales of $493 million with net income of $2.5 million, despite a challenging macro environment.

• The company's flat roll shipping volumes increased by 24% sequentially and 6% year-over-year, reaching their highest levels since Q3 2021.

• Olympic Steel Inc (NASDAQ:ZEUS) successfully executed its strategy to diversify into metal-intensive end markets and expand fabrication capabilities, contributing to profitable growth.

• The recent acquisition of MetalWorks has been immediately accretive to results, supporting the company's growth strategy.

• The company reduced its debt by $37 million during the quarter, demonstrating strong cash flow management and operational discipline.

Negative Points

• Net income for the first quarter of 2025 was $2.5 million, a decrease from $8.7 million in the first quarter of 2024.

• EBITDA in the first quarter was $16.1 million, down from $23.3 million in the prior year period.

• Operating expenses increased to $110.6 million from $103.2 million in the first quarter of 2024, partly due to the acquisition of MetalWorks.

• The pipe and tube segment experienced slower OEM orders, delivering EBITDA of $6.4 million, indicating a lag in performance compared to other segments.

• The specialty metal segment faced challenges with falling nickel surcharges, although it still reported EBITDA of $3.6 million.

Q & A Highlights

Q: Starting in carbon flat, volumes were up about 25% versus the fourth quarter, well ahead of your normal seasonality and the MSCI figures. How much of that first quarter volume boost is due to pull forward demand? A: Andrew Greiff, President, COO: A significant portion of the volume boost was due to pull forward demand. Traditionally, our sales are about 65% contract and 35% spot, but this quarter saw stronger spot sales, which propelled the strength of our carbon sales. Richard Marabito, CEO: Typically, we see a 10% to 12% increase from fourth to first quarter, so this was a notable increase, largely driven by spot business.