Press Release

Olympic Steel Announces Third Quarter Profits


Cleveland, Ohio -- (October 20, 1999) Olympic Steel, Inc., (Nasdaq: ZEUS), a leading national steel service center, today announced financial results for the third quarter and nine months ended September 30, 1999. Tons sold increased 3.6% from 295.6 thousand in the third quarter of last year to 306.1 thousand this year. Net sales decreased 5.2% to $125.2 million this year from $132.0 million for the prior year period. Earnings totaled $808 thousand, or $.08 per share, compared to a net loss of $299 thousand, or $.03 per share for last year's third quarter. Operating income totaled $3.4 million, or 2.7% of net sales for the current year quarter, compared to $1.5 million, or 1.1% for the prior year period.

Tons sold for the first nine months of 1999 decreased 5.1% to 938.7 thousand from 988.7 thousand, and net sales decreased 11.8% to $387.9 million from $440.0 million. Earnings for the first nine months totaled $4.2 million, or $.40 per share, compared to $4.0 million, or $.37 per share last year. Operating income totaled $12.6 million, or 3.3% of net sales for the first nine months of 1999, compared to $12.4 million, or 2.8% last year.

"In almost all sectors, gross margins continued to improve year over year. While below our expectations, Iowa continues to grow its marketplace and we remain confident in its future performance capabilities," commented Michael D. Siegal, Chairman and Chief Executive Officer. "While increasing our market share and investing in value-added processing remains our focus and strategy, we are beginning cost cutting measures across all operations to improve our financial performance."

"In September, we held a grand opening for our new machining and plate processing facility in Chambersburg, Pennsylvania which further downstreams our processing capabilities and will help to accelerate our profitability. Likewise, in response to the emergence of the metals electronic marketplace, we are undertaking a proactive approach to e-commerce by putting essential programs in place," concluded Mr. Siegal.

The Company announced that effective October 11, 1999, Jerome R. Gea, Vice-President - Eastern Region, will assume the responsibility for the company's Southern operation in addition to the Connecticut, Philadelphia and Chambersburg operations he currently oversees. The expansion of the Eastern Region supports Olympic's overall growth strategy and promotes the successful performance that has been achieved in the Northeast.

Founded in 1954, Olympic Steel is a leading North American steel service center that has positioned itself for growth in a consolidating steel industry. It is experienced in the specialized processing and distribution of flat-rolled carbon and stainless steel products, as well as tubular steel products. Headquartered in Cleveland, Ohio, the company has over 1,000 employees in 15 locations serving nine geographic markets. For further information on Olympic Steel, Inc., visit the Company's web site at http://www.olysteel.com.

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Such risks and uncertainties include, but are not limited to, general business and economic conditions; competitive factors such as the availability and pricing of steel and fluctuations in demand, specifically in the automotive and agricultural markets; work stoppages by automotive or steel manufacturers; potential equipment malfunction; equipment installation and facility construction delays; year 2000 issues; and the ramp up rates for the Iowa and Pennsylvania facilities. Please refer to the Company's Securities and Exchange Commission filings for further information.

Contact: Cathy S. Kish
Director-Investor Relations
Telephone (216) 292-3800
Fax: (216) 682-4065



Earnings
SUMMARY FINANCIAL INFORMATION
     
(in thousands, except per share and tonnage data - unaudited)
 
  Three Months Ended September 30, Nine Months Ended September 30,
  1999   1998   1999   1998  
SUMMARY
Net sales $125,168   $132,035   $387,863   $439,996  
Operating income 3,392 2.7% 1,497 1.1% 12,611 3.3% 12,384 2.8%
Net income (loss) 808   (299)   4,207   4,001  
Net income (loss) per share $0.08   $(0.03)   $0.40   $0.37  
 
DETAILS
Tons sold:
    Direct 259,808   244,365   781,470   816,567  
    Toll 46,287   51,236   157,224   172,175  
  306,095   295,601   938,694   988,742  
    % increase 3.6%   -9.1%   -5.1%   0.9%  
Net sales $125,168   $132,035   $387,863   $439,996  
    % change -5.2%   -9.1%   -11.8%   -2.7%  
Cost of sales 94,563   104,208   294,592   347,862  
    Gross margin 30,605 24.5% 27,827 21.1% 93,271 24.0% 92,134 20.9%
Operating expenses:
    Warehouse and
     processing 		8,849 7.1% 9,221 7.0% 25,760 6.6% 26,730 6.1%
    Administrative
    and general 		7,365 5.9% 6,496 4.9% 21,414 5.5% 20,366 4.6%
    Distribution 4,363 3.5% 4,295 3.3% 13,089 3.4% 13,513 3.1%
    Selling 3,673 2.9% 3,522 2.7% 11,315 2.9% 10,830 2.5%
    Occupancy 1,086 0.9% 1,035 0.8% 3,438 0.9% 3,196 0.7%
    Depreciation and
    amortization 		1,877 1.5% 1,761 1.3% 5,644 1.5% 5,115 1.2%
      Total operating
      expenses 		27,213 21.7% 26,330 19.9%80,660 20.8% 79,750 18.1%
    Operating
     income 		3,392 2.7% 1,497 1.1% 12,611 3.3% 12,384 2.8%
Income from OCR joint venture - -   170   - -   375  
Loss from OLP joint venture (305)   (144)   (676)   (432)  
Income (loss) from TSP joint venture 2   (72)   (24)   (194)  
    Earnings before
    interest and taxes 		3,089   1,451   11,911   12,133  
Interest expense 1,006   1,030   2,825   2,807  
Receivable securitization expense 769   903   2,245   2,872  
    Financing costs 1,775 1.4%1,933 1.5%5,070 1.3% 5,6791.3%
Income (loss) before taxes 1,314 1.0%(482) -0.4% 6,841 1.8%6,454 1.5%
Income taxes 506 38.5% (183) 38.0% 2,634 38.5% 2,453 38.0%
Net income (loss) $808   $(299)   $4,207   $4,001  
Net income (loss) per share $0.08   $(0.03)   $0.40   $0.37  
Weighted average shares outstanding 10,381   10,692   10,543   10,692  
 
 
It is the Company's policy not to make quarterly or annual sales or earnings projections
for external use and not to endorse any analyst's sales or earnings estimates.


SUMMARY OTHER FINANCIAL INFORMATION
     
(in thousands, except ratios)
 
 
September 30,
December 31,
  1999   1998   1998  
 
(unaudited)
(audited)
Accounts receivable $21,417   $15,304   $3,096  
Inventories 119,022   141,650   121,407  
Net property and equipment 122,685   118,781   119,312  
Total assets 278,102   297,354   256,108  
Current liabilities 43,810   38,782   43,225  
Total debt (current & long-term) 95,164   104,224   76,520  
Shareholders' equity 139,363   150,175   137,743  
Shareholders' equity per share 13.43   14.05   12.88  
Debt-to-equity ratio .68 to 1   .69 to 1   .56 to 1  

 
 
Nine Months Ended
 
 
September 30,
 
 
1999
1998
 
 
(unaudited)
 
Increase in working capital $12,991   $15,905    
Capital expenditures, net 8,889   19,303    
Repurchase of Common Stock 2,587   -    
EBITDA 18,255   17,499    

 
It is the Company's policy not to make quarterly or annual sales or earnings projections
for external use and not to endorse any analyst's sales or earnings estimates.


 
Olympic Steel, Inc.
5096 Richmond Road
Bedford Heights, OH 44146
SSCI


AISI
(216) 292 3800
infoolysteel.com
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