Olympic Steel said it is weathering the COVID-19 crisis well, managing to earn a profit and supplying metals to essential industries making products for health care, transportation and food service markets.
“We are sure to face some difficult times ahead, but we have weathered challenges and cyclical downturns throughout our history,” said CEO Rick Marabito during the company’s first-quarter earnings call. “This particular challenge requires resiliency, flexibility and decisiveness, and a strong balance sheet and ample liquidity. This is how we’re managing through this situation. Olympic Steel acted quickly and decisively early in the COVID-19 crisis to right-size our inventory and work force, limit our capital spending to business essentials and to preserve liquidity.
Olympic has furloughed about a quarter of its workforce, preserving health benefits and providing the flexibility to call back employees when demand rebounds.
Olympic Steel’s Specialty Metals and Pipe and Tube segments were particularly strong in the first quarter, contributing $3.2 million and $5.2 million of EBITDA, respectively. Specialty Metals outperformed the market in shipments of stainless and aluminum, and Pipe and Tube maintained strong margins and reduced operating expenses in inventory turns.
The company expects to see declining shipments in the second quarter and is working to reduce inventory by another 15 to 20 percent.
Automotive demand began to slow in mid-March followed by most of Olympic’s industrial business sectors. The company said it continues to adjust operations to meet short-term needs of customers.
Sales in the first quarter totaled $354 million, down from with $446 million in Q1 2019. The company managed a profit of $0.6 million during the challenging quarter, compared to $2.1 million a year ago.
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