CHICAGO Processor and distributor Olympic Steel Inc. cited falling prices as a drag on second-quarter net income, which fell 43 percent to $4.53 million despite sales jumping 22.9 percent from a year earlier to $367.37 million.
"We are pleased with our sales and market share growth in the second quarter," chairman and chief executive officer Michael D. Siegal said Thursday.
However, he noted that falling prices for both carbon and nickel products, as well as costs associated with not-fully-operational start-ups, negatively affected earnings.
"We are focused on increasing cash flows and reducing debt, and look to the future contributions of our 2012 start-up locations in Gary, Ind.; Mount Sterling, Ky.; Monterrey, Mexico; Kansas City, Mo., and Streetsboro, Ohio," he said.
Romeoville, Ill.-based Chicago Tube & Iron, which Olympic Steel acquired in July 2011, continues to add to Olympics earnings and will receive additional investments in facilities and equipment, the company said.
First-half net income totaled $10.76 million, down 41.1 percent from the same period last year despite a 26.3-percent sales increase to $749.42 million.
The Bedford Heights, Ohio-based company ended June with inventories valued at $312.3 million, a 12.4-percent from $277.8 million at the start of the year. Olympic Steel plans to reduce its inventory during the second half, chief financial offer and treasurer Rick Marabito said during the companys conference call Thursday.