CLEVELAND, Nov. 4, 2010 (GLOBE NEWSWIRE) -- Olympic Steel, Inc., (Nasdaq:ZEUS), a national steel service center, today announced that it has signed agreements to purchase a new temper mill and cut-to-length line, and plans to locate it on U.S. Steel's Gary Works facility in Gary, Indiana. Terms of the agreement with U.S. 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, "We are thrilled to announce this strategic growth initiative and its prime location on the U.S. 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. We look forward to operating a third temper mill facility to serve our customers in the Chicago market, allowing our existing Cleveland and Iowa temper mills to expand their respective sales territories. This new operation fits directly into our strategic plan of adding new footprints to serve and be logistically closer to our customers. We are especially proud to further our physical market presence with plans to operate in the state of Indiana, as well as our recently announced purchase of a facility in Kentucky."
Founded in 1954, Olympic Steel is a leading U.S. metals service center focused on the direct sale and distribution of large volumes of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel and aluminum products. Headquartered in Cleveland, Ohio, the Company operates 15 facilities. For further information, visit the Company's web site at http://www.olysteel.com.
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It is the Company's policy not to endorse any analyst's sales or earnings estimates. Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as "may," "will," "anticipate," "should," "intend," "expect," "believe," "estimate," "project," "plan," "potential," or "continue," as well as the negative of these terms or other similar expressions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those implied by such statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Such risks and uncertainties include, but are not limited to: the ability to successfully finalize an agreement with U.S. Steel for the purchase of the facility and to place the facility in operation on the expected timeframe; fluctuations in steel demand and steel pricing; general and global business, economic, financial and political conditions, including the ongoing effects of the global credit crisis and recovery; access to capital and global credit markets; competitive factors such as the availability and pricing of metal, industry shipping and inventory levels, and rapid fluctuations in customer demand and metal pricing; the cyclicality and volatility within the metals industry; the ability of our customers (especially those that may be highly leveraged, those in the domestic automotive industry and those with inadequate liquidity) to maintain their credit availability and to honor their agreements related to derivative instruments; customer, supplier, and competitor consolidation, bankruptcy or insolvency, especially those in the domestic auto industry; reduced production schedules, layoffs or work stoppages by our own, our suppliers' or our customers' personnel; the availability and costs of transportation and logistical services; equipment installation delays or malfunctions, including the temper mill and cut-to-length line; the amounts, successes and ability to continue our capital investments and our business information system projects; the successes of our strategic efforts and initiatives to increase sales volumes, maintain or improve working capital turnover and free cash flows, reduce costs and improve inventory turnover while improving customer service; the timing and outcome of inventory lower of cost or market adjustments; the adequacy of our existing information technology and business system software; the successful implementation of our new enterprise-wide information systems; the timing and outcome of our joint venture's efforts and ability to liquidate its remaining real estate; our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; and our ability to generate free cash flow through operations, reduce inventory and repay debt within anticipated timeframes, the recently enacted federal healthcare legislation's impact on the healthcare benefits required to be provided by us and the impact of such legislation on our compensation and administrative costs. Further information on these and other risks and uncertainties is provided under Item 1A "Risk Factors" of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which disclosure is incorporated herein by reference, and elsewhere in reports that the Company files or furnishes with the SEC. This release speaks only as of its date and the Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law. You are advised, however, to consult any further disclosures the Company makes on related subjects in its reports filed with or furnished to the SEC.