Olympic Steel Inc. (NASDAQ:ZEUS) Q3 2019 Earnings Conference Call - Final Transcript
Nov 08, 2019 • 10:00 am ET
Good morning and welcome to the Olympic Steel 2019 Third Quarter Financial Results Conference Call. [Operator Instructions]
Some statements made on today's call will be predictive and are intended to be made as forward-looking within the Safe Harbor protections of the Private Securities Litigation Reform Act of 1995 and may not reflect actual results. The company does not undertake to update such statements, changes in assumptions or changes in other factors affecting such forward-looking statements. Important assumptions, risks and uncertainties and other factors that could cause actual results to differ materially are set forth in the company's reports on Forms 10-K and 10-Q and the press releases filed with the Securities and Exchange Commission.
During today's discussion, there may be references to adjusted net income per diluted share, which is non-GAAP financial measure. A reconciliation of this non-GAAP measure to the most directly comparable GAAP financial measure is provided in the press release that was issued this morning, which can be found on the company's website.
Today's live broadcast will be archived and available for replay on Olympic Steel's website. At this time, I'd like to introduce your host for today's call, Olympic Steel's Chief Executive Officer, Rick Marabito. Please go ahead, Mr. Marabito.
Thank you, operator. Good morning, and thank you for joining us to discuss Olympic Steel's 2019 third quarter results. Joining me on the call this morning are Olympic Steel's President, David Wolfort; CFO, Rich Manson; Executive Vice President and Chief Operating Officer, Andrew Greiff; and President of our Chicago Tube and Iron Business, Don McNeeley.
This morning, we announced third quarter net income of $591,000 or $0.05 per diluted share. Our Specialty Metals and Pipe and Tube segments, continued to show resilience and solid profitability in the third quarter, which was a difficult market for carbon steel products. Softer global demand, unsettled trade agreements, excess global steel and overall market uncertainty, resulted in sharp declines in carbon steel pricing and slowing customer demand. We are beginning to see the positive results of diversifying our business. We have grown our Specialty Metals and Pipe and Tube segments to constitute 44% of our sales in the third quarter. Our Specialty Metals segment had strong profitability, as we continue to grow our market share. Andrew will detail our Specialty Metals accomplishments later in the call.
Our Pipe and Tube segment also continues to deliver strong sales and earnings. We have continued to profitably grow market share, particularly in the Southeast, where we re-positioned our North Carolina operation for greater participation in Pipe and Tube distribution in that geography. As evidenced by the MSCI statistics, our Pipe and Tube sales were down approximately 2% year-over-year, while the market was down 14%.
This year, we also acquired two manufacturers of metal intensive branded products. McCullough Industries and EZ Dumper, which are included in the Carbon Flat Products segment. These acquisitions have already started to pay off by providing a counter-cyclical benefit, in times of falling steel prices. We believe the execution of