Olympic Steel, Inc.

Good morning and welcome to the Olympic Steel 2020 fourth quarter financial results conference call. At this time, all participants are on a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to hand the conference over to Rich Manson, Chief Financial Officer at Olympic Steel. Please go ahead, sir.

Thank you, operator. Welcome to Olympic Steel's earnings call for the fourth quarter and full year 2020. Our call this morning will be hosted by our Chief Executive Officer, Rick Marabito, and we will also be joined by our President and Chief Operating Officer, Andrew Greif. Before we begin, I have a few reminders. Some statements made on today's call will be predictive and are intended to be made as forward-looking within the safe harbor provisions 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, 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 release is filed with the Securities and Exchange Commission. During today's discussion, we may refer to adjusted net income for diluted share, EBITDA, or adjusted EBITDA, which are all non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures is provided in the press release that was issued this morning and can be found on our website. Today's live broadcast will be archived and available for replay on Olympic Steel's website. At this time, I'll turn the call over to Rick.

Thank you Rich and good morning everyone and thank you for joining us to discuss Olympic Steel's results for the fourth quarter and the full year 2020. I'll begin with some comments about our quarterly performance and the tremendous progress our team made during really an incredible year. Andrew will then review our business segment performance and will then share some thoughts about what I think we're all most interested in and that's the future and our outlook. Rich will finish up with some additional details about our financial results. And after that, we'll be happy to take your questions. So as we reflect on a truly unprecedented year, we're immensely proud of the Olympic Steel team, its resiliency and accomplishments. Together, we took decisive actions that resulted in sustainable advancements across the organization. Today, we are a safer company with a permanently lower operating expense base a faster-turning inventory, a stronger balance sheet, and cultural resolve, which, combined with improved market conditions, enabled us to deliver our strongest quarter of the year and, more importantly, position us for success as we enter 2021. Our fourth quarter net sales were $332 million, compared with $320 million for the fourth quarter of last year. Net income for the fourth quarter rose to $1.8 million, or 16 cents per diluted share, compared with a net loss of $890,000, or 8 cents per diluted share, a year ago. Adjusted EBITDA was $9.9 million for the quarter, and that's up from $3.4 million a year ago. Market dynamics became increasingly favorable in the fourth quarter, and metals prices increased rapidly to unprecedented levels. As we shared on our last call, we began to see stronger demand in the late third quarter, and that demand continued in the fourth quarter as volumes approached pre-pandemic levels. Our fourth quarter shipping volumes not only increased year over year, but they also increased sequentially from the third quarter. Together, these trends drove sales improvement across all three of our segments during the quarter. While we're certainly pleased with our fourth quarter performance, we are most excited about our future and the opportunities in front of us. We remain vigilant on our operational disciplines as we move forward and build on our successes. We ended the year with consolidated operating expenses down nearly 10% year over year, and our flat product inventory turns approached six times during the fourth quarter. We also reduced debt to a four-year low while increasing availability under our asset-based loan to well above pre-pandemic levels, and that's after making an acquisition. Our strong counter-cyclical cash flow generation in tougher markets is often not fully appreciated. In a COVID-ravaged year, we actually reduced our debt by $32 million, and we increased our ABL borrowing availability by $30 million, all after spending almost $30 million on CapEx and an acquisition. We also remain committed to strategically growing the company and reducing cyclicality in our returns. One of the highlights of the quarter was our acquisition of Action Stainless and Alloys in December. Action brings a strong and talented team, a great culture, additional products and capabilities, and an expanded distribution footprint to our specialty metals business. We are actively seeking additional acquisitions that support our strategy to grow and niche high-performing applications that offer higher return opportunities for our business. Continued growth of our specialty metals business is also an important element of our strategy. So as we start 2021, we're optimistic and have strong momentum in a recovering economy. We are organizationally prepared for the opportunities from a growing economy and rapidly changing industry dynamics. As further evidenced by last week's energy distribution issues in Texas, we are also hopeful that the Biden administration will push Congress to pass a much needed comprehensive infrastructure bill to spur America's rebuild. In summary, we believe we are in excellent position to drive significantly higher profitability and returns in the first quarter of 2021. With that, I'll now turn the call over to Andrew for some additional comments.