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Olympic Steel (ZEUS) Acquires Metal-Fab to Diversify Portfolio
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Olympic Steel Inc. (ZEUS - Free Report) announced that it acquired the venting and filtration product manufacturer, Metal-Fab, Inc. The acquisition will aid Olympic Steel’s strategy to diversify and grow in higher-return products and services. With the acquisition, ZEUS will broaden its product offerings, manufacturing capabilities and geographic reach.
The $131-million acquisition of Metal-Fab marks Olympic Steel’s sixth acquisition in the past five years and its second-largest acquisition overall.
Founded in 1958, Metal-Fab operates from two warehousing and fabrication facilities in Kansas. The company develops venting and filtration products, mostly out of coated carbon and stainless steel, for use in residential, commercial and industrial applications.
Olympic Steel will now have a solid platform to advance growth in two target market segments — stainless steel and carbon coated. Metal-Fab’s manufacturing expertise and wide range of products will benefit Olympic Steel’s growing portfolio of metal-intensive end-use products.
Olympic Steel’s asset-based revolving credit facility has increased to $625 million from $475 million after acquiring Metal-Fab. Currently, Olympic Steel’s total debt under the revolving credit facility is around $297 million, with further availability of about $280 million. This will give Olympic Steel a scope to further diversify through investments.
In the third quarter of 2022, Olympic Steel reported adjusted earnings of $1.14 per share, beating the Zacks Consensus Estimate of 93 cents. Notably, the company reported earnings of $4.09 per share a year ago. Net sales for the third quarter totaled $634 million, down 5.1% year over year. The top line missed the Zacks Consensus Estimate of $678 million.
The company’s third-quarter results were hurt by a significant decline in metal prices in the quarter and macroeconomic uncertainty caused by the ongoing supply-chain constraints, labor shortages and inflation.
Price Performance
Shares of Olympic Steel have gained 28.5% in the past year against the industry’s decline of 4.9%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for CalMaine Foods’ 2022 earnings per share is pegged at $12.28, suggesting 351.5% growth from the year-ago reported figure. Earnings estimates have moved 51.6% north in the past 60 days. CALM has a trailing four-quarter earnings surprise of 15.3%, on average. Its shares have gained 47.7% in the past year.
The Zacks Consensus Estimate for Sociedad’s 2022 earnings per share is pegged at $13.40, suggesting 553.7% growth from the year-ago reported figure. Earnings estimates have moved 3.6% north in the past 60 days. SQM has a trailing four-quarter earnings surprise of 37.4%, on average. Its shares have surged 64% in the past year.
The Zacks Consensus Estimate for Reliance Steel’s earnings per share is pegged at $28.65 for 2022, indicating a year-over-year growth rate of 29.5%. Earnings estimates have been revised 0.2% upward in the past 60 days. RS has a trailing four-quarter average surprise of 13.6%, on average. It has gained 23.1% in a year.
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Olympic Steel (ZEUS) Acquires Metal-Fab to Diversify Portfolio
Olympic Steel Inc. (ZEUS - Free Report) announced that it acquired the venting and filtration product manufacturer, Metal-Fab, Inc. The acquisition will aid Olympic Steel’s strategy to diversify and grow in higher-return products and services. With the acquisition, ZEUS will broaden its product offerings, manufacturing capabilities and geographic reach.
The $131-million acquisition of Metal-Fab marks Olympic Steel’s sixth acquisition in the past five years and its second-largest acquisition overall.
Founded in 1958, Metal-Fab operates from two warehousing and fabrication facilities in Kansas. The company develops venting and filtration products, mostly out of coated carbon and stainless steel, for use in residential, commercial and industrial applications.
Olympic Steel will now have a solid platform to advance growth in two target market segments — stainless steel and carbon coated. Metal-Fab’s manufacturing expertise and wide range of products will benefit Olympic Steel’s growing portfolio of metal-intensive end-use products.
Olympic Steel’s asset-based revolving credit facility has increased to $625 million from $475 million after acquiring Metal-Fab. Currently, Olympic Steel’s total debt under the revolving credit facility is around $297 million, with further availability of about $280 million. This will give Olympic Steel a scope to further diversify through investments.
In the third quarter of 2022, Olympic Steel reported adjusted earnings of $1.14 per share, beating the Zacks Consensus Estimate of 93 cents. Notably, the company reported earnings of $4.09 per share a year ago. Net sales for the third quarter totaled $634 million, down 5.1% year over year. The top line missed the Zacks Consensus Estimate of $678 million.
The company’s third-quarter results were hurt by a significant decline in metal prices in the quarter and macroeconomic uncertainty caused by the ongoing supply-chain constraints, labor shortages and inflation.
Price Performance
Shares of Olympic Steel have gained 28.5% in the past year against the industry’s decline of 4.9%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks from the basic materials space are CalMaine Foods (CALM - Free Report) , Sociedad Quimica y Minera (SQM - Free Report) and Reliance Steel (RS - Free Report) . CALM and SQM currently flaunt a Zacks Rank #1 (Strong Buy), and RS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CalMaine Foods’ 2022 earnings per share is pegged at $12.28, suggesting 351.5% growth from the year-ago reported figure. Earnings estimates have moved 51.6% north in the past 60 days. CALM has a trailing four-quarter earnings surprise of 15.3%, on average. Its shares have gained 47.7% in the past year.
The Zacks Consensus Estimate for Sociedad’s 2022 earnings per share is pegged at $13.40, suggesting 553.7% growth from the year-ago reported figure. Earnings estimates have moved 3.6% north in the past 60 days. SQM has a trailing four-quarter earnings surprise of 37.4%, on average. Its shares have surged 64% in the past year.
The Zacks Consensus Estimate for Reliance Steel’s earnings per share is pegged at $28.65 for 2022, indicating a year-over-year growth rate of 29.5%. Earnings estimates have been revised 0.2% upward in the past 60 days. RS has a trailing four-quarter average surprise of 13.6%, on average. It has gained 23.1% in a year.