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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ____________

Commission File Number 0-23320

OLYMPIC STEEL, INC.

(Exact name of registrant as specified in its charter)

	Ohio		34-1245650
	(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

	22901 Millcreek Boulevard, Suite 650, Highland Hills, OH		44122
	(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code (216) 292-3800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, without par value	ZEUS	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐	Accelerated filer ☒
	Non-accelerated filer ☐	Smaller reporting company ☐
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares of each of the issuer's classes of common stock, as of the latest practicable date:

	Class		Outstanding as of October 30, 2025
	Common stock, without par value		11,197,621

Table of Contents

Olympic Steel, Inc.

Index to Form 10-Q

			Page No.

Part I. FINANCIAL INFORMATION			3

	Item 1. *Financial Statements*		3

		Consolidated Balance Sheets – September 30, 2025 and December 31, 2024 (unaudited)	3

		Consolidated Statements of Comprehensive Income – for the three and nine months ended September 30, 2025 and 2024 (unaudited)	4

		Consolidated Statements of Cash Flows – for the nine months ended September 30, 2025 and 2024 (unaudited)	5

		Supplemental Disclosures of Cash Flow Information – for the nine months ended September 30, 2025 and 2024 (unaudited)	6

		Consolidated Statements of Shareholders’ Equity – for the three and nine months ended September 30, 2025 and 2024 (unaudited)	7

		Notes to Unaudited Consolidated Financial Statements	8

	Item 2. *Management’s Discussion and Analysis of Financial Condition and Results of Operations*		20

	Item 3. *Quantitative and Qualitative Disclosures About Market Risk*		31

	Item 4. *Controls and Procedures.*		32

Part II. OTHER INFORMATION			33

	Item 5. *Other Information*		35

	Item 6. *Exhibits*		36

SIGNATURES			37

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

Olympic Steel, Inc.

Consolidated Balance Sheets

(in thousands)

	*As of*
	*September 30, 2025*			*December 31, 2024*
	(unaudited)
Assets
Cash and cash equivalents	$	7,548		$	11,912
Accounts receivable, net		209,684			166,149
Inventories, net (includes LIFO reserves of $7,230 as of September 30, 2025 and $6,341 as of December 31, 2024)		383,922			390,626
Prepaid expenses and other		13,530			11,904
Total current assets		614,684			580,591
Property and equipment, at cost		539,219			519,702
Accumulated depreciation		(330,211	)		(315,866	)
Net property and equipment		209,008			203,836
Goodwill		83,818			83,818
Intangible assets, net		113,555			118,111
Other long-term assets		28,327			21,204
Right of use assets, net		40,666			36,936
Total assets	$	1,090,058		$	1,044,496

Liabilities
Accounts payable	$	143,384		$	80,743
Accrued payroll		24,509			24,184
Other accrued liabilities		22,165			21,846
Current portion of lease liabilities		6,838			5,865
Total current liabilities		196,896			132,638
Credit facility revolver		240,926			272,456
Other long-term liabilities		24,555			22,484
Deferred income taxes		13,551			11,049
Lease liabilities		35,001			31,945
Total liabilities		510,929			470,572
Shareholders' Equity
Preferred stock		-			-
Common stock		139,498			138,538
Accumulated other comprehensive income (loss)		(93	)		190
Retained earnings		439,724			435,196
Total shareholders' equity		579,129			573,924
Total liabilities and shareholders' equity	$	1,090,058		$	1,044,496

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Olympic Steel, Inc.

Consolidated Statements of Comprehensive Income

For the Three and Nine Months Ended September 30,

(in thousands, except per share data)

	*Three months ended*						*Nine months ended*
	*September 30,*						*September 30,*
	*2025*			*2024*			*2025*			*2024*
	(unaudited)

Net sales	$	490,655		$	469,996		$	1,480,079		$	1,522,888
Costs and expenses
Cost of materials sold (excludes items shown separately below)		373,029			363,144			1,122,208			1,177,229
Warehouse and processing		36,425			31,719			107,380			97,855
Administrative and general		31,132			28,226			93,778			87,545
Distribution		18,660			16,881			56,134			51,101
Selling		11,679			10,721			35,653			35,458
Occupancy		4,490			4,262			14,008			13,048
Depreciation		6,237			5,740			19,278			17,585
Amortization		1,739			1,494			5,210			4,210
Total costs and expenses		483,391			462,187			1,453,649			1,484,031
Operating income		7,264			7,809			26,430			38,857
Other loss, net		14			26			62			66
Income before interest and income taxes		7,250			7,783			26,368			38,791
Interest and other expense on debt		4,144			3,880			12,282			12,283
Income before income taxes		3,106			3,903			14,086			26,508
Income tax provision		952			1,169			4,186			7,417
Net income	$	2,154		$	2,734		$	9,900		$	19,091
Loss on cash flow hedge		(52	)		(544	)		(378	)		(585	)
Tax effect on cash flow hedge		14			136			95			136
Total comprehensive income	$	2,116		$	2,326		$	9,617		$	18,642

Earnings per share:
Net income per share - basic	$	0.18		$	0.23		$	0.84		$	1.64
Weighted average shares outstanding - basic		11,744			11,695			11,739			11,673
Net income per share - diluted	$	0.18		$	0.23		$	0.84		$	1.64
Weighted average shares outstanding - diluted		11,763			11,695			11,761			11,673

Dividends declared per share of common stock	$	0.16		$	0.15		$	0.48		$	0.45

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Olympic Steel, Inc.

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30,

(in thousands)

	*2025*			*2024*
	(unaudited)

Cash flows provided by operating activities:
Net income	$	9,900		$	19,091
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation and amortization		24,563			21,795
Amortization of deferred financing fees		402			584
Loss on disposition of property and equipment		2			189
Stock-based compensation		960			1,499
Other long-term assets		(9,768	)		(4,970	)
Other long-term liabilities		9,153			6,593
		35,212			44,781
Changes in working capital:
Accounts receivable		(43,535	)		(6,443	)
Inventories		6,704			(12,859	)
Prepaid expenses and other		(1,904	)		(2,018	)
Accounts payable		63,168			4,357
Change in outstanding checks		(527	)		1,267
Accrued payroll and other accrued liabilities		416			(9,971	)
		24,322			(25,667	)
Net cash provided by operating activities		59,534			19,114

Cash flows used for investing activities:
Capital expenditures		(24,998	)		(22,308	)
Proceeds from disposition of property and equipment		120			56
Net cash used for investing activities		(24,878	)		(22,252	)

Cash flows (used for) provided by financing activities:
Credit facility revolver borrowings		410,781			469,117
Credit facility revolver repayments		(442,311	)		(462,039	)
Principal payment under finance lease obligation		(837	)		(930	)
Credit facility fees and expenses		(1,284	)		(109	)
Dividends paid on common stock		(5,369	)		(5,009	)
Net cash (used for) provided by financing activities		(39,020	)		1,030

Cash and cash equivalents:
Net change		(4,364	)		(2,108	)
Beginning balance		11,912			13,224
Ending balance	$	7,548		$	11,116

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Olympic Steel, Inc.

Supplemental Disclosures of Cash Flow Information

For the Nine Months Ended September 30,

(in thousands)

	*2025*		*2024*
	(unaudited)

Interest paid	$	11,681	$	11,487
Income taxes paid	$	3,039	$	7,507

The Company incurred a nominal amount of new financing lease obligations during the nine months ended September 30, 2025. The Company incurred $2.3 million of new financing lease obligations during the nine months ended September 30, 2024. These non-cash transactions have been excluded from the Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024.

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Olympic Steel, Inc.

Consolidated Statements of Shareholders’ Equity

(in thousands)

(unaudited)

	*For the Three Months Ended September 30, 2025*
			*Accumulated*
			*Other*
	*Common*		*Comprehensive*			*Retained*			*Total*
	*Stock*		*Loss*			*Earnings*			*Equity*

Balance at June 30, 2025	$	138,892	$	(54	)	$	439,365		$	578,203
Net income		-		-			2,154			2,154
Payment of dividends on common stock ($0.16 per share)		-		-			(1,792	)		(1,792	)
Stock-based compensation		606		-			-			606
Changes in fair value of hedges, net of tax		-		(39	)		-			(39	)
Other		-		-			(3	)		(3	)
Balance at September 30, 2025	$	139,498	$	(93	)	$	439,724		$	579,129

	*For the Nine Months Ended September 30, 2025*
			*Accumulated*
			*Other*
	*Common*		*Comprehensive*			*Retained*			*Total*
	*Stock*		*Loss*			*Earnings*			*Equity*

Balance at December 31, 2024	$	138,538	$	190		$	435,196		$	573,924
Net income		-		-			9,900			9,900
Payment of dividends on common stock ($0.32 per share)		-		-			(5,369	)		(5,369	)
Stock-based compensation		960		-			-			960
Changes in fair value of hedges, net of tax		-		(283	)		-			(283	)
Other		-		-			(3	)		(3	)
Balance at September 30, 2025	$	139,498	$	(93	)	$	439,724		$	579,129

	*For the Three Months Ended September 30, 2024*
			*Accumulated*
			*Other*
	*Common*		*Comprehensive*			*Retained*			*Total*
	*Stock*		*Loss*			*Earnings*			*Equity*

Balance at June 30, 2024	$	137,541	$	-		$	431,912		$	569,453
Net income		-		-			2,734			2,734
Payment of dividends on common stock ($0.15 per share)		-		-			(1,670	)		(1,670	)
Stock-based compensation		499		-			-			499
Changes in fair value of hedges, net of tax		-		(408	)		-			(408	)
Other		-		-			2			2
Balance at September 30, 2024	$	138,040	$	(408	)	$	432,978		$	570,610

	*For the Nine Months Ended September 30, 2024*
			*Accumulated*
			*Other*
	*Common*		*Comprehensive*			*Retained*			*Total*
	*Stock*		*Loss*			*Earnings*			*Equity*

Balance at December 31, 2023	$	136,541	$	41		$	418,896		$	555,478
Net income		-		-			19,091			19,091
Payment of dividends on common stock ($0.30 per share)		-		-			(5,009	)		(5,009	)
Stock-based compensation		1,499		-			-			1,499
Changes in fair value of hedges, net of tax		-		(449	)		-			(449	)
Balance at September 30, 2024	$	138,040	$	(408	)	$	432,978		$	570,610

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Olympic Steel, Inc.

Notes to Unaudited Consolidated Financial Statements

September 30, 2025

1.	*Basis of Presentation*:

The accompanying consolidated financial statements have been prepared from the financial records of Olympic Steel, Inc. and its wholly-owned subsidiaries (collectively, Olympic or the Company), without audit and reflect all normal and recurring adjustments which are, in the opinion of management, necessary to fairly state the results of the interim periods covered by this report. Year-to-date results are not necessarily indicative of 2025 annual results and these financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. All intercompany transactions and balances have been eliminated in consolidation.

Olympic is a leading metals service center focused on the direct sale and value-added processing of carbon and coated steel, plate and coil products; stainless steel sheet, plate, bar and coil; aluminum sheet, plate and coil; pipe, tube bar, valves and fittings, tin plate and metal-intensive end-use products. The Company operates in three reportable segments: specialty metals flat products, carbon flat products, and tubular and pipe products. The specialty metals flat products segment and the carbon flat products segment are at times consolidated and referred to as the flat products segments. Certain of the flat products segment's assets and resources are shared by the specialty metals and carbon flat products segments, and both segments' products are stored in the shared facilities and, in some locations, processed on shared equipment. As such, total assets and capital expenditures are reported in the aggregate for the flat products segment. Due to the shared assets and resources, certain of the flat products segment expenses are allocated between the specialty metals flat products segment and the carbon flat products segment based upon an established allocation methodology. The specialty metals flat products segment sells and distributes processed aluminum and stainless flat-rolled sheet and coil products, flat bar products, prime tin mill products and fabricated parts. Through acquisitions, the specialty metals flat product segment has expanded its geographical footprint and enhanced its product offerings in stainless steel and aluminum plate, sheet, angles, rounds, flat bar, tubing and pipe, stainless steel bollards and water treatment systems. The carbon flat products segment sells and distributes large volumes of processed carbon and coated flat-rolled sheet, coil and plate products and fabricated parts. Through acquisitions, our carbon flat products segment has expanded its product offerings to include self-dumping metal hoppers, steel and stainless-steel dump inserts for pickup truck and service truck beds and venting, micro air and clean air products for residential, commercial and industrial applications. With the acquisition of Metal Works, LLC (MetalWorks) on November 11, 2024, the carbon flat products segment further expanded its product offerings to include the manufacture of service station canopies, deck clips, long gutters, trim and boat docks, as well as solar canopy and ground racking components. The tubular and pipe products segment distributes metal tubing, pipe, bar, valves and fittings and the fabrication of parts, tube and bar products, including round, square, rectangular and special shaped tubes supplied to various industrial markets. Each segments' products are primarily distributed through a direct sales force.

The Company operates from 54 strategically located sales offices and processing and distributions facilities in the United States and Monterrey, Mexico. Our geographic footprint allows us to focus on regional customer and larger national and multi-national accounts, primarily located through the midwestern, eastern and southern United States.

Corporate expenses are reported as a separate line item for segment reporting purposes. Corporate expenses include the unallocated expenses related to managing the entire Company (i.e., all three segments), including payroll expenses for certain personnel, expenses related to being a publicly traded entity such as board of directors' expenses, audit expenses, and various other professional fees.

Impact of Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, "Income Statement-Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses". The objective of the ASU is to enhance transparency into the nature and function of income statement expenses. The ASU requires that, on an annual and interim basis, entities disclose disaggregated operating expense information about specific categories, including purchases of inventory, employee compensation, depreciation and amortization. The ASU is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is in the process of evaluating the effect of the ASU on the related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". The objective of the ASU is to improve the information a reporting entity provides to users of financial statements about the entity's operations and the effects of related tax risks and tax planning on the entity's tax rate and potential future cash flows. The ASU enhances disclosures regarding the rate reconciliation, income taxes paid and other items. The ASU is effective for annual periods beginning after December 15, 2024 for public business entities. The Company does not anticipate the adoption of the ASU to have a material impact on the Consolidated Financial Statements and related disclosures.

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2.	*Revenue Recognition:*

The Company provides metals processing, distribution and delivery of large volumes of processed carbon, coated flat-rolled sheet, coil and plate products, aluminum, and stainless flat-rolled products, prime tin mill products, flat bar products, metal tubing, pipe, bar, valves, fittings, fabricated parts and metal-intensive end-use products. The Company's contracts with customers are comprised of purchase orders with standard terms and conditions. Occasionally, the Company may also have longer-term agreements with customers. Substantially all of the contracts with customers require the delivery of metals, which represent single performance obligations that are satisfied at a point in time upon transfer of control of the product to the customer.

Transfer of control is assessed based on the use of the product distributed and rights to payment for performance under the contract terms. Transfer of control and revenue recognition for substantially all of the Company’s sales occur upon shipment or delivery of the product, which is when title, ownership and risk of loss pass to the customer and is based on the applicable shipping terms. The shipping terms depend on the customer contract. An invoice for payment is issued at time of shipment and terms are generally net 30 days.

Within the metals industry, revenue is frequently disaggregated by products sold. The table below disaggregates the Company’s revenues by segment and products sold for the periods ended September 30, 2025 and 2024, respectively.

	*Disaggregated Revenue by Products Sold*
	*For the Three Months Ended September 30, 2025*
	*Specialty*
	*metals flat*			*Carbon flat*			*Tubular and*
	*products*			*products*			*pipe products*			*Total*
Specialty		28.7	%		-			-			28.7	%
Hot Rolled		-			26.3	%		-			26.3	%
Tube		-			-			16.6	%		16.6	%
Coated		-			12.4	%		-			12.4	%
Plate		-			10.7	%		-			10.7	%
Cold Rolled		-			4.3	%		-			4.3	%
Other		-			0.9	%		-			0.9	%
Total		28.7	%		54.6	%		16.6	%		99.9	%

	*Disaggregated Revenue by Products Sold*
	*For the Nine Months Ended September 30, 2025*
	*Specialty*
	*metals flat*			*Carbon flat*			*Tubular and*
	*products*			*products*			*pipe products*			*Total*
Specialty		27.4	%		-			-			27.4	%
Hot Rolled		-			28.2	%		-			28.2	%
Tube		-			-			16.1	%		16.1	%
Coated		-			13.1	%		-			13.1	%
Plate		-			9.9	%		-			9.9	%
Cold Rolled		-			4.3	%		-			4.3	%
Other		-			1.0	%		-			1.0	%
Total		27.4	%		56.5	%		16.1	%		100.0	%

	*Disaggregated Revenue by Products Sold*
	*For the Three Months Ended September 30, 2024*
	*Specialty*
	*metals flat*			*Carbon flat*			*Tubular and*
	*products*			*products*			*pipe products*			*Total*
Specialty		26.7	%		-			-			26.7	%
Hot Rolled		-			26.7	%		-			26.7	%
Tube		-			-			16.9	%		16.9	%
Coated		-			12.9	%		-			12.9	%
Plate		-			9.6	%		-			9.6	%
Cold Rolled		-			5.6	%		-			5.6	%
Other		-			1.6	%		-			1.6	%
Total		26.7	%		56.4	%		16.9	%		100.0	%

	*Disaggregated Revenue by Products Sold*
	*For the Nine Months Ended September 30, 2024*
	*Specialty*
	*metals flat*			*Carbon flat*			*Tubular and*
	*products*			*products*			*pipe products*			*Total*
Specialty		25.4	%		-			-			25.4	%
Hot Rolled		-			28.0	%		-			28.0	%
Tube		-			-			17.3	%		17.3	%
Coated		-			12.0	%		-			12.0	%
Plate		-			11.7	%		-			11.7	%
Cold Rolled		-			4.7	%		-			4.7	%
Other		-			0.9	%		-			0.9	%
Total		25.4	%		57.3	%		17.3	%		100.0	%

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3.	*Accounts Receivable*:

Accounts receivable are presented net of allowances for credit losses and unissued credits of $3.8 million and $3.7 million as of September 30, 2025 and December 31, 2024, respectively. The allowance for credit losses is maintained at a level considered appropriate based on historical experience, specific customer collection issues that have been identified, current market considerations and estimates for supportable forecasts when appropriate. Estimations are based upon a calculated percentage of accounts receivable, which remains fairly level from year to year, and judgments about the probable effects of economic conditions on certain customers, which can fluctuate significantly from year to year. The Company cannot guarantee that the rate of future credit losses will be similar to past experience. The Company considers all available information when assessing the adequacy of its allowance for credit losses and unissued credits.

4.	*Inventories:*

Inventories consisted of the following:

	*Inventory as of*
(in thousands)	*September 30, 2025*		*December 31, 2024*
Unprocessed	$	277,167	$	273,668
Processed and finished		106,755		116,958
Totals	$	383,922	$	390,626

The Company values certain of its tubular and pipe products inventory at the last-in, first-out (LIFO) method. As of September 30, 2025 and December 31, 2024, approximately $33.2 million, or 8.7% of consolidated inventory, and $31.3 million, or 8.0% of consolidated inventory, respectively, was reported under the LIFO method of accounting. The cost of the remainder of the tubular and pipe products inventory is determined using a weighted average rolling first-in, first-out (FIFO) method.

During the three and nine months ended September 30, 2025, the Company recorded $0.1 million and $0.9 million of LIFO expense, respectively. During the three and nine months ended September 30, 2024, the Company recorded $2.0 million and $2.6 million of LIFO income, respectively.

If the FIFO method had been in use, inventories would have been $7.2 million higher than reported as of September 30, 2025 and $6.3 million higher than reported at December 31, 2024.

5.	*Goodwill and Intangible Assets:*

The Company's intangible assets were recorded in connection with its acquisitions of MetalWorks in 2024, Central Tube and Bar, Inc. and Metal-Fab, Inc. in 2023, Shaw Stainless & Alloy, Inc. in 2021, Action Stainless & Alloys, Inc. in 2020, EZ Dumper® hydraulic dump inserts and McCullough Industries in 2019, Berlin Metals, LLC in 2018 and Chicago Tube and Iron in 2011. The intangible assets were evaluated on the premise of highest and best use to a market participant, primarily utilizing the income approach valuation methodology.

Goodwill, by reportable unit, was as follows as of September 30, 2025 and December 31, 2024, respectively. The goodwill is deductible for tax purposes.

	Carbon Flat		Specialty Metals		Tubular and
(in thousands)	Products		Flat Products		Pipe Products		Total
Balance as of December 31, 2024	$	65,986	$	9,431	$	8,401	$	83,818
Acquisitions		-		-		-		-
Impairments		-		-		-		-
Balance as of September 30, 2025	$	65,986	$	9,431	$	8,401	$	83,818

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Intangible assets, net, consisted of the following as of September 30, 2025 and December 31, 2024, respectively:

	*As of September 30, 2025*
	Gross Carrying		Accumulated			Intangible
(in thousands)	Amount		Amortization			Assets, Net
Customer relationships - subject to amortization	$	84,459	$	(22,088	)	$	62,371
Covenant not to compete - subject to amortization		3,229		(1,555	)		1,674
Technology and know-how - subject to amortization		8,900		(1,458	)		7,442
Trade name - not subject to amortization		42,068		-			42,068
	$	138,656	$	(25,101	)	$	113,555

	*As of December 31, 2024*
	Gross Carrying		Accumulated			Intangible
(in thousands)	Amount		Amortization			Assets, Net
Customer relationships - subject to amortization	$	84,459	$	(18,513	)	$	65,946
Covenant not to compete - subject to amortization		3,229		(1,110	)		2,119
Technology and know-how - subject to amortization		8,900		(922	)		7,978
Trade name - not subject to amortization		42,068		-			42,068
	$	138,656	$	(20,545	)	$	118,111

The Company estimates that amortization expense for its intangible assets subject to amortization will be approximately $5.6 million per year for the next year, $5.1 million the following year and then $4.8 million, $4.7 million, $3.9 million and $3.9 million respectively, over the next four years. Amortization expense for intangible assets was $1.5 million and $4.6 million, respectively, for the three and nine months ended September 30, 2025. Amortization expense for intangible assets was $1.1 million and $3.3 million, respectively, for the three and nine months ended September 30, 2024.

6.	*Leases*:

The components of lease expense were as follows:

	*For the Three Months*				*For the Nine Months*
	*Ended September 30,*				*Ended September 30,*
(in thousands)	*2025*		*2024*		*2025*		*2024*
Operating lease cost	$	2,443	$	2,111	$	7,174	$	6,660

Finance lease cost:
Amortization of right-of-use assets	$	221	$	331	$	656	$	922
Interest on lease liabilities		32		66		101		147
Total finance lease cost	$	253	$	397	$	757	$	1,069

Supplemental cash flow information related to leases was as follows:

	*For the Three Months*				*For the Nine Months*
	*Ended September 30,*				*Ended September 30,*
(in thousands)	*2025*		*2024*		*2025*		*2024*
Cash paid for lease liabilities:
Operating cash flows from operating leases	$	2,356	$	2,031	$	6,875	$	6,540
Operating cash flows from finance leases		32		66		101		147
Financing cash flows from finance leases		225		327		668		930
Total cash paid for lease liabilities	$	2,613	$	2,424	$	7,644	$	7,617

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Supplemental balance sheet information related to leases was as follows:

	*September 30,*			*December 31,*
(in thousands)	*2025*			*2024*
Operating Leases
Operating lease	$	60,944		$	54,337
Operating lease accumulated amortization		(20,278	)		(17,401	)
Operating lease right-of-use asset, net		40,666			36,936

Operating lease current liabilities		6,838			5,865
Operating lease liabilities		35,001			31,945
Total operating lease liabilities	$	41,839		$	37,810

Finance Leases
Finance lease		4,591			4,812
Finance lease accumulated depreciation		(2,559	)		(2,354	)
Finance lease, net		2,032			2,458

Finance lease current liabilities		713			853
Finance lease liabilities		1,401			1,697
Total finance lease liabilities	$	2,114		$	2,550

Weighted Average Remaining Lease Term
Operating leases (in years)		8			9
Finance leases (in years)		3			4

Weighted Average Discount Rate
Operating leases		6.15	%		5.76	%
Finance leases		6.02	%		5.89	%

Maturities of lease liabilities were as follows:

	Operating			Finance
(in thousands)	Leases			Leases
Year Ending December 31,
2025	$	2,350		$	230
2026		9,090			767
2027		7,752			654
2028		6,190			485
2029		5,086			155
Thereafter		25,958			30
Total future minimum lease payments	$	56,426		$	2,321
Less remaining imputed interest		(14,587	)		(207	)
Total	$	41,839		$	2,114

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7.	*Debt*:

The Company’s debt is comprised of the following components:

	*As of*
	*September 30,*		*December 31,*
(in thousands)	*2025*		*2024*
Asset-based revolving credit facility due April 17, 2030	$	240,926	$	272,456
Total debt	$	240,926	$	272,456

On April 17, 2025, the Company entered into a Ninth Amendment to Third Amended and Restated Loan and Security Agreement, which extended the maturity date of its asset-based credit facility (the ABL Credit Facility) to April 17, 2030. The amendment also reset the Machinery and Equipment and Real Estate advance rates. The Company's ABL Credit Facility is collateralized by the Company's accounts receivable, inventory, personal property and certain real estate. The $625 million ABL Credit Facility consists of: (i) a revolving credit facility of up to $595 million, including a $20 million sub-limit for letters of credit, and (ii) a first in, last out revolving credit facility of up to $30 million. Under the terms of the ABL Credit Facility, the Company may, subject to the satisfaction of certain conditions, request additional commitments under the revolving credit facility in the aggregate principal amount of up to $200 million to the extent that existing or new lenders agree to provide such additional commitments. The ABL Credit Facility matures on April 17, 2030.

The ABL Credit Facility contains customary representations and warranties and certain covenants that limit the ability of the Company to, among other things: (i) incur or guarantee additional indebtedness; (ii) pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt; (iii) make investments; (iv) sell assets; (v) enter into agreements that restrict distributions or other payments from restricted subsidiaries to the Company; (vi) incur liens securing indebtedness; (vii) consolidate, merge or transfer all or substantially all of the Company’s assets; and (viii) engage in transactions with affiliates. In addition, the ABL Credit Facility contains a financial covenant which requires if any commitments or obligations are outstanding and the Company’s availability is less than the greater of $30 million or 10.0% of the aggregate amount of revolver commitments ($62.5 million at September 30, 2025) or 10.0% of the aggregate borrowing base ($55.7 million at September 30, 2025), then the Company must maintain a ratio of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) minus certain capital expenditures and cash taxes paid to fixed charges of at least 1.00 to 1.00 for the most recent twelve fiscal month period.

As of September 30, 2025, the Company was in compliance with its covenants and had approximately $312 million of availability under the ABL Credit Facility.

The Company has the option to borrow under its revolving credit facility based on the agent’s base rate plus a premium ranging from 0.00% to 0.25% or the Secured Overnight Financing Rate (SOFR) plus a premium ranging from 1.25% to 2.75%.

On August 15, 2024, the Company entered into a two-year forward starting fixed rate interest rate hedge in order to eliminate the variability of cash interest payments on $75 million of the outstanding SOFR based borrowings under the ABL Credit Facility. The interest rate hedge fixed the rate at 3.82%. Although the Company is exposed to credit loss in the event of nonperformance by the other party to the interest rate hedge agreement, the Company anticipates performance by the counterparty.

As of September 30, 2025 and December 31, 2024, $1.9 million and $1.1 million, respectively, of bank financing fees were included in “Prepaid expenses and other” and “Other long-term assets” on the accompanying Consolidated Balance Sheets. The financing fees are being amortized over the five-year term of the ABL Credit Facility and are included in “Interest and other expense on debt” on the accompanying Consolidated Statements of Comprehensive Income.

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8.	*Derivative Instruments*:

Metals swaps and embedded customer derivatives

During 2025 and 2024, the Company entered into nickel swaps indexed to the London Metal Exchange price of nickel with third-party brokers. The nickel swaps are accounted for as derivatives for accounting purposes. The Company entered into them to mitigate its customers’ risk of volatility in the price of metals. The outstanding nickel swaps mature between the fourth quarter of 2025 and the first quarter of 2026. The swaps are settled with the brokers at maturity. The economic benefit or loss arising from the changes in fair value of the swaps is contractually passed through to the customer. The primary risk associated with the metals swaps is the ability of customers or third-party brokers to honor their agreements with the Company related to derivative instruments. If the customer or third-party brokers are unable to honor their agreements, the Company’s risk of loss is the fair value of the metals swaps.

These derivatives have not been designated as hedging instruments. The periodic changes in fair value of the metals and embedded customer derivative instruments are included in “Cost of materials sold” in the Consolidated Statements of Comprehensive Income. The Company recognizes derivative positions with both the customer and the third party for the derivatives and classifies cash settlement amounts associated with them as part of “Cost of materials sold” in the Consolidated Statements of Comprehensive Income. The cumulative change in fair value of the metals swaps that had not yet settled as of September 30, 2025, are included in “Other accrued liabilities” and the embedded customer derivatives are included in “Accounts receivable, net” on the Consolidated Balance Sheets as of September 30, 2025.

As of September 30, 2025, the Company has entered into nickel swaps for 309 thousand pounds of nickel. As of December 31, 2024, the Company has entered into nickel swaps for 439 thousand pounds of nickel.

Fixed rate interest rate hedge

On August 15, 2024, the Company entered into a two-year forward starting fixed rate interest rate hedge in order to eliminate the variability of cash interest payments on $75 million of the outstanding SOFR based borrowings under the ABL Credit Facility. The interest rate hedge fixed the rate at 3.82%. The interest rate hedge is included in "Other long-term liabilities" on the Consolidated Balance Sheets as of September 30, 2025. Although the Company is exposed to credit loss in the event of nonperformance by the other party to the interest rate hedge agreement, the Company anticipates performance by the counterparty.

The table below shows the total impact to the Company’s Consolidated Statements of Comprehensive Income through pre-tax income of the derivatives for the three and nine months ended September 30, 2025 and 2024, respectively.

	*Net Gain (Loss) Recognized*
	*For the Three Months*						*For the Nine Months*
	*Ended September 30,*						*Ended September 30,*
(in thousands)	*2025*			*2024*			*2025*			*2024*
Fixed interest rate hedge	$	94		$	138		$	284		$	193
Metals swaps		(51	)		(19	)		(162	)		205
Embedded customer derivatives		51			19			162			(205	)
Total gain	$	94		$	138		$	284		$	193

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9.	*Fair Value of Assets and Liabilities*:

During the nine months ended September 30, 2025, there were no transfers of financial assets between Levels 1, 2 or 3 fair value measurements. There have been no changes in the methodologies used as of September 30, 2025 since December 31, 2024.

The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company:

	*Value of Items Recorded at Fair Value*
	*As of September 30, 2025*
(in thousands)	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets:
Metal swaps	$	-	$	2,130	$	-	$	2,130
Embedded customer derivative		-		87		-		87
Supplemental executive retirement plan		17,516		-		-		17,516
Total assets at fair value	$	17,516	$	2,217	$	-	$	19,733

Liabilities:
Metal swaps	$	-	$	2,217	$	-	$	2,217
Fixed Interest rate hedge		-		124		-		124
Total liabilities recorded at fair value	$	-	$	2,341	$	-	$	2,341

	*Value of Items Recorded at Fair Value*
	*As of December 31, 2024*
(in thousands)	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets:
Metal swaps	$	-	$	3,055	$	-	$	3,055
Embedded customer derivative		-		402		-		402
Fixed interest rate hedge		-		254		-		254
Supplemental executive retirement plan		15,061		-		-		15,061
Total assets at fair value	$	15,061	$	3,711	$	-	$	18,772

Liabilities:
Metal swaps	$	-	$	3,457	$	-	$	3,457
Total liabilities at fair value	$	-	$	3,457	$	-	$	3,457

The value of the items not recorded at fair value represent the carrying value of the liabilities.

The carrying value of the ABL Credit Facility was $240.9 million and $272.5 million at September 30, 2025 and December 31, 2024, respectively. Management believes that the ABL Credit Facility’s carrying value approximates its fair value due to its recent refinancing and the variable interest rate on the ABL Credit Facility.

10.

Accumulated Other Comprehensive Income:

On August 15, 2024, the Company entered into a two-year forward starting fixed rate interest rate hedge in order to eliminate the variability of cash interest payments on $75 million of the outstanding SOFR based borrowings under the ABL Credit Facility. The interest rate hedge fixed the rate at 3.82%. The fair value of the interest rate hedge of $123.9 thousand, net of tax of $31.0 thousand, is included in "Accumulated other comprehensive income" on the Consolidated Balance Sheets at September 30, 2025.

11.

Equity Plans:

Restricted Shares, Restricted Stock Units and Performance Stock Units

Pursuant to the Amended and Restated Olympic Steel 2007 Omnibus Incentive Plan (the Incentive Plan), the Company may grant stock options, stock appreciation rights, restricted shares (RS), restricted share units (RSU), performance shares, and other stock- and cash-based awards to employees and directors of, and consultants to, the Company and its affiliates. Since adoption of the Incentive Plan, 1,400,000 shares of common stock have been authorized for equity grants. On an annual basis, the compensation committee of the Company’s Board of Directors (the Committee) awards RSs or RSUs to each non-employee director as part of their annual compensation.

The annual award for 2025 per director was $110,000 of RSs. Subject to the terms of the Incentive Plan and the RS agreement, one-third of the RSs vest on each December 31, 2025, December 31, 2026 and December 31, 2027. The grantee will not be entitled to vote on the RSs or receive dividends with respect to RSs until they vest. The annual award for 2024 per director was $110,000 of RSs. Subject to the terms of the Incentive Plan and the RS agreement, one-third of the RSs vest on each December 31, 2024, December 31, 2025 and December 31, 2026.

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In January 2022, the Company adopted a new C-Suite Long-Term Incentive Plan (the C-Suite Plan) that operates under the Senior Manager Stock Incentive Plan. Under the C-Suite Plan, the Chief Executive Officer, the Chief Financial Officer and the President and Chief Operating Officer are eligible for participation. In each calendar year, the Committee may award eligible participants a long-term incentive of both a RSU grant and a performance stock units (PSU) grant. Additionally, the Committee may offer a long-term cash incentive (split equally between service and performance-based portions) to supplement both the RSU and PSU grants in order to arrive at the total long-term award target. For 2025 and 2024, the total long-term award target is $1.1 million for the Chief Executive Officer, $0.5 million for the Chief Financial Officer and $0.8 million for the President and Chief Operating Officer. The PSUs will vest if the return on net assets, calculated as EBITDA divided by Average Accounts Receivable, Inventory and Property and Equipment, exceeds 5 percent. Each RSU and service-based cash incentive vests three years after the grant date. Each vested RSU will convert into the right to receive one share of common stock. During 2025, a total of 20,000 RSUs and 20,000 PSUs were granted to the participants under the C-Suite Plan, and $531,300 and $531,300, respectively, were granted in service-based and performance-based cash awards. During 2024, a total of 17,243 RSUs and 17,243 PSUs were granted to the participants under the C-Suite Plan, and $37,400 and $37,400, respectively, were granted in service-based and performance-based cash awards. If the return on net assets falls below five percent, no performance-based incentive will be awarded. The maximum performance-based award is achieved if return on net assets exceeds ten percent, and is capped at 150% of the grant.

Stock-based compensation expense recognized on RSUs for the three and nine months ended September 30, 2025 and 2024, respectively, is summarized in the following table:

	*For the Three Months Ended*				*For the Nine Months Ended*
	*September 30,*				*September 30,*
(in thousands, except per share data)	*2025*		*2024*		*2025*		*2024*
RS and RSU expense before taxes	$	606	$	499	$	1,758	$	1,499
RS and RSU expense after taxes	$	420	$	349	$	1,236	$	1,080

All pre-tax charges related to RSs and RSUs were included in the caption “Administrative and general” on the accompanying Consolidated Statements of Comprehensive Income.

The following table summarizes the activity related to RSs for the nine months ended September 30, 2025 and 2024, respectively:

	*As of September 30, 2025*					*As of September 30, 2024*
	*Number of*			*Weighted Average*		*Number of*		*Weighted Average*
	*Shares*			*Granted Price*		*Shares*		*Granted Price*
Outstanding at December 31		6,702		$	65.65		-	$	-
Granted		21,336			30.93		10,050		65.65
Converted into shares		(4,673	)		39.23		-		-
Outstanding at September 30		23,365		$	39.23		10,050	$	65.65
Vested at September 30		-		$	-		-	$	-

The following table summarizes the activity related to RSUs for the nine months ended September 30, 2025 and 2024, respectively:

	*As of September 30, 2025*					*As of September 30, 2024*
	*Number of*			*Weighted Average*		*Number of*			*Weighted Average*
	*Shares*			*Granted Price*		*Shares*			*Granted Price*
Outstanding at December 31		691,241		$	22.61		662,103		$	20.28
Granted		40,000			32.81		34,486			66.70
Converted into shares		(70,244	)		22.21		-			-
Forfeited		(274	)		13.29		(2,570	)		16.99
Outstanding at September 30		660,723		$	23.28		694,019		$	22.60
Vested at September 30		546,237		$	19.08		563,839		$	19.69

12.

Income Taxes:

For the three months ended September 30, 2025, the Company recorded an income tax provision of $1.0 million, or 30.7%, compared to an income tax provision of $1.2 million, or 29.9%, for the three months ended September 30, 2024. For the nine months ended September 30, 2025, the Company recorded an income tax provision of $4.2 million, or 29.7%, compared to an income tax provision of $7.4 million, or 28.0%, for the nine months ended September 30, 2024.

The tax provision for the interim period is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items that are taken into account in the relevant period. Each quarter, the Company updates the estimate of the annual effective tax rate, and if the estimated tax rate changes, the Company makes a cumulative adjustment.

The quarterly tax provision and the quarterly estimate of the annual effective tax rate is subject to significant volatility due to several factors, including variability in accurately predicting the Company’s pre-tax and taxable income and the mix of jurisdictions to which they relate, changes in law and relative changes of expenses or losses for which tax benefits are not recognized. Additionally, the effective tax rate can be more or less volatile based on the amount of pre-tax income. For example, the impact of discrete items and non-deductible expenses on the effective tax rate is greater when pre-tax income is lower.

On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business deductions. The legislation has multiple effective dates, with certain provisions effective in 2025. The impact of the OBBBA to the tax provision was evaluated and there was no impact to the tax rate as of September 2025.

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13.

Shares Outstanding and Earnings Per Share:

Earnings per share have been calculated based on the weighted average number of shares outstanding as set forth below:

	*For the Three Months Ended*				*For the Nine Months Ended*
	*September 30,*				*September 30,*
(in thousands, except per share data)	*2025*		*2024*		*2025*		*2024*
Weighted average basic shares outstanding		11,744		11,695		11,739		11,673
Assumed exercise of stock options and issuance of stock awards		19		-		22		-
Weighted average diluted shares outstanding		11,763		11,695		11,761		11,673
Net income	$	2,154	$	2,734	$	9,900	$	19,091
Basic earnings per share	$	0.18	$	0.23	$	0.84	$	1.64
Diluted earnings per share	$	0.18	$	0.23	$	0.84	$	1.64
Unvested RSs and RSUs		138		140		138		140

14.

Stock Repurchase Program:

On October 2, 2015, the Company announced that its Board of Directors authorized a stock repurchase program of up to 550,000 shares of the Company’s issued and outstanding common stock, which could include open market repurchases, negotiated block transactions, accelerated stock repurchases or open market solicitations for shares, all or some of which may be effected through Rule 10b5-1 plans. Any of the repurchased shares are held in the Company’s treasury, or canceled and retired as the Board may determine from time to time. Any repurchases of common stock are subject to the covenants contained in the ABL Credit Facility. Under the ABL Credit Facility, the Company may repurchase common stock and pay dividends up to $15 million in the aggregate during any trailing twelve months without restrictions. Purchases of common stock or dividend payments in excess of $15 million in the aggregate require the Company to (i) maintain availability in excess of 20.0% of the aggregate revolver commitments ($125.0 million at September 30, 2025) or (ii) to maintain availability equal to or greater than 15.0% of the aggregate revolver commitments ($93.8 million at September 30, 2025) and the Company must maintain a pro-forma ratio of EBITDA minus certain capital expenditures and cash taxes paid to fixed charges of at least 1.00 to 1.00.

There were no shares repurchased during the three and nine months ended September 30, 2025 and 2024. As of September 30, 2025, 360,212 shares remain authorized for repurchase under the program.

15.

Segment Information:

The Company follows the accounting guidance that requires the utilization of a "management approach" to define and report the financial results of reporting segments. The management approach defines operating segments along the lines used by the Company's chief operating decision maker (CODM) to assess performance and make operating and resource allocation decisions. The Company's Chief Executive Officer serves as the CODM and evaluates performance and allocates resources based on segment operating income. The CODM uses operating income to evaluate the income generated and overall profitability created from segment assets. These financial metrics are used to make key operating decisions, such as the determination of how capital spending is deployed between organic growth, automation and defensive projects and investment through acquisition.

The Company operates in three reportable segments; specialty metals flat products, carbon flat products, and tubular and pipe products. The specialty metals flat products segment and the carbon flat products segment are at times consolidated and referred to as the flat products segment, as certain of the flat products segments' assets and resources are shared by the specialty metals and carbon flat products segments and both segments' products are stored in the shared facilities and, in some locations, processed on shared equipment. The reportable segments are defined based on the products they sell as each segment requires unique purchasing and marketing strategies. In addition, capital equipment requirements differ between segments.

The Company uses segment operating income as the measure of segment income or loss. The Company believes that segment operating income is most reflective of the operational profitability or loss of its reportable segments.

Segment operating income excludes certain Corporate expenses. These Corporate expenses include the unallocated expenses related to managing the entire Company (i.e., all three segments), including the compensation for certain personnel, expenses related to being a publicly traded entity such as board of directors' expenses, audit expenses, and various other professional fees.

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The following tables provide financial information frequently shared with our CODM for the Company's reportable segments for the three and nine months ended September 30, 2025 and 2024, respectively.

	*For the Three Months Ended September 30, 2025*
	*Specialty metals flat products*		*Carbon flat products*		*Tubular and pipe products*		*Other*			*Total*
(in thousands)
Net sales	$	140,870	$	268,214	$	81,571	$	-		$	490,655
Cost of materials sold		113,982		202,670		56,377		-			373,029
Operating expenses		19,616		59,299		19,058		4,413			102,386
Depreciation		654		3,879		1,704		-			6,237
Amortization		205		1,089		445		-			1,739
Operating income	$	6,413	$	1,277	$	3,987	$	(4,413	)	$	7,264
Other loss, net											14
Interest and other expense on debt											4,144
Income before income taxes										$	3,106

	*For the Nine Months Ended September 30, 2025*
	*Specialty metals flat products*		*Carbon flat products*		*Tubular and pipe products*		*Other*			*Total*
(in thousands)
Net sales	$	405,114	$	836,997	$	237,968	$	-		$	1,480,079
Cost of materials sold		333,543		627,621		161,044		-			1,122,208
Operating expenses		54,834		179,671		58,452		13,996			306,953
Depreciation		2,140		11,953		5,150		35			19,278
Amortization		628		3,257		1,325		-			5,210
Operating income	$	13,969	$	14,495	$	11,997	$	(14,031	)	$	26,430
Other loss, net											62
Interest and other expense on debt											12,282
Income before income taxes										$	14,086

	*For the Three Months Ended September 30, 2024*
	*Specialty metals flat products*		*Carbon flat products*		*Tubular and pipe products*		*Other*			*Total*
(in thousands)
Net sales	$	125,693	$	264,849	$	79,454	$	-		$	469,996
Cost of materials sold		103,450		208,093		51,601		-			363,144
Operating expenses		16,302		52,294		19,193		4,020			91,809
Depreciation		699		3,366		1,658		17			5,740
Amortization		306		662		526		-			1,494
Operating income	$	4,936	$	434	$	6,476	$	(4,037	)	$	7,809
Other loss, net											26
Interest and other expense on debt											3,880
Income before income taxes										$	3,903

	*For the Nine Months Ended September 30, 2024*
	*Specialty metals flat products*		*Carbon flat products*		*Tubular and pipe products*		*Other*			*Total*
(in thousands)
Net sales	$	386,100	$	873,579	$	263,209	$	-		$	1,522,888
Cost of materials sold		315,984		687,704		173,541		-			1,177,229
Operating expenses		50,478		159,202		62,468		12,859			285,007
Depreciation		2,083		10,277		5,173		52			17,585
Amortization		839		1,944		1,427		-			4,210
Operating income	$	16,716	$	14,452	$	20,600	$	(12,911	)	$	38,857
Other loss, net											66
Interest and other expense on debt											12,283
Income before income taxes										$	26,508

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	*For the Nine Months Ended*
	*September 30,*
(in thousands)	*2025*		*2024*
Capital expenditures
Flat products segments	$	23,965	$	18,458
Tubular and pipe products		1,033		3,850
Total capital expenditures	$	24,998	$	22,308

	*As of*
	*September 30,*		*December 31,*
(in thousands)	*2025*		*2024*
Assets
Flat products segments	$	728,754	$	695,880
Tubular and pipe products		360,345		347,469
Corporate		959		1,147
Total assets	$	1,090,058	$	1,044,496

There were no material revenue transactions between the specialty metals flat products, carbon flat products and tubular and pipe products segments.

The Company sells certain products internationally, primarily in Canada and Mexico. International sales are immaterial to the consolidated financial results and to the individual segments’ results.

16.

Subsequent Event:

On October 28, 2025, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Ryerson Holding Corporation, a Delaware corporation (Ryerson), and Crimson MS Corp., an Ohio corporation and a wholly owned subsidiary of Ryerson (Merger Sub). The Merger Agreement provides that, subject to the terms and conditions set forth therein, Merger Sub will merge with and into the Company (the Merger), with the Company continuing as the surviving corporation and a wholly owned subsidiary of Ryerson.

At the effective time of the Merger (the Effective Time), and upon consummation of the Merger, subject to the terms and conditions set forth in the Merger Agreement, each share of the Company’s common stock issued and outstanding immediately prior to the Effective Time will be canceled and converted into and thereafter represent the right to receive that number of validly issued, fully paid and non-assessable shares of common stock, $0.01 par value per share, of Ryerson (Ryerson Common Stock) equal to 1.7105, rounded down to the nearest whole share and, if applicable, the cash amount to be paid in lieu of fractional shares. Upon closing of the Merger, legacy Company shareholders will own approximately 37% of the combined company.

Consummation of the Merger is subject to the satisfaction or waiver of certain customary closing conditions, including (a) the adoption of the Merger Agreement by (i) a majority of the shareholders of the Company and (ii) a majority of the stockholders of Ryerson; (b) the Ryerson Common Stock issuable in connection with the Merger having been approved for listing on the New York Stock Exchange; (c) Ryerson’s registration statement on Form S-4 having become effective under the Securities Act of 1933; (d) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; and (e) the performance or compliance by the Company, Ryerson and Merger Sub with their respective covenants and agreements in all material respects or as otherwise specified in the Merger Agreement.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and accompanying notes contained herein and our consolidated financial statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2024. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause a difference include, but are not limited to, those discussed under Item 1A (Risk Factors) in our Annual Report on Form 10-K for the year ended December 31, 2024, and in Part II, Item 1A (Risk Factors) in this Quarterly Report on Form 10-Q. The following section is qualified in its entirety by the more detailed information, including our financial statements and the notes thereto, which appear elsewhere in this Quarterly Report on Form 10-Q.

Forward-Looking Information

This Quarterly Report on Form 10-Q and other documents we file with the Securities and Exchange Commission, or SEC, contain various forward-looking statements that are based on current expectations, estimates, forecasts and projections about our future performance, business, our beliefs and management’s assumptions. In addition, we, or others on our behalf, may make forward-looking statements in press releases or written statements, or in our communications and discussions with investors and analysts in the normal course of business through meetings, conferences, webcasts, phone calls and conference calls. Words such as “may,” “will,” “anticipate,” “should,” “intend,” “expect,” “believe,” “estimate,” “project,” “plan,” “potential,” and “continue,” as well as the negative of these terms or similar expressions are intended to identify forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those implied by such statements including, but not limited to:

	●	the levels of imported steel in the United States, imposed tariffs and duties on imported and exported steel or other products, U.S. trade policy and its impact on the U.S. manufacturing industry, including retaliatory actions by other countries;
	●	supply disruptions and inflationary pressures, including the availability and rising costs of transportation, energy, logistical services and labor;
	●	general and global business, economic, financial and political conditions, including, but not limited to, recessionary conditions and legislation passed under the current administration, including the impact of the enactment of the One Big Beautiful Bill Act, or the OBBBA, on July 4, 2025;
	●	the failure to complete the proposed merger, or Merger, with Ryerson Holding Corporation, or Ryerson, on the anticipated terms and timing, or at all:
	●	the failure to obtain the requisite shareholder approval in connection with the proposed Merger, and the failure to satisfy various other conditions to the closing of the Merger;
	●	the failure to obtain governmental approvals of the Merger on the proposed terms and timeline, and any conditions imposed on the combined company in connection with consummation of the Merger;
	●	the risk that the cost savings and any other synergies from the Merger may not be fully realized or may take longer to realize than expected;
	●	disruption from the proposed Merger making it more difficult to maintain relationships with customers, partners, employees or suppliers;
	●	the risk that the Merger may be less accretive than expected, or may be dilutive, and that the combined company may fail to realize the benefits expected from the Merger;
	●	risks associated with shortages of skilled labor, increased labor costs and our ability to attract and retain qualified personnel;
	●	risks of volatile metals prices and inventory devaluation;
	●	supplier consolidation or addition of new capacity;
	●	risks associated with economic sanctions, and current global conflicts, or additional war, military conflict, or hostilities could adversely affect global metals supply and pricing;
	●	reduced production schedules, layoffs or work stoppages by our own, our suppliers’ or customers’ personnel;
	●	rising interest rates and their impacts on our variable interest rate debt;

	●	our ability to successfully integrate recent acquisitions into our business and risks inherent with the acquisitions in the achievement of expected results;
	●	the adequacy of our existing information technology and business system software, including duplication and security processes;
	●	the inflation or deflation existing within the metals industry, as well as product mix and inventory levels on hand, which can impact our cost of materials sold as a result of the fluctuations in the last-in, first-out, or LIFO, inventory valuation;
	●	competitive factors such as the availability, and global pricing of metals and production levels, industry shipping and inventory levels and rapid fluctuations in customer demand and metals pricing;
	●	fluctuations in the value of the U.S. dollar and the related impact on foreign steel pricing, U.S. exports, and foreign imports to the United States;
	●	risks associated with infectious disease outbreaks, including, but not limited to customer closures, reduced sales and profit levels, slower payment of accounts receivable and potential increases in uncollectible accounts receivable, falling metals prices that could lead to lower of cost or net realizable value inventory adjustments and the impairment of intangible and long-lived assets, negative impacts on our liquidity position, inability to access our traditional financing sources and increased costs associated with and less ability to access funds under our asset-based credit facility, or ABL Credit Facility, and the capital markets;
	●	increased customer demand without corresponding increase in metal supply could lead to an inability to meet customer demand and result in lower sales and profits;
	●	cyclicality and volatility within the metals industry;
	●	customer, supplier and competitor consolidation, bankruptcy or insolvency;
	●	the timing and outcomes of inventory lower of cost or net realizable value adjustments and LIFO income or expense;
	●	reduced availability and productivity of our employees, increased operational risks as a result of remote work arrangements, including the potential effects on internal controls, as well as cybersecurity risks and increased vulnerability to security breaches, information technology disruptions and other similar events;
	●	the successes of our efforts and initiatives to improve working capital turnover and cash flows, and achieve cost savings;

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●

risks and uncertainties associated with intangible assets, including impairment charges related to indefinite lived intangible assets;

	●	our ability to generate free cash flow through operations and repay debt;
	●	the impacts of union organizing activities and the success of union contract renewals;

●

the amounts, successes and our ability to continue our capital investments and strategic growth initiatives, including acquisitions and our business information system implementations;

●

events or circumstances that could adversely impact the successful operation of our processing equipment and operations;

●

changes in laws or regulations or the manner of their interpretation or enforcement could impact our financial performance and restrict our ability to operate our business or execute our strategies;

●

events or circumstances that could impair or adversely impact the carrying value of any of our assets;

●

our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends;

●

our ability to repurchase shares of our common stock and the amounts and timing of repurchases, if any; and

●

unanticipated developments that could occur with respect to contingencies such as litigation, arbitration and environmental matters, including any developments that would require any increase in our costs for such contingencies.

Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, intended, expected, believed, estimated, projected or planned. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to republish revised forward-looking statements to reflect the occurrence of unanticipated events or circumstances after the date hereof, except as otherwise required by law.

Overview

We are a leading metals service center focused on the direct sale and value-added processing of carbon and coated sheet, plate and coil products; stainless steel sheet, plate, bar and coil; aluminum sheet, plate and coil; pipe, tube bar, valves and fittings, tin plate and metal-intensive end-use products. We provide metals processing and distribution services for a wide range of customers. We operate in three reportable segments: specialty metals flat products, carbon flat products, and tubular and pipe products. Our specialty metals flat products segment's focus is on the direct sale and distribution of processed aluminum and stainless flat-rolled sheet and coil products, flat bar products, prime tin mill products and fabricated parts. Through acquisitions, our specialty metals flat products segment has expanded its geographical footprint and enhanced its product offerings in stainless steel and aluminum plate, sheet, angles, rounds, flat bar, tube and pipe and the manufacturing and distribution of stainless steel bollards and water treatment systems. Our carbon flat products segment's focus is on the direct sale and distribution of large volumes of processed carbon and coated flat-rolled sheet, coil and plate products and fabricated parts. Through acquisitions, our carbon flat products segment has expanded its product offerings to include self-dumping metal hoppers and steel and stainless-steel dump inserts for pickup truck and service beds and venting, micro air and clean air products for residential, commercial and industrial applications. Through the acquisition of MetalWorks on November 11, 2024, the carbon flat products segment further expanded its product offerings to include the manufacturing of service station canopies, deck clips, long gutters, trim, boat docks and solar canopy and ground racking components. Our tubular and pipe products segment's focus is on the distribution of metal tubing, pipe, bar, valves and fittings and the fabrication of parts supplied to various industrial markets. We also perform toll processing of customer-owned metals. We sell certain products internationally, primarily in Canada and Mexico. International sales are immaterial to our consolidated financial results and to the individual segments' results.

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Our results of operations are affected by numerous external factors including, but not limited to: metals pricing, demand and availability; the availability, and increased costs of, labor; global supply, the level of metals imported into the United States, tariffs, and inventory held in the supply chain; general and global business, economic, financial, banking and political conditions; competition; layoffs or work stoppages by our own, our suppliers’ or our customers’ personnel; fluctuations in the value of the U.S. dollar to foreign currencies; transportation and energy costs; pricing and availability of raw materials used in the production of metals and customers’ ability to manage their credit line availability. The metals industry also continues to be affected by the addition of new capacity and the global consolidation of our suppliers, competitors and end-use customers, and tariffs.

Like other metals service centers, we maintain substantial inventories of metals to accommodate the short lead times and just-in-time delivery requirements of our customers. Accordingly, we purchase metals, primarily from domestic mills in an effort to maintain our inventory at levels that we believe to be appropriate to satisfy the anticipated needs of our customers based upon customer forecasts, historic buying practices, supply agreements with customers and market conditions. Our commitments to purchase metals are generally at prevailing market prices in effect at the time we place our orders. From time to time, we have entered into pass-through nickel swaps at the request of our customers in order to mitigate our customers’ risk of volatility in the price of metals. We have no long-term, fixed-price metals purchase contracts. When metals prices decline, customer demands for lower prices and our competitors’ responses to those demands could result in lower sale prices and, consequently, lower gross profits and earnings as we use existing metals inventory. When metals prices increase, competitive conditions will influence how much of the price increase we can pass on to our customers. To the extent we are unable to pass on future price increases in our raw materials to our customers, the net sales and gross profits of our business could be adversely affected.

At September 30, 2025, we employed approximately 2,181 people. Approximately 229 of the hourly plant personnel at the facilities listed below are represented by seven separate collective bargaining units. The table below shows the expiration dates of the collective bargaining agreements.

Facility	Expiration date
Indianapolis, Indiana	January 29, 2026
Minneapolis (plate), Minnesota	March 31, 2027
St. Paul, Minnesota	May 25, 2028
Locust, North Carolina	March 4, 2029
Minneapolis (coil), Minnesota	September 30, 2029
Hammond, Indiana	November 30, 2029
Romeoville, Illinois	May 31, 2030

We have never experienced a work stoppage and we believe that our relationship with employees is good. However, any prolonged work stoppages by our personnel represented by collective bargaining units could have a material adverse impact on our business, financial condition, results of operations and cash flows.

Proposed Merger with Ryerson

On October 28, 2025, we entered into an Agreement and Plan of Merger, or Merger Agreement, with Ryerson, a Delaware corporation, and Crimson MS Corp., an Ohio corporation and a wholly owned subsidiary of Ryerson, or Merger Sub. The Merger Agreement provides that, subject to the terms and conditions set forth therein, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Ryerson.

Consummation of the Merger is subject to the satisfaction or waiver of certain customary closing conditions, including (a) the adoption of the Merger Agreement by (i) a majority of the shareholders of the Company and (ii) a majority of the stockholders of Ryerson; (b) the Ryerson Common Stock issuable in connection with the Merger having been approved for listing on the New York Stock Exchange; (c) Ryerson’s registration statement on Form S-4 having become effective under the Securities Act of 1933; (d) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; and (e) the performance or compliance by the Company, Ryerson and Merger Sub with their respective covenants and agreements in all material respects or as otherwise specified in the Merger Agreement.

Reportable Segments

We operate in three reportable segments: specialty metals flat products, carbon flat products and tubular and pipe products. The specialty metals flat products segment and the carbon flat products segment are at times consolidated and referred to as the flat products segment. Some of the flat products segments’ assets and resources are shared by the specialty metals and carbon flat products segments and both segments’ products are stored in the shared facilities and, in some locations, processed on shared equipment. As such, total assets and capital expenditures are reported in the aggregate for the flat products segments. Due to the shared assets and resources, certain of the flat products segment expenses are allocated between the specialty metals flat products segment and the carbon flat products segment based upon an established allocation methodology.

We follow the accounting guidance that requires the utilization of a “management approach” to define and report the financial results of operating segments. The management approach defines operating segments along the lines used by the chief operating decision maker, or CODM, to assess performance and make operating and resource allocation decisions. Our CODM, who is our Chief Executive Officer, evaluates performance and allocates resources based primarily on operating income. Our operating segments are based primarily on internal management reporting.

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Due to the nature of the products sold in each segment, there are significant differences in the segments’ average selling price and the cost of materials sold. The specialty metals flat products segment generally has the highest average selling price among the three segments followed by the tubular and pipe products segment and carbon flat products segment. Due to the nature of the tubular and pipe products, we do not report tons sold or per ton information. Gross profit per ton is generally higher in the specialty metals flat products segment than the carbon flat products segment. Gross profit as a percentage of net sales is generally higher in the tubular and pipe products and specialty metals flat products segments than the carbon flat products segment. Due to the differences in average selling prices, gross profit and gross profit percentage among the segments, a change in the mix of sales could impact total net sales, gross profit, and gross profit percentage. In addition, certain inventory in the tubular and pipe products segment is valued under the LIFO method. Adjustments to the LIFO inventory value are recorded to cost of materials sold and may impact the gross margin and gross margin percentage at the consolidated Company and tubular and pipe products segment levels.

Specialty metals flat products

The primary focus of our specialty metals flat products segment is on the direct sale and distribution of processed aluminum and stainless flat-rolled sheet and coil products, flat bar products, prime tin mill products and fabricated parts. Through acquisitions, our specialty metals flat products segment has expanded its geographical footprint and enhanced its product offerings in stainless steel and aluminum plate, sheet, angles, rounds, flat bar, tube and pipe and the manufacturing and distribution of stainless steel bollards and water treatment systems. We act as an intermediary between metals producers and manufacturers that require processed metals for their operations. We serve customers in various industries, including manufacturers of food service and commercial appliances, agriculture equipment, transportation and automotive equipment. We distribute these products primarily through a direct sales force.

Carbon flat products

The primary focus of our carbon flat products segment is on the direct sale and distribution of large volumes of processed carbon and coated flat-rolled sheet, coil and plate products and fabricated parts. Through acquisitions, our carbon flat products segment has expanded its product offerings to include self-dumping hoppers and steel and stainless-steel dump inserts for pickup truck and service truck beds and venting, micro air and clean air products for residential, commercial and industrial applications. Through the acquisition of MetalWorks, the carbon flat products segment further expanded its product offerings to include the manufacturing of service station canopies, deck clips, long gutters, trim, boat docks and solar canopy and ground racking components. We act as an intermediary between metals producers and manufacturers that require processed metals for their operations. We serve customers in most metals consuming industries, including manufacturers and fabricators of transportation and material handling equipment, construction and farm machinery, storage tanks, environmental and energy generation equipment, automobiles, military vehicles and equipment, as well as general and plate fabricators and metals service centers. We distribute these products primarily through a direct sales force.

Many of our facilities service both the carbon and the specialty metals flat products segments, and certain assets and resources are shared by the segments. Our geographic footprint allows us to focus on regional customers and larger national and multi-national accounts, primarily located throughout the midwestern, eastern and southern United States.

Tubular and pipe products

The primary focus of our tubular and pipe products segment is on the distribution of metal tubing, pipe, bar, valve and fittings and the fabrication of pressure parts supplied to various industrial markets. The tubular and pipe products segment distributes its products primarily through a direct sales force.

Corporate expenses

Corporate expenses are reported as a separate line item for segment reporting purposes. Corporate expenses include the unallocated expenses related to managing the entire Company (i.e., all three segments), including compensation for certain personnel, expenses related to being a publicly traded entity such as board of directors’ expenses, audit expenses, and various other professional fees.

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Results of Operations

Our results of operations are impacted by the market price of metals. Metals prices fluctuate significantly and changes to our net sales, cost of materials sold, gross profit, cost of inventory and profitability are all impacted by industry metals pricing.

Metals prices in our specialty metals products segment decreased during 2025 compared to 2024, due to decreases in metals surcharges experienced during 2025. The price of grade 304 stainless steel surcharges decreased by 2.8% between December 2024 and September 2025. Metals index pricing for our carbon flat products segment decreased during the third quarter of 2025 by $101 per ton, or 11.2%, and increased during the first nine months of 2025 by $108 per ton, or 15.6%. In addition, metals index prices were 27.1% higher in the third quarter of 2025 compared to the third quarter of 2024. Metals pricing for the tubular and pipe products segment lags behind the carbon flat products segment by several months.

Transactional or “spot” selling prices generally move in tandem with market price changes, while fixed selling prices typically lag and reset quarterly. Similarly, inventory costs (and, therefore, cost of materials sold) tend to move slower than market selling price changes due to mill lead times and inventory turnover impacting the rate of change in average cost. When average selling prices decrease, and net sales decrease, gross profit and operating expenses as a percentage of net sales will generally increase.

Consolidated Operations

The following table presents consolidated operating results for the periods indicated (dollars are shown in thousands):

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2025				2024				2025				2024
			% of net				% of net				% of net				% of net
	$		sales		$		sales		$		sales		$		sales
Net sales	$	490,655		100.0	$	469,996		100.0	$	1,480,079		100.0	$	1,522,888		100.0
Cost of materials sold (a)		373,029		76.0		363,144		77.3		1,122,208		75.8		1,177,229		77.3
Gross profit (b)		117,626		24.0		106,852		22.7		357,871		24.2		345,659		22.7
Operating expenses (c)		110,362		22.5		99,043		21.0		331,441		22.4		306,802		20.1
Operating income		7,264		1.5		7,809		1.7		26,430		1.8		38,857		2.6
Other loss, net		14		0.0		26		0.0		62		0.0		66		0.0
Interest and other expense on debt		4,144		0.9		3,880		0.9		12,282		0.8		12,283		0.9
Income before income taxes		3,106		0.6		3,903		0.8		14,086		1.0		26,508		1.7
Income taxes		952		0.2		1,169		0.2		4,186		0.3		7,417		0.4
Net income	$	2,154		0.4	$	2,734		0.6	$	9,900		0.7	$	19,091		1.3

(a) Includes $139 and $899 of LIFO expense, respectively, for the three and nine months ended September 30, 2025. Includes $2,000 and $2,600 of LIFO income, respectively, for the three and nine months ended September 30, 2024.

(b) Gross profit is calculated as net sales less the cost of materials sold.

Net sales increased $20.7 million, or 4.4%, to $490.7 million in the third quarter of 2025 from $470.0 million in the third quarter of 2024. Specialty metals flat products net sales were 28.7% of total net sales in the third quarter of 2025 compared to 26.7% of total net sales in the third quarter of 2024. Carbon flat products net sales were 54.7% of total net sales in the third quarter of 2025 compared to 56.4% of total net sales in the third quarter of 2024. Tubular and pipe products net sales were 16.6% of total net sales in the third quarter of 2025 compared to 16.9% of total net sales in the third quarter of 2024. The increase in net sales was due to a 6.5% increase in average selling prices during the third quarter of 2025 compared to the third quarter of 2024, partially offset by and a consolidated 2.0% decrease in sales volume.

Net sales decreased $42.8 million, or 2.8%, to $1.48 billion in the first nine months of 2025 from $1.52 billion in the first nine months of 2024. Specialty metals flat products net sales were 27.4% of total net sales in the first nine months of 2025 compared to 25.4% of total net sales in the first nine months of 2024. Carbon flat products net sales were 56.6% of total net sales in the first nine months of 2025 compared to 57.4% of total net sales in the first nine months of 2024. Tubular and pipe products net sales were 16.1% of total net sales in the first nine months of 2025 compared to 17.3% of total net sales in the first nine months of 2024. The decrease in net sales was due to a consolidated 1.7% decrease in average selling prices and a 1.2% decrease in sales volume during the first nine months of 2025 compared to the first nine months of 2024.

Cost of materials sold increased $9.9 million, or 2.7%, to $373.0 million in the third quarter of 2025 from $363.1 million in the third quarter of 2024. Cost of materials sold decreased $55.0 million, or 4.7%, to $1.1 billion in the first nine months of 2025 from $1.2 billion in the first nine months of 2024. The decrease in cost of materials sold in the first nine months of 2025 is related to the decreased metals pricing discussed above in Results of Operations.

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As a percentage of net sales, gross profit (as defined in footnote (b) in the table above) increased to 24.0% in the third quarter of 2025 from 22.7% in the third quarter of 2024. The increase in the gross profit as a percentage of net sales is due to the average selling prices increasing more than the average cost of inventory. As a percentage of net sales, gross profit (as defined in footnote (b) in the table above) increased to 24.2% in the first nine months of 2025 from 22.7% in the first nine months of 2024. The increase in the gross profit as a percentage of net sales is due to the average selling prices increasing more than the average cost of inventory.

Operating expenses in the third quarter of 2025 increased $11.3 million, or 11.4%, to $110.4 million from $99.0 million in the third quarter of 2024. As a percentage of net sales, operating expenses increased to 22.5% for the third quarter of 2025 from 21.0% in the third quarter of 2024. Operating expenses in the specialty metals flat products segment increased $3.2 million, operating expenses in the carbon flat products segment increased $8.0 million, operating expenses in the tubular and pipe products segment decreased $0.2 million and Corporate expenses increased $0.4 million in the third quarter of 2025 compared to the third quarter of 2024. The increase in operating expenses on a dollar basis was primarily attributable to the inclusion of MetalWorks operating and acquisitions related expenses in 2025 and higher year-over-year payroll, distribution and warehousing expenses.

Operating expenses in the first nine months of 2025 increased $24.6 million, or 8.0%, to $331.4 million from $306.8 million in the first nine months of 2024. As a percentage of net sales, operating expenses increased to 22.4% for the first nine months of 2025 from 20.1% in the first nine months of 2024. Operating expenses in the specialty metals flat products segment increased $4.2 million, operating expenses in the carbon flat products segment increased $23.5 million, operating expenses in the tubular and pipe products segment decreased $4.1 million and Corporate expenses increased $1.1 million in the first nine months of 2025 compared to the first nine months of 2024. The increase in operating expenses on a dollar basis was primarily attributable to the inclusion of MetalWorks operating and acquisition related expenses in 2025 and higher year-over-year payroll, distribution, occupancy and warehousing expenses.

Interest and other expense on debt totaled $4.1 million, or 0.9% of net sales, in the third quarter of 2025 compared to $3.9 million, or 0.9% of net sales, in the third quarter of 2024. Interest and other expense on debt totaled $12.3 million, or 0.8% of net sales, in the first nine months of 2025 compared to $12.3 million, or 0.9% of net sales, in the first nine months of 2024. Interest and other expenses on debt remained flat between the first nine months of 2025 when compared to the first nine months of 2024. Our effective borrowing rate, exclusive of deferred financing fees and commitment fees, was 5.9% for the first nine months of 2025 compared to 6.5% for the first nine months of 2024.

In the third quarter of 2025, income before income taxes totaled $3.1 million compared to income before income taxes of $3.9 million in the third quarter of 2024. In the first nine months of 2025, income before income taxes totaled $14.1 million compared to income before income taxes of $26.5 million in the first nine months of 2024.

An income tax provision of 30.7% was recorded for the third quarter of 2025, compared to an income tax provision of 29.9% for the third quarter of 2024. Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items that are considered in the relevant period. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. An income tax provision of 29.5% was recorded for the first nine months of 2025, compared to an income tax provision of 28.0% for the first nine months of 2024. Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items that are considered in the relevant period. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business deductions. The legislation has multiple effective dates, with certain provisions effective in 2025. We are currently assessing its impact on our consolidated financial statements.

Net income for the third quarter of 2025 totaled $2.2 million, or $ 0.18 per basic share and diluted share, compared to net income of $2.7 million, or $ 0.23 per basic and diluted share, for the third quarter of 2024. Net income for the first nine months of 2025 totaled $9.9 million, or $ 0.84 per basic share and diluted share, compared to net income of $19.1 million, or $ 1.64 per basic and diluted share, for the first nine months of 2024.

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Segment Operations

Specialty metals flat products

The following table presents selected operating results for our specialty metals flat products segment for the periods indicated (dollars are shown in thousands, except for per ton information):

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2025				2024				2025				2024
			% of net				% of net				% of net				% of net
			sales				sales				sales				sales
Direct tons sold		32,104				28,374				93,827				87,787
Toll tons sold		979				1,364				3,084				3,549
Total tons sold		33,083				29,738				96,911				91,336

Net sales	$	140,870		100.0	$	125,693		100.0	$	405,114		100.0	$	386,100		100.0
Average selling price per ton		4,258				4,227				4,180				4,227
Cost of materials sold		113,982		80.9		103,450		82.3		333,543		82.3		315,984		81.8
Gross profit (a)		26,888		19.1		22,243		17.7		71,571		17.7		70,116		18.2
Operating expenses (b)		20,475		14.5		17,307		13.8		57,602		14.3		53,400		13.9
Operating income	$	6,413		4.6	$	4,936		3.9	$	13,969		3.4	$	16,716		4.3

(a) Gross profit is calculated as net sales less the cost of materials sold.

(b) Operating expenses are calculated as total costs and expenses less the cost of materials sold.

Tons sold by our specialty metals flat products segment increased three thousand to 33 thousand in the third quarter of 2025 from 30 thousand in the third quarter of 2024. Tons sold by our specialty metals flat products segment increased six thousand to 97 thousand in the first nine months of 2025 from 91 thousand in the first nine months of 2024. We do not report tons sold for our end-use products.

Net sales in our specialty metals flat products segment increased $15.2 million, or 12.1%, to $140.9 million in the third quarter of 2025 from $125.7 million in the third quarter of 2024. Average selling prices in the third quarter of 2025 were $4,258 per ton, compared with $4,227 per ton in the third quarter of 2024. Net sales in our specialty metals flat products segment increased $19.0 million, or 4.9%, to $405.1 million in the first nine months of 2025 from $386.1 million in the third quarter of 2024. Average selling prices in the first nine months of 2025 were $4,180 per ton, compared with $4,227 per ton in the first nine months of 2024.

Cost of materials sold in our specialty metals flat products segment increased $10.5 million, or 10.2%, to $114.0 million in the third quarter of 2025 from $103.5 million in the third quarter of 2024. Cost of materials sold in our specialty metals flat products segment increased $17.6 million, or 5.6%, to $333.5 million in the first nine months of 2025 from $316.0 million in the first nine months of 2024. The increase in cost of materials sold was due to a 6.1% increase in sales volume.

As a percentage of net sales, gross profit (as defined in footnote (a) in the table above) increased to 19.1% in the third quarter of 2025 from 17.7% in the third quarter of 2024. As a percentage of net sales, gross profit (as defined in footnote (a) in the table above) decreased to 17.7% in the first nine months of 2025 from 18.2% in the first nine months of 2024. The decrease in the gross profit as a percentage of net sales for the nine months ended September 30, 2025 is due to the average selling prices decreasing more than the average cost of materials sold.

Operating expenses increased $3.2 million, or 18.3%, to $20.5 million in the third quarter of 2025 from $17.3 million in the third quarter of 2024. As a percentage of net sales, operating expenses increased to 14.5% in the third quarter of 2025 compared to 13.8% in the third quarter of 2024. The increase in operating expenses on a dollar basis was primarily attributable to increased variable operating expenses due to increased shipments.

Operating expenses increased $4.2 million, or 7.9%, to $57.6 million in the first nine months of 2025 from $53.4 million in the first nine months of 2024. As a percentage of net sales, operating expenses increased to 14.1% in the first nine months of 2025 compared to 13.8% in the first nine months of 2024. The increase in operating expenses on a dollar basis was primarily attributable to increased variable operating expenses due to increased shipments.

Operating income in the third quarter of 2025 totaled $6.4 million, or 4.6% of net sales, compared to $4.9 million, or 3.9% of net sales, in the third quarter of 2024. Operating income in the first nine months of 2025 totaled $14.0 million, or 3.4% of net sales, compared to $16.7 million, or 4.3% of net sales, in the first nine months of 2024.

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Carbon flat products

The following table presents selected operating results for our carbon flat products segment for the periods indicated (dollars are shown in thousands, except for per ton information):

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2025				2024				2025				2024
			% of net				% of net				% of net				% of net
			sales				sales				sales				sales
Direct tons sold		189,475				198,079				622,924				630,018
Toll tons sold		6,125				6,132				20,397				22,958
Total tons sold		195,600				204,211				643,321				652,976

Net sales	$	268,214		100.0	$	264,849		100.0	$	836,997		100.0	$	873,579		100.0
Average selling price per ton		1,371				1,297				1,301				1,338
Cost of materials sold		202,670		75.6		208,093		78.6		627,621		75.0		687,704		78.7
Gross profit (a)		65,544		24.4		56,756		21.4		209,376		25.0		185,875		21.3
Operating expenses (b)		64,267		23.9		56,322		21.2		194,881		23.3		171,423		19.6
Operating income	$	1,277		0.5	$	434		0.2	$	14,495		1.7	$	14,452		1.7

(a) Gross profit is calculated as net sales less the cost of materials sold.

(b) Operating expenses are calculated as total costs and expenses less the cost of materials sold.

Tons sold by our carbon flat products segment decreased eight thousand to 196 thousand in the third quarter of 2025 from 204 thousand in the third quarter of 2024. Tons sold by our carbon flat products segment decreased ten thousand to 643 thousand in the first nine months of 2025 from 653 thousand in the first nine months of 2024. We do not report tons sold for our end-use products.

Net sales in our carbon flat products segment increased $3.4 million, or 1.3%, to $268.2 million in the third quarter of 2025 from $264.9 million in the third quarter of 2024. Average selling prices in the third quarter of 2025 increased to $1,371 per ton, compared with $1,297 per ton in the third quarter of 2024. The increase in sales was attributable to a $74 increase in average selling prices per ton in the third quarter of 2025 compared to the third quarter of 2024, partially offset by an eight thousand ton decrease in tons sold.

Net sales in our carbon flat products segment decreased $36.6 million, or 4.2%, to $837.0 million in the first nine months of 2025 from $873.6 million in the first nine months of 2024. Average selling prices in the first nine months of 2025 decreased to $1,301 per ton, compared with $1,338 per ton in the first nine months of 2024. The decrease in sales was attributable to a $37 decrease in average selling prices per ton in the first nine months of 2025 compared to the first nine months of 2024 and a ten thousand ton decrease in tons sold.

Cost of materials sold decreased $5.4 million, or 2.6%, to $202.7 million in the third quarter of 2025 from $208.1 million in the third quarter of 2024. Cost of materials sold decreased $60.1 million, or 8.7%, to $627.6 million in the first nine months of 2025 from $687.7 million in the first nine months of 2024.

As a percentage of net sales, gross profit (as defined in footnote (a) in the table above) increased to 24.4% in the third quarter of 2025 compared to 21.4% in the third quarter of 2024. As a percentage of net sales, gross profit (as defined in footnote (a) in the table above) increased to 25.0% in the first nine months of 2025 compared to 21.3% in the first nine months of 2024. The increase in the gross profit as a percentage of net sales in the first nine months of 2025 when compared to the first nine months of 2024 was due to the inclusion of MetalWorks revenue but no corresponding tons sold and the average cost of inventory decreasing more than the average selling prices.

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Operating expenses in the third quarter of 2025 increased $8.0 million, or 14.1%, to $64.3 million from $56.3 million in the third quarter of 2024. As a percentage of net sales, operating expenses increased to 24.0% in the third quarter of 2025 compared to 21.3% in the third quarter of 2024. The increase in operating expenses on a dollar basis was primarily attributable to the inclusion of MetalWorks operating expenses and higher year-over-year payroll and warehousing expenses in 2025.

Operating expenses in the first nine months of 2025 increased $23.5 million, or 13.7%, to $194.9 million from $171.4 million in the first nine months of 2024. As a percentage of net sales, operating expenses increased to 23.0% in the first six months of 2025 compared to 18.9 % in the first nine months of 2024. The increase in operating expenses on a dollar basis was primarily attributable to the inclusion of MetalWorks operating expenses and higher year-over-year payroll, distribution and warehousing expenses in 2025.

Operating income in the third quarter of 2025 totaled $1.3 million, or 0.5% of net sales, compared to operating income of $0.4 million, or 0.2% of net sales, in the third quarter of 2024. Operating income in the first nine months of 2025 totaled $14.5 million, or 1.7% of net sales, compared to operating income of $14.5 million, or 1.7% of net sales, in the first nine months of 2024.

Tubular and pipe products

The following table presents selected operating results for our tubular and pipe products segment for the periods indicated (dollars are shown in thousands):

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2025				2024				2025				2024
			% of net				% of net				% of net				% of net
	$		sales		$		sales		$		sales		$		sales
Net sales	$	81,571		100.0	$	79,454		100.0	$	237,968		100.0	$	263,209		100.0
Cost of materials sold (a)		56,377		69.1		51,601		64.9		161,044		67.7		173,541		65.9
Gross profit (b)		25,194		30.9		27,853		35.1		76,924		32.3		89,668		34.1
Operating expenses (c)		21,207		26.0		21,377		26.9		64,927		27.3		69,068		26.3
Operating income	$	3,987		4.9	$	6,476		8.2	$	11,997		5.0	$	20,600		7.8

(b) Gross profit is calculated as net sales less the cost of materials sold.

Net sales increased $2.1 million, or 2.7%, to $81.6 million in the third quarter of 2025 from $79.5 million in the third quarter of 2024. The increase is a result of a 2.5% increase in average selling prices and a 0.2% increase in shipping volume during the third quarter of 2025 compared to the third quarter of 2024.

Net sales decreased $25.2 million, or 9.6%, to $238.0 million in the first nine months of 2025 from $263.2 million in the first nine months of 2024. The decrease is a result of a 7.0% decrease in shipping volume and a 2.8% decrease in average selling prices during the first nine months of 2025 compared to the first nine months of 2024.

Cost of materials sold increased $4.8 million, or 9.3%, to $56.4 million in the third quarter of 2025 from $51.6 million in the third quarter of 2024. The increase in cost of materials sold was due to the increased material costs discussed above. Cost of materials sold decreased $12.5 million, or 7.2%, to $161.0 million in the first nine months of 2025 from $173.5 million in the first nine months of 2024. The decrease in cost of materials sold was due to the 7.0% decrease in shipping volume. We recorded $0.1 million and $0.9 million of LIFO expense, respectively, during the three and nine months ended September 30, 2025. We recorded $2.0 million and $2.6 million of LIFO income, respectively, during the three and nine months ended September 30, 2024.

As a percentage of net sales, gross profit (as defined in footnote (b) in the table above) decreased to 30.9% in the third quarter of 2025 compared to 35.1% in the third quarter of 2024. As a percentage of net sales, the LIFO expense recorded in the third quarter of 2025 reduced gross profit by 0.2%. As a percentage of net sales, the LIFO income recorded in the third quarter of 2024 increased gross profit by 2.5%. The decrease in the gross profit as a percentage of net sales in the third quarter of 2025 when compared to the third quarter of 2024 was due to average cost of inventory increasing more than the average selling prices. As a percentage of net sales, gross profit (as defined in footnote (b) in the table above) decreased to 32.3% in the first nine months of 2025 compared to 34.1% in the first nine months of 2024. As a percentage of net sales, the LIFO expense recorded in the first nine months of 2025 decreased gross profit by 0.4%. As a percentage of net sales, the LIFO income recorded in the first nine months of 2024 increased gross profit by 1.0%. The decrease in the gross profit as a percentage of net sales in the first nine months of 2025 when compared to the first nine months of 2024 was due to the average selling prices decreasing more than the average cost of inventory.

Operating expenses in the third quarter of 2025 decreased $0.2 million, or 0.8%, to $21.2 million from $21.4 million in the third quarter of 2024. Operating expenses decreased to 26.0% of net sales in the third quarter of 2025 compared to 26.9% in the third quarter of 2024. Operating expenses in the first nine months of 2025 decreased $4.1 million, or 6.0%, to $64.9 million from $69.1 million in the first nine months of 2024. Operating expenses increased to 27.3% of net sales in the first nine months of 2025 compared to 26.3% in the first nine months of 2024. The decrease in operating expenses on a dollar basis was primarily due to lower variable performance-based incentive compensation and lower operating expenses associated with lower shipments.

Operating income in the third quarter 2025 totaled $4.0 million, or 4.9% of net sales, compared to $6.5 million, or 8.2% of net sales, in the third quarter of 2024. Operating income in the first nine months 2025 totaled $12.0 million, or 5.0% of net sales, compared to $20.6 million, or 7.8% of net sales, in the first nine months of 2024.

Corporate expenses

Corporate expenses increased $0.4 million, or 10.0%, to $4.4 million in the third quarter of 2025 from $4.0 million in the third quarter of 2024. Corporate expense primarily increased due to higher year-over-year professional service fees. Corporate expenses increased $1.1 million, or 8.7%, to $14.0 million in the first nine months of 2025 from $12.9 million in the first nine months of 2024. Corporate expense primarily increased due to higher year-over-year payroll and professional service fees.

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Liquidity, Capital Resources and Cash Flows

Our principal capital requirements include funding working capital needs, purchasing, upgrading and acquiring processing equipment and facilities, making acquisitions and paying dividends. We use cash generated from operations and borrowings under our ABL Credit Facility to fund these requirements.

We believe that funds available under our ABL Credit Facility, together with funds generated from operations, will be sufficient to provide us with the liquidity necessary to fund anticipated working capital requirements, capital expenditure requirements, our dividend payments, and any share repurchases and business acquisitions over at least the next 12 months and for the foreseeable future thereafter. In the future, we may, as part of our business strategy, acquire and dispose of assets or other companies in the same or complementary lines of business, or enter into or exit strategic alliances and joint ventures. Accordingly, the timing and size of our capital requirements are subject to change as business conditions warrant and opportunities arise.

Operating Activities

For the nine months ended September 30, 2025, we generated $59.5 million of net cash from operations, of which $35.2 million was generated from operating activities and $24.3 million was generated from working capital. For the nine months ended September 30, 2024, we generated $19.1 million of net cash for operations, of which $44.8 million was generated from operating activities and $25.7 million was used for working capital requirements.

Net cash from operating activities totaled $35.2 million during the first nine months of 2025 and was mainly comprised of net income of $9.9 million, the non-cash depreciation and amortization addback of $25.0 million, and changes in other long-term liabilities of $9.2 million, partially offset by changes in other long-term assets of $9.8 million. Net cash from operating activities totaled $44.8 million during the first nine months of 2024 and was mainly comprised of net income of $19.1 million, the non-cash depreciation and amortization addback of $22.4 million and changes in other long-term liabilities of $6.6 million, partially offset by changes in other long-term assets of $5.0 million.

Working capital at September 30, 2025 totaled $417.8 million, a $30.2 million decrease from December 31, 2024. The decrease was primarily attributable to a $62.6 million increase in accounts payable and outstanding checks and a $6.7 million decrease in inventory, partially offset by a $43.5 million increase in accounts receivable and a $1.9 million increase in prepaid expenses and other.

Investing Activities

Net cash used for investing activities totaled $24.9 million during the nine months ended September 30, 2025 and $22.3 million during the nine months ended September 30, 2024 and consisted of capital expenditures attributable to additional processing and automation equipment at our existing facilities.

Financing Activities

During the first nine months of 2025, $39.0 million of cash was used for financing activities, which primarily consisted of $31.5 million of net repayments under our ABL Credit Facility, $5.4 million of dividends paid, $1.3 million of credit facility fees and expenses related to the amendment of the ABL Credit Facility and $0.8 million of principal payments under finance lease obligations. During the first nine months ended of 2024, $1.0 million was generated from financing activities, which primarily consisted of $7.1 million of net borrowings under our ABL Credit Facility partially offset by $5.0 million of dividends paid, $0.9 million of principal payments under finance lease obligations and $0.1 million of credit facility fees and expenses related to the amendment of the ABL Credit Facility.

Dividends paid were $5.4 million and $5.0 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. In October 2025, our Board of Directors approved a regular quarterly dividend of $0.16 per share, which will be paid on December 15, 2025 to shareholders of record as of December 1, 2025. Regular dividend distributions in the future are subject to the availability of cash, the $15.0 million annual limitation on cash dividends and common stock repurchases under our ABL Credit Facility and continuing determination by our Board of Directors that the payment of dividends remains in the best interest of our shareholders.

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Stock Repurchase Program

In 2015, our Board of Directors authorized a stock repurchase program of up to 550,000 shares of our issued and outstanding common stock, which could include open market repurchases, negotiated block transactions, accelerated stock repurchases or open market solicitations for shares, all or some of which may be effected through Rule 10b5-1 plans. Repurchased shares will be held in our treasury, or canceled and retired as our Board of Directors may determine from time to time. Any repurchases of common stock are subject to the covenants contained in the ABL Credit Facility. Under the ABL Credit Facility, we may repurchase common stock and pay dividends up to $15.0 million in the aggregate during any trailing twelve months without restrictions. Purchases in excess of $15.0 million require us to (i) maintain availability in excess of 20% of the aggregate revolver commitments ($125.0 million at September 30, 2025) or (ii) to maintain availability equal to or greater than 15% of the aggregate revolver commitments ($93.8 million at September 30, 2025) and we must maintain a pro forma ratio of earnings before interest, taxes, depreciation and amortization, or EBITDA, minus certain capital expenditures and cash taxes paid to fixed charges of at least 1.00 to 1.00. The timing and amount of any repurchases under the stock repurchase program will depend upon several factors, including market and business conditions, and limitations under the ABL Credit Facility, and repurchases may be discontinued at any time. As of September 30, 2025, 360,212 shares remain authorized for repurchase under the program.

There were no shares repurchased during 2025 or 2024.

Debt Arrangements

On April, 17 2025, we entered into a Ninth Amendment to Third Amended and Restated Loan and Security Agreement, which extended the maturity date of the ABL Credit Facility to April 17, 2030. The amendment also reset the Machinery and Equipment and Real Estate advance rates. Additional financing fees incurred in connection with the amendment will be amortized over the length of the amended ABL Credit Facility.

Our ABL Credit Facility is collateralized by our accounts receivable, inventory, personal property and certain real estate. The $625 million ABL Credit Facility consists of: (i) a revolving credit facility of up to $595 million, including a $20 million sub-limit for letters of credit, and (ii) a first in, last out revolving credit facility of up to $30 million. Under the terms of the ABL Credit Facility we may, subject to the satisfaction of certain conditions, request additional commitments under the revolving credit facility in the aggregate principal amount of up to $200 million to the extent that existing or new lenders agree to provide such additional commitments.

The ABL Credit Facility contains customary representations and warranties and certain covenants that limit our ability to, among other things: (i) incur or guarantee additional indebtedness; (ii) pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt; (iii) make investments; (iv) sell assets; (v) enter into agreements that restrict distributions or other payments from restricted subsidiaries to us; (vi) incur liens securing indebtedness; (vii) consolidate, merge or transfer all or substantially all of their assets; and (viii) engage in transactions with affiliates. In addition, the ABL Credit Facility contains a financial covenant which requires if any commitments or obligations are outstanding and the our availability is less than the greater of $30 million or 10.0% of the aggregate amount of revolver commitments ($62.5 million at September 30, 2025) or 10.0% of the aggregate borrowing base ($55.7 million at September 30, 2025), then we must maintain a ratio of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) minus certain capital expenditures and cash taxes paid to fixed charges of at least 1.00 to 1.00 for the most recent twelve fiscal month period.

As of September 30, 2025, we were in compliance with our covenants and had approximately $312 million of availability under the ABL Credit Facility.

We have the option to borrow under its revolver based on the agent’s base rate plus a premium ranging from 0.00% to 0.25% or the Secured Overnight Financing Rate, or SOFR, plus a premium ranging from 1.25% to 2.75%.

On August 15, 2024, we entered into a two-year forward starting fixed rate interest rate hedge in order to eliminate the variability of cash interest payments on $75 million of the outstanding SOFR based borrowings under the ABL Credit Facility. The interest rate hedge fixed the rate at 3.82%. Although we are exposed to credit loss in the event of nonperformance by the other party to the interest rate hedge agreement, we anticipate performance by the counterparty.

As of September 30, 2025 and December 31, 2024, $1.9 million and $1.1 million, respectively, of bank financing fees were included in “Prepaid expenses and other” and “Other long-term assets” on the accompanying Consolidated Balance Sheets. The financing fees are being amortized over the five-year term of the ABL Credit Facility and are included in “Interest and other expense on debt” on the accompanying Consolidated Statements of Comprehensive Income.

Critical Accounting Policies

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on the consolidated financial statements included in this Quarterly Report on Form 10-Q, which have been prepared in conformity with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements. We monitor and evaluate our estimates and assumptions, based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.

We review our financial reporting and disclosure practices and accounting practices quarterly to ensure they provide accurate and transparent information relative to the current economic and business environment. For further information regarding the accounting policies that we believe to be critical accounting policies that affect our more significant judgments and estimates used in preparing our consolidated financial statements, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2024.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our principal raw materials are carbon, coated and stainless steel, aluminum, pipe and tube, flat rolled coil, sheet and plate that we typically purchase from multiple primary metals producers. The metals industry as a whole is cyclical and, at times, pricing and availability of metals can be volatile due to numerous factors beyond our control, including general domestic and international economic conditions, the levels of metals imported into the United States, labor costs, sales levels, competition, levels of inventory held by other metals service centers, consolidation of metals producers, new global capacity by metals producers, higher raw material costs for the producers of metals, import duties and tariffs and currency exchange rates. This volatility can significantly affect the availability and cost of raw materials for us.

We, like many other metals service centers, maintain substantial inventories of metals to accommodate the short lead times and just‑in‑time delivery requirements of our customers. Accordingly, we purchase metals in an effort to maintain our inventory at levels that we believe to be appropriate to satisfy the anticipated needs of our customers based upon historic buying practices, supply agreements with customers and market conditions. Our commitments to purchase metals are generally at prevailing market prices in effect at the time we place our orders. We have no long‑term, fixed‑price metals purchase contracts. When metals prices increase, competitive conditions will influence how much of the price increase we can pass on to our customers. To the extent we are unable to pass on future price increases in our raw materials to our customers, the net sales and profitability of our business could be adversely affected. When metals prices decline, customer demands for lower prices and our competitors’ responses to those demands could result in lower sale prices and, consequently, lower gross profits and inventory lower of cost or net realizable value adjustments as we sell existing inventory. Significant or rapid declines in metals prices or reductions in sales volumes could adversely impact our ability to remain in compliance with certain financial covenants in the ABL Credit Facility, as well as result in us incurring inventory or intangible asset impairment charges. Changing metals prices therefore could significantly impact our net sales, gross profits, operating income and net income.

Rising metals prices result in higher working capital requirements for us and our customers. Some customers may not have sufficient credit lines or liquidity to absorb significant increases in the price of metals. While we have generally been successful in the past in passing on producers’ price increases and surcharges to our customers, there is no guarantee that we will be able to pass on price increases to our customers in the future. Declining metals prices have generally adversely affected our net sales and net income, while increasing metals prices have generally favorably affected our net sales and net income.

Approximately 43% and 48%, respectively, of our consolidated net sales during the first nine months of 2025 and 2024 were directly related to industrial machinery and equipment manufacturers and their fabricators.

Inflation generally affects us by increasing the cost of employee wages and benefits, transportation services, energy, borrowings under our credit facility, processing equipment, and purchased metals. General inflation, including increases in the price of metals and increased labor and distribution expense, did not materially affect our operations during the first nine months of 2025, and it has not had a material effect on our financial results during the last two years, but may have a significant impact in future years.

We are exposed to the impact of fluctuating metals prices and interest rate changes. During 2025 and 2024, we entered into metals swaps at the request of customers. These derivatives have not been designated as hedging instruments. For certain customers, we enter into contractual relationships that entitle us to pass through the economic effect of trading positions that we take with other third parties on our customers’ behalf.

Our primary interest rate risk exposure results from variable rate debt. On August 15, 2024, we entered into a two-year forward starting fixed rate interest rate hedge in order to eliminate the variability of cash interest payments on $75 million of the outstanding SOFR based borrowings under the ABL Credit Facility. The interest rate hedge fixed the rate at 3.82%.

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Item 4. Controls and Procedures

The evaluation required by Rule 13a-15(e) of the Securities Exchange Act of 1934, or the Exchange Act, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q has been carried out under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. These disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in reports that are filed with or submitted to the SEC is: (i) accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures and (ii) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2025, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting that occurred during the third quarter of 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. OTHER INFORMATION

Items 1, 2, 3 and 4 of this Part II are either inapplicable or are answered in the negative and are omitted pursuant to the instructions to Part II.

Item 1A. Risk Factors

Please consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. Other than the risk factors provided below relating to the Merger, there have been no material changes or additions to our risk factors discussed in such report that could materially affect the Company’s business, financial condition, or future results.

The consideration the Company’s shareholders will receive in the Merger is uncertain because the market price of Ryerson Common Stock will fluctuate.

Subject to the terms and conditions set forth in the Merger Agreement, upon consummation of the Merger, each share of the Company’s common stock issued and outstanding immediately prior to the effective time of the Merger will be canceled and converted into and thereafter represent the right to receive that number of validly issued, fully paid and non-assessable shares of Ryerson Common Stock equal to 1.7105, rounded down to the nearest whole share and, if applicable, the cash amount to be paid in lieu of fractional shares. The exchange ratio in the Merger is fixed, and there will be no adjustment to the consideration to be received by the Company’s shareholders in the Merger for changes in the market price of Ryerson Common Stock or the Company’s common stock prior to the completion of the Merger. The market value of Ryerson Common Stock may fluctuate prior to the closing of the Merger as a result of a variety of factors, including reactions from the financial markets to the Merger, general market and economic conditions, changes in Ryerson’s business, operations and prospects and regulatory considerations. Such factors are difficult to predict and in many cases may be beyond the Company’s control or Ryerson’s control. The actual value of the consideration to be received by the Company’s shareholders at the completion of the Merger will depend on the market value of Ryerson Common Stock at that time. This market value may differ, possibly materially, from the market value of the Company’s shares of common stock at the time the Merger Agreement was entered into or at any other time.

The Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed.

The Merger Agreement contains a number of conditions that must be satisfied or waived in order to complete the Merger. Those conditions include, among others:

● the adoption of the Merger Agreement by (i) a majority of the Company’s shareholders and (ii) a majority of the stockholders of Ryerson;

● the Ryerson Common Stock issuable in connection with the Merger having been approved for listing on the New York Stock Exchange;

● the absence of any laws or orders in any jurisdiction in which Ryerson or the Company has material assets or material business operations prohibiting the consummation of the Merger;

● Ryerson’s registration statement on Form S-4 having become effective under the Securities Act of 1933 and the absence of any stop order or action or proceeding by or before the SEC seeking a stop order;

● the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976;

● subject to certain materiality exceptions set forth in the Merger Agreement, the accuracy of the respective representations and warranties of each of the Company and Ryerson under the Merger Agreement;

● the receipt by each of the Company and Ryerson from qualified counsel of a respective written opinion in connection with the consummation of the Merger based on the facts, representations, assumptions and exclusions set forth in such written opinion, to the effect that the Merger will qualify for the tax treatment intended by the Merger Agreement;

● the absence of a material adverse effect on the Company and Ryerson (as described in the Merger Agreement); and

● the performance or compliance by the Company and Ryerson with their respective covenants and agreements in all material respects or as otherwise specified in the Merger Agreement.

The conditions to the closing of the Merger may not be fulfilled in a timely manner or at all, and, accordingly, the Merger may be delayed or may not be completed. In addition, if the Merger is not completed by April 28, 2026 (subject to the Company’s and Ryerson’s ability to extend the date to July 28, 2026), either Ryerson or the Company may choose not to proceed with the Merger. The parties can mutually decide to terminate the Merger Agreement at any time. In addition, Ryerson could determine that it is unwilling or unable to close the Merger.

The price of the Company’s common stock, as well as the Company’s financial results, may be negatively impacted if the Merger is not completed.

If the Merger is not completed for any reason, the Company’s business and financial results may be adversely affected, including as follows:

● the Company may experience negative reactions from the financial markets, including negative impacts on the market price of its common stock;

● the manner in which customers, suppliers, business partners and other third parties perceive the Company may be negatively impacted, which in turn could affect the Company’s ability to compete for new business or maintain existing business in the marketplace more broadly;

● the Company may experience negative reactions from employees, which may adversely affect, among other things, productivity, employee turnover and occupational safety; and

● the Company has and will continue to expend significant time and resources that could otherwise have been spent on its existing businesses and the pursuit of other opportunities that could have been beneficial to the Company, and its ongoing business and financial results may be adversely affected.

In addition to the above risks, if the Merger Agreement is terminated and the Company’s Board of Directors seeks an alternative transaction, the Company’s shareholders cannot be certain that the Company will be able to find a party willing to engage in a transaction on more attractive terms than the Merger. If the Merger Agreement is terminated under specified circumstances, the Company also may be required to pay Ryerson a termination fee.

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The Merger Agreement limits the Company’s ability to pursue alternatives to the Merger.

The Merger Agreement contains provisions that may discourage a third party from submitting an acquisition proposal to the Company that might result in greater value to the Company’s shareholders than the Merger, or may result in a potential competing acquirer proposing to pay a lower per share price to acquire the Company than it might otherwise have proposed to pay. These provisions include a general prohibition on the Company’s soliciting or, subject to certain exceptions relating to the exercise of fiduciary duties by the Company’s Board of Directors, entering into discussions with any third party regarding any acquisition proposal or offer for a competing transaction, and a termination fee that is payable to Ryerson if the Company terminates the Merger Agreement to accept a superior acquisition proposal.

While the Merger is pending, the Company may be exposed to a number of business uncertainties and related adverse effects on the Company’s business.

Uncertainty about the effect of the Merger on employees, suppliers and customers may have an adverse effect on the Company. These uncertainties may impair the Company’s relationships with collectively bargained employees and the Company’s ability to attract, retain and motivate key personnel until the Merger is completed, and could cause suppliers, customers, partners and others that deal with the Company to seek to change the Company’s existing business relationships. In addition, the Merger Agreement restricts the Company from entering into certain corporate transactions and taking other specified actions without the consent of Ryerson, and generally requires the Company to continue its operations in the ordinary course, until completion of the Merger. These restrictions may prevent the Company from pursuing attractive business opportunities that may arise prior to the completion of the Merger.

Merger-related costs may exceed the Company’s expectations.

The Company has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement, including, among others, fees paid to financial and legal advisors, employee retention costs, severance and benefit costs and filing fees. Many of these costs will be borne by the Company even if the Merger is not completed and could have an adverse effect on the Company’s financial condition and operating results.

In connection with the Merger, the Company may lose management personnel and other employees, which could adversely impact the Company’s future business and operations.

The Company is dependent on the experience and industry knowledge of its officers and other employees to execute the Company’s business plans. The Company’s success depends in part upon its ability to retain management personnel and other employees. The Company’s current and prospective employees may experience uncertainty about their roles within the combined company following the Merger, which may have an adverse effect on the Company’s ability to attract or retain management and other personnel while the Merger is pending.

The Company and its directors may be targets of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Merger from being completed.

Securities class action lawsuits and derivative lawsuits are often brought against public companies and their directors when companies enter into agreements for transactions similar to those contemplated by the Merger Agreement, and such lawsuits may be brought against the Company and its directors in connection with the Merger Agreement. Even if the lawsuits are without merit, these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on the Company’s liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, then that injunction may delay or prevent the Merger from being completed, which may adversely affect the Company’s business, financial position and results of operations.

The Merger may be less accretive than expected, or may be dilutive, and the combined company may fail to realize all of the anticipated benefits of the proposed Merger.

The success of the proposed Merger will depend, in part, on the combined company’s ability to realize the anticipated benefits and cost savings from combining the Company’s and Ryerson’s businesses. The anticipated benefits and cost savings of the proposed Merger may not be realized fully or at all, may take longer to realize than expected, may require more non-recurring costs and expenditures to realize than expected or could have other adverse effects that the Company and Ryerson do not currently foresee. Some of the assumptions that the companies have made, such as with respect to anticipated operating synergies or the costs associated with realizing such synergies; significant long-term cash flow generation; and the benefits of the combined enterprise, may not be realized. The integration process may result in the loss of key employees, the disruption of ongoing businesses or inconsistencies in standards, controls, procedures and policies. There could also be potential unknown liabilities and unforeseen expenses associated with the Merger that were not discovered in the course of performing due diligence. Any of the foregoing factors could adversely affect the combined company’s business, financial position and results of operations.

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Item 5. Other Information

Trading Arrangements

During the quarter ended September 30, 2025, no director or officer (as defined in Rule 16a-1(f) promulgated under the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408 of Regulation S-K).

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Item 6. Exhibits

Exhibit	Description of Document	Reference

31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith

31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith

32.1	Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith

32.2	Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith

101	The following materials from Olympic Steel’s Quarterly Report on Form 10-Q for the period ended September 30, 2025, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Comprehensive Income (Loss), (iii) the Consolidated Statements of Cash Flows, (iv) the Supplemental Disclosures of Cash Flow Information, (v) the Consolidated Statements of Shareholders’ Equity, (vi) Notes to Unaudited Consolidated Financial Statements and (vii) document and entity information.

104	Cover Pager Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	OLYMPIC STEEL, INC. (Registrant)

Date: October 30, 2025	By:	/s/ Richard T. Marabito
	Richard T. Marabito
	Chief Executive Officer

	By:	/s/ Richard A. Manson
	Richard A. Manson
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

OLYMPIC STEEL INC 10-Q