Company: ZEUS
Filing Date: 2025-10-29
Form Type: 425
Source: 0001193125-25-256374
Chunk: 2

Company: OLYMPIC STEEL INC
Filing Date: 2025-10-29
Form: 425
Chunk 2
---
 line with expectations. Looking ahead to the fourth quarter of 2025, we expect volumes to soften during the quarter by 5 to 7%. This aligns
with typical seasonality patterns as our customers slow production around the holidays, and it also reflects our anticipation that the current demand challenges will persist, at least through the close of the year.

From a pricing perspective, we anticipate that the current tariff structure will continue to be nominally supportive, leading to what we
expect to be flat to 2% higher average selling prices, resulting in revenues in the range of $1.07 to $1.11 billion. We expect that gross margins will continue to be under pressure in the fourth quarter, given elevated input prices and the
recessed demand environment. In all, we forecast fourth quarter adjusted EBITDA, excluding LIFO, in the range of $33 to $37 million and net loss per share in the range of $0.28 to $0.22 per diluted share. Given projected LIFO expenses and
depreciation higher than normalized go forward CapEx of 50 to 55 million, we expect LIFO expense to be between $10 and $14 million in the quarter and net CapEx to finish the year within our target range of $50 million.

Turning to the balance sheet and cash flow highlights. We ended the third quarter with $500 million in total debt and $470 million
in net debt, which represents a decrease of $10 million and $9 million, respectively, compared to the prior quarter. As a result of incremental improvements in both our net debt and trailing 12 month adjusted EBITDA, excluding LIFO, our
third quarter leverage ratio came in at 3.7 times, moving us closer to our target range of 0.5 to 2.0 times. As we progress through the fourth quarter, we expect cash flow generation to continue moving our leverage ratio back towards our target
range.

From a global liquidity perspective, the company’s profile remained healthy during the third quarter, and we ended the
period with $521 million of liquidity, compared to $485 million at the end of the second quarter. Third quarter operating cash use of $8.3 million was primarily driven by the net loss generated. We ended the quarter with a cash
conversion cycle of 68 days, which compares to 66 for the prior quarter as our higher value inventory added two days of supply while our payables and receivable cycles remain consistent. I’ll now turn