Company: ZEUS
Filing Date: 2025-10-29
Form Type: 425
Source: 0001193125-25-256374
Chunk: 21

Company: OLYMPIC STEEL INC
Filing Date: 2025-10-29
Form: 425
Chunk 21
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, and better that that gets you to 6% to 8%.

And then when you get
to that top quartile, you start to see 8% to 10% EBITDA margins, which is really a function of being able to sweat the assets to a greater extent. Your demand is going up, you get some holding gains in inventory, but you also get more value add,
because at that point, when the economy is doing better you also get more outsourcing of manufacturing where some of our customers bring things in house during times like this. As everybody gets busy, they need to go out to variable resources to go
ahead and service that demand. And so, you get incremental margins on top of that. So it really is we’ve studied it over the years. It really looks like that 2% to 5%, 5% to 7%, 6% to 8% and 8% to 10%. So I hope that helps.

Alan Weber: It does. Thanks. And I guess my last question is did you talk about assuming market conditions are flattish next year or similar to this year,
kind of working capital for the combined company for next year, whether that would be a source of cash or -

Edward Lehner: Yeah. Alan, I try to give some
a little bit of insight into that in terms of what we’ve seen over time, where how much working capital does it take for us to really finance an incremental dollar of revenue? And I think if you look at that in reverse, if conditions were to
stay the same, depending on where price goes, but if conditions were to stay the same in a combined company scenario, there’s certainly working capital there to be had and there’s working capital release in free cash flow there. More to
come as we get through this signing to close period. And as we really start to really enumerate that. But again, I want to kick it over to Rick, and I know he’s got some thoughts around that as well.

Rick Marabito: No, I agree. I think, Eddie, you said it well. I think in a normal market if we just stayed in the same market conditions. So let’s not
talk about the price side of the equation. There’s big opportunity on working capital turnover, specifically on inventory, inventory sharing, improving inventory turns. Absolutely will have a positive cash flow and a working capital release
just from being more efficient.

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Alan Weber: And