Company: ZEUS
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001437749-25-032420
Chunk: 8

Company: OLYMPIC STEEL INC
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 8
Chunk 8
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 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