##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-K




|    |                                                                                         
|--- | ----------------------------------------------------------------------------------------
|(X) | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For The Year Ended December 31, 2004




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



OLYMPIC STEEL, INC.




|                                          |  |                       
|----------------------------------------- |  | ----------------------
|Ohio                                      |  | 34-1245650            
|(State or other jurisdiction of           |  | (I.R.S. Employer      
|incorporation or organization)            |  | Identification Number)
|                                         
|5096 Richmond Road, Bedford Heights, Ohio |  | 44146                 
|(Address of principal executive offices)  |  | (Zip Code)            



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




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












DOCUMENTS INCORPORATED BY REFERENCE












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TABLE OF CONTENTS



|                                                                                                                      |                                                                                                                      |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                                                                                               
|                                                                                                                      | ITEM 1. BUSINESS                                                                                                    
|                                                                                                                      | ITEM 2. PROPERTIES                                                                                                  
|                                                                                                                      | ITEM 3. LEGAL PROCEEDINGS                                                                                           
|                                                                                                                      | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                         
|PART II                                                                                                              
|                                                                                                                      | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|                                                                                                                      | ITEM 6. SELECTED FINANCIAL DATA                                                                                     
|                                                                                                                      | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                       
|                                                                                                                      | ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK                                                  
|                                                                                                                      | ITEM 8. FINANCIAL STATEMENTS                                                                                        
|SUPPLEMENTAL FINANCIAL INFORMATION Unaudited Quarterly Results of Operations (in thousands, except per share amounts)
|                                                                                                                      | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                        
|                                                                                                                      | ITEM 9A. CONTROLS AND PROCEDURES                                                                                    
|                                                                                                                      | ITEM 9B. OTHER INFORMATION                                                                                          
|PART III                                                                                                             
|                                                                                                                      | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                         
|                                                                                                                      | ITEM 11. EXECUTIVE COMPENSATION                                                                                     
|                                                                                                                      | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                             
|                                                                                                                      | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                             
|                                                                                                                      | ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                     
|PART IV                                                                                                              
|                                                                                                                      | ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K                                          
|INDEX TO EXHIBITS                                                                                                    
|SIGNATURES                                                                                                           
|EX-4.9 AM #7 TO AMENDED AND RESTATED CREDIT AGMT                                                                     
|EX-4.10 AM #8 TO AMENDED AND RESTATED CREDIT AGMT                                                                    
|EX-10.14 EXECUTIVE DEFERRED COMPENSATION PLAN                                                                        
|EX-21 LIST OF SUBSIDIARIES                                                                                           
|EX-23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCNT FIRM                                                            
|EX-24 POWERS OF ATTORNEY                                                                                             
|EX-31.1 302 CEO CERTIFICATION                                                                                        
|EX-31.2 302 CFO CERTIFICATION                                                                                        
|EX-32.1 906 CEO CERTIFICATION                                                                                        
|EX-32.2 906 CFO CERTIFICATION                                                                                        



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PART I





ITEM 1.     BUSINESS


The Company








Industry Overview








Corporate History




2



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Business Strategy and Objectives










| |   |                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our flawless execution program (Fe), which is an
    internal program that empowers employees to achieve profitable
    growth by delivering superior customer service and exceeding
    customer expectations.
|
| |  | A set of core values which is communicated and practiced
    throughout the company.                                                                                                                             
|
| |  | On-going business process enhancements and redesigns to improve
    efficiencies and reduce costs.                                                                                                               
|
| |  | Continued evolution of information and key metric reporting to
    focus managers on achieving the specific operating objectives
    mentioned above.                                                            



Investment In Value-Added Processing Equipment.




Sales And Marketing.


3



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Acquisitions.


Investments in Joint Ventures.






Management.


Products, Processing Services, and Quality Standards






4



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|                       |       |         |    |    |         |  |    |         |  |     |          |   |  |       |   |    |  |  |    |    | 
|---------------------- | ----- | ------- | -- | -- | ------- |  | -- | ------- |  | --- | -------- | - |  | ----- | - | -- |  |  | -- | -- | 
|                       |       | (a)     |    |    | (b)     |  |    |         |  | (d) |          |   | 
|Processing             |       | Eastern |    |    | Central |  |    | (c)     |  |     | Joint    |   |  |      
|Equipment              |       | Region  |    |    | Region  |  |    | Detroit |  |     | Ventures |   |  | Total |  
|                       |       |         |    |    |         |  |    |         |  |     |          |   |  |       |  
|Cutting-to-length      |       |         | 8  |    |         |  | 5  |         |  |     | 2        |   |  |       |   |    |  |  | 15 |   
|Blanking               |       |         |    |    |         |  |    |         |  |     | 4        |   |  |       |   |    |  |  | 4  |   
|Tempering (e)          |       |         | 3  |    |         |  | 1  |         |  |     |          |   |  |       |   |    |  |  | 4  |   
|Plate processing       |       |         | 7  |    |         |  | 19 |         |  |     |          |   |  |       |   |    |  |  | 26 |   
|Slitting               |       |         | 4  |    |         |  | 2  |         |  |     | 2        |   |  |       | 1 |    |  |  | 9  |   
|Shearing               |       |         | 1  |    |         |  | 5  |         |  |     |          |   |  |       | 4 |    |  |  | 10 |   
|Machining              |       |         | 16 |    |         |  |    |         |  |     |          |   |  |       |   |    |  |  | 16 |   
|Shot blasting/grinding |       |         | 1  |    |         |  | 2  |         |  |     |          |   |  |       |   |    |  |  | 3  |   
|Laser welding          |       |         |    |    |         |  |    |         |  |     |          |   |  |       | 5 |    |  |  | 5  |   
|                       |       |         |    |    |         |  |    |         |  |     |          |   |  |       |  
|                       | Total |         |    | 40 |         |  |    | 34      |  |     |          | 8 |  |       |   | 10 |  |  |    | 92 | 
|                       |       |         |    |    |         |  |    |         |  |     |          |   |  |       |  






|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(a) | Consists of seven facilities located in Cleveland, Connecticut,
    Pennsylvania and Georgia.



|    |                                                                         
|--- | ------------------------------------------------------------------------
|(b) | Consists of four facilities located in Illinois, Minnesota and
    Iowa.



|    |                                                                                             
|--- | --------------------------------------------------------------------------------------------
|(c) | Consists of one facility located in Michigan, primarily serving
    the automotive industry.



|    |                                                                                               
|--- | ----------------------------------------------------------------------------------------------
|(d) | Consists of two facilities located in Michigan, primarily
    serving the automotive industry.



|    |                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------
|(e) | In addition to the temper mills located in Cleveland and Iowa,
    tempering includes press brake equipment.



Customers and Distribution




5



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Suppliers






Competition






6



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Management Information Systems




Inventory Management.


Differentiated Services To Customers.


Internal Communications.


E-Commerce and Advanced Customer Interaction.






Employees






Service Marks, Trade Names and Patents






7



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Government Regulation




Environmental




Cyclicality in the Steel Industry; Impact of Changing Steel
Prices








Cyclicality of Demand; Sales to the Automotive Industry






8



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Effects of Inflation




Forward-Looking Information






| |   |                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | general and global business, economic and political conditions;                                                                                                                             
|
| |  | competitive factors such as the availability and pricing of
    steel and fluctuations in customer demand;                                                                                  
|
| |  | our ability to pass steel price increases to our customers;                                                                                                                                 
|
| |  | the ability of our customers (especially in the automotive
    industry) to maintain their credit availability in periods of
    escalating steel prices;                                   
|
| |  | layoffs or work stoppages by our own or our suppliers or
    customers personnel;                                                                                                         
|
| |  | equipment malfunctions or installation delays;                                                                                                                                              
|
| |  | the adequacy of our information technology and business system
    software;                                                                                                                
|
| |  | the successes of our joint ventures;                                                                                                                                                        
|
| |  | the successes of our strategic efforts and initiatives to
    increase sales volumes, improve cash flows and reduce debt,
    maintain, or improve inventory turns and reduce our costs; and
|
| |  | customer, supplier, and competitor consolidation or insolvency.                                                                                                                             



9



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ITEM 2.     PROPERTIES




|             |  |                               |  |         |  |                                                                        |  |               
|------------ |  | ----------------------------- |  | ------- |  | ---------------------------------------------------------------------- |  | --------------
|             |  |                               |  | Square  |  |                                                                        |  | Owned or      
|Operation    |  | Location                      |  | Feet    |  | Function                                                               |  | Leased        
|             |  |                               |  |         |  |                                                                        |  |               
|Cleveland    |  | Bedford Heights, Ohio
    (1) |  | 127,000 |  | Corporate headquarters and coil processing and distribution
    center |  | Owned         
|             |  | Bedford Heights, Ohio
    (1) |  | 121,500 |  | Coil and plate processing, distribution center and office              |  | Owned         
|             |  | Bedford Heights, Ohio
    (1) |  | 59,500  |  | Plate processing, distribution center and offices                      |  | Leased
    (2)
|Minneapolis  |  | Plymouth, Minnesota           |  | 196,800 |  | Coil and plate processing, distribution center and offices             |  | Owned         
|             |  | Plymouth, Minnesota           |  | 112,200 |  | Plate processing, distribution center and offices                      |  | Owned         
|Detroit      |  | Detroit, Michigan             |  | 256,000 |  | Coil processing, distribution center and offices                       |  | Owned         
|South        |  | Winder, Georgia               |  | 240,000 |  | Coil processing, distribution center and offices                       |  | Owned         
|Iowa         |  | Bettendorf, Iowa              |  | 190,000 |  | Coil and plate processing, distribution center and offices             |  | Owned         
|Connecticut  |  | Milford, Connecticut          |  | 134,000 |  | Coil processing, distribution center and offices                       |  | Owned         
|Philadelphia |  | Lester, Pennsylvania          |  | 92,500  |  | Plate processing, distribution center and offices                      |  | Leased
    (3)
|Chambersburg |  | Chambersburg, Pennsylvania    |  | 87,000  |  | Plate processing and machining, distribution center and offices        |  | Owned         
|Chicago      |  | Schaumburg, Illinois          |  | 80,500  |  | Coil processing, distribution center and offices                       |  | Owned         






|    |                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Bedford Heights facilities are all adjacent properties.                                                                                                                                                    
|   
|(2) | This facility is leased from a related party pursuant to the
    terms of a triple net lease for $195,300 per year. The lease
    expires in June 2010, with one renewal option for an additional
    10 years.
|   
|(3) | The lease on this facility expires on December 31, 2005.                                                                                                                                                       






ITEM 3.     LEGAL PROCEEDINGS




10



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ITEM 4.     SUBMISSION OF MATTERS TO
A VOTE OF SECURITY HOLDERS




EXECUTIVE OFFICERS OF THE REGISTRANT














11



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PART II







|        |                                                                                                                 
|------- | ----------------------------------------------------------------------------------------------------------------
|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
    SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Price Range of Common Stock




|               |  |      |       |  |      |   |       |      |  |   |      |  |  |   |      | 
|-------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ---- |  |  | - | ---- | 
|               |  | 2004 |       |  | 2003 |  
|               |  |      |       |  |      |  
|               |  | High |       |  | Low  |   |       | High |  |   | Low  | 
|               |  |      |       |  |      |   |       |      |  |   |      | 
|First quarter  |  | $    | 14.00 |  |      | $ | 7.24  |      |  | $ | 4.10 |  |  | $ | 2.79 | 
|Second quarter |  |      | 20.42 |  |      |   | 10.89 |      |  |   | 4.25 |  |  |   | 3.35 | 
|Third quarter  |  |      | 24.69 |  |      |   | 16.95 |      |  |   | 4.91 |  |  |   | 3.71 | 
|Fourth quarter |  |      | 29.90 |  |      |   | 16.93 |      |  |   | 8.50 |  |  |   | 4.25 | 

Holders of Record




Dividends




Equity Compensation Plan Information


|                                                           |  |                      |         |  |                     |   |      |                      |  |  |       | 
|---------------------------------------------------------- |  | -------------------- | ------- |  | ------------------- | - | ---- | -------------------- |  |  | ----- | 
|                                                           |  | Number of securities |         |  |                     |   |     
|                                                           |  | to be issued         |         |  | Weighted-average    |   |      | Number of securities | 
|                                                           |  | upon exercise of     |         |  | exercise price of   |   |      | remaining available  | 
|Plan Category                                              |  | outstanding options  |         |  | outstanding options |   |      | for future issuance  | 
|                                                           |  |                      |         |  |                     |   |      |                      | 
|Equity compensation plans approved by security holders     |  |                      | 887,504 |  |                     | $ | 6.33 |                      |  |  | 3,168 | 
|Equity compensation plans not approved by security holders |  |                      |        |  |                     |   |     |                      |  |  |      | 
|                                                           |  |                      |         |  |                     |   |      |                      | 
|Totals                                                     |  |                      | 887,504 |  |                     | $ | 6.33 |                      |  |  | 3,168 | 
|                                                           |  |                      |         |  |                     |   |      |                      | 

12



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|        |                        
|------- | -----------------------
|ITEM 6. | SELECTED FINANCIAL DATA



|                                                                                                                           |          |                                       |         |       |       |   |         |      |       |   |         |       |       |      |         |     |       |   |         |       |       | 
|-------------------------------------------------------------------------------------------------------------------------- | -------- | ------------------------------------- | ------- | ----- | ----- | - | ------- | ---- | ----- | - | ------- | ----- | ----- | ---- | ------- | --- | ----- | - | ------- | ----- | ----- | 
|                                                                                                                           |          | For the Years Ended December 31,      |        
|                                                                                                                           |          |                                       |        
|                                                                                                                           |          | 2004                                  |         |       | 2003  |   |         | 2002 |       |   | 2001    |       |       | 2000 |        
|                                                                                                                           |          |                                       |         |       |       |   |         |      |       |   |         |       |       |      |        
|                                                                                                                           |          | (in thousands, except per share data) |        
|Tons Sold Data:                                                                                                            |          |                                       |         |       |       |   |         |      |       |   |         |       |       |      |         |     |       |   |         |      
|                                                                                                                           | Direct   |                                       |         | 1,171 |       |   |         | 996  |       |   |         | 1,004 |       |      |         | 936 |       |   |         | 1,008 |      
|                                                                                                                           | Toll (a) |                                       |         | 184   |       |   |         | 185  |       |   |         | 154   |       |      |         | 131 |       |   |         | 165   |      
|                                                                                                                           |          | Total                                 |         |       | 1,355 |   |         |      | 1,181 |   |         |       | 1,158 |      |         |     | 1,067 |   |         |       | 1,173 | 
|Income Statement Data:                                                                                                     |          |                                       |         |       |       |   |         |      |       |   |         |       |       |      |         |     |       |   |         |      
|Net sales (a)                                                                                                              |          | $                                     | 894,157 |       |       | $ | 472,548 |      |       | $ | 459,384 |       |       | $    | 404,803 |     |       | $ | 505,522 |      
|Gross profit                                                                                                               |          |                                       | 242,370 |       |       |   | 99,856  |      |       |   | 109,776 |       |       |      | 102,740 |     |       |   | 113,153 |      
|Operating expenses                                                                                                         |          |                                       | 139,563 |       |       |   | 99,690  |      |       |   | 103,938 |       |       |      | 99,869  |     |       |   | 113,854 |      
|Operating income (loss)                                                                                                    |          |                                       | 102,807 |       |       |   | 166     |      |       |   | 5,838   |       |       |      | 2,871   |     |       |   | (701    | )    
|Income (loss) from joint ventures                                                                                          |          |                                       | 741     |       |       |   | (1,012  | )    |       |   | 606     |       |       |      | (160    | )   |       |   | (1,425  | )    
|Interest and other financing costs                                                                                         |          |                                       | 4,655   |       |       |   | 4,155   |      |       |   | 8,071   |       |       |      | 7,733   |     |       |   | 9,347   |      
|Income (loss) from continuing operations before income
    taxes and cumulative effect of a change in accounting principle |          |                                       | 98,893  |       |       |   | (5,001  | )    |       |   | (1,627  | )     |       |      | (5,022  | )   |       |   | (11,473 | )    
|Net income (loss)                                                                                                          |          | $                                     | 60,078  |       |       | $ | (3,260  | )    |       | $ | (5,759  | )     |       | $    | (3,648  | )   |       | $ | (8,721  | )    
|Earnings Per Share Data:                                                                                                   |          |                                       |         |       |       |   |         |      |       |   |         |       |       |      |         |     |       |   |         |      
|Basic (b)                                                                                                                  |          | $                                     | 6.12    |       |       | $ | (0.34   | )    |       | $ | (0.60   | )     |       | $    | (0.38   | )   |       | $ | (0.90   | )    
|Diluted                                                                                                                    |          | $                                     | 5.88    |       |       | $ | (0.34   | )    |       | $ | (0.60   | )     |       | $    | (0.38   | )   |       | $ | (0.90   | )    
|Weighted average shares  basic                                                                                            |          |                                       | 9,816   |       |       |   | 9,646   |      |       |   | 9,637   |       |       |      | 9,588   |     |       |   | 9,677   |      
|Weighted average shares  diluted                                                                                          |          |                                       | 10,222  |       |       |   | 9,646   |      |       |   | 9,637   |       |       |      | 9,588   |     |       |   | 9,677   |      
|Balance Sheet Data (end of period):                                                                                        |          |                                       |         |       |       |   |         |      |       |   |         |       |       |      |         |     |       |   |         |      
|Current assets (c)                                                                                                         |          | $                                     | 287,307 |       |       | $ | 155,794 |      |       | $ | 162,686 |       |       | $    | 117,240 |     |       | $ | 103,837 |      
|Current liabilities                                                                                                        |          |                                       | 95,688  |       |       |   | 42,574  |      |       |   | 43,962  |       |       |      | 32,455  |     |       |   | 32,672  |      
|Working capital (c)                                                                                                        |          |                                       | 191,619 |       |       |   | 113,220 |      |       |   | 118,724 |       |       |      | 84,785  |     |       |   | 71,165  |      
|Total assets (c)                                                                                                           |          |                                       | 374,146 |       |       |   | 249,002 |      |       |   | 262,911 |       |       |      | 235,386 |     |       |   | 224,929 |      
|Total debt (c)                                                                                                             |          |                                       | 96,022  |       |       |   | 97,797  |      |       |   | 106,793 |       |       |      | 84,499  |     |       |   | 68,009  |      
|Shareholders equity                                                                                                       |          |                                       | 176,525 |       |       |   | 112,236 |      |       |   | 115,495 |       |       |      | 121,243 |     |       |   | 124,920 |      






|    |                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------
|(a) | Net sales generated from toll tons sold represented less than 3%
    of consolidated net sales for all years presented.



|    |                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Calculated by dividing net income (loss) by weighted
    average shares outstanding. There was no dilution for any
    periods prior to 2004.



|    |                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | 2000 reflects the sale of $48,000 of accounts receivable under
    the Companys former accounts receivable securitization
    program which was terminated in June 2001.

13



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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS

Overview
















Critical Accounting Policies




Allowance for Doubtful Accounts Receivable




14



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Inventory Valuation




Impairment of Long-Lived Assets




Income Taxes




Revenue Recognition




15



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Results of Operations




|                                                      |                                                                                                                            |      |        |       |      |  |        |       |   |  |        |       |  
|----------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | ---- | ------ | ----- | ---- |  | ------ | ----- | - |  | ------ | ----- | -
|                                                      |                                                                                                                            | 2004 |        |       | 2003 |  |        | 2002  |  
|                                                      |                                                                                                                            |      |        |       |      |  |        |       |  
|Net sales                                             |                                                                                                                            |      | 100.00 |       |      |  | 100.00 |       |   |  | 100.00 |      
|Cost of materials sold                                |                                                                                                                            |      | 72.89  |       |      |  | 78.87  |       |   |  | 76.10  |      
|                                                      |                                                                                                                            |      |        |       |      |  |        |       |  
|                                                      | Gross profit                                                                                                               |      |        | 27.11 |      |  |        | 21.13 |   |  |        | 23.90 |  
|Operating expenses                                    |                                                                                                                            |      | 15.61  |       |      |  | 21.10  |       |   |  | 22.63  |      
|                                                      |                                                                                                                            |      |        |       |      |  |        |       |  
|                                                      | Operating income                                                                                                           |      |        | 11.50 |      |  |        | 0.03  |   |  |        | 1.27  |  
|Income (loss) from joint ventures                     |                                                                                                                            |      | 0.08   |       |      |  | (0.21  | )     |   |  | 0.13   |      
|Financing costs                                       |                                                                                                                            |      | 0.52   |       |      |  | 0.88   |       |   |  | 1.76   |      
|                                                      |                                                                                                                            |      |        |       |      |  |        |       |  
|                                                      | Income (loss) from continuing operations before income
    taxes and cumulative effect of a change in accounting principle |      |        | 11.06 |      |  |        | (1.06 | ) |  |        | (0.36 | )
|Income tax (provision) benefit                        |                                                                                                                            |      | (4.34  | )     |      |  | 0.37   |       |   |  | 0.14   |      
|                                                      |                                                                                                                            |      |        |       |      |  |        |       |  
|                                                      | Income (loss) from continuing operations before cumulative
    effect of a change in accounting principle                  |      |        | 6.72  |      |  |        | (0.69 | ) |  |        | (0.22 | )
|Discontinued operations                               |                                                                                                                            |      |       |       |      |  |       |       |   |  | (0.57  | )    
|                                                      |                                                                                                                            |      |        |       |      |  |        |       |  
|                                                      | Income (loss) before cumulative effect of a change in
    accounting principle                                             |      |        | 6.72  |      |  |        | (0.69 | ) |  |        | (0.79 | )
|Cumulative effect of a change in accounting principle |                                                                                                                            |      |       |       |      |  |       |       |   |  | (0.46  | )    
|                                                      |                                                                                                                            |      |        |       |      |  |        |       |  
|                                                      | Net income (loss)                                                                                                          |      |        | 6.72  |      |  |        | (0.69 | ) |  |        | (1.25 | )
|                                                      |                                                                                                                            |      |        |       |      |  |        |       |  

2004 Compared to 2003














16



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2003 Compared to 2002


















17



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Liquidity and Capital Resources


















18



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Contractual Obligations




|                           |                               |       |        |           |        |   |       |           |  |   |           |        |  |         |       |       |  |   |       |       | 
|-------------------------- | ----------------------------- | ----- | ------ | --------- | ------ | - | ----- | --------- |  | - | --------- | ------ |  | ------- | ----- | ----- |  | - | ----- | ----- | 
|Contractual Obligations    |                               |       |        | Less than |        |   |       |           |  |   | More Than |       
|(amounts in thousands)     |                               | Total |        |           | 1 Year |   |       | 1-3 Years |  |   | 3-5 Years |        |  | 5 Years |      
|                           |                               |       |        |           |        |   |       |           |  |   |           |        |  |         |      
|Long-term debt obligations |                               | $     | 96,022 |           |        | $ | 4,892 |           |  | $ | 88,858    |        |  | $       | 1,056 |       |  | $ | 1,216 |      
|Operating leases           |                               |       | 6,362  |           |        |   | 1,756 |           |  |   | 2,302     |        |  |         | 1,938 |       |  |   | 366   |      
|                           |                               |       |        |           |        |   |       |           |  |   |           |        |  |         |      
|                           | Total contractual obligations |       | $      | 102,384   |        |   | $     | 6,648     |  |   | $         | 91,160 |  |         | $     | 2,994 |  |   | $     | 1,582 | 
|                           |                               |       |        |           |        |   |       |           |  |   |           |        |  |         |      

Off Balance Sheet Arrangements




Impact of Recently Issued Accounting Pronouncements









ITEM
7A.                      QUALITATIVE
AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM










Consolidated financial statements






Internal control over financial reporting


Internal Control  Integrated Framework Internal Control 
Integrated Framework




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| |                           
| | --------------------------
| | PricewaterhouseCoopers LLP





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|        |                     
|------- | --------------------
|ITEM 8. | FINANCIAL STATEMENTS

Olympic Steel, Inc.


Consolidated Statements of Operations


For The Years Ended December 31, 2004, 2003, and 2002




|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |        |   |         |         |         | 
|------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------ | ------------------------ | ------- | ------- | ------- | - | ------- | ------ | ------ | - | ------- | ------- | ------- | 
|                                                                               |                                                                                                                                | 2004                     |         |         | 2003    |   |         | 2002   |       
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|Net sales                                                                      |                                                                                                                                | $                        | 894,157 |         |         | $ | 472,548 |        |        | $ | 459,384 |        
|Cost of materials sold, exclusive of depreciation                              |                                                                                                                                |                          | 651,787 |         |         |   | 372,692 |        |        |   | 349,608 |        
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|                                                                               | Gross profit                                                                                                                   |                          |         | 242,370 |         |   |         | 99,856 |        |   |         | 109,776 |        
|Operating expenses                                                             |                                                                                                                                |                          |         |         |         |   |         |        |        |   |         |        
|                                                                               | Warehouse and processing                                                                                                       |                          |         | 42,582  |         |   |         | 33,127 |        |   |         | 35,686  |        
|                                                                               | Administrative and general                                                                                                     |                          |         | 44,820  |         |   |         | 22,901 |        |   |         | 24,008  |        
|                                                                               | Distribution                                                                                                                   |                          |         | 18,775  |         |   |         | 16,538 |        |   |         | 17,319  |        
|                                                                               | Selling                                                                                                                        |                          |         | 19,792  |         |   |         | 14,867 |        |   |         | 12,884  |        
|                                                                               | Occupancy                                                                                                                      |                          |         | 4,898   |         |   |         | 3,936  |        |   |         | 3,944   |        
|                                                                               | Depreciation                                                                                                                   |                          |         | 8,209   |         |   |         | 8,321  |        |   |         | 10,097  |        
|                                                                               | Asset impairment charge                                                                                                        |                          |         | 487     |         |   |         |       |        |   |         |        |        
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|                                                                               |                                                                                                                                | Total operating expenses |         |         | 139,563 |   |         |        | 99,690 |   |         |         | 103,938 | 
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|                                                                               | Operating income                                                                                                               |                          |         | 102,807 |         |   |         | 166    |        |   |         | 5,838   |        
|Income (loss) from joint ventures                                              |                                                                                                                                |                          | 741     |         |         |   | (1,012  | )      |        |   | 606     |        
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|                                                                               | Income (loss) before financing costs and income taxes                                                                          |                          |         | 103,548 |         |   |         | (846   | )      |   |         | 6,444   |        
|Interest and other expense on debt                                             |                                                                                                                                |                          | 4,655   |         |         |   | 4,155   |        |        |   | 8,071   |        
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|                                                                               | Income (loss) from continuing operations before income
    taxes and cumulative effect of a change in
    accounting principle |                          |         | 98,893  |         |   |         | (5,001 | )      |   |         | (1,627  | )      
|Income tax provision (benefit)                                                 |                                                                                                                                |                          | 38,815  |         |         |   | (1,741  | )      |        |   | (626    | )      
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|                                                                               | Income (loss) from continuing operations before cumulative
    effect of a change in accounting principle                      |                          |         | 60,078  |         |   |         | (3,260 | )      |   |         | (1,001  | )      
|Discontinued operations:                                                       |                                                                                                                                |                          |         |         |         |   |         |        |        |   |         |        
|                                                                               | Loss from discontinued tube operation, net of income tax benefit
    of $653 in 2002                                           |                          |         |        |         |   |         |       |        |   |         | (1,042  | )      
|                                                                               | Loss on disposition of discontinued tube operation, net of
    income tax benefit of $1,001                                    |                          |         |        |         |   |         |       |        |   |         | (1,599  | )      
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|Income (loss) before cumulative effect of a change in
    accounting principle |                                                                                                                                |                          | 60,078  |         |         |   | (3,260  | )      |        |   | (3,642  | )      
|                                                                               | Cumulative effect of a change in accounting principle, net of
    income tax benefit of $1,298                                 |                          |         |        |         |   |         |       |        |   |         | (2,117  | )      
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|Net income (loss)                                                              |                                                                                                                                | $                        | 60,078  |         |         | $ | (3,260  | )      |        | $ | (5,759  | )      
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|Basic net income (loss) per share:                                             |                                                                                                                                |                          |         |         |         |   |         |        |        |   |         |        
|                                                                               | Income (loss) from continuing operations                                                                                       |                          | $       | 6.12    |         |   | $       | (0.34  | )      |   | $       | (0.10   | )      
|                                                                               | Loss from discontinued operations                                                                                              |                          |         |        |         |   |         |       |        |   |         | (0.28   | )      
|                                                                               | Cumulative effect of a change in accounting principle                                                                          |                          |         |        |         |   |         |       |        |   |         | (0.22   | )      
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|Net income (loss) per share                                                    |                                                                                                                                | $                        | 6.12    |         |         | $ | (0.34   | )      |        | $ | (0.60   | )      
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|Weighted average shares outstanding  basic                                    |                                                                                                                                |                          | 9,816   |         |         |   | 9,646   |        |        |   | 9,637   |        
|Diluted net income (loss) per share:                                           |                                                                                                                                |                          |         |         |         |   |         |        |        |   |         |        
|                                                                               | Income (loss) from continuing operations                                                                                       |                          | $       | 5.88    |         |   | $       | (0.34  | )      |   | $       | (0.10   | )      
|                                                                               | Loss from discontinued operations                                                                                              |                          |         |        |         |   |         |       |        |   |         | (0.28   | )      
|                                                                               | Cumulative effect of a change in accounting principle                                                                          |                          |         |        |         |   |         |       |        |   |         | (0.22   | )      
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|Net income (loss) per share                                                    |                                                                                                                                | $                        | 5.88    |         |         | $ | (0.34   | )      |        | $ | (0.60   | )      
|                                                                               |                                                                                                                                |                          |         |         |         |   |         |        |       
|Weighted average shares outstanding  diluted                                  |                                                                                                                                |                          | 10,222  |         |         |   | 9,646   |        |        |   | 9,637   |        

The accompanying notes are an integral part of these
statements.


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Olympic Steel, Inc.


Consolidated Balance Sheets


As of December 31, 2004 and 2003




|                                                                                                                                                                                                            |                                            |      |         |         |      |   |         |         | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---- | ------- | ------- | ---- | - | ------- | ------- | 
|                                                                                                                                                                                                            |                                            | 2004 |         |         | 2003 |  
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|Assets                                                                                                                                                                                                      |                                            |      |         |         |      |   |         |        
|Cash                                                                                                                                                                                                        |                                            | $    | 4,684   |         |      | $ | 3,087   |        
|Accounts receivable, net                                                                                                                                                                                    |                                            |      | 93,336  |         |      |   | 56,501  |        
|Inventories                                                                                                                                                                                                 |                                            |      | 186,124 |         |      |   | 92,775  |        
|Prepaid expenses and other                                                                                                                                                                                  |                                            |      | 3,163   |         |      |   | 2,794   |        
|Assets held for sale                                                                                                                                                                                        |                                            |      |        |         |      |   | 637     |        
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|                                                                                                                                                                                                            | Total current assets                       |      |         | 287,307 |      |   |         | 155,794 | 
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|Property and equipment, at cost                                                                                                                                                                             |                                            |      | 153,235 |         |      |   | 152,085 |        
|Accumulated depreciation                                                                                                                                                                                    |                                            |      | (69,664 | )       |      |   | (62,303 | )      
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|                                                                                                                                                                                                            | Net property and equipment                 |      |         | 83,571  |      |   |         | 89,782  | 
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|Investments in joint ventures                                                                                                                                                                               |                                            |      | 2,311   |         |      |   | 1,625   |        
|Deferred financing fees, net                                                                                                                                                                                |                                            |      | 957     |         |      |   | 1,801   |        
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|                                                                                                                                                                                                            | Total assets                               |      | $       | 374,146 |      |   | $       | 249,002 | 
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|Liabilities                                                                                                                                                                                                 |                                            |      |         |         |      |   |         |        
|Current portion of long-term debt                                                                                                                                                                           |                                            | $    | 4,892   |         |      | $ | 4,877   |        
|Accounts payable                                                                                                                                                                                            |                                            |      | 63,680  |         |      |   | 31,345  |        
|Accrued payroll                                                                                                                                                                                             |                                            |      | 16,778  |         |      |   | 2,772   |        
|Other accrued liabilities                                                                                                                                                                                   |                                            |      | 10,338  |         |      |   | 3,580   |        
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|                                                                                                                                                                                                            | Total current liabilities                  |      |         | 95,688  |      |   |         | 42,574  | 
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|Credit facility revolver                                                                                                                                                                                    |                                            |      | 58,638  |         |      |   | 55,537  |        
|Term loans                                                                                                                                                                                                  |                                            |      | 29,212  |         |      |   | 33,629  |        
|Industrial revenue bonds                                                                                                                                                                                    |                                            |      | 3,280   |         |      |   | 3,754   |        
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|                                                                                                                                                                                                            | Total long-term debt                       |      |         | 91,130  |      |   |         | 92,920  | 
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|Deferred income taxes                                                                                                                                                                                       |                                            |      | 10,803  |         |      |   | 1,272   |        
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|                                                                                                                                                                                                            | Total liabilities                          |      |         | 197,621 |      |   |         | 136,766 | 
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|Shareholders Equity                                                                                                                                                                                        |                                            |      |         |         |      |   |         |        
|Preferred stock, without par value, 5,000 shares authorized, no
    shares issued or outstanding                                                                                                            |                                            |      |        |         |      |   |        |        
|Common stock, without par value, 20,000 shares authorized,
    10,039 and 9,650 issued and outstanding after deducting 653 and
    1,042 shares in treasury at December 31, 2004 and
    2003, respectively |                                            |      | 103,252 |         |      |   | 99,790  |        
|Officer note receivable                                                                                                                                                                                     |                                            |      |        |         |      |   | (749    | )      
|Retained earnings                                                                                                                                                                                           |                                            |      | 73,273  |         |      |   | 13,195  |        
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|                                                                                                                                                                                                            | Total shareholders equity                 |      |         | 176,525 |      |   |         | 112,236 | 
|                                                                                                                                                                                                            |                                            |      |         |         |      |  
|                                                                                                                                                                                                            | Total liabilities and shareholders equity |      | $       | 374,146 |      |   | $       | 249,002 | 
|                                                                                                                                                                                                            |                                            |      |         |         |      |  

The accompanying notes are an integral part of these balance
sheets.


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Olympic Steel, Inc.


Consolidated Statements of Cash Flows


For The Years Ended December 31, 2004, 2003 and 2002




|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |        |   |         |         |         |  
|------------------------------------- | -------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ------- | ------- | ------ | - | ----- | ------ | ------ | - | ------- | ------- | ------- | -
|                                      |                                                                                        | 2004                                                              |         |         | 2003   |   |       | 2002   |       
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       
|Cash flows from operating activities: |                                                                                        |                                                                   |         |         |        |   |       |        |        |   |         |        
|                                      | Net income (loss)                                                                      |                                                                   | $       | 60,078  |        |   | $     | (3,260 | )      |   | $       | (5,759  | )      
|                                      | Adjustments to reconcile net income (loss) to net cash from
    operating activities  |                                                                   |         |         |        |   |       |        |        |   |         |         |        
|                                      |                                                                                        | Depreciation and amortization                                     |         |         | 9,753  |   |       |        | 9,060  |   |         |         | 13,852  |  
|                                      |                                                                                        | Loss on disposition of discontinued tube operation, net of tax    |         |         |       |   |       |        |       |   |         |         | 1,599   |  
|                                      |                                                                                        | Loss (income) from joint ventures, net of distributions           |         |         | (686   | ) |       |        | 1,012  |   |         |         | (606    | )
|                                      |                                                                                        | Asset impairment charge                                           |         |         | 487    |   |       |        |       |   |         |         |        |  
|                                      |                                                                                        | Loss on disposition of property and equipment                     |         |         | 58     |   |       |        | 38     |   |         |         | 185     |  
|                                      |                                                                                        | Cumulative effect of a change in accounting principle, net of tax |         |         |       |   |       |        |       |   |         |         | 2,117   |  
|                                      |                                                                                        | Tax benefit from exercise of stock options                        |         |         | 1,622  |   |       |        |        |   |         |         |         |  
|                                      |                                                                                        | Long-term deferred income taxes                                   |         |         | 9,531  |   |       |        | (2,362 | ) |         |         | 3,958   |  
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       
|                                      |                                                                                        |                                                                   | 80,843  |         |        |   | 4,488 |        |        |   | 15,346  |        
|Changes in working capital:           |                                                                                        |                                                                   |         |         |        |   |       |        |        |   |         |        
|                                      | Accounts receivable                                                                    |                                                                   |         | (36,761 | )      |   |       | (8,922 | )      |   |         | (8,899  | )      
|                                      | Inventories                                                                            |                                                                   |         | (93,349 | )      |   |       | 9,062  |        |   |         | (29,550 | )      
|                                      | Prepaid expenses and other                                                             |                                                                   |         | (369    | )      |   |       | 4,015  |        |   |         | (3,295  | )      
|                                      | Accounts payable                                                                       |                                                                   |         | 32,335  |        |   |       | 2,680  |        |   |         | 8,522   |        
|                                      | Accrued payroll and other accrued liabilities                                          |                                                                   |         | 20,764  |        |   |       | (1,771 | )      |   |         | 921     |        
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       
|                                      |                                                                                        |                                                                   | (77,380 | )       |        |   | 5,064 |        |        |   | (32,301 | )      
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       
|                                      |                                                                                        | Net cash from (used for) operating activities                     |         |         | 3,463  |   |       |        | 9,552  |   |         |         | (16,955 | )
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       
|Cash flows from investing activities: |                                                                                        |                                                                   |         |         |        |   |       |        |        |   |         |        
|                                      | Capital expenditures                                                                   |                                                                   |         | (2,029  | )      |   |       | (836   | )      |   |         | (1,490  | )      
|                                      | Proceeds from disposition of property and equipment                                    |                                                                   |         | 123     |        |   |       | 1,292  |        |   |         | 1,615   |        
|                                      | Investments in joint ventures                                                          |                                                                   |         |        |        |   |       | (2,000 | )      |   |         |        |        
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       
|                                      |                                                                                        | Net cash from (used for) investing activities                     |         |         | (1,906 | ) |       |        | (1,544 | ) |         |         | 125     |  
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       
|Cash flows from financing activities: |                                                                                        |                                                                   |         |         |        |   |       |        |        |   |         |        
|                                      | Credit facility revolver borrowings (payments), net                                    |                                                                   |         | 3,101   |        |   |       | (2,023 | )      |   |         | 33,201  |        
|                                      | Scheduled repayments of long-term debt                                                 |                                                                   |         | (4,876  | )      |   |       | (6,973 | )      |   |         | (4,786  | )      
|                                      | Credit facility closing fees and expenses                                              |                                                                   |         | (700    | )      |   |       | (275   | )      |   |         | (2,225  | )      
|                                      | Repayment of officer note receivable                                                   |                                                                   |         | 675     |        |   |       |       |        |   |         |        |        
|                                      | Proceeds from exercise of stock options and employee stock
    purchases               |                                                                   |         | 1,840   |        |   |       | 24     |        |   |         | 33      |        
|                                      | Repayments of refinanced debt                                                          |                                                                   |         |        |        |   |       |       |        |   |         | (48,121 | )      
|                                      | Proceeds from debt refinancings                                                        |                                                                   |         |        |        |   |       |       |        |   |         | 42,000  |        
|                                      | Escrowed cash restricted for payment of debt                                           |                                                                   |         |        |        |   |       | 2,590  |        |   |         | (2,590  | )      
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       
|                                      |                                                                                        | Net cash from (used for) financing activities                     |         |         | 40     |   |       |        | (6,657 | ) |         |         | 17,512  |  
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       
|Cash:                                 |                                                                                        |                                                                   |         |         |        |   |       |        |        |   |         |        
|                                      | Net increase                                                                           |                                                                   |         | 1,597   |        |   |       | 1,351  |        |   |         | 682     |        
|                                      | Beginning balance                                                                      |                                                                   |         | 3,087   |        |   |       | 1,736  |        |   |         | 1,054   |        
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       
|                                      | Ending balance                                                                         |                                                                   | $       | 4,684   |        |   | $     | 3,087  |        |   | $       | 1,736   |        
|                                      |                                                                                        |                                                                   |         |         |        |   |       |        |       

The accompanying notes are an integral part of these
statements.


25



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Olympic Steel, Inc.


Consolidated Statements of Shareholders Equity


For The Years Ended December 31, 2004, 2003 and 2002




|                             |                                                                         |        |         |         |            |   |      |          |   |   |        |        |  
|---------------------------- | ----------------------------------------------------------------------- | ------ | ------- | ------- | ---------- | - | ---- | -------- | - | - | ------ | ------ | -
|                             |                                                                         |        |         | Officer |            |   |     
|                             |                                                                         | Common |         |         | Note       |   |      | Retained |  
|                             |                                                                         | Stock  |         |         | Receivable |   |      | Earnings |  
|                             |                                                                         |        |         |         |            |   |      |          |  
|Balance at December 31, 2001 |                                                                         | $      | 99,733  |         |            | $ | (704 | )        |   | $ | 22,214 |       
|                             | Net loss                                                                |        |         |        |            |   |      |         |   |   |        | (5,759 | )
|                             | Interest on officer note                                                |        |         |        |            |   |      | (34      | ) |   |        |       |  
|                             | Payment of interest on officer note                                     |        |         |        |            |   |      | 12       |   |   |        |       |  
|                             | Exercise of stock options and employee stock purchases (12
    shares)  |        |         | 33      |            |   |      |         |   |   |        |       |  
|                             |                                                                         |        |         |         |            |   |      |          |  
|Balance at December 31, 2002 |                                                                         |        | 99,766  |         |            |   | (726 | )        |   |   | 16,455 |       
|                             | Net loss                                                                |        |         |        |            |   |      |         |   |   |        | (3,260 | )
|                             | Interest on officer note                                                |        |         |        |            |   |      | (35      | ) |   |        |       |  
|                             | Payment of interest on officer note                                     |        |         |        |            |   |      | 12       |   |   |        |       |  
|                             | Exercise of stock options and employee stock purchases (7 shares)       |        |         | 24      |            |   |      |         |   |   |        |       |  
|                             |                                                                         |        |         |         |            |   |      |          |  
|Balance at December 31, 2003 |                                                                         |        | 99,790  |         |            |   | (749 | )        |   |   | 13,195 |       
|                             | Net income                                                              |        |         |        |            |   |      |         |   |   |        | 60,078 |  
|                             | Interest on officer note                                                |        |         |        |            |   |      | (23      | ) |   |        |       |  
|                             | Payment of interest on officer note                                     |        |         |        |            |   |      | 97       |   |   |        |       |  
|                             | Repayment of officer note principal                                     |        |         |        |            |   |      | 675      |   |   |        |       |  
|                             | Exercise of stock options and employee stock purchases (389
    shares) |        |         | 3,462   |            |   |      |         |   |   |        |       |  
|                             |                                                                         |        |         |         |            |   |      |          |  
|Balance at December 31, 2004 |                                                                         | $      | 103,252 |         |            | $ |     |          |   | $ | 73,273 |       
|                             |                                                                         |        |         |         |            |   |      |          |  

The accompanying notes are an integral part of these
statements.


26



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Olympic Steel, Inc.


Notes to Consolidated Financial Statements


For The Years Ended December 31, 2004, 2003, and 2002




1.     Summary of Significant
Accounting Policies:


Principles of Consolidation




Nature of Business




Accounting Estimates




Concentration Risks






Accounts Receivable






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Inventories




Property and Equipment, and Depreciation




Income Taxes




Goodwill




Revenue Recognition




Shipping and Handling Fees and Costs




Impairment




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Stock-Based Compensation






|                                     |             |                                       |        |      |      |   |        |       |   |   |        |       |  
|------------------------------------ | ----------- | ------------------------------------- | ------ | ---- | ---- | - | ------ | ----- | - | - | ------ | ----- | -
|                                     |             | Years Ended December 31,              |       
|                                     |             |                                       |       
|                                     |             | 2004                                  |        |      | 2003 |   |        | 2002  |  
|                                     |             |                                       |        |      |      |   |        |       |  
|                                     |             | (in thousands, except per share data) |       
|Net income (loss), as reported       |             | $                                     | 60,078 |      |      | $ | (3,260 | )     |   | $ | (5,759 | )    
|Pro forma expense, net of tax        |             |                                       | (2,068 | )    |      |   | (239   | )     |   |   | (134   | )    
|                                     |             |                                       |        |      |      |   |        |       |  
|Pro forma net income (loss)          |             | $                                     | 58,010 |      |      | $ | (3,499 | )     |   | $ | (5,893 | )    
|                                     |             |                                       |        |      |      |   |        |       |  
|Basic net income (loss) per share:   |             |                                       |        |      |      |   |        |       |   |   |        |      
|                                     | As reported |                                       | $      | 6.12 |      |   | $      | (0.34 | ) |   | $      | (0.60 | )
|                                     |             |                                       |        |      |      |   |        |       |  
|                                     | Pro forma   |                                       | $      | 5.91 |      |   | $      | (0.36 | ) |   | $      | (0.61 | )
|                                     |             |                                       |        |      |      |   |        |       |  
|Diluted net income (loss) per share: |             |                                       |        |      |      |   |        |       |   |   |        |      
|                                     | As reported |                                       | $      | 5.88 |      |   | $      | (0.34 | ) |   | $      | (0.60 | )
|                                     |             |                                       |        |      |      |   |        |       |  
|                                     | Pro forma   |                                       | $      | 5.68 |      |   | $      | (0.36 | ) |   | $      | (0.61 | )
|                                     |             |                                       |        |      |      |   |        |       |  

Shares Outstanding and Earnings Per Share




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|                                    |  |                                       |        |  |      |   |        |      |  |   |        |  
|----------------------------------- |  | ------------------------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | -
|                                    |  | Years Ended December 31,              |       
|                                    |  |                                       |       
|                                    |  | 2004                                  |        |  | 2003 |   |        | 2002 | 
|                                    |  |                                       |        |  |      |   |        |      | 
|                                    |  | (in thousands, except per share data) |       
|Weighted average shares outstanding |  |                                       | 9,816  |  |      |   | 9,646  |      |  |   | 9,637  |  
|Assumed exercise of stock options   |  |                                       | 406    |  |      |   |       |      |  |   |       |  
|                                    |  |                                       |        |  |      |   |        |      | 
|Weighted average diluted shares     |  |                                       | 10,222 |  |      |   | 9,646  |      |  |   | 9,637  |  
|                                    |  |                                       |        |  |      |   |        |      | 
|Net income (loss)                   |  | $                                     | 60,078 |  |      | $ | (3,260 | )    |  | $ | (5,759 | )
|Basic earnings (loss) per share     |  | $                                     | 6.12   |  |      | $ | (0.34  | )    |  | $ | (0.60  | )
|                                    |  |                                       |        |  |      |   |        |      | 
|Diluted earnings (loss) per share   |  | $                                     | 5.88   |  |      | $ | (0.34  | )    |  | $ | (0.60  | )
|                                    |  |                                       |        |  |      |   |        |      | 



Impact of Recently Issued Accounting Pronouncements






2.     Discontinued
Operations:




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|                                                                                            |  |                       |        |  
|------------------------------------------------------------------------------------------- |  | --------------------- | ------ | -
|                                                                                            |  | Year Ended 2002      
|                                                                                            |  |                      
|                                                                                            |  | (in thousands, except
|                                                                                            |  | per share data)      
|Net sales                                                                                   |  | $                     | 3,766  |  
|Loss before income taxes                                                                    |  |                       | (1,695 | )
|Loss from operations of discontinued tube operation, net of
    income tax benefit of $653  |  |                       | (1,042 | )
|Loss on disposition of discontinued tube operation, net of
    income tax benefit of $1,001 |  |                       | (1,599 | )
|                                                                                            |  |                       |        |  
|Loss from discontinued operations                                                           |  | $                     | (2,641 | )
|                                                                                            |  |                       |        |  
|Basic and diluted net loss per share from discontinued operations                           |  | $                     | (0.28  | )
|                                                                                            |  |                       |        |  

3.     Investments in Joint
Ventures:








|                        |  |                          |        |  |      |   |        |      |  |   |        | 
|----------------------- |  | ------------------------ | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                        |  | Years Ended December 31, |       
|                        |  |                          |       
|Income Statement Data:  |  | 2004                     |        |  | 2003 |   |        | 2002 | 
|                        |  |                          |        |  |      |   |        |      | 
|Net sales               |  | $                        | 46,947 |  |      | $ | 36,268 |      |  | $ | 31,067 | 
|Gross profit            |  |                          | 15,446 |  |      |   | 11,553 |      |  |   | 11,392 | 
|Operating income (loss) |  |                          | 2,281  |  |      |   | (1,294 | )    |  |   | 2,022  | 
|Net income (loss)       |  | $                        | 1,514  |  |      | $ | (2,031 | )    |  | $ | 1,208  | 

|                           |  |                    |        |  |      |   |        | 
|-------------------------- |  | ------------------ | ------ |  | ---- | - | ------ | 
|                           |  | As of December 31, |       
|                           |  |                    |       
|Balance Sheet Data:        |  | 2004               |        |  | 2003 |  
|                           |  |                    |        |  |      |  
|Current assets             |  | $                  | 15,129 |  |      | $ | 6,918  | 
|Net property and equipment |  |                    | 18,678 |  |      |   | 20,151 | 
|Current liabilities        |  |                    | 19,064 |  |      |   | 9,380  | 
|Long-term liabilities      |  | $                  | 10,453 |  |      | $ | 15,370 | 

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4.     Property and
Equipment:




|                              |                            |                    |         |        |      |   |         |        | 
|----------------------------- | -------------------------- | ------------------ | ------- | ------ | ---- | - | ------- | ------ | 
|                              |                            | As of December 31, |        
|                              |                            |                    |        
|                              |                            | 2004               |         |        | 2003 |  
|                              |                            |                    |         |        |      |  
|Land and land improvements    |                            | $                  | 9,994   |        |      | $ | 9,833   |       
|Buildings and improvements    |                            |                    | 54,664  |        |      |   | 54,603  |       
|Machinery and equipment       |                            |                    | 77,313  |        |      |   | 75,983  |       
|Furniture and fixtures        |                            |                    | 4,540   |        |      |   | 4,640   |       
|Computer equipment            |                            |                    | 6,497   |        |      |   | 6,789   |       
|Vehicles                      |                            |                    | 62      |        |      |   | 63      |       
|Construction in progress      |                            |                    | 165     |        |      |   | 174     |       
|                              |                            |                    |         |        |      |  
|                              |                            | $                  | 153,235 |        |      | $ | 152,085 |       
|Less accumulated depreciation |                            |                    | (69,664 | )      |      |   | (62,303 | )     
|                              |                            |                    |         |        |      |  
|                              | Net property and equipment |                    | $       | 83,571 |      |   | $       | 89,782 | 
|                              |                            |                    |         |        |      |  



5.     Inventories:




|                       |        |                    |         |         |      |   |        |        | 
|---------------------- | ------ | ------------------ | ------- | ------- | ---- | - | ------ | ------ | 
|                       |        | As of December 31, |        
|                       |        |                    |        
|                       |        | 2004               |         |         | 2003 |  
|                       |        |                    |         |         |      |  
|Unprocessed            |        | $                  | 141,578 |         |      | $ | 65,709 |       
|Processed and finished |        |                    | 44,546  |         |      |   | 27,066 |       
|                       |        |                    |         |         |      |  
|                       | Totals |                    | $       | 186,124 |      |   | $      | 92,775 | 
|                       |        |                    |         |         |      |  

6.     Debt:


Credit Facility








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|                              |  |                                          |  |                                                         
|----------------------------- |  | ---------------------------------------- |  | --------------------------------------------------------
|Component                     |  | Amortization                             |  | Premium Over Base                                       
|                              |  |                                          |  |                                                         
|$110,000 Revolver             |  | Not applicable                           |  | (0.75%) on Prime Borrowings                             
|                              |  |                                          |  | 1.25% on EURO Borrowings                                
|$12,000 Equipment Term Loan   |  | $200 per month, commencing February 2003 |  | (0.25%) on Prime Borrowings
    1.75% on EURO Borrowings
|$30,000 Real Estate Term Loan |  | $167 per month, commencing February 2003 |  | (0.25%) on Prime Borrowings
    1.75% on EURO Borrowings









Term Loans




|                      |  |              |      |  |          |  |      |      |  |   |        |  |  |   |        | 
|--------------------- |  | ------------ | ---- |  | -------- |  | ---- | ---- |  | - | ------ |  |  | - | ------ | 
|                      |  | Opening Rate |      |  | Rate at  |  |      |      |  |  
|Description           |  | at 1/2/04    |      |  | 12/31/04 |  |      | 2004 |  |   | 2003   | 
|                      |  |              |      |  |          |  |      |      |  |   |        | 
|Equipment Term Loan   |  |              | 3.9% |  |          |  | 4.1% |      |  | $ | 5,000  |  |  | $ | 7,400  | 
|Real Estate Term Loan |  |              | 3.9% |  |          |  | 4.1% |      |  |   | 24,167 |  |  |   | 26,167 | 
|Other                 |  |              | 4.0% |  |          |  | 4.0% |      |  |   | 45     |  |  |   | 62     | 
|                      |  |              |      |  |          |  |      |      |  |   |        | 
|                      |  |              |      |  |          |  |      |      |  | $ | 29,212 |  |  | $ | 33,629 | 
|                      |  |              |      |  |          |  |      |      |  |   |        | 

Industrial Revenue Bonds




|                                              |  |                  |      |  |      |   |       |      |  |   |       | 
|--------------------------------------------- |  | ---------------- | ---- |  | ---- | - | ----- | ---- |  | - | ----- | 
|                                              |  | Interest         |      |  |      |   |      
|Description of Bonds                          |  | Rate at 12/31/04 |      |  | 2004 |   |       | 2003 | 
|                                              |  |                  |      |  |      |   |       |      | 
|$6,000 fixed rate bonds due 1999 through 2014 |  |                  | 5.1% |  |      | $ | 3,280 |      |  | $ | 3,754 | 

Scheduled Debt Maturities, Interest, Debt Carrying
Values




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7.     Income Taxes:




|         |                 |      |        |        |      |   |        |      |  |   |      |   | 
|-------- | --------------- | ---- | ------ | ------ | ---- | - | ------ | ---- |  | - | ---- | - | 
|         |                 | 2004 |        |        | 2003 |   |        | 2002 | 
|         |                 |      |        |        |      |   |        |      | 
|Current: |                 |      |        |        |      |   |        |      |  |   |      |  
|         | Federal         |      | $      | 25,355 |      |   | $      |     |  |   | $    |  | 
|         | State and local |      |        | 3,766  |      |   |        |     |  |   |      |  | 
|         |                 |      |        |        |      |   |        |      | 
|         |                 |      | 29,121 |        |      |   |       |      |  |   |     |  
|Deferred |                 |      | 9,694  |        |      |   | (1,741 | )    |  |   | (626 | )
|         |                 |      |        |        |      |   |        |      | 
|         |                 | $    | 38,815 |        |      | $ | (1,741 | )    |  | $ | (626 | )
|         |                 |      |        |        |      |   |        |      | 



|                                       |                                                |      |         |         |      |   |         |         |  
|-------------------------------------- | ---------------------------------------------- | ---- | ------- | ------- | ---- | - | ------- | ------- | -
|                                       |                                                | 2004 |         |         | 2003 |  
|                                       |                                                |      |         |         |      |  
|Deferred tax assets:                   |                                                |      |         |         |      |   |         |        
|                                       | Inventory                                      |      | $       | 635     |      |   | $       | 419     |  
|                                       | Tax credit and net operating loss carryforward |      |         | 278     |      |   |         | 11,059  |  
|                                       | Intangibles                                    |      |         | 480     |      |   |         | 911     |  
|                                       | Allowance for doubtful accounts                |      |         | 830     |      |   |         | 315     |  
|                                       | Accrued expenses                               |      |         | 1,214   |      |   |         | 258     |  
|                                       |                                                |      |         |         |      |  
|Total deferred tax assets              |                                                |      | 3,437   |         |      |   | 12,962  |        
|                                       |                                                |      |         |         |      |  
|Deferred tax liabilities:              |                                                |      |         |         |      |   |         |        
|                                       | Property and equipment                         |      |         | (10,210 | )    |   |         | (10,260 | )
|                                       | Partnership basis differences                  |      |         | (1,351  | )    |   |         | (1,132  | )
|                                       |                                                |      |         |         |      |  
|Total deferred tax liabilities         |                                                |      | (11,561 | )       |      |   | (11,392 | )      
|                                       |                                                |      |         |         |      |  
|Deferred tax assets (liabilities), net |                                                | $    | (8,124  | )       |      | $ | 1,570   |        
|                                       |                                                |      |         |         |      |  



|                                              |  |      |      |   |      |  |      |      |  |  |      |  
|--------------------------------------------- |  | ---- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                              |  | 2004 |      |   | 2003 |  |      | 2002 | 
|                                              |  |      |      |   |      |  |      |      | 
|U.S. federal statutory rate                   |  |      | 35.0 | % |      |  | 34.0 | %    |  |  | 35.0 | %
|State and local taxes, net of federal benefit |  |      | 3.1  |   |      |  | 4.7  |      |  |  | 2.6  |  
|All other, net                                |  |      | 1.1  |   |      |  | (3.9 | )    |  |  | 0.9  |  
|                                              |  |      |      |   |      |  |      |      | 
|Effective income tax rate                     |  |      | 39.2 | % |      |  | 34.8 | %    |  |  | 38.5 | %
|                                              |  |      |      |   |      |  |      |      | 

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8.     Retirement Plans:










9.     Stock Options:




35



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|                                 |                                                          |        |           |          |                |   |      |       | 
|-------------------------------- | -------------------------------------------------------- | ------ | --------- | -------- | -------------- | - | ---- | ----- | 
|                                 |                                                          |        |           | Weighted |               
|                                 |                                                          |        |           | Average  |               
|                                 |                                                          | Shares |           |          | Exercise Price |  
|                                 |                                                          |        |           |          |                |  
|Outstanding at December 31, 2001 |                                                          |        | 885,833   |          |                | $ | 5.09 |      
|                                 | Granted (at exercise price of $5.28)                     |        |           | 147,000  |                |   |      | 5.28  | 
|                                 | Exercised                                                |        |           | (10,500  | )              |   |      | 2.91  | 
|                                 | Forfeited                                                |        |           | (39,500  | )              |   |      | 6.21  | 
|                                 |                                                          |        |           |          |                |  
|Outstanding at December 31, 2002 |                                                          |        | 982,833   |          |                |   | 5.10 |      
|                                 | Granted (at exercise price of $3.50)                     |        |           | 136,000  |                |   |      | 3.50  | 
|                                 | Exercised                                                |        |           | (2,500   | )              |   |      | 2.63  | 
|                                 | Forfeited                                                |        |           | (20,500  | )              |   |      | 5.97  | 
|                                 |                                                          |        |           |          |                |  
|Outstanding at December 31, 2003 |                                                          |        | 1,095,833 |          |                |   | 4.89 |      
|                                 | Granted (at exercise prices of $7.97, $12.32 and $13.94) |        |           | 244,000  |                |   |      | 12.49 | 
|                                 | Exercised                                                |        |           | (388,329 | )              |   |      | 4.70  | 
|                                 | Forfeited                                                |        |           | (64,000  | )              |   |      | 15.14 | 
|                                 |                                                          |        |           |          |                |  
|Outstanding at December 31, 2004 |                                                          |        | 887,504   |          |                | $ | 6.33 |      
|                                 |                                                          |        |           |          |                |  



|         |        |                     |           |                  |                     |                  |  |  |                  |  |  |           |       |  |                  |  |         |  |  |   |       | 
|-------- | ------ | ------------------- | --------- | ---------------- | ------------------- | ---------------- |  |  | ---------------- |  |  | --------- | ----- |  | ---------------- |  | ------- |  |  | - | ----- | 
|         |        | Options Outstanding |           |                  | Options Exercisable |                 
|         |        |                     |           |                  |                     |                 
|         |        |                     |           | Weighted Average |                     |                  |  |  |                 
|Exercise |        |                     | Number of |                  |                     | Remaining        |  |  | Weighted Average |  |  | Number of |       |  | Weighted Average | 
|Price    |        |                     | Shares    |                  |                     | Contractual Life |  |  | Exercise Price   |  |  | Shares    |       |  | Exercise Price   | 
|         |        |                     |           |                  |                     |                  |  |  |                  |  |  |           |       |  |                  | 
|$        | 15.50  |                     |           |                  | 10,000              |                  |  |  | 1.3 years        |  |  | $         | 15.50 |  |                  |  | 10,000  |  |  | $ | 15.50 | 
|         | 14.63  |                     |           |                  | 8,000               |                  |  |  | 2.3 years        |  |  |           | 14.63 |  |                  |  | 8,000   |  |  |   | 14.63 | 
|         | 8.75   |                     |           |                  | 77,333              |                  |  |  | 4.3 years        |  |  |           | 8.75  |  |                  |  | 77,333  |  |  |   | 8.75  | 
|         | 4.84   |                     |           |                  | 60,000              |                  |  |  | 5.3 years        |  |  |           | 4.84  |  |                  |  | 60,000  |  |  |   | 4.84  | 
|         | 1.97   |                     |           |                  | 220,000             |                  |  |  | 6.0 years        |  |  |           | 1.97  |  |                  |  | 100,000 |  |  |   | 1.97  | 
|         | 2.38   |                     |           |                  | 20,000              |                  |  |  | 6.1 years        |  |  |           | 2.38  |  |                  |  |        |  |  |   | 2.38  | 
|         | 2.63   |                     |           |                  | 63,166              |                  |  |  | 6.3 years        |  |  |           | 2.63  |  |                  |  | 59,166  |  |  |   | 2.63  | 
|         | 5.28   |                     |           |                  | 84,169              |                  |  |  | 7.3 years        |  |  |           | 5.28  |  |                  |  | 39,669  |  |  |   | 5.28  | 
|         | 3.50   |                     |           |                  | 113,501             |                  |  |  | 8.4 years        |  |  |           | 3.50  |  |                  |  | 24,168  |  |  |   | 3.50  | 
|         | 7.97   |                     |           |                  | 10,000              |                  |  |  | 9.1 years        |  |  |           | 7.97  |  |                  |  |        |  |  |   | 7.97  | 
|         | 12.32  |                     |           |                  | 171,001             |                  |  |  | 9.3 years        |  |  |           | 12.32 |  |                  |  | 161,001 |  |  |   | 12.32 | 
|         | 13.94  |                     |           |                  | 50,334              |                  |  |  | 9.4 years        |  |  |           | 13.94 |  |                  |  | 50,334  |  |  |   | 13.94 | 
|         |        |                     |           |                  |                     |                  |  |  |                  |  |  |           |       |  |                  | 
|         | Totals |                     |           |                  | 887,504             |                  |  |  |                  |  |  |           |       |  |                  |  | 589,671 |  |  |   |       | 
|         |        |                     |           |                  |                     |                  |  |  |                  |  |  |           |       |  |                  | 



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|                        |  |      |      |   |      |  |      |      |  |  |      |  
|----------------------- |  | ---- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                        |  | 2004 |      |   | 2003 |  |      | 2002 | 
|                        |  |      |      |   |      |  |      |      | 
|Risk free interest rate |  |      | 4.48 | % |      |  | 3.77 | %    |  |  | 5.13 | %
|Expected life in years  |  |      | 10   |   |      |  | 10   |      |  |  | 10   |  
|Expected volatility     |  |      | .59  |   |      |  | .57  |      |  |  | .57  |  
|Expected dividend yield |  |      | 0    | % |      |  | 0    | %    |  |  | 0    | %

10.     Commitments and
Contingencies:






|           |  |   |       | 
|---------- |  | - | ----- | 
|2005       |  | $ | 1,756 | 
|2006       |  |   | 1,211 | 
|2007       |  |   | 1,091 | 
|2008       |  |   | 974   | 
|2009       |  |   | 964   | 
|Thereafter |  |   | 366   | 
|           |  |   |      
|           |  | $ | 6,362 | 
|           |  |   |      











11.     Related Party
Transactions:






37



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12.     Shareholder Rights
Plan:




38



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SUPPLEMENTAL FINANCIAL INFORMATION


Unaudited Quarterly Results of Operations




|                                                      |                                               |     |         |       |     |   |         |        |  |   |         |        |  |      |         |        |  |   |         |        | 
|----------------------------------------------------- | --------------------------------------------- | --- | ------- | ----- | --- | - | ------- | ------ |  | - | ------- | ------ |  | ---- | ------- | ------ |  | - | ------- | ------ | 
|2004                                                  |                                               | 1st |         |       | 2nd |   |         | 3rd    |  |   | 4th     |        |  | Year |        
|                                                      |                                               |     |         |       |     |   |         |        |  |   |         |        |  |      |        
|Net sales                                             |                                               | $   | 187,033 |       |     | $ | 222,773 |        |  | $ | 244,142 |        |  | $    | 240,209 |        |  | $ | 894,157 |       
|Gross profit                                          |                                               |     | 53,487  |       |     |   | 70,526  |        |  |   | 65,566  |        |  |      | 52,791  |        |  |   | 242,370 |       
|Operating income                                      |                                               |     | 18,835  |       |     |   | 31,747  |        |  |   | 31,581  |        |  |      | 20,644  |        |  |   | 102,807 |       
|Income from continuing operations before income taxes |                                               |     | 17,495  |       |     |   | 30,814  |        |  |   | 30,570  |        |  |      | 20,014  |        |  |   | 98,893  |       
|Net income                                            |                                               | $   | 10,847  |       |     | $ | 18,500  |        |  | $ | 18,572  |        |  | $    | 12,159  |        |  | $ | 60,078  |       
|                                                      | Basic net income per share                    |     | $       | 1.12  |     |   | $       | 1.89   |  |   | $       | 1.88   |  |      | $       | 1.22   |  |   | $       | 6.12   | 
|                                                      | Weighted average shares outstanding  basic   |     |         | 9,675 |     |   |         | 9,794  |  |   |         | 9,904  |  |      |         | 9,997  |  |   |         | 9,816  | 
|                                                      | Diluted net income per share                  |     | $       | 1.09  |     |   | $       | 1.82   |  |   | $       | 1.80   |  |      | $       | 1.17   |  |   | $       | 5.88   | 
|                                                      | Weighted average shares outstanding  diluted |     |         | 9,959 |     |   |         | 10,182 |  |   |         | 10,341 |  |      |         | 10,394 |  |   |         | 10,222 | 
|Market price of common stock: (a)                     |                                               |     |         |       |     |   |         |        |  |   |         |        |  |      |         |        |  |   |         |       
|                                                      | High                                          |     | $       | 14.00 |     |   | $       | 20.42  |  |   | $       | 24.69  |  |      | $       | 29.90  |  |   | $       | 29.90  | 
|                                                      | Low                                           |     |         | 7.24  |     |   |         | 10.89  |  |   |         | 16.95  |  |      |         | 16.93  |  |   |         | 7.24   | 

|                                                                                                                  |                                                         |     |         |       |     |   |         |       |   |   |         |       |   |      |         |       |   |   |         |       |  
|----------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | --- | ------- | ----- | --- | - | ------- | ----- | - | - | ------- | ----- | - | ---- | ------- | ----- | - | - | ------- | ----- | -
|2003                                                                                                              |                                                         | 1st |         |       | 2nd |   |         | 3rd   |   |   | 4th     |       |   | Year |        
|                                                                                                                  |                                                         |     |         |       |     |   |         |       |   |   |         |       |   |      |        
|Net sales                                                                                                         |                                                         | $   | 114,880 |       |     | $ | 113,401 |       |   | $ | 115,850 |       |   | $    | 128,417 |       |   | $ | 472,548 |      
|Gross profit                                                                                                      |                                                         |     | 23,893  |       |     |   | 23,971  |       |   |   | 25,005  |       |   |      | 26,987  |       |   |   | 99,856  |      
|Operating income (loss)                                                                                           |                                                         |     | 379     |       |     |   | 146     |       |   |   | 1,491   |       |   |      | (1,850  | )     |   |   | 166     |      
|Loss from continuing operations before income taxes and
    cumulative effect of a change in accounting principle |                                                         |     | (798    | )     |     |   | (816    | )     |   |   | (146    | )     |   |      | (3,241  | )     |   |   | (5,001  | )    
|Net loss                                                                                                          |                                                         | $   | (479    | )     |     | $ | (554    | )     |   | $ | (115    | )     |   | $    | (2,112  | )     |   | $ | (3,260  | )    
|                                                                                                                  | Basic and diluted net loss per share                    |     | $       | (0.05 | )   |   | $       | (0.06 | ) |   | $       | (0.01 | ) |      | $       | (0.22 | ) |   | $       | (0.34 | )
|                                                                                                                  | Weighted average shares outstanding  basic and diluted |     |         | 9,644 |     |   |         | 9,645 |   |   |         | 9,646 |   |      |         | 9,648 |   |   |         | 9,646 |  
|Market price of common stock: (a)                                                                                 |                                                         |     |         |       |     |   |         |       |   |   |         |       |   |      |         |       |   |   |         |      
|                                                                                                                  | High                                                    |     | $       | 4.10  |     |   | $       | 4.25  |   |   | $       | 4.91  |   |      | $       | 8.50  |   |   | $       | 8.50  |  
|                                                                                                                  | Low                                                     |     |         | 2.79  |     |   |         | 3.35  |   |   |         | 3.71  |   |      |         | 4.25  |   |   |         | 2.79  |  






|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|(a) | Represents high and low closing quotations as reported by the
    Nasdaq National Market.

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|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
    AND FINANCIAL DISCLOSURE








|         |                        
|-------- | -----------------------
|ITEM 9A. | CONTROLS AND PROCEDURES



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING




Internal Control  Integrated
Framework







ITEM 9B.     OTHER INFORMATION







PART III







|         |                                                   
|-------- | --------------------------------------------------
|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT





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##### Table of Contents






ITEM 11.     EXECUTIVE
COMPENSATION









|         |                                                                   
|-------- | ------------------------------------------------------------------
|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT








|         |                                               
|-------- | ----------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS






ITEM 14.     PRINCIPAL ACCOUNTANT
FEES AND SERVICES







PART IV





ITEM 15.     EXHIBITS, FINANCIAL
STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K




| |                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)(1) The following financial statements are included
    in Part II, Item 8:                                                                                                                                                                                                                                      
|
| | Report of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                             
|
| | Consolidated Statements of Operations for the Years Ended
    December 31, 2004, 2003, and 2002                                                                                                                                                                                                                     
|
| | Consolidated Balance Sheets as of December 31, 2004 and 2003                                                                                                                                                                                                                                                        
|
| | Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2004, 2003, and 2002                                                                                                                                                                                                                     
|
| | Consolidated Statements of Shareholders Equity for the
    Years Ended December 31, 2004, 2003, and 2002                                                                                                                                                                                                           
|
| | Notes to Consolidated Financial Statements for the Years Ended
    December 31, 2004, 2003, and 2002                                                                                                                                                                                                                
|
| | (a)(2) Financial Statement Schedules. All schedules
    have been omitted since the required information is not present
    or not present in amounts sufficient to require submission of
    the schedule, or because the information required is included in
    the financial statements including notes thereto.
|
| | (a)(3) Exhibits.The Exhibits filed herewith are set
    forth on the Index to Exhibits filed as part of this report.                                                                                                                                                                                                

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OLYMPIC STEEL, INC.







INDEX TO EXHIBITS


|        |         |  |                         |                                                                                                                                                                                                                |  |  |     | 
|------- | ------- |  | ----------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | --- | 
|Exhibit |         |  | Description of Document |                                                                                                                                                                                                                | 
|        |         |  |                         |                                                                                                                                                                                                                | 
|        | 3.1(i)  |  |                         | Amended and Restated Articles of Incorporation                                                                                                                                                                 |  |  | (a) | 
|        | 3.1(ii) |  |                         | Amended and Restated Code of Regulations                                                                                                                                                                       |  |  | (a) | 
|        | 4.1     |  |                         | Amended and Restated Credit Agreement dated December 30,
    2002 by and among the Registrant, three banks and Comerica Bank,
    as Administrative Agent                                                      |  |  | (b) | 
|        | 4.2     |  |                         | Amendment No. 1 to Amended and Restated Credit Agreement
    dated February 6, 2003 by and among the Registrant, five
    banks and Comerica Bank, as Administrative Agent                                     |  |  | (b) | 
|        | 4.3     |  |                         | Amendment No. 2 to Amended and Restated Credit Agreement
    dated March 15, 2003 by and among the Registrant, five
    banks and Comerica Bank, as Administrative Agent                                       |  |  | (i) | 
|        | 4.4     |  |                         | Amendment No. 3 to Amended and Restated Credit Agreement
    dated June 30, 2003 by and among the Registrant, five banks
    and Comerica Bank, as Administrative Agent                                        |  |  | (i) | 
|        | 4.5     |  |                         | Amendment No. 4 to Amended and Restated Credit Agreement
    dated December 26, 2003 by and among the Registrant, five
    banks and Comerica Bank, as Administrative Agent                                    |  |  | (i) | 
|        | 4.6     |  |                         | Amendment No. 5 to Amended and Restated Credit Agreement
    and Waiver dated February 9, 2004 by and among the
    Registrant, five banks and Comerica Bank, as Administrative Agent                          |  |  | (i) | 
|        | 4.7     |  |                         | Rights Agreement (Including Form of Certificate of Adoption of
    Amendment to Amended Articles of Incorporation as Exhibit A
    thereto, together with a Summary of Rights to Purchase Preferred
    Stock) |  |  | (c) | 
|        | 4.8     |  |                         | Amendment No. 6 to Amended and Restated Credit Agreement
    and Waiver dated May 21, 2004 by and among the Registrant,
    five banks and Comerica Bank, as Administrative Agent                              |  |  | (j) | 
|        | 4.9     |  |                         | Amendment No. 7 to Amended and Restated Credit Agreement
    and Waiver dated August 26, 2004 by and among the
    Registrant, five banks and Comerica Bank, as Administrative Agent                           |  |  |     | 
|        | 4.10    |  |                         | Amendment No. 8 to Amended and Restated Credit Agreement
    and Waiver dated February 25, 2005 by and among the
    Registrant, five banks and Comerica Bank, as Administrative Agent                         |  |  |     | 
|        | 10.1    |  |                         | Olympic Steel, Inc. Stock Option Plan                                                                                                                                                                          |  |  | (a) | 
|        | 10.2    |  |                         | Lease, dated as of July 1, 1980, as amended, between S.M.S.
    Realty Co., a lessor, and the Registrant, as lessee, relating to
    one of the Cleveland facilities                                           |  |  | (a) | 
|        | 10.4    |  |                         | Lease, dated as of November 30, 1987, as amended, between
    Tinicum Properties Associates L.P., as lessor, and the
    Registrant, as lessee, relating to Registrants Lester,
    Pennsylvania facility     |  |  | (a) | 
|        | 10.5    |  |                         | Operating Agreement of Trumark Steel & Processing, LLC,
    dated April 1, 2002, by and among The Goss Group, Inc., and
    Oly Steel Welding, Inc.                                                            |  |  | (d) | 
|        | 10.6    |  |                         | Carrier Contract Agreement for Transportation Services, dated
    August 1, 1998, between Lincoln Trucking Company and the
    Registrant                                                                      |  |  | (e) | 
|        | 10.7    |  |                         | Operating Agreement of OLP, LLC, dated April 4, 1997, by
    and between the U.S. Steel Group of USX Corporation and Oly
    Steel Welding, Inc.                                                               |  |  | (f) | 

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##### Table of Contents



|        |       |  |                         |                                                                                                                                                                                                                  |  |  |     | 
|------- | ----- |  | ----------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | --- | 
|Exhibit |       |  | Description of Document |                                                                                                                                                                                                                  | 
|        |       |  |                         |                                                                                                                                                                                                                  | 
|        | 10.8  |  |                         | Form of Management Retention Agreement for Senior Executive
    Officers of the Company                                                                                                                          |  |  | (g) | 
|        | 10.9  |  |                         | Form of Management Retention Agreement for Other Officers of the
    Company                                                                                                                                     |  |  | (g) | 
|        | 10.10 |  |                         | David A. Wolfort Employment Agreement dated January 1, 2001                                                                                                                                                      |  |  | (h) | 
|        | 10.12 |  |                         | Michael D. Siegal Employment Agreement dated July 1, 2004                                                                                                                                                        |  |  | (j) | 
|        | 10.13 |  |                         | Richard T. Marabito Employment Agreement dated July 1, 2004                                                                                                                                                      |  |  | (j) | 
|        | 10.14 |  |                         | Olympic Steel, Inc. Executive Deferred Compensation Plan dated
    December 15, 2004                                                                                                                             |  |  |     | 
|        | 10.15 |  |                         | Non-Solicitation Agreements for Heber MacWilliams and Richard A.
    Manson                                                                                                                                      |  |  | (k) | 
|        | 21    |  |                         | List of Subsidiaries                                                                                                                                                                                             |  |  |     | 
|        | 23    |  |                         | Consent of Independent Registered Public Accounting Firm                                                                                                                                                         |  |  |     | 
|        | 24    |  |                         | Directors and Officers Powers of Attorney                                                                                                                                                                        |  |  |     | 
|        | 31.1  |  |                         | Certification of the Principal Executive Officer of the Company,
    as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
    2002.                                                                   |  |  |     | 
|        | 31.2  |  |                         | Certification of the Principal Financial Officer of the Company,
    as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
    2002.                                                                   |  |  |     | 
|        | 32.1  |  |                         | Written Statement of Michael D. Siegal, Chairman and Chief
    Executive Officer of the Company pursuant to 18 U.S.C. Section
    1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002 |  |  |     | 
|        | 32.2  |  |                         | Written Statement of Richard T. Marabito, Chief Financial
    Officer of the Company pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                |  |  |     | 






|    |                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Incorporated by reference to the Exhibit with the same exhibit
    number included in Registrants Registration Statement on
    Form S-1 (No. 33-73992) filed with the Commission on
    January 12, 1994.



|    |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------
|(b) | Incorporated by reference to an Exhibit included in
    Registrants Form 10-K filed with the Commission on
    March 28, 2003.



|    |                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------
|(c) | Incorporated by reference to an Exhibit included in
    Registrants Form 10-Q filed with the Commission on
    August 13, 2001.



|    |                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------
|(d) | Incorporated by reference to an Exhibit included in
    Registrants Form 10-Q filed with the Commission on
    May 13, 2002.



|    |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------
|(e) | Incorporated by reference to an Exhibit included in
    Registrants Form 10-K filed with the Commission on
    March 12, 1999.



|    |                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------
|(f) | Incorporated by reference to an Exhibit included in
    Registrants Form 10-Q filed with the Commission on
    May 2, 1997.



|    |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------
|(g) | Incorporated by reference to an Exhibit included in
    Registrants Form 10-Q filed with the Commission on
    August 3, 2000.
|   
|(h) | Incorporated by reference to an Exhibit included in
    Registrants Form 10-K filed with the Commission on
    March 28, 2001.



|    |                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------
|(i) | Incorporated by reference to an Exhibit included in
    Registrants Form 10-K filed with the Commission on
    March 30, 2004. 
|   
|(j) | Incorporated by reference to an Exhibit included in
    Registrants Form 10-Q filed with the Commission on
    August 16, 2004.



|    |                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------
|(k) | Incorporated by reference to an Exhibit included in
    Registrants Form 8-K filed with the Commission on
    March 4, 2005.

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##### Table of Contents






SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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.



| |     |                         
| | --- | ------------------------
| | By: | /s/ Richard T. Marabito,

| |                        
| | -----------------------
| |                        
| | Richard T. Marabito,   
| | Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons in the capacities indicated and on the 10th day of
March, 2005.


|                                                                                                                |  |               
|--------------------------------------------------------------------------------------------------------------- |  | --------------
|                                                                                                               
|/s/ Michael D.
    Siegal *Michael D. Siegal
    Chairman of the Board
    and Chief Executive Officer          |  | March 10, 2005
|                                                                                                               
|/s/ David A.
    Wolfort *David A. Wolfort
    President, Chief Operating Officer
    and Director              |  | March 10, 2005
|                                                                                                               
|/s/ Richard T.
    Marabito *Richard T. Marabito
    Chief Financial Officer
    (Principal Accounting Officer) |  | March 10, 2005
|                                                                                                               
|/s/ Ralph M. Della Ratta,
    Jr. *Ralph M. Della Ratta, Jr., Director                                          |  | March 10, 2005
|                                                                                                               
|/s/ Martin H.
    Elrad *Martin H. Elrad, Director                                                              |  | March 10, 2005
|                                                                                                               
|/s/ Thomas M.
    Forman *Thomas M. Forman, Director                                                            |  | March 10, 2005
|                                                                                                               
|/s/ James B.
    Meathe *James B. Meathe, Director                                                              |  | March 10, 2005
|                                                                                                               
|/s/ Howard L.
    Goldstein *Howard L. Goldstein, Director                                                      |  | March 10, 2005



|  |                                                                                                                                                                                                                                                                                                                        
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | The undersigned, by signing his name hereto, does sign and
    execute this Annual Report on Form 10-K pursuant to the
    Powers of Attorney executed by the above-named officers and
    Directors of the Company and filed with the Securities and
    Exchange Commission on behalf of such officers and Directors.

|                                                                     |  |               
|-------------------------------------------------------------------- |  | --------------
|                                                                    
|By: /s/ Richard T.
    MarabitoRichard T. Marabito, Attorney-in-Fact |  | March 10, 2005

44