##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C. 20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES 
    EXCHANGE ACT OF 1934For The Year Ended December 31, 2007o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES 
    EXCHANGE ACT OF 1934    OLYMPIC STEEL, INC.
 (Exact name of registrant as
    specified in its charter)
  Ohio

34-1245650(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)5096 Richmond Road, Bedford Heights, Ohio

44146(Address of principal executive
    offices)

(Zip Code)   292-3800
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of each Class

Name of each Exchange on which registeredCommon Stock, without par value


The NASDAQ Stock Market LLCPreferred Stock Purchase Rights


The NASDAQ Stock Market LLC  Securities registered pursuant to Section 12(g) of the
    Act:
   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated filer
    o

Accelerated filer
    þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller Reporting
    company o   Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




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##### 





TABLE OF
    CONTENTS
   
 PagePart IItem 1.

Business


2Item 1A.

Risk Factors


11Item 1B.

Unresolved Staff Comments


15Item 2.

Properties


16Item 3.

Legal Proceedings


16Item 4.

Submission of Matters to a Vote of Security
    Holders Executive Officers of the Registrant


17Part IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


18Item 6.

Selected Financial Data


19Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


20Item 7A.

Qualitative and Quantitative Disclosures About
    Market Risk


26Item 8.

Financial Statements and Supplementary Data


27Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


46Item 9A.

Controls and Procedures


46Item 9B.

Other Information


46Part IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


46Item 11.

Executive Compensation


47Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


47Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


47Item 14.

Principal Accountant Fees and Services


47Part IVItem 15.

Exhibits and Financial Statement Schedules


47Signatures


48Index to Exhibits


50EX-10.24EX-21EX-23EX-24EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS The
    Company      (216) 292-3800,
  Industry
    Overview
       2




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##### Table of Contents



just-in-time
  Corporate
    History
  start-up
  Business
    Strategy and Objectives
    start-up,
      
    Our flawless execution program (Fe), which is an
    internal program that empowers and recognizes employees to
    achieve profitable growth by delivering superior customer
    service and exceeding customer expectations.
    A set of core values, which is communicated, practiced, and
    measured throughout the company.
    On-going business process enhancements and redesigns to improve
    efficiencies and reduce costs.
    Continued evolution of information systems and key metric
    reporting to focus managers on achieving the specific operating
    objectives mentioned above.
    Alignment of compensation with achievement of the operating
    objectives described above.    Investment In Value-Added Processing
    Equipment.
 3




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Sales And Marketing. just-in-time just-in-time
      e-commerce
  Acquisitions.
  Management.
  Products,
    Processing Services, and Quality Standards
       4




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##### Table of Contents



Cutting-to-length
    (a)


(b)


(c)Eastern


Central


AutomotiveProcessing Equipment

Region


Region


Region


TotalCutting-to-length


8



5



2



15Blanking










4



4Tempering (d)


3



1







4Plate processing


24



22







46Slitting


4



2



2



8Shearing


1



5







6Machining


30



1







31Painting


2











2Shot blasting/grinding


3



2







5Total


75



38



8



121     (a)
    
    Consists of ten facilities located in Ohio, Connecticut,
    Pennsylvania, Georgia and North Carolina.(b)
    
    Consists of four facilities located in Illinois, Minnesota and
    Iowa.(c)
    
    Consists of our Detroit, Michigan facility, primarily serving
    the automotive industry.(d)
    
    In addition to the temper mills located in Ohio and Iowa,
    tempering includes press brake equipment.    Customers
    and Distribution
    250-mile
 5




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##### Table of Contents



just-in-time
  just-in-time just-in-time
    Raw
    Materials
    just-in-time
  Suppliers
   6




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##### Table of Contents



just-in-time
  Competition
      Management
    Information Systems
      Inventory Management.
  Differentiated Services To
    Customers. just-in-time
  Internal Communications.
  E-Commerce
    and Advanced Customer Interaction. e-procurement
     7




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Employees
      Service
    Marks, Trade Names and Patents
      Government
    Regulation
    Environmental
    Effects
    of Inflation
   8




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Backlog
    Available
    Information
  1-800-SEC-0330. http://www.sec.gov.
  Form 10-K, Form 10-Q, Form 8-K
  Form 10-K.
  Forward-Looking
    Information
  Form 10-K
  
    general and global business, economic and political conditions;
    competitive factors such as the availability and pricing of
    steel, industry inventory levels and rapid fluctuations in
    customer demand and pricing;
    the cyclicality and volatility within the steel industry;
    the ability of our customers (especially those that may be
    highly leveraged or in the domestic automotive industry) to
    maintain their credit availability;
    customer, supplier and competitor consolidation, bankruptcy or
    insolvency;
    layoffs or work stoppages by our own or our suppliers or
    customers personnel;
    the availability and costs of transportation and logistical
    services;
    equipment malfunctions or installation delays;
    the amounts and successes of our capital investments; 9




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##### Table of Contents




    the successes of our strategic efforts and initiatives to
    increase sales volumes, maintain cash turnover, maintain or
    improve inventory turns, reduce costs and improve customer
    service;
    the adequacy of our existing information technology and business
    system software;
    the successful implementation of our new enterprise-wide
    information system;
    the timing and outcome of OLPs efforts and ability to
    liquidate its remaining assets; and
    our ability to pay regular quarterly cash dividends.   10




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##### Table of Contents



ITEM 1A.
    RISK
    FACTORS  In addition to the other information in this Annual Report
    and our other filings with the SEC, the following risk factors
    should be carefully considered in evaluating us and our business
    before investing in our common stock. The risks and
    uncertainties described below are not the only ones facing us.
    Additional risks and uncertainties, not presently known to us or
    otherwise, may also impair our business. If any of the risks
    actually occur, our business, financial condition or results of
    operations could be materially and adversely affected. In that
    case, the trading price of our common stock could decline, and
    investors may lose all or part of their investment.
  Risks
    Related to our Business
  Volatile
    steel prices can cause significant fluctuations in our operating
    results. Our sales and operating income could decrease if we are
    unable to pass producer price increases on to our
    customers.
    just-in-time
    We
    service industries that are highly cyclical, and any downturn in
    our customers industries could reduce our sales, margins
    and profitability.
   11




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Our
    success is dependent upon our relationships with certain key
    customers.
    Customer
    credit constraints and credit losses could have a material
    adverse effect on our results of operations.
    An
    interruption in the sources of our steel supply could have a
    material adverse effect on our results of operations.
  just-in-time
  We depend
    on our senior management team and the loss of any member could
    prevent us from implementing our business strategy.
   12




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Labor
    disruptions at any of our facilities or those of major customers
    could adversely affect our business, results of operations and
    financial condition.
      Risks
    associated with our growth strategy may adversely impact our
    ability to sustain our growth.
    start-up start-up
    The
    failure of our key computer-based systems could have a material
    adverse effect on our business.
   13




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Our
    project to initiate implementation of a new information system
    could adversely affect our results of operations and cash
    flows.
    
    a significant deployment of capital and a significant use of
    management and employee time;
    the possibility that the software vendor may not be able to
    complete the project as planned;
    the possibility that the timeline, costs or complexities related
    to the new system implementation will be greater than expected;
    the possibility that the software, once implemented, does not
    work as planned;
    the possibility that benefits from the new system may be lower
    or take longer to realize than expected;
    the possibility that disruptions from the implementation may
    make it difficult for us to maintain relationships with our
    respective customers, employees or suppliers; and
    limitations on the availability and adequacy of the proprietary
    software or consulting, training and project management
    services, as well as our ability to retain key personnel
    assigned to the project.    We may
    not be able to retain or expand our customer base if the U.S.
    manufacturing industry continues to erode.
    Our
    business is highly competitive, and increased competition could
    reduce our market share and harm our financial
    performance.
    Increases
    in energy prices would increase our operating costs, and we may
    be unable to pass all these increases on to our customers in the
    form of higher prices.
   14




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We expect
    to finance our future growth through borrowings under our credit
    facility. Increased leverage could adversely impact our business
    and results of operations.
    
    increase our vulnerability to adverse economic and industry
    conditions;
    require us to dedicate a substantial portion of cash from
    operations to the payment of debt service, thereby reducing the
    availability of cash to fund working capital, capital
    expenditures, dividends and other general corporate purposes;
    limit our ability to obtain additional financing for working
    capital, capital expenditures, general corporate purposes or
    acquisitions;
    place us at a disadvantage compared to our competitors that are
    less leveraged; and
    limit our flexibility in planning for, or reacting to, changes
    in our business and in the steel industry.  Risks
    Related to Our Common Stock
  The
    market price for our common stock may be volatile.
    
    announcement of our quarterly operating results or the operating
    results of other steel service centers;
    changes in financial estimates or recommendations by stock
    market analysts regarding us or our competitors; and
    announcements by us or our competitors of significant
    acquisitions, dispositions or joint ventures, or other material
    events impacting the domestic or global steel industry.    Our
    quarterly results may be volatile.
      ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   15




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ITEM 2.
    PROPERTIES  250-mile one-day
  Square




Owned orOperation

Location

Feet


Function

LeaseCleveland

Bedford
    Heights,Ohio(1)


127,000


Corporate headquarters, coil processing and distribution center

OwnedBedford Heights,
    Ohio(1)


121,500


Coil and plate processing, distribution center and offices

OwnedBedford 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

OwnedPlymouth, Minnesota


112,200


Plate processing, fabrication, distribution center and offices

OwnedDetroit

Detroit, Michigan


256,000


Coil processing, distribution center and offices

OwnedSouth

Winder, Georgia


285,000


Coil and plate processing, distribution center and offices

OwnedIowa

Bettendorf, Iowa


244,000


Coil and plate processing, distribution center and offices

OwnedConnecticut

Milford, Connecticut


134,000


Coil processing, distribution center and offices

OwnedPhiladelphia

Lester, Pennsylvania


84,250


Plate processing, distribution center and offices

Leased(3)Chambersburg

Chambersburg, Pennsylvania


87,000


Plate processing, distribution center and offices

OwnedChambersburg, Pennsylvania


150,000


Plate processing, fabrication, distribution center and offices

OwnedChicago

Schaumburg, Illinois


80,500


Coil and plate processing, distribution center and offices

OwnedPS&W

Siler City, NC
    Seagrove, NC


74,000
    31,000


Plate processing, fabrication, distribution center and offices

Owned
    Leased(4)     (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, 2009,
    with a one year renewal option.(4)
    
    The lease on this facility expires on October 31, 2008,
    with one renewal option for an additional three years.    ITEM 3.
    LEGAL
    PROCEEDINGS   16




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ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   EXECUTIVE
    OFFICERS OF THE REGISTRANT  Regulation S-K.
      Make-A-Wish
     17




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PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Price
    Range of Common Stock
    2007


2006High


Low


High


LowFirst quarter

$
31.72


$
21.03


$
32.00


$
23.18Second quarter


34.99



28.54



37.86



28.31Third quarter


31.59



21.79



39.49



23.76Fourth quarter


33.20



23.00



28.77



21.20   Holders
    of Record
    Dividends
        Issuer
    Purchases of Equity Securities
    Recent
    Sales of Unregistered Securities
   18




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ITEM 6.
    SELECTED
    FINANCIAL DATA    For the Years Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share data)Tons Sold Data:Direct


1,098



1,064



1,091



1,171



996Toll (a)


150



202



189



184



185Total


1,248



1,266



1,280



1,355



1,181Income Statement Data:Net sales (a)

$
1,028,963


$
981,004


$
939,210


$
894,157


$
472,548Gross profit (b)


201,675



200,699



166,471



242,370



99,856Operating expenses (c)


158,351



146,479



122,450



139,563



99,690Operating income


43,324



54,220



44,021



102,807



166Income (loss) from joint ventures (d)






(2,137
)


(4,125
)


741



(1,012
)Interest and other financing costs


2,819



2,677



3,703



4,655



4,155Income (loss) before income taxes


40,505



49,406



36,193



98,893



(5,001
)Net income (loss)

$
25,270


$
31,048


$
22,092


$
60,078


$
(3,260
)Earnings (Loss) Per Share Data:Basic (e)

$
2.38


$
2.99


$
2.18


$
6.12


$
(0.34
)Diluted

$
2.35


$
2.92


$
2.11


$
5.88


$
(0.34
)Weighted average shares  basic


10,628



10,383



10,134



9,816



9,646Weighted average shares  diluted


10,763



10,633



10,457



10,222



9,646Dividends declared

$
0.14


$
0.12











Balance Sheet Data (end of period):Current assets

$
283,388


$
308,215


$
227,655


$
287,307


$
155,794Current liabilities


92,290



92,340



94,603



95,688



42,574Working capital


191,098



215,875



133,052



191,619



113,220Total assets


386,083



405,320



305,606



374,146



249,002Total debt


16,707



68,328







96,022



97,797Shareholders equity


263,520



234,237



200,321



176,525



112,236     (a)
    
    Net sales generated from toll tons sold represented less than 3%
    of consolidated net sales for all years presented.(b)
    
    Gross profit is calculated as net sales less the cost of
    materials sold, exclusive of depreciation.(c)
    
    Operating expenses are calculated as total costs and expenses
    less the cost of materials sold.(d)
    
    Includes $2,000 and $3,500 loss on disposition of OLP joint
    venture in 2006 and 2005, respectively.(e)
    
    Calculated by dividing net income (loss) by weighted average
    shares outstanding. 19




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The following Managements Discussion and Analysis of
    Financial Condition and Results of Operations contains
    forward-looking statements that involve risks and uncertainties.
    Our actual results may differ materially from the results
    discussed in the forward-looking statements. Factors that might
    cause a difference include, but are not limited to, those
    discussed under Item 1A. Risk Factors in this Annual Report
    on
    Form 10-K.
    The following section is qualified in its entirety by the more
    detailed information, including our financial statements and the
    notes thereto, which appears elsewhere in this Annual Report.
  Overview
               20




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Critical
    Accounting Policies
      Allowance
    for Doubtful Accounts Receivable
    Inventory
    Valuation
    Impairment
    of Long-Lived Assets
    Income
    Taxes
   21




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Revenue
    Recognition
  Revenue
    Recognition
  Results
    of Operations
    2007


2006


2005% of net





% of net





% of net$


sales


$


sales


$


salesNet sales

$
1,028,963



100.0
%

$
981,004



100.0
%

$
939,210



100.0
%Gross profit (a)


201,675



19.6
%


200,699



20.5
%


166,471



17.7
%Operating expenses (b)


158,351



15.4
%


146,479



14.9
%


122,450



13.0
%Operating income

$
43,324



4.2
%

$
54,220



5.5
%

$
44,021



4.7
%     (a)
    
    Gross profit is calculated as net sales less the cost of
    materials sold, exclusive of depreciation.(b)
    
    Operating expenses are calculated as total costs and expenses
    less the cost of materials sold.  2007
    Compared to 2006
             22




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2006
    Compared to 2005
          No. 123-R, Share Based Payment (SFAS No. 123-R) SFAS No. 123-R
          Liquidity
    and Capital Resources
   23




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##### Table of Contents



24




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##### Table of Contents



Contractual
    Obligations
    Contractual Obligations




Less than








More than(amounts in thousands)

Total


1 year


1-3 years


3-5 years


5 yearsLong-term debt obligations (including interest)

$
19,563


$
2,856


$
16,707


$



$
Unrecognized tax positions


3,282



241



3,041Other long-term liabilities


9,779







7,314



192



2,273Operating leases


11,817



4,113



5,663



1,699



342Total contractual obligations

$
44,441


$
7,210


$
32,725


$
1,891


$
2,615   Off-Balance
    Sheet Arrangements
      Effects
    of Inflation
    Impact of
    Recently Issued Accounting Pronouncements
  Fair Value
    Measurements
  The Fair Value Option for Financial Assets and Financial
    Liabilities  Including an Amendment of FASB Statement
    No. 115
  Noncontrolling Interests in Consolidated Financial
    Statements  an Amendment of Accounting Research
    Bulletin No. 51
 25




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##### Table of Contents



Business Combinations
  ITEM 7A.
    QUALITATIVE
    AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK            180-day
 26




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Olympic
    Steel, Inc.
  Index to
    Consolidated Financial Statements
   
 PageReport of Independent Registered Public
    Accounting Firm


28Managements Report on Internal Control Over
    Financial Reporting


29Consolidated Statements of Operations for the
    Years Ended December 31, 2007, 2006 and 2005


30Consolidated Balance Sheets as of
    December 31, 2007 and 2006


31Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2007, 2006 and 2005


32Consolidated Statements of Shareholders
    Equity for the Years Ended December 31, 2007, 2006 and
    2005


33Notes to Consolidated Financial Statements for
    the Years Ended December 31, 2007, 2006 and 2005


34   27




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REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control 
    Integrated Framework
          28




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##### Table of Contents



MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING    Internal Control  Integrated
    Framework
   29




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##### Table of Contents



Olympic
    Steel, Inc.
 Consolidated Statements of Operations
 For The Years Ended December 31, 2007, 2006, and 2005
   2007


2006


2005Net sales

$
1,028,963


$
981,004


$
939,210Costs and expensesCost of materials sold (exclusive of depreciation shown below)


827,288



780,305



772,739Warehouse and processing


59,449



55,407



41,461Administrative and general


41,472



38,143



32,229Distribution


26,342



25,384



21,171Selling


15,993



13,485



14,838Occupancy


6,145



5,704



4,728Depreciation


8,950



8,356



8,023Total costs and expenses


985,639



926,784



895,189Operating income


43,324



54,220



44,021Loss from joint ventures






(137
)


(625
)Loss on disposition of joint venture






(2,000
)


(3,500
)Income before financing costs and income taxes


43,324



52,083



39,896Interest and other expense on debt


2,819



2,677



3,703Income before income taxes


40,505



49,406



36,193Income tax provision


15,235



18,358



14,101Net income

$
25,270


$
31,048


$
22,092Net income per share  basic

$
2.38


$
2.99


$
2.18Weighted average shares outstanding  basic


10,628



10,383



10,134Net income per share  diluted

$
2.35


$
2.92


$
2.11Weighted average shares outstanding  diluted


10,763



10,633



10,457   The accompanying notes are an integral part of these
    statements.
 30




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##### Table of Contents



Olympic
    Steel, Inc.
 Consolidated Balance Sheets
 As of December 31, 2007 and 2006
   2007


2006AssetsCash and cash equivalents

$
7,707


$
5,211Accounts receivable, net


88,414



85,883Inventories


178,530



210,738Prepaid expenses and other


8,737



6,383Total current assets


283,388



308,215Property and equipment, at cost


183,850



173,745Accumulated depreciation


(94,199
)


(86,386
)Net property and equipment


89,651



87,359Goodwill


6,583



6,583Other long-term assets


6,461



3,163Total assets

$
386,083


$
405,320LiabilitiesAccounts payable

$
73,408


$
75,095Accrued payroll


9,393



7,698Other accrued liabilities


9,489



9,547Total current liabilities


92,290



92,340Credit facility revolver


16,707



68,328Other long-term liabilities


9,779



6,664Deferred income taxes


3,787



3,751Total liabilities


122,563



171,083Shareholders EquityPreferred stock, without par value, 5,000 shares
    authorized, no shares issued or outstanding






Common stock, without par value, 20,000 shares authorized,
    10,728 and 10,430 shares issued and outstanding after
    deducting 0 and 262 shares in treasury at December 31,
    2007 and 2006, respectively


114,582



109,075Retained earnings


148,938



125,162Total shareholders equity


263,520



234,237Total liabilities and shareholders equity

$
386,083


$
405,320   The accompanying notes are an integral part of these balance
    sheets.
 31




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##### Table of Contents



Olympic
    Steel, Inc.
 Consolidated Statements of Cash Flows
 For The Years Ended December 31, 2007, 2006 and 2005
   2007


2006


2005Cash flows from operating activities:Net income

$
25,270


$
31,048


$
22,092Adjustments to reconcile net income to net cash from operating
    activities (net of effects from 2006 purchases of GSP and
    PS&W) Depreciation and amortization


8,950



8,356



8,980Loss from joint ventures, net of distributions and consolidation
    of GSP






137



778Loss on disposition of joint venture






2,000



3,500(Gain) loss on disposition of property and equipment


(446
)


108



27Stock based compensation


840



127



Other long-term assets


(3,298
)


(3,172
)


Other long-term liabilities


3,115



3,702



2,962Long-term deferred income taxes


36



(3,800
)


(3,083
)34,467



38,506



35,256Changes in working capital:Accounts receivable


(2,531
)


(725
)


13,205Inventories


32,208



(70,994
)


51,888Prepaid expenses and other


(2,354
)


(2,557
)


(570
)Accounts payable


1,254



(12,631
)


(1,296
)Accrued payroll and other accrued liabilities


1,637



(2,402
)


(12,092
)30,214



(89,309
)


51,135Net cash from (used for) operating activities


64,681



(50,803
)


86,391Cash flows from (used for) investing activities:Purchase of GSP Interest






(100
)


Purchase of PS&W






(8,965
)


Capital expenditures


(12,498
)


(12,303
)


(2,230
)Proceeds from disposition of property and equipment


1,702



9



Net cash used for investing activities


(10,796
)


(21,359
)


(2,230
)Cash flows from (used for) financing activities:Credit facility revolver borrowings (payments), net


(51,621
)


65,481



(49,517
)Change in outstanding checks


(2,941
)


1,860



5,907Debt repayments






(2,264
)


(37,384
)Proceeds from exercise of stock options (including tax benefit)
    and employee stock purchases


4,667



3,992



1,704Dividends paid


(1,494
)


(1,251
)


Net cash from (used for) financing activities


(51,389
)


67,818



(79,290
)Cash and cash equivalents:Net increase (decrease)


2,496



(4,344
)


4,871Beginning balance


5,211



9,555



4,684Ending balance

$
7,707


$
5,211


$
9,555   The accompanying notes are an integral part of these
    statements.
 32




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##### Table of Contents



Olympic
    Steel, Inc.
 Consolidated Statements of Shareholders
    Equity
 For The Years Ended December 31, 2007, 2006 and 2005
   Common


RetainedStock


EarningsBalance at December 31, 2004

$
103,252


$
73,273Net income






22,092Exercise of stock options and employee stock purchases
    (115 shares)


1,704



Balance at December 31, 2005


104,956



95,365Net income






31,048Payment of dividends






(1,251
)Exercise of stock options and employee stock purchases
    (276 shares)


3,992



Stock based compensation


127



Balance at December 31, 2006


109,075



125,162Net income






25,270Payment of dividends






(1,494
)Exercise of stock options and employee stock purchases
    (298 shares)


4,667



Stock based compensation


840



Balance at December 31, 2007

$
114,582


$
148,938   The accompanying notes are an integral part of these
    statements.
 33




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##### Table of Contents



Olympic
    Steel, Inc.Notes to Consolidated Financial StatementsFor The Years Ended December 31, 2007, 2006 and 2005 (dollars
    in thousands, except per share amounts)
  1.
    Summary
    of Significant Accounting Policies:  Principles
    of Consolidation
    Nature
    of Business
    Accounting
    Estimates
    Concentration
    Risks
      Cash
    and Cash Equivalents
    Accounts
    Receivable
     34




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##### Table of Contents



Inventories
    Property
    and Equipment, and Depreciation
    Goodwill
  Goodwill and Other Intangible Assets
  Income
    Taxes
    Revenue
    Recognition
    Shipping
    and Handling Fees and Costs
    Impairment
  Accounting
    for the Impairment or Disposal of Long-Lived Assets
  Stock-Based
    Compensation
  No. 123-R, Share Based Payment (SFAS No. 123-R)
 35




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##### Table of Contents



Impact
    of Recently Issued Accounting Pronouncements
  Fair Value
    Measurements
  The Fair Value Option for Financial Assets and Financial
    Liabilities  Including an Amendment of FASB Statement
    No. 115
  Noncontrolling Interests in Consolidated Financial
    Statements  an Amendment of Accounting Research
    Bulletin No. 51
  Business Combinations
  2.
    Acquisition
    of Tinsley Group  PS&W,
    Inc.:      3.
    Investments
    in Joint Ventures:   36




---



##### Table of Contents



4.
    Property
    and Equipment:    Depreciable


As of December 31,Lives


2007


2006Land





$
9,954


$
10,269Land improvements


10



1,302



1,259Buildings and improvements


30



63,605



61,347Machinery and equipment


10-15



88,786



85,590Furniture and fixtures


7



4,947



4,874Computer equipment


5



8,245



6,663Vehicles


5



33



33Construction in progress






6,978



3,710$
183,850


$
173,745Less accumulated depreciation






(94,199
)


(86,386
)Net property and equipment





$
89,651


$
87,359    37




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##### Table of Contents



5.
    Inventories:    As of December 31,2007


2006Unprocessed

$
133,319


$
159,581Processed and finished


45,211



51,157Totals

$
178,530


$
210,738   6.
    Debt:  Credit
    Facility
        Scheduled
    Debt Maturities, Interest, Debt Carrying Values
      7.
    Income
    Taxes:    2007


2006


2005Current:Federal

$
14,665


$
17,776


$
14,557State and Local


2,158



3,230



2,76316,823



21,006



17,320Deferred


(1,588
)


(2,648
)


(3,219
)$
15,235


$
18,358


$
14,101  38




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##### Table of Contents



2007


2006Deferred tax assets:Inventory

$
617


$
923Net operating loss and tax credit carryforwards


1,951



1,728Intangibles






1,690Allowance for doubtful accounts


542



630Other


83



155Accrued expenses


5,196



4,1038,389



9,229Valuation reserve


(337
)


(2,336
)Total deferred tax assets


8,052



6,893Deferred tax liabilities:Property and equipment


(6,587
)


(7,949
)Intangibles


(742
)Other


(1,392
)


(1,201
)Total deferred tax liabilities


(8,721
)


(9,150
)Deferred tax liabilities, net

$
(669
)

$
(2,257
)   Accounting for
    Uncertainty in Income Taxes: an interpretation of FASB Statement
    No. 109
      Balance as of January 1, 2007

$
773Increases related to prior year tax positions


276Decreases related to prior year tax positions


Increases related to current year tax positions


2,035Decreases related to settlements with taxing authorities


Decreases related to lapsing of statute of limitations


(25
)Balance as of December 31, 2007

$
3,059   2004-2006
   39




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##### Table of Contents



2007


2006


2005U.S. federal statutory rate


35.0
%


35.0
%


35.0
%State and local taxes, net of federal benefit


1.9
%


1.6
%


4.0
%Sec. 199 manufacturing deduction


(1.2
)%


(1.0
)%


(1.1
)%All other, net


1.9
%


1.6
%


1.1
%Effective income tax rate


37.6
%


37.2
%


39.0
%     8.
    Retirement
    Plans:      W-2
      9.
    Stock
    Options:      SFAS No. 123-R
 40




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##### Table of Contents



SFAS No. 123-R, Accounting for Stock Issued to Employees SFAS No. 123-R.
    SFAS No. 123-R
  For the Year Ended


For the Year EndedDecember 31, 2007


December 31, 2006Stock option expense before taxes

$
150


$
127Stock option expense after taxes

$
93


$
80Impact per basic share

$
0.01


$
0.01Impact per diluted share

$
0.01


$
0.01   SFAS No. 123-R, SFAS No. 123-R
    2007


2006


2005Risk-free interest rate


4.58
%


n/a



n/aExpected life in years


10



n/a



n/aExpected volatility


57.70
%


n/a



n/aExpected dividend yield


0.40
%


n/a



n/a      41




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##### Table of Contents



For the Year EndedDecember 31, 2005Net income, as reported

$
22,092Pro forma expense, net of tax


(348
)Pro forma net income

$
21,744Basic net income per share:As reported

$
2.18Pro forma

$
2.15Diluted earnings per share:As reported

$
2.11Pro forma

$
2.08     WeightedAverageWeighted


RemainingNumber of


Average Exercise


Contractual


AggregateShares


Price


Term


Intrinsic ValueOutstanding at December 31, 2006


477,140


$
6.12Granted


24,170



32.63Exercised


(297,503
)


4.94Canceled






Outstanding at December 31, 2007


203,807


$
10.99



5.41 years


$
4,246Exercisable at December 31, 2007


171,637


$
7.98



4.78 years


$
4,074     10.
    Restricted
    Stock Units and Performance Share Units:     42




---



##### Table of Contents



32-month
    Number of SharesRSUs


PERSUsUnvested as of January 1, 2007






Granted


9,000



32,378Vested






Forfeited






Unvested as of December 31, 2007


9,000



32,378   SFAS No. 123-R,
  For the Year EndedDecember 31, 2007RSU and PERSU expense before taxes

$
690RSU and PERSU expense after taxes

$
430Impact per basic share

$
0.04Impact per diluted share

$
0.04     11.
    Commitments
    and Contingencies:      2008

$
4,1132009


3,5432010


2,1202011


1,2252012


474Thereafter


342$
11,817    43




---



##### Table of Contents



12.
    Related
    Party Transactions:  10-year
      13.
    Supplemental
    Cash Flow Information:      PS&W


GSPFair value of assets acquired (including goodwill)

$
17,562


$
5,419Termination of existing equity method investment in joint venture






(63
)Cash paid for stock/ownership interest


(8,965
)


(100
)Liabilities assumed

$
8,597


$
5,256   14.
    Shareholder
    Rights Plan:   44




---



##### Table of Contents



SUPPLEMENTAL
    FINANCIAL INFORMATION
    Unaudited Quarterly Results of Operations (in
    thousands, except per share amounts)
  2007

1st


2nd


3rd


4th


YearNet sales

$
259,405


$
277,413


$
256,089


$
236,056


$
1,028,963Operating income


9,410



15,871



10,678



7,365



43,324Income before income taxes


8,383



15,018



10,038



7,066



40,505Net income

$
5,252


$
9,446


$
6,029


$
4,543


$
25,270Basic net income per share

$
0.50


$
0.89


$
0.56


$
0.42


$
2.38Weighted average shares outstanding  basic


10,435



10,603



10,727



10,728



10,628Diluted net income per share

$
0.49


$
0.88


$
0.56


$
0.42


$
2.35Weighted average shares outstanding  diluted


10,664



10,753



10,821



10,814



10,763Market price of common stock: (a)High

$
31.72


$
34.99


$
31.59


$
33.20


$
34.99Low


21.03



28.54



21.79



23.00



21.03   2006

1st


2nd


3rd


4th


YearNet sales

$
238,871


$
256,155


$
259,917


$
226,061


$
981,004Operating income


12,834



16,042



18,751



6,593



54,220Income before income taxes


12,573



13,667



17,853



5,313



49,406Net income

$
7,981


$
8,371


$
10,935


$
3,761


$
31,048Basic net income per share

$
0.78


$
0.80


$
1.05


$
0.36


$
2.99Weighted average shares outstanding  basic


10,259



10,416



10,429



10,429



10,383Diluted net income per share

$
0.76


$
0.79


$
1.03


$
0.35


$
2.92Weighted average shares outstanding  diluted


10,568



10,661



10,663



10,651



10,633Market price of common stock: (a)High

$
32.00


$
37.86


$
39.49


$
28.77


$
39.49Low


23.18



28.31



23.76



21.20



21.20     (a)
    
    Represents the high and low sales quotations of our Common Stock
    as reported by the Nasdaq Global Market. 45




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rule 13a-15 Rule 13a-15(e)
  MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Form 10-K
  Changes
    in Internal Control Over Financial Reporting
    ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE
    GOVERNANCE  Form 10-K
 46




---



##### Table of Contents



ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  (a)(1) The following financial statements are included in
    Part II, Item 8:
                (a)(2) Financial Statement Schedules.
  (a)(3) Exhibits.
 47




---



##### 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.
    By:
    /s/  Richard
    T. Marabito      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 14th day of
    March, 2008.
  /s/  Michael
    D.
    Siegal*Michael
    D. Siegal
    Chairman of the Board and Chief Executive Officer
    (Principal Executive Officer)

March 14, 2008/s/  David
    A.
    Wolfort*David
    A. Wolfort
    President, Chief Operating Officer and Director

March 14, 2008/s/  Richard
    T.
    Marabito*Richard
    T. Marabito
    Chief Financial Officer
    (Principal Financial Officer and Principal
    Accounting Officer)

March 14, 2008/s/  Ralph
    M. Della Ratta,
    Jr.*Ralph
    M. Della Ratta, Jr., Director

March 14, 2008/s/  Martin
    H.
    Elrad*Martin
    H. Elrad, Director

March 14, 2008/s/  Thomas
    M.
    Forman*Thomas
    M. Forman, Director

March 14, 2008/s/  James
    B.
    Meathe*James
    B. Meathe, Director

March 14, 2008/s/  Howard
    L.
    Goldstein*Howard
    L. Goldstein, Director

March 14, 2008   *
    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 14, 2008  48




---



##### Table of Contents



OLYMPIC
    STEEL, INC.
  INDEX
    TO EXHIBITS
  Exhibit

Description of Document

Reference2
.1

Stock Purchase Agreement dated May 19, 2006 with Goldstar
    Holdings Limited, a subsidiary of the Eliza Tinsley Group PLC
    and the sole shareholder of Tinsley Group-PS&W, Inc., and
    Goldstar Holdings joint administrators

Incorporated by reference to Exhibit 2.1 to Olympic Steel,
    Inc.s (SEC File No. 000-23320) (the
    Registrant) Form 10-Q filed with the Commission on
    August 9, 2006.3
.1(i)

Amended and Restated Articles of Incorporation

Incorporated by reference to Exhibit 4.2 to Registrants
    Registration Statement on Form
    S-8 (No.
    333-1439001) (the S-8 Registration Statement) filed
    with the Commission on June 20, 2007.3
.1(ii)

Amended and Restated Code of Regulations

Incorporated by reference to Exhibit 3.1(ii) to the S-1
    Registration Statement filed with the Commission on January 12,
    1994.4
.1

Amended and Restated Credit Agreement dated December 30,
    2002 by and among the Registrant, three banks and Comerica Bank,
    as Administrative Agent

Incorporated by reference to Exhibit 4.1 to Registrants
    Form 10-K filed with the Commission on March 28, 2003.4
.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

Incorporated by reference to Exhibit 4.2 to Registrants
    Form 10-K filed with the Commission on March 28, 2003.4
.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

Incorporated by reference to Exhibit 4.3 to Registrants
    Form 10-K filed with the Commission on March 30, 2004.4
.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

Incorporated by reference to Exhibit 4.4 to Registrants
    Form 10-K filed with the Commission on March 30, 2004.4
.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

Incorporated by reference to Exhibit 4.5 to Registrants
    Form 10-K filed with the Commission on March 30, 2004.4
.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

Incorporated by reference to Exhibit 4.6 to Registrants
    Form 10-K filed with the Commission on March 30, 2004.4
.7

Rights Agreement dated as of January 31, 2000 (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)

Incorporated by reference to Exhibit 4.1 to Registrants
    Form 8-K filed with the Commission on February 15, 2000.4
.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

Incorporated by reference to Exhibit 4.8 to Registrants
    Form 10-Q filed with the Commission on August 16, 2004. 49




---



##### Table of Contents



Exhibit

Description of Document

Reference4
.9

Amendment No. 7 to Amended and Restated Credit Agreement
    dated August 26, 2004 by and among the Registrant, five
    banks and Comerica Bank, as Administrative Agent

Incorporated by reference to Exhibit 4.9 to Registrants
    Form 10-K filed with the Commission on March 14, 2005.4
.10

Amendment No. 8 to Amended and Restated Credit Agreement
    dated February 25, 2005 by and among the Registrant, five
    banks and Comerica Bank, as Administrative Agent

Incorporated by reference to Exhibit 4.10 to Registrants
    Form 10-K filed with the Commission on March 14, 2005.4
.11

Amendment No. 9 to Amended and Restated Credit Agreement
    dated March 31, 2005 by and among the Registrant, five
    banks and Comerica Bank, as Administrative Agent

Incorporated by reference to Exhibit 4.11 to Registrants
    Form 8-K filed with the Commission on April 1, 2005.4
.12

Amendment No. 10 to Amended and Restated Credit Agreement
    dated June 24, 2005 by and among the Registrant, five banks
    and Comerica Bank, as Administrative Agent

Incorporated by reference to Exhibit 4.12 to Registrants
    Form 8-K filed with the Commission on June 24, 2005.4
.13

Amendment No. 11 to Amended and Restated Credit Agreement
    dated April 26, 2006 by and among the Registrant, five
    banks and Comerica Bank, as Administrative Agent

Incorporated by reference to Exhibit 4.13 to Registrants
    Form 8-K filed with the Commission on April 28, 2006.4
.14

Amendment No. 12 to Amended and Restated Credit Agreement
    dated September 29, 2006 by and among the Registrant, five
    banks and Comerica Bank, as Administrative Agent

Incorporated by reference to Exhibit 4.14 to Registrants
    Form 8-K filed with the Commission on October 3, 2006.4
.15

Amendment No. 13 to Amended and Restated Credit Agreement
    dated April 30, 2007 by and among the Registrant, five
    banks and Comerica Bank, as Administrative Agent

Incorporated by reference to Exhibit 4.15 to Registrants
    Form 8-K filed with the Commission on April 30, 2007.4
.16

Amendment No. 14 to Amended and Restated Credit Agreement
    dated July 18, 2007 by and among the Registrant, five banks
    and Comerica Bank, as Administrative Agent

Incorporated by reference to Exhibit 4.16 to Registrants
    Form 8-K filed with the Commission on July 18, 2007.4
.17

Amendment No. 15 to Amended and Restated Credit Agreement
    dated November 28, 2007 by and among the Registrant, four
    banks and Comerica Bank, as Administrative Agent

Incorporated by reference to Exhibit 4.17 to Registrants
    Form 8-K filed with the Commission on November 28, 2007.10
.1*

Olympic Steel, Inc. Stock Option Plan

Incorporated by reference to Exhibit 10.1 to the S-1
    Registration Statement filed with the Commission on January 12,
    1994.10
.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

Incorporated by reference to Exhibit 10.3 to the S-1
    Registration Statement filed with the Commission on January 12,
    1994.10
.3

Intentionally omitted10
.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

Incorporated by reference to Exhibit 10.4 to the S-1
    Registration Statement filed with the Commission on January 12,
    1994. 50




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##### Table of Contents



Exhibit

Description of Document

Reference10
.5

Operating Agreement of Trumark Steel & Processing,
    LLC, dated April 1, 2002, by and among The Goss Group,
    Inc., and Oly Steel Welding, Inc.

Incorporated by reference to Exhibit 10.5 to Registrants
    Form 10-Q filed with the Commission on May 15, 2002.10
.6

Intentionally omitted10
.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.

Incorporated by reference to Exhibit 10.9 to Registrants
    Form 10-Q filed with the Commission on May 5, 1997.10
.8*

Form of Management Retention Agreement for Senior Executive
    Officers of the Company

Incorporated by reference to Exhibit 10.8 to Registrants
    Form 10-Q filed with the Commission on August 7, 2000.10
.9*

Form of Management Retention Agreement for Other Officers of the
    Company

Incorporated by reference to Exhibit 10.9 to Registrants
    Form 10-Q filed with the Commission on August 7, 2000.10
.10*

David A. Wolfort Employment Agreement effective as of
    January 1, 2006

Incorporated by reference to Exhibit 10.10 to Registrants
    Form 8-K filed with the Commission on December 23, 2005.10
.11

Intentionally omitted10
.12*

Michael D. Siegal Employment Agreement dated August 8, 2006

Incorporated by reference to Exhibit 10.12 to Registrants
    Form 10-Q filed with the Commission on August 9, 2006.10
.13*

Richard T. Marabito Employment Agreement dated August 8,
    2006

Incorporated by reference to Exhibit 10.13 to Registrants
    Form 10-Q filed with the Commission on August 9, 2006.10
.14*

Olympic Steel, Inc. Executive Deferred Compensation Plan dated
    December 15, 2004

Incorporated by reference to Exhibit 10.14 to Registrants
    Form 10-K filed with the Commission on March 14, 2005.10
.15*

Form of Non-Solicitation Agreements

Incorporated by reference to Exhibit 10.15 to Registrants
    Form 8-K filed with the Commission on March 4, 2005.10
.16*

Form of Management Retention Agreement

Incorporated by reference to Exhibit 10.16 to Registrants
    Form 10-Q filed with the Commission on August 8, 2005.10
.17*

Supplemental Executive Retirement Plan Term Sheet

Incorporated by reference to Exhibit 99.1 to Registrants
    Form 8-K filed with the Commission on January 5, 2006.10
.18*

Summary of Non-Employee Director Compensation

Incorporated by reference to Exhibit 10.18 to Registrants
    Form 10-K filed with the Commission on March 15, 2006.10
.19*

Summary of Senior Management Compensation Plan

Incorporated by reference to Exhibit 10.19 to Registrants
    Form 10-K filed with the Commission on March 15, 2006.10
.20*

Olympic Steel, Inc. Supplemental Executive Retirement Plan

Incorporated by reference to Exhibit 10.20 to Registrants
    Form 8-K filed with the Commission on April 28, 2006.10
.21*

Olympic Steel, Inc. 2007 Omnibus Incentive Plan

Incorporated by reference to Exhibit 10.21 to Registrants
    Form 8-K filed with the Commission on May 3, 2007. 51




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##### Table of Contents



Exhibit

Description of Document

Reference10
.22*

Form of Performance-Earned Restricted Stock Unit (PERS Unit)
    Agreement for Messrs. Siegal, Wolfort and Marabito

Incorporated by reference to Exhibit 10.22 to Registrants
    Form 10-Q filed with the Commission on August 8, 2007.10
.23*

Form of Performance-Earned Restricted Stock Unit (PERS Unit)
    Agreement for Mr. Manson and Ms. Potash

Incorporated by reference to Exhibit 10.23 to Registrants
    Form 10-Q filed with the Commission on August 8, 2007.10
.24*

Amendment to Management Retention Agreement with Richard T.
    Marabito dated March 13, 2008

Filed herewith21


List of Subsidiaries

Filed herewith23


Consent of Independent Registered Public Accounting Firm

Filed herewith24


Directors and Officers Powers of Attorney

Filed herewith31
.1

Certification of the Principal Executive Officer of the Company,
    as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002

Filed herewith31
.2

Certification of the Principal Financial Officer of the Company,
    as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002

Filed herewith32
.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

Furnished herewith32
.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

Furnished herewith     *
    
    This exhibit is a management contract or compensatory plan or
    arrangement. 52