<PAGE>   1

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                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, 2000

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

                         Commission File Number 0-23320

                              OLYMPIC STEEL, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                             <C>
                     OHIO                             34-1245650
----------------------------------------------  ----------------------
       (State or other jurisdiction of             (I.R.S. Employer
        incorporation or organization)          Identification Number)
</TABLE>

<TABLE>
<S>                                             <C>

  5096 RICHMOND ROAD, BEDFORD HEIGHTS, OHIO             44146
----------------------------------------------  ----------------------
   (Address of principal executive offices)           (Zip Code)
</TABLE>

       Registrant's telephone number, including area code (216) 292-3800

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      None

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                        Common Stock, without par value

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes (X)  No ( )

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )

     As of March 16, 2001, the aggregate market value of voting stock held by
nonaffiliates of the registrant based on the closing price at which such stock
was sold on The NASDAQ Stock Market on such date approximated $20,270,000. The
number of shares of Common Stock outstanding as of March 16, 2001 was 9,631,100.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Registrant intends to file with the Securities and Exchange Commission a
definitive Proxy Statement pursuant to Regulation 14A of the Securities Exchange
Act of 1934 within 120 days of the close of its fiscal year ended December 31,
2000, portions of which document shall be deemed to be incorporated by reference
in Part I and Part III of this Annual Report on Form 10-K from the date such
document is filed.

                                               Exhibit Index Appears on Page 36
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<PAGE>   2

                                     PART I

ITEM 1.  BUSINESS

THE COMPANY

     The Company is a leading North American steel service center with 46 years
of experience in specialized processing and distribution of large volumes of
carbon, coated carbon and stainless steel, flat-rolled sheet, coil and plate,
and tubular steel products from 13 facilities in eight midwestern and eastern
states. The Company also participates in two joint ventures in Michigan. The
Company operates as an intermediary between steel producers and manufacturers
that require processed steel for their operations. The Company purchases
flat-rolled steel typically from steel producers and responds to its customers'
needs by processing steel to customer specifications and by providing critical
inventory and just-in-time delivery services. Such services reduce customers'
inventory levels, as well as save time, labor and expense for customers, thereby
reducing their overall production costs. The Company's services include both
traditional service center processes of cutting-to-length, slitting, shearing
and roll forming and higher value-added processes of blanking, tempering, plate
burning, laser welding, and precision machining of steel parts.

     The Company is organized into four regional operations with domestic
processing and distribution facilities in Connecticut, Georgia, Pennsylvania,
Ohio, Michigan, Illinois, Iowa, and Minnesota, servicing a diverse base of over
2,800 active customers located throughout the midwestern, eastern and southern
United States. Its international sales office is located in Miami, Florida and
services customers primarily in Mexico and Puerto Rico.

     The Company is incorporated under the laws of the State of Ohio. The
Company's executive offices are located at 5096 Richmond Road, Cleveland, Ohio
44146. Its telephone number is (216) 292-3800.

INDUSTRY OVERVIEW

     The steel industry is comprised of three types of entities: steel
producers, intermediate steel processors and steel service centers. Steel
producers have historically emphasized the sale of steel to volume purchasers
and have generally viewed intermediate steel processors and steel service
centers as part of their customer base. However, all three entities can compete
for certain customers who purchase large quantities of steel. Intermediate steel
processors tend to serve as processors in large quantities for steel producers
and major industrial consumers of processed steel, including automobile and
appliance manufacturers.

     Services provided by steel service centers can range from storage and
distribution of unprocessed metal products to complex, precision value-added
steel processing. Steel service centers respond directly to customer needs and
emphasize value-added processing of flat-rolled steel and plate pursuant to
specific customer demands, such as cutting-to-length, slitting, shearing, roll
forming, shape correction and surface improvement, blanking, tempering, plate
burning and stamping. These processes produce steel to specified lengths,
widths, shapes and surface characteristics through the use of specialized
equipment. Steel service centers typically have lower cost structures and
provide services and value-added processing not otherwise available from steel
producers.

     End product manufacturers and other steel users have increasingly sought to
purchase steel on shorter lead times and with more frequent and reliable
deliveries than can normally be provided by steel producers. Steel service
centers generally have lower labor costs than steel producers and consequently
process steel on a more cost-effective basis. In addition, due to this lower
cost structure, steel service centers are able to handle orders in quantities
smaller than would be economical for steel producers. The net results to
customers purchasing products from steel service centers are lower inventory
levels, lower overall cost of raw materials, more timely response and decreased
manufacturing time and operating expense. The Company believes that the
increasing prevalence of just-in-time delivery requirements has made the
value-added inventory, processing and delivery functions performed by steel
service centers increasingly important.

                                        2
<PAGE>   3

CORPORATE HISTORY

     The Company was founded in 1954 by the Siegal family as a general steel
service center. Michael Siegal (CEO), the son of one of the founders, began
working at the Company in the early 1970's and became CEO at the end of 1983.
David Wolfort (President and COO) was hired as general manager at the end of
1983. In the late 1980's, the Company's business strategy changed from a focus
on warehousing and distributing steel from a single facility with no major
processing equipment to a focus on growth, geographic and customer diversity and
value-added processing. An integral part of the Company's growth has been the
acquisition and start-up of several processing and sales operations, and the
continued investment in processing equipment.

     In March 1994, the Company completed an initial public offering, and in
August 1996, completed a follow-on offering of its Common Stock.

BUSINESS STRATEGY

     The Company believes that the steel service center and processing industry
continues to be driven by four primary trends: increased outsourcing of
manufacturing processes by domestic manufacturers; shift by customers to fewer
and larger suppliers; increased customer demand for higher quality products and
services; and consolidation of industry participants.

     In recognition of these industry dynamics, the Company has historically
focused its business strategy on achieving profitable growth through the
start-up, acquisition, or joint venture partnering of service centers,
processors, and related businesses, and continued investments in higher
value-added processing equipment and services, while continuing its commitment
to expanding and improving its sales and servicing efforts and information
systems.

     In the third quarter of 1999, the Company hired a strategic planning firm
to assist the Company with its strategic initiatives. Assistance from the
strategic consulting firm concluded in the first quarter of 2000. The strategic
process focused on expense reduction and management, and the establishment and
communication of specific operating objectives including: (i) increasing tons
sold; (ii) reducing controllable operating expenses; (iii) improving on-time
delivery; (iv) improving quality directives; (v) improving inventory turns; and
(vi) improving return on assets performance.

     The Company's strategic plans also involve other efforts such as:

     (i)   Flawless execution (Fe), which is an internal program that empowers
           every employee to achieve profitable growth by delivering superior
           customer service and exceeding customer expectations.

     (ii)   Development and communication of a set of core values which will
            cascade throughout the Company.

     (iii)  On-going business process reviews and redesigns to be more efficient
            and cost effective, including the assembly of a Company-wide team to
            implement one common computer system across the Company.

     (iv)  Continued evolution of information and reports that are generated and
           distributed to key managers to focus on those matters important to
           achieving the specific operating objectives mentioned above.

     (v)   Aggressive marketing and e-commerce initiatives.

     Olympic believes its depth of management, strategically located facilities,
information systems, reputation for quality and customer service, extensive and
experienced sales force, and supplier relationships provide a strong foundation
for implementation of its strategy. Certain elements of the Company's strategy
are set forth in more detail below.

                                        3
<PAGE>   4

     INVESTMENT IN VALUE-ADDED PROCESSING EQUIPMENT. An integral part of the
Company's growth has been the purchase of major processing equipment and
construction of facilities. The Company's philosophy is that equipment purchases
should be driven by customer demand, and Olympic will continue to invest in
processing equipment to support such demand. When the results of sales and
marketing efforts indicate that there is sufficient customer demand for a
particular product or service, the Company will purchase the equipment to
satisfy that demand. In addition, the Company is constantly evaluating existing
equipment to ensure that it remains productive. This includes upgrading,
replacing, or disposing equipment wherever necessary.

     In 1987, the Company constructed a facility to house its first major piece
of processing equipment, a heavy gauge, cut-to-length line. The Company now has
97 major pieces of processing equipment. Certain equipment was purchased
directly from equipment manufacturers while the balance was acquired in the
Company's acquisitions of other steel service centers and related businesses.

     In response to customer demands for higher tolerances and flatness
specifications, in 1996 the Company began operating a customized four-high 1/2"
by 72" temper mill and heavy gauge cut-to-length line in one of its Cleveland
facilities. It remains one of only a few of its kind in the United States and
incorporates state-of-the-art technology and unique design specifications. The
equipment permits the Company to process steel to a more uniform thickness and
flatness, upgrades the quality and consistency of certain of the Company's
products, and enables the Company to produce tempered sheet or coil to customer
specifications in smaller quantities than is available from other sources.

     Customer response to the Cleveland Temper Mill product was so strong,
especially by agricultural equipment manufacturers and plate fabricators located
in the central states region, that the Company constructed and equipped a new,
190,000 square foot temper mill, sheet processing, and plate burning facility in
Bettendorf, Iowa which became operational in the fourth quarter of 1998.

     Since 1995, the Company has significantly expanded its plate processing
capacity. In 1995, the Company constructed a $7.4 million, 112,200 square foot
facility in Minneapolis which now houses ten laser, plasma and oxygen burning
tables and shot blasting equipment. Additional plate burning tables have been
added in Philadelphia and Connecticut as well. In September 1999, the Company
completed construction of an 87,000 square foot facility in Chambersburg,
Pennsylvania to house existing machining centers as well as two new pieces of
plate processing equipment. These investments in plate processing equipment have
allowed the Company to further increase its higher value-added processing
services. The Company believes it is among the largest processors and
distributors of steel plate in the United States.

     In addition to the plate burning and temper mill investments described
above, the Company has also invested over the last 3 years in a new tube mill
and end finishing equipment in Cleveland, new or upgraded cut-to-length
capabilities in Detroit, Minneapolis, and Georgia, and a new slitter for the
Detroit operation. As part of its strategy to evaluate and upgrade or replace
non-productive equipment, in many cases the new equipment has replaced multiple
pieces of older, less efficient equipment.

     The expansion of the Company's plate processing, machining and tempering
capabilities were made in response to the growing trend among capital equipment
manufacturers to outsource non-core production processes, such as plate
processing, and to concentrate on engineering, design and assembly. The Company
expects to further benefit from this trend.

     SALES AND MARKETING. The Company believes that its commitment to quality,
service and just-in-time delivery has enabled it to build and maintain strong
customer relationships, while expanding its geographic growth through the
continued upgrading and addition of sales personnel and the value-added services
provided.

     The Company is continuously analyzing its customer base and adapting its
marketing plan to ensure that strategic customers are properly targeted and
serviced, while focusing its efforts to supply and service its larger customers
on a national account basis. The national account program has successfully
resulted in selling to multi-location customers from multi-location Olympic
facilities.

                                        4
<PAGE>   5

     The Company initiated a "Flawless execution" program (Fe) in 1998, which is
a commitment that every Olympic employee makes to provide superior customer
service while striving to exceed customer expectations. The Fe program includes
tracking actual on-time delivery and quality performance against goals, and the
appointment of Fe teams and leaders to improve efficiencies and streamline
processes at each operation.

     The Company believes its sales force is among the largest and most
experienced in the industry, which is a significant competitive advantage. These
individuals make direct daily sales calls to customers throughout the
continental United States. The continuous interaction between the Company's
sales force and active and prospective customers provides the Company with
valuable market information and sales opportunities, including opportunities for
outsourcing and increased sales.

     The Company's sales efforts are further supported by metallurgical
engineers and technical service personnel, who have specific expertise in carbon
and stainless steel and alloy plate. The Company's e-commerce initiatives
include extranet pages for specific customers, which are integrated with the
Company's internal business systems to provide cost efficiencies for both the
Company and its customers.

     In the international market, the Company's objective is to service foreign
customers by matching their steel requirements to a specific primary steel
producer. The Company functions as the sales and logistics arm of primary
producers, giving them access to customers that they might otherwise not sell or
service. All international sales and payments are made in United States dollars.
International sales have represented less than 5% of net sales in each of the
last three years.

     ACQUISITIONS. Although the Company has focused on start-up and internal
operations over the past 30 months, its strategy is to continue to expand
geographically by making acquisitions of steel service centers, processors and
related businesses, with a focus on the central and southern United States. The
Company has made seven acquisitions of other steel service centers or processors
since 1987. Its most recent acquisition was the June 1998 strategic acquisition
of JNT Precision Machining (JNT), a machining center located in McConnellsburg,
Pennsylvania. JNT allowed the Company to provide additional value added services
to its existing and prospective customers that continue to outsource.
Additionally, the processes performed by JNT augment the Company's plate
processing performed at its Philadelphia operation. JNT operated lathes,
machining centers, drills and saws, which were relocated in September 1999 to a
newly constructed 87,000 square foot, $7 million facility in nearby
Chambersburg, Pennsylvania. The new facility also includes two new pieces of
plate processing equipment, which allows for multiple processing of plate
products in one location.

     INVESTMENTS IN JOINT VENTURES. The Company has diversified its selling and
processing capabilities for its customers by participating in the following
joint venture relationships:

     Olympic Laser Processing (OLP), a 50% owned joint venture, was formed in
1997 with the U.S. Steel Group of USX Corporation. OLP constructed a facility in
Michigan equipped with two automated laser-welding lines, which are both in
production. An additional manual-feed line was added in 2000 and a second manual
feed line is expected to become operational during the second half of 2001. OLP
produces laser-welded sheet steel blanks for the automotive industry. Although
OLP's ramp-up to capacity has been slower than expected, demand for laser-welded
parts is expected to continue growing due to cost benefits, and reduced scrap
and auto body weight. The Company expects OLP to be operating at four-line
capacity and to achieve profitability by the end of 2001. OLP obtained its
QS-9000 quality certification in 1998.

     In December 1997, the Company invested in a 49% interest in Trumark Steel &
Processing (TSP), a joint venture formed in eastern Michigan with Michael J.
Guthrie and Carlton L. Guthrie (the Guthries). TSP was formed to support the
flat-rolled steel requirements of the automotive industry as a Minority Business
Enterprise (MBE). TSP obtained certification as an MBE from the Michigan
Minority Business Development Council in December 1998, and obtained its QS-9000
quality certification in January 1999.

                                        5
<PAGE>   6

     DEPTH OF MANAGEMENT. The Company attributes a portion of its success to the
depth of its management. In addition to its principal executive officers, the
Company's management team includes three Regional Vice Presidents, eleven
General Managers, its Vice President of Sales and Marketing, its Directors of
Investor Relations, Taxes & Risk Management, Materials Management and Human
Resources, its Credit Manager and its Corporate Controller. Members of the
management team have a diversity of backgrounds within the steel industry,
including management positions at steel producers and other steel service
centers. They average 20 years of experience in the steel industry and 9 years
with the Company. This depth of management allows the Company to pursue and
implement its strategic plans.

PRODUCTS, PROCESSING SERVICES, AND QUALITY STANDARDS

     The Company maintains a substantial inventory of coil and plate steel. Coil
is in the form of a continuous sheet, typically 36 to 96 inches wide, between
0.015 and 0.625 inches thick, and rolled into 10 to 30 ton coils. Because of the
size and weight of these coils and the equipment required to move and process
them into smaller sizes, such coils do not meet the requirements, without
further processing, of most customers. Plate is typically thicker than coil and
is processed by laser, plasma or oxygen burning.

     Customer orders are entered (or electronically transmitted) into
computerized order entry systems, and appropriate inventory is then selected and
scheduled for processing in accordance with the customer's specified delivery
date. The Company attempts to maximize yield by combining customer orders for
processing each coil or plate to the fullest extent practicable.

     The Company's services include both traditional service center processes of
cutting-to-length, slitting, shearing and roll forming and higher value-added
processes of blanking, tempering, plate burning, precision machining and laser
welding to process steel to specified lengths, widths and shapes pursuant to
specific customer orders. Cutting-to-length involves cutting steel along the
width of the coil. Slitting involves cutting steel to specified widths along the
length of the coil. Shearing is the process of cutting sheet steel, while roll
forming is the process in which flat rolled coils are formed into tubing and
welded. Blanking cuts the steel into specific shapes with close tolerances.
Tempering improves the uniformity of the thickness and flatness of the steel
through a cold rolling process. Plate burning is the process of cutting steel
into specific shapes and sizes. The Company's machining activities include
drilling, bending, milling, tapping, boring and sawing. Laser welding of
processed steel blanks is performed by the Company's OLP joint venture.

     The following table sets forth the major pieces of processing equipment in
operation by geographic region:

<TABLE>
<CAPTION>
       PROCESSING
        EQUIPMENT          (A) EASTERN REGION   (B) CENTRAL REGION   (C) DETROIT   (D) MINNEAPOLIS   (E) JOINT VENTURES   TOTAL
       ----------          ------------------   ------------------   -----------   ---------------   ------------------   -----
<S>                        <C>                  <C>                  <C>           <C>               <C>                  <C>
Cutting-to-length........           5                    5                2               3                                15
Blanking presses.........                                                 4                                                 4
Tempering (f)............           2                    2                                1                                 5
Plate processing.........           7                    9                               10                                26
Slitting.................           4                                     2               2                  1              9
Shearing (g).............                                4                                6                  3             13
Roll forming.............                                2                                                                  2
Machining................          18                                                                                      18
Shot blasting/grinding...           1                                                     1                                 2
Laser welding............                                                                                    3              3
                                   --                   --                --             --                  --            --
     Total...............          37                   22                8              23                  7             97
                                   ==                   ==                ==             ==                  ==            ==
</TABLE>

---------------
(a) Consists of four facilities located in Connecticut, Pennsylvania and
    Georgia.

(b) Consists of six facilities located in Ohio, Illinois, and Iowa. Excludes the
    Elk Grove Village, Illinois facility, which is held for sale.

(c) Consists of one facility primarily serving the automotive industry.

(d) Consists of two facilities located in Minnesota.

(e) Consists of two facilities located in Michigan.

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

(g) Shearing in the Central Region includes two tubing recut lines.

                                        6
<PAGE>   7

     The Company's quality control system establishes controls and procedures
covering all aspects of its products from the time the material is ordered
through receipt, processing and shipment to the customer. These controls and
procedures encompass periodic supplier audits, meetings with customer advisory
boards, inspection criteria, traceability and certification. From time to time,
the Company has undergone quality audits by certain of its customers and has met
all requirements of those customers. In addition, the Philadelphia, Southern,
and both Minneapolis operations are ISO 9002 certified. The Detroit operation is
one of only a few domestic service centers to earn Ford's Q1 quality rating, and
is also QS-9000 certified. The TSP and OLP joint ventures are also QS-9000
certified. The Company has a quality testing lab adjacent to its temper mill
facility in Cleveland.

CUSTOMERS AND DISTRIBUTION

     The Company offers business solutions through value-added and
value-engineered services for sale to over 2,800 domestic and foreign customers.
The Company has a diversified customer and geographic base, which reduces the
inherent cyclicality of its business. The concentration of net sales to the
Company's top 20 customers increased to approximately 26% of net sales in 2000
compared to 20% in 1999, as the Company continues to expand its participation
with national accounts. In addition, the Company's largest customer accounted
for approximately 4% and 3% of net sales in 2000 and 1999, respectively. Major
domestic customers include manufacturers and fabricators of transportation and
material handling equipment, automobiles, construction and farm machinery,
storage tanks, environmental equipment, appliances, food service and electrical
equipment, as well as general and plate fabricators, and steel service centers.
Sales to the three largest U.S. automobile manufacturers and their suppliers,
made principally by the Company's Detroit operation, and sales to other steel
service centers, accounted for approximately 15% and 12%, respectively, of the
Company's net sales in 2000, and 17% and 12% of net sales in 1999.

     While the Company ships products throughout the United States, most of its
customers are located in the midwestern, eastern and southern regions of the
United States. Most domestic customers are located within a 250-mile radius of
one of the Company's processing facilities, thus enabling an efficient delivery
system capable of handling a high frequency of short lead-time orders. The
Company transports most of its products directly to customers via dedicated
independent trucking firms, although the Company also owns and operates some
trucks in different locations to facilitate short-distance, multi-stop
deliveries. International products are shipped either directly from the steel
producers to the customer or to an intermediate processor, and then to the
customer by rail, truck or ocean carrier.

     The Company processes its steel to specific customer orders as well as for
stock. Many of the Company's customers commit to purchase on a regular basis
with the customer notifying the Company of specific release dates as the
processed products are required. Customers typically notify the Company of
release dates anywhere from a just-in-time basis up to three weeks before the
release date. Therefore, the Company is required to carry sufficient inventory
to meet the short lead time and just-in-time delivery requirements of its
customers.

SUPPLIERS

     Olympic concentrates on developing relationships with high-quality domestic
integrated and mini mills, as well as foreign steel producers. The Company is a
major customer of flat-rolled coil and plate for many of its principal
suppliers, but is not dependent on any one supplier. The Company purchases in
bulk from steel producers in quantities that are efficient for such producers.
This enables the Company to maintain a continued source of supply at what it
believes to be competitive prices. Olympic believes the accessibility and
proximity of its facilities to major domestic steel producers will continue to
be an important factor in maintaining strong relationships with them.

     The Company purchases flat-rolled steel for processing at regular intervals
from a number of domestic and foreign producers of primary steel. The Company
believes that its relationships with its suppliers are good. The Company has no
long-term commitments with any of its suppliers.

                                        7
<PAGE>   8

COMPETITION

     The principal markets served by the Company are highly competitive. The
Company competes with other regional and national steel service centers, single
location service centers and, to a certain degree, steel producers and
intermediate steel processors on a regional basis. The Company has different
competitors for each of its products and within each region. The Company
competes on the basis of price, product selection and availability, customer
service, quality and geographic proximity. Certain of the Company's competitors
have financial and operating resources in excess of those of the Company.

     With the exception of certain Canadian operations, foreign steel service
centers are generally not a material factor in the Company's principal domestic
markets. The Company competes for international sales with many domestic and
foreign steel traders and producers, none of whom dominates or controls the
international markets served by the Company. Many of these international
competitors are also suppliers to the Company.

MANAGEMENT INFORMATION SYSTEMS

     Information systems are a critical component of Olympic's strategy. The
Company has invested, and will continue to invest, in advanced technologies and
human resources required in this area. The Company believes that its information
systems provide it with a significant competitive advantage over smaller
competitors with less resources than Olympic. The Company's information systems
focus on the following core application areas:

     INVENTORY MANAGEMENT. The Company's information systems track the status of
inventories in all locations on a daily basis. This information is essential in
allowing the Company to closely monitor and manage its inventory.

     DIFFERENTIATED SERVICES TO CUSTOMERS. The Company's information systems
allow it to provide value-added services to customers, including quality control
monitoring and reporting, just-in-time inventory management and shipping
services and EDI communications.

     INTERNAL COMMUNICATIONS. The Company believes that its ability to quickly
and efficiently share information across its operations is critical to the
Company's success. The Company continues to invest in various communications and
workgroup technologies, which enables employees to remain effective and
responsive.

     E-COMMERCE AND ADVANCED CUSTOMER INTERACTION. The Company is actively
involved in electronic commerce initiatives, including buying or selling steel
on the primary Internet auction sites for steel. These include MetalSite,
e-Steel, MaterialNet, FreeMarkets, and Ferrous Exchange. Olympic has also
introduced extranet sites for specific customers, which are integrated with the
Company's internal business systems to streamline the costs and time associated
with processing these electronic transactions.

     The Company has initiated a project to implement a new management
information system (ERP). The new system will integrate all of the business
units of the Company and will provide a common foundation for the future. The
new system is expected to become operational in 2003.

EMPLOYEES

     At December 31, 2000, the Company employed 1,012 people. Approximately 220
of the Company's hourly plant personnel at the Minneapolis and Detroit
facilities are represented by four separate collective bargaining units. The two
collective bargaining agreements at Detroit expire in July 2001 and July 2002.
The agreements covering personnel at the Minneapolis facilities expire in
September 2002 and March 2003. The Company has never experienced a work stoppage
and believes that its relationship with its employees is good.

                                        8
<PAGE>   9

SERVICE MARKS, TRADE NAMES AND PATENTS

     The Company conducts its business under the name "Olympic Steel." A
provision of federal law grants exclusive rights to the word "Olympic" to the
U.S. Olympic Committee. The U.S. Supreme Court has recognized, however, that
certain users may be able to continue to use the word based on long-term and
continuous use. The Company has used the name Olympic Steel since 1954, but is
prevented from registering the name "Olympic" and from being qualified to do
business as a foreign corporation under that name in certain states. In such
states, the Company has registered under different names, including "Oly Steel"
and "Olympia Steel." The Company's wholly-owned subsidiary, Olympic Steel
Lafayette, Inc., does business in certain states under the names "Lafayette
Steel and Processing" and "Lafayette Steel," and the Company's operation in
Georgia does business under the name "Southeastern Metal Processing." The
Company's web site is located at http://www.olysteel.com.

GOVERNMENT REGULATION

     The Company's operations are governed by many laws and regulations,
including those relating to workplace safety and worker health, principally the
Occupational Safety and Health Act and regulations thereunder. The Company
believes that it is in material compliance with these laws and regulations and
does not believe that future compliance with such laws and regulations will have
a material adverse effect on its results of operations or financial condition.

ENVIRONMENTAL

     The Company's facilities are subject to certain federal, state and local
requirements relating to the protection of the environment. The Company believes
that it is in material compliance with all environmental laws, does not
anticipate any material expenditures to meet environmental requirements and does
not believe that compliance with such laws and regulations will have a material
adverse effect on its results of operations or financial condition.

CYCLICALITY IN THE STEEL INDUSTRY; IMPACT OF CHANGING STEEL PRICES

     The principal raw material used by the Company is flat-rolled carbon and
stainless steel that the Company typically purchases from steel producers. The
steel industry as a whole is cyclical, and at times pricing and availability in
the steel industry can be volatile due to numerous factors beyond the control of
the Company, including general, domestic and international economic conditions,
labor costs, production levels, competition, steel import levels, import duties
and tariffs and currency exchange rates. This volatility can significantly
affect the availability and costs of raw materials for the Company.

     Steel service centers maintain substantial inventories of steel to
accommodate the short lead times and just-in-time delivery requirements of their
customers. Accordingly, the Company purchases steel in an effort to maintain its
inventory at levels that it believes to be appropriate to satisfy the
anticipated needs of its customers based upon historic buying practices,
contracts with customers and market conditions. The Company's commitments for
steel purchases are generally at prevailing market prices in effect at the time
the Company places its orders. The Company has no long-term, fixed-price steel
purchase contracts. When raw material prices increase, competitive conditions
will influence how much of the steel price increases can be passed on to the
Company's customers. When raw material prices decline, customer demands for
lower prices could result in lower sale prices and, as the Company uses existing
steel inventory, lower margins. Changing steel prices therefore could adversely
affect the Company's net sales, gross margins and net income.

                                        9
<PAGE>   10

CYCLICALITY OF DEMAND; SALES TO THE AUTOMOTIVE INDUSTRY

     Certain of the Company's products are sold to industries that experience
significant fluctuations in demand based on economic conditions or other matters
beyond the control of the Company. The Company's diversified customer and
geographic base reduce such cyclicality; however, no assurance can be given that
the Company will be able to increase or maintain its level of sales in periods
of economic stagnation or downturn.

     Sales of the Company's products for use in the automotive industry
accounted for approximately 15% and 17% of the Company's net sales in 2000 and
1999, respectively. Such sales include sales directly to automotive
manufacturers and to manufacturers of automotive components and parts. The
automotive industry experiences significant fluctuations in demand based on
numerous factors such as general economic conditions and consumer confidence.
The automotive industry is also subject, from time to time, to labor work
stoppages. Any prolonged disruption in business arising from work stoppages by
automotive manufacturers or by steel manufacturers could have a material adverse
effect on the Company's results of operations.

EFFECTS OF INFLATION AND PRICING FLUCTUATIONS

     Inflation generally affects the Company by increasing the cost of
personnel, transportation services, processing equipment, purchased steel,
energy, and borrowings under the various credit agreements. In 2000, increasing
energy prices had an adverse effect on the Company's distribution and occupancy
expense. Rising interest rates also adversely impacted the Company's Financing
Costs in 2000. Additionally, when raw material prices decline, as in 2000,
customer demands for lower prices result in lower selling prices and, as the
Company uses existing steel inventory, lower margins. Declining steel prices
therefore adversely affected the Company's net sales, gross margins and net
income in 2000.

FORWARD-LOOKING INFORMATION

     This document contains various forward-looking statements and information
that are based on management's beliefs as well as assumptions made by and
information currently available to management. When used in this document, the
words "anticipate," "expect," "believe," "estimated," "project," "plan" and
similar expressions are intended to identify forward-looking statements, which
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks,
uncertainties and assumptions including, but not limited to: general business
and economic conditions; competitive factors such as the availability and
pricing of steel and fluctuations in demand, specifically in the automotive,
transportation, and other service centers markets served by the Company;
potential equipment malfunction; equipment installation and facility
construction delays especially as related to the equipment installations at OLP
in 2001; the adequacy of information technology and business system software
investment; the successes of the Company's strategic efforts and initiatives;
the successes of its joint ventures; the successes of the Company's ability to
increase sales volumes, improve gross margins, quality, service, inventory turns
and reduce its costs; and the availability of acquisition opportunities. Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, expected, believed, estimated, projected or planned. Readers are
cautioned not to place undue reliance on these forward-looking statements which
speak only as of the date hereof. The Company undertakes no obligation to
republish revised forward-looking statements to reflect the occurrence of
unanticipated events or circumstances after the date hereof.

                                        10
<PAGE>   11

ITEM 2.  PROPERTIES

     The Company believes that its properties are strategically situated
relative to its customers and each other, allowing the Company to support
customers from multiple locations. This permits the Company to provide inventory
and processing services which are available at one operation but not another.
Steel is shipped from the most advantageous facility, regardless of where the
order was taken. The facilities are located in the hubs of major steel
consumption markets, and within a 250-mile radius of most of the Company's
customers, a distance approximating the one-day driving and delivery limit for
truck shipments. The following table sets forth certain information concerning
the Company's principal properties:

<TABLE>
<CAPTION>
                                            SQUARE                                    OWNED OR
  OPERATION             LOCATION             FEET                FUNCTION              LEASED
  ---------    ---------------------------  -------   ------------------------------  --------
<S>            <C>                          <C>       <C>                             <C>
Cleveland      Bedford Heights, Ohio (1)    127,000   Corporate headquarters and        Owned
                                                      coil processing and
                                                      distribution center
               Bedford Heights, Ohio (1)    121,500   Coil processing, distribution     Owned
                                                      center and offices
               Bedford Heights, Ohio (1)     59,500   Plate processing, distribution   Leased(2)
                                                      center and offices
               Cleveland, Ohio              118,500   Roll form processing,             Owned
                                                      distribution center and
                                                      offices
Minneapolis    Plymouth, Minnesota          196,800   Coil processing, distribution     Owned
                                                      center and offices
               Plymouth, Minnesota          112,200   Plate processing, distribution    Owned
                                                      center and offices
Lafayette      Detroit, Michigan            256,000   Coil processing, distribution     Owned
                                                      center and offices
South          Winder, Georgia              240,000   Coil processing, distribution     Owned
                                                      center and offices
Iowa           Bettendorf, Iowa             190,000   Coil and plate processing,        Owned
                                                      distribution center and
                                                      offices
Connecticut    Milford, Connecticut         134,000   Coil and plate processing,        Owned
                                                      distribution center and
                                                      offices
Chicago        Schaumburg, Illinois          80,500   Coil processing, distribution     Owned
                                                      center and offices
               Elk Grove Village,            48,000   Discontinued use                  Owned
               Illinois (3)
Philadelphia   Lester, Pennsylvania          92,500   Plate processing, distribution   Leased
                                                      center and offices
Chambersburg   Chambersburg, Pennsylvania    87,000   Plate processing and              Owned
                                                      machining, distribution center
                                                      and offices
</TABLE>

---------------
(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 was renewed in June 2000
    for a 10-year term, with one remaining renewal option for an additional 10
    years.

(3) The Company has consolidated its Chicago operations in the Schaumburg,
    Illinois facility. The Company has discontinued use of its Elk Grove Village
    facility, which is included in assets held for sale on the accompanying
    consolidated balance sheets as of December 31, 2000.

                                        11
<PAGE>   12

     The Company's international sales office is located in Miami, Florida. The
Company also has invested in two joint ventures which each own a facility in
Michigan. All of the properties listed in the table as owned are subject to
mortgages securing industrial revenue bonds, taxable rate notes, term loans and
the Company's credit agreement. Management believes that the Company will be
able to accommodate its capacity needs for the immediate future at its existing
facilities.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is party to various legal actions that it believes are ordinary
in nature and incidental to the operation of its business. In the opinion of
management, the outcome of the proceedings to which the Company is currently a
party will not have a material adverse effect upon its operations or financial
condition.

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

     None

                      EXECUTIVE OFFICERS OF THE REGISTRANT

     This information is included in this Report pursuant to Instruction 3 of
Item 401(b) of Regulation S-K. The following is a list of the executive officers
of the Company and a brief description of their business experience. Each
executive officer will hold office until his successor is chosen and qualified.

     Michael D. Siegal, age 48, has served as Chief Executive Officer of the
Company since 1984, and as Chairman of the Board of Directors since 1994. From
1984 until January 2001, he also served as President. He has been employed by
the Company in a variety of capacities since 1974. Mr. Siegal is a member of the
Executive Committee for the Steel Service Center Institute (SSCI). He is also a
member of the American Iron and Steel Institute. He previously served as
National Chairman of Israel Bonds during the period 1991-1993 and presently
serves as Vice Chairman of the Executive Committee of the Development
Corporation for Israel and as an officer for the Cleveland Jewish Community
Federation. He is also a member of the Board of Directors of American National
Bank (Cleveland, Ohio).

     David A. Wolfort, age 48, has served as Chief Operating Officer since 1995
and a director of the Company since 1987. Mr. Wolfort assumed the additional
title of President in January 2001. He previously served as Vice
President -- Commercial from 1987 to 1995, after having joined the Company in
1984 as General Manager. Mr. Wolfort's duties include the management of all
sales, purchasing and operational aspects of each region. Prior to joining the
Company, Mr. Wolfort spent eight years with Sharon Steel, a primary steel
producer, in a variety of sales assignments. Mr. Wolfort is the Chairman of
SSCI's Political Action Committee and serves as Past Chairman of SSCI's
Governmental Affairs Committee. He is also a member of the Northern Ohio
Regional Board of the Anti-Defamation League.

     Richard T. Marabito, age 37, serves as the Company's Chief Financial
Officer (CFO) and Treasurer. He joined the Company in 1994 as Corporate
Controller and Treasurer and served in these capacities until being named CFO in
March 2000. Prior to joining the Company, Mr. Marabito served as Corporate
Controller for Waxman Industries, Inc., a publicly traded wholesale distribution
company. Mr. Marabito is a certified public accountant, and was employed from
1985 to 1990 by Arthur Andersen LLP in its audit division. Mr. Marabito also
serves as a director for the Company's two joint ventures.

     Mr. Heber MacWilliams, age 57, serves as Vice President -- Management
Information Systems, and has been employed by the Company since 1994. Prior to
joining the Company, Mr. MacWilliams spent 14 years as partner in charge of
management consulting at Walthall & Drake, a public accounting firm in
Cleveland, Ohio. Mr. MacWilliams is also a member of the faculty of the
Weatherhead School of Management at Case Western Reserve University in
Cleveland, Ohio.

                                        12
<PAGE>   13

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

PRICE RANGE OF COMMON STOCK

     The Company's Common Stock trades on NASDAQ under the symbol "ZEUS." The
following table sets forth, for each quarter in the two year period ended
December 31, 2000, the high and low closing prices of the Company's Common Stock
on NASDAQ:

<TABLE>
<CAPTION>
                                                              HIGH      LOW
                                                              -----    -----
<S>                                                           <C>      <C>
2000
  First quarter.............................................  $5.13    $3.88
  Second quarter............................................   5.00     3.50
  Third quarter.............................................   4.06     2.50
  Fourth quarter............................................   2.81     1.88

1999
  First quarter.............................................  $8.38    $5.06
  Second quarter............................................   8.88     6.50
  Third quarter.............................................   7.00     5.63
  Fourth quarter............................................   6.22     4.38
</TABLE>

HOLDERS OF RECORD

     March 12, 2001, the Company believed there were approximately 3,051
beneficial holders of the Company's Common Stock.

DIVIDENDS

     The Company presently retains all of its earnings, and anticipates that all
of its future earnings will be retained to finance the expansion of its business
and does not anticipate paying cash dividends on its Common Stock in the
foreseeable future. Any determination to pay cash dividends in the future will
be at the discretion of the Board of Directors after taking into account various
factors, including the Company's financial condition, results of operations,
current and anticipated cash needs, plans for expansion and restrictions under
the Company's credit agreements.

STOCK REPURCHASE

     In April 1999, the Company's Board of Directors authorized a one-year
program to purchase up to 1 million shares of Olympic Common Stock. During the
first half of 2000, the Company completed the 1 million share repurchase at an
average price of $5.86 per share. In July 2000, the Company's Board of Directors
authorized a one-year program to purchase up to an additional 1 million shares
of Olympic Common Stock. During the third quarter of 2000, the Company
repurchased 360,900 shares at an average price of $3.88 per share. Repurchased
shares are held in treasury and are available for general corporate purposes.
The Company does not anticipate purchasing additional shares before the program
expires in July 2001.

SHAREHOLDER RIGHTS PLAN

     On February 15, 2000, the Company filed a Form 8-K relative to the adoption
of a shareholder rights plan.

                                        13
<PAGE>   14

ITEM 6.  SELECTED FINANCIAL DATA

     The following table sets forth selected data of the Company for each of the
five years in the period ended December 31, 2000. Certain amounts have been
reclassified to conform to the 2000 presentation. The data presented should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements
and notes thereto included elsewhere in this report.

<TABLE>
<CAPTION>
                                                  FOR THE YEARS ENDED DECEMBER 31,
                                      --------------------------------------------------------
                                        2000        1999        1998        1997        1996
                                      --------    --------    --------    --------    --------
                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                   <C>         <C>         <C>         <C>         <C>
TONS SOLD DATA:
  Direct............................     1,038       1,065       1,070       1,111       1,022
  Toll..............................       165         207         231         219         150
     Total..........................     1,203       1,272       1,301       1,330       1,172

INCOME STATEMENT DATA:
Net sales...........................  $520,359    $525,785    $576,769    $608,714    $560,588
Cost of sales.......................   411,624     401,028     455,544     483,071     436,553
Gross margin........................   108,735     124,757     121,225     125,643     124,035
Operating expenses (a)..............   110,247     111,155     125,764     103,536      93,653
Operating income (loss).............    (1,512)     13,602      (4,539)     22,107      30,382
Income (loss) from joint ventures...    (1,425)     (1,032)       (322)         11          --
Interest expense....................     6,258       4,315       3,856       4,172       4,301
Receivable securitization expense...     3,724       3,119       3,773       3,791       3,393
Income (loss) before taxes..........   (12,919)      5,136     (12,490)     14,155      22,688
Income taxes........................    (4,198)      1,977      (4,059)      5,308       8,569
Net income (loss)...................  $ (8,721)   $  3,159    $ (8,431)   $  8,847    $ 14,119
Basic and diluted net income (loss)
  per share.........................  $  (0.90)   $   0.30    $  (0.79)   $   0.83    $   1.50
Weighted average shares
  outstanding.......................     9,677      10,452      10,692      10,692       9,427

BALANCE SHEET DATA:
Current assets......................  $103,837    $137,513    $132,080    $142,175    $152,255
Current liabilities.................    32,672      36,248      43,225      37,126      36,267
Working capital.....................    71,165     101,265      88,855     105,049     115,988
     Total assets...................   224,929     267,007     256,108     265,534     241,130
     Total debt.....................    68,009      93,426      76,520      79,924      64,582
Shareholders' equity................   124,920     136,820     137,743     146,174     137,327
</TABLE>

---------------
(a) 2000 and 1998 operating expenses include asset impairment charges of $1,178
    and $19,056, respectively.

                                        14
<PAGE>   15

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

     The Company's results of operations are affected by numerous external
factors, such as general economic and political conditions, competition, steel
pricing and availability, energy prices, and work stoppages by automotive
manufacturers.

     Olympic sells a broad range of products, many of which have different gross
margins. Products that have more value-added processing generally have a greater
gross margin. Accordingly, the Company's overall gross margin is affected by
product mix and the amount of processing performed, as well as volatility in
selling prices and material purchase costs. The Company performs toll processing
of customer-owned steel, the majority of which is performed by its Detroit and
Georgia operations. Toll processing generally results in lower selling prices
and gross margin dollars per ton but higher gross margin percentages than the
Company's direct sales.

     The Company's two joint ventures include: Olympic Laser Processing (OLP), a
company that processes laser welded sheet steel blanks for the automotive
industry; and Trumark Steel & Processing (TSP), a Minority Business Enterprise
(MBE) company supporting the flat-rolled steel requirements of the automotive
industry. The Company's 50% interest in OLP and 49% interest in TSP are
accounted for under the equity method. The Company guarantees portions of
outstanding debt under both of the joint venture companies' bank credit
facilities. As of December 31, 2000, Olympic guaranteed 50% of OLP's $19.9
million and 49% of TSP's $3.0 million of outstanding debt on a several basis.

     Financing costs include interest expense on debt and costs associated with
the Company's accounts receivable securitization program (Financing Costs).
Interest rates paid by the Company under its credit agreement are generally
based on prime or LIBOR plus a premium (the Premium) determined quarterly, which
varies based on the Company's operating performance and financial leverage.
Receivable securitization costs are based on commercial paper rates calculated
on the amount of receivables sold.

     The Company sells certain products internationally, primarily in Mexico and
Puerto Rico. All international sales and payments are made in United States
dollars. These sales historically involve the Company's direct representation of
steel producers and may be covered by letters of credit or trade receivable
insurance. Typically, international sales are more transactional in nature with
lower gross margins than domestic sales. Domestic steel producers generally
supply domestic customers before meeting foreign demand, particularly during
periods of supply constraints.

     Because the Company conducts its operations generally on the basis of
short-term orders, backlog is not a meaningful indicator of future performance.

RESULTS OF OPERATIONS

     The following table sets forth certain income statement data expressed as a
percentage of net sales:

<TABLE>
<CAPTION>
                                                      2000     1999     1998
                                                      -----    -----    -----
<S>                                                   <C>      <C>      <C>
Net sales...........................................  100.0%   100.0%   100.0%
Cost of sales.......................................   79.1     76.3     79.0
                                                      -----    -----    -----
  Gross margin......................................   20.9     23.7     21.0
Operating expenses before asset impairment charge...   21.0     21.1     18.5
Asset impairment charge.............................    0.2       --      3.3
                                                      -----    -----    -----
  Operating income (loss)...........................   (0.3)     2.6     (0.8)
Loss from joint ventures............................   (0.3)    (0.2)    (0.1)
Interest and receivable securitization expense......    1.9      1.4      1.3
                                                      -----    -----    -----
  Income (loss) before taxes........................   (2.5)     1.0     (2.2)
Income taxes........................................   (0.8)     0.4     (0.7)
                                                      -----    -----    -----
  Net income (loss).................................   (1.7)%    0.6%    (1.5)%
                                                      =====    =====    =====
</TABLE>

                                        15
<PAGE>   16

2000 COMPARED TO 1999

     Tons sold decreased 5.5% to 1,203 thousand in 2000 from 1,272 thousand in
1999. Tons sold in 2000 included 1,038 thousand from direct sales and 165
thousand from toll processing, compared with 1,065 thousand from direct sales
and 207 thousand from toll processing in 1999. The decrease in direct and toll
tons sold was attributable to depressed demand primarily in the automotive,
transportation, and other service center sectors.

     Net sales decreased by $5.4 million, or 1.0%, to $520.4 million from $525.8
million in 1999. Average selling prices increased 4.7% primarily due to more
direct sales as a percentage of total sales. The Company does not expect
improvement in customer demand during the first half of 2001.

     As a percentage of net sales, gross margin decreased to 20.9% in 2000 from
23.7% in 1999. The decrease is attributable to the significant and continuous
decline in steel prices since April 2000, as well as the Company's initiative to
reduce its inventory levels in reaction to depressed customer demand. Base hot
rolled pricing declined by 35% from April to December 2000. The Company expects
steel pricing to stabilize in the first half of 2001, resulting in increased
gross margin percentages.

     Operating expenses in 2000 include a $1.2 million asset impairment charge
to reduce the net book value of certain equipment to its estimated sale value.
The Company also recorded $1.5 million of incremental accounts receivable
reserves for collectibility concerns. Excluding the impact of these charges in
2000, operating expenses decreased $3.6 million or 3.2% from 1999. On a per ton
basis excluding the charges, operating expenses increased 2.4% to $89.45 from
$87.36 in 1999. Operating expenses, specifically distribution and occupancy
expense, were also adversely affected by rising energy costs in 2000. As a
percentage of net sales before the charges, operating expenses decreased to
20.7% from 21.1% in 1999. The decrease was primarily due to strategic
initiatives to reduce controllable expenses, which began with the Company's
strategic planning efforts in late 1999. Costs associated with the strategic
planning initiative, which concluded in March 2000, approximated $600 thousand
in both 2000 and 1999.

     Loss from joint ventures totaled $1.4 million in 2000, compared to $1.0
million in 1999. The Company's losses from OLP totaled $1.4 million in 2000
compared to $1.0 million last year, while TSP operated at approximately
breakeven for both years.

     Financing Costs increased 34.3% to $10.0 million in 2000 from $7.4 million
in 1999. Total average borrowings outstanding in 2000 increased approximately
$4.9 million. However, total borrowings outstanding at December 31, 2000 reflect
a $25.4 million, or 27.2% reduction from December 31, 1999, primarily due to
lower inventory levels. The Company's overall effective borrowing rate was 8.3%
in 2000, compared to 6.9% in 1999. The Premium for 2000 averaged 2.05%, compared
to 1.50% in 1999. The Company's Premium increased to 3.0% effective January 1,
2001. Costs associated with the accounts receivable securitization program
increased $605 thousand or 19.4%. The effective borrowing rate on the
securitization program increased to 7.0% in 2000 from 5.9% in 1999.

     Loss before taxes for 2000 totaled $12.9 million compared to income before
taxes of $5.1 million in 1999. Excluding the impact of the asset impairment and
accounts receivable reserve charges in 2000, loss before taxes totaled $10.3
million. In 2000, the income tax benefit approximated 32.5% of loss before
taxes, compared to income tax expense recorded at 38.5% of income before taxes
in 1999. The lower tax rate in 2000 is primarily attributable to a valuation
reserve against the realizability of net operating loss carryforwards.

     Net loss totaled $8.7 million or $.90 per share in 2000, compared to net
income of $3.2 million or $.30 per share in 1999. Excluding the impact of the
asset impairment and accounts receivable reserve charges in 2000, net loss
totaled $6.4 million or $.66 per share.

     During 2000, the Company repurchased 760 thousand shares of its Common
Stock. Weighted average shares outstanding totaled 9.7 million in 2000, compared
to 10.5 million in 1999.

                                        16
<PAGE>   17

1999 COMPARED TO 1998

     Tons sold decreased 2.2% to 1,272 thousand in 1999 from 1,301 thousand in
1998. Tons sold in 1999 included 1,065 thousand from direct sales and 207
thousand from toll processing, compared with 1,070 thousand from direct sales
and 231 thousand from toll processing in 1998. The decrease in direct tons was
primarily attributable to the elimination of low margin automotive business in
Detroit and depressed demand from customers in the agricultural equipment
market, especially for unprocessed plate products. The decrease in tolling tons
was attributable to the Company's Georgia operation, which increased its
proportion of direct sales in 1999.

     Net sales decreased by $51.0 million, or 8.8%, to $525.8 million from
$576.8 million in 1998. Average selling prices declined 6.8% due to continued
decreased market prices for steel, resulting from the significant penetration of
imported steel in 1998.

     As a percentage of net sales, gross margin increased to 23.7% in 1999 from
21.0% in 1998. The increase resulted from selling a larger proportion of
processed, higher value-added steel, and elimination of certain lower margin
automotive sales.

     Operating expenses in 1998 included an asset impairment charge of $19.1
million. Excluding the 1998 impairment charge, operating expenses in 1999
increased 4.2% to $111.2 million from $106.7 million. On a per ton basis,
operating expenses increased 6.5% to $87.36 from $82.00 in 1998. As a percentage
of net sales, operating expenses increased to 21.1% from 18.5% in 1998. The
increases were primarily due to lower sales volume; lower average selling
prices; new facility start-up costs; and costs associated with strategic
planning efforts. Operating expenses in 1999 also included approximately $3.5
million of incremental costs associated with the Iowa temper mill and plate
processing facility start-up, and the JNT / Chambersburg operation acquisition
and new facility start-up.

     Net start-up costs from joint ventures totaled $1.0 million in 1999
compared to $322 thousand in 1998. The Company's losses from OLP totaled $1.0
million in 1999 compared to $553 thousand in 1998, while TSP losses decreased to
$14 thousand in 1999 from $264 thousand in 1998. OCR, the Company's former joint
venture which ceased operations and was dissolved in 1999, contributed $495
thousand of income in 1998. OLP incurred higher start-up costs in 1999 as a
result of the facility and equipment becoming operational. TSP was profitable in
the second half of 1999.

     Financing Costs decreased 2.6% to $7.4 million in 1999 from $7.6 million in
1998. Total average borrowings outstanding in 1999 decreased approximately $2.1
million, primarily as a result of lower inventory levels in 1999. Interest costs
associated with the Iowa facility borrowings were expensed in 1999 and
capitalized in 1998. The Company's overall effective borrowing rate was 6.9% in
both 1999 and 1998. The Premium for 1999 averaged 1.50%, compared to 1.15% in
1998. The Company's Premium increased to 2.0% effective December 1, 1999. Costs
associated with the accounts receivable securitization program decreased $654
thousand or 17.3%, as a result of less average receivables sold in 1999 compared
to 1998, due to lower sales in 1999.

     Income before taxes for 1999 totaled $5.1 million compared to a loss before
taxes of $12.5 million in 1998. Excluding the impact of the asset impairment
charge, 1998 income before taxes totaled $6.6 million. Income taxes approximated
38.5% of income before taxes in 1999, compared to a 1998 tax benefit of 32.5% of
loss before taxes. The lower tax rate in 1998 was attributable to the asset
impairment charge.

     Net income totaled $3.2 million or $.30 per share compared to a net loss of
$8.4 million or $.79 per share in 1998. Excluding the impact of the asset
impairment charge, 1998 net income totaled $4.1 million, or $.38 per share.

     During 1999, the Company repurchased 601 thousand shares of its Common
Stock. Average shares outstanding totaled 10.5 million in 1999, compared to 10.7
million in 1998.

                                        17
<PAGE>   18

LIQUIDITY AND CAPITAL RESOURCES

     The Company's principal capital requirement is to fund the purchase and
upgrading of processing equipment and services, the construction and upgrading
of related facilities, its working capital requirements, and historically its
investments in joint ventures and acquisitions. The Company uses cash generated
from operations, long-term debt obligations, equity offerings, and leasing
transactions to fund these requirements. Historically, the Company has used
revolving credit borrowings under its bank credit facility and proceeds from its
receivable securitization program to finance its working capital requirements.

     Net cash from operating activities primarily represents earnings plus
non-cash charges for depreciation, amortization and losses from joint ventures,
as well as changes in working capital. During 2000, $33 million of net cash was
provided from operating activities, consisting of $1.1 million of cash generated
from earnings and non-cash charges and $31.9 million of cash from working
capital components.

     Working capital at December 31, 2000 decreased $30.1 million from the end
of 1999. The decrease is attributable to a $30.2 million decrease in
inventories.

     As of December 31, 2000, $48 million of eligible receivables were sold
under the Company's accounts receivable securitization program, compared to $52
million at December 31, 1999. The amount of trade receivables sold by the
Company typically changes monthly depending upon the level of defined eligible
receivables available for sale at each month end.

     Net cash used for investing activities in 2000 totaled $6.1 million,
consisting primarily of progress payments made for the new slitter in Detroit,
which became operational in the fourth quarter of 2000, as well as final
expenditures for the new Chambersburg, Pennsylvania plate processing and
machining facility. The Company's 2001 capital spending plan approximates $6
million, one-half of which will be spent on the development of a common computer
system for the Company. The remaining capital expenditure budget primarily
consists of maintenance capital spending for the Company's existing buildings
and equipment.

     Cash flows used for financing activities totaled $26.9 million, and
primarily consisted of $25.4 million of net paydowns under the Company's various
bank agreements, and $3.2 million used to repurchase shares of Olympic Common
Stock. In April 1999, the Company's Board of Directors authorized a one-year
program to purchase up to 1 million shares of Olympic Common Stock (Stock
Purchase), and in July 2000, authorized a one-year program to purchase up to an
additional 1 million shares. A total of 1,360,900 shares have been purchased
under the programs. The cost of purchasing such shares has been funded from the
Company's revolving credit facility. The Company does not anticipate purchasing
additional shares before the program expires in July 2001.

     The Company's bank credit agreement (the Credit Facility) and its other
long-term debt agreements contain certain financial covenants including minimum
net worth, interest coverages, and capital expenditure limitations. The Company
obtained waivers for non-compliance with its minimum net worth and interest
coverage covenants through March 31, 2001. In February 2001, the Company signed
a proposal with an affiliate of its current agent bank to replace its existing
Credit Facility and accounts receivable securitization program with a secured
3-year, $125 million facility. The Company expects to complete the refinancing
in the second quarter, subject to customary conditions, due diligence, and the
execution of definitive documentation. The Company believes the new agreement,
when executed, will provide the Company with sufficient availability to meet its
anticipated working capital requirements and capital expenditure requirements
over the next 12 months.

     As of December 31, 2000, approximately $61.6 million was available under
the Company's revolving credit and accounts receivable securitization
facilities. The Company believes that funds available under its existing
financing facilities and its proposed new financing facility, together with
funds generated from operations, will be sufficient to provide the Company with
the liquidity necessary to fund its anticipated working capital requirements and
capital expenditure requirements over the next 12 months. Capital requirements
are subject to change as business conditions warrant and opportunities arise. In
connection with its internal and external expansion strategies, the Company may
from time to time seek additional funds to finance other new facilities and
equipment, acquisitions and significant improvements to processing equipment to
respond to customers' demands.

                                        18
<PAGE>   19

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 established new standards
of accounting and reporting for derivative instruments and hedging activities.
SFAS No. 133 requires that all derivatives be recognized at fair value in the
balance sheet, and the corresponding gains or losses be reported either in the
income statement or as a component of comprehensive income, depending on the
type of hedging relationship that exists. SFAS No. 133 was adopted by the
Company on January 1, 2001. The Company does not currently hold derivative
instruments or engage in hedging activities.

     In December 1999, the staff of the Securities and Exchange Commission
issued Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in
Financial Statements." SAB 101 provides guidance on applying generally accepted
accounting principles to revenue recognition. The Company adopted the provisions
of this bulletin in 2000. The adoption did not impact the Company's recognition
of revenue in 2000.

     In September 2000, the Emerging Issues Task Force ("EITF") reached a
consensus on Issue No. 00-10, "Accounting for Shipping and Handling Fees and
Costs", which requires shipping and handling amounts billed to a customer to be
classified as revenue. The Company restated its revenues and distribution
expenses for the fiscal years ended December 31, 1999 and 1998, resulting in an
increase to both revenues and distribution expenses of $991 thousand and $580
thousand, respectively.

ITEM 7A.  QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company is exposed to the impact of interest rate changes and
fluctuating steel prices. The Company has not entered into interest rate or
steel commodity transactions for speculative purposes or otherwise.

     Inflation generally affects the Company by increasing the cost of
personnel, transportation services, processing equipment, purchased steel,
energy, and borrowings under the various credit agreements. In 2000, increasing
energy prices did have an adverse effect on the Company's distribution and
occupancy expense. Rising interest rates also adversely impacted the Company's
Financing Costs in 2000. Additionally, when raw material prices decline, as in
2000, customer demands for lower prices result in lower selling prices and, as
the Company uses existing steel inventory, lower margins. Declining steel prices
therefore adversely affected the Company's net sales, gross margins and net
income in 2000.

     Olympic's primary interest rate risk exposure results from floating rate
debt. If interest rates were to increase 100 basis points (1.0%) from December
31, 2000 rates, and assuming no changes in debt from December 31, 2000 levels,
the additional annual interest expense to the Company would be approximately
$680 thousand. The Company currently does not hedge its exposure to floating
interest rate risk.

                                        19
<PAGE>   20

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and
the Board of Directors of
Olympic Steel, Inc.:

     We have audited the accompanying consolidated balance sheets of Olympic
Steel, Inc. (an Ohio corporation) and subsidiaries as of December 31, 2000 and
1999, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Olympic Steel, Inc. and
subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United States.

                                          Arthur Andersen LLP

Cleveland, Ohio,
January 26, 2001
  (except with respect to the
  matters discussed in Notes
  8, 14, and 16, as to which the
  date is February 22, 2001.)

                                        20
<PAGE>   21

ITEM 8.  FINANCIAL STATEMENTS

                              OLYMPIC STEEL, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
             FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                               2000        1999        1998
                                                             --------    --------    --------
<S>                                                          <C>         <C>         <C>
Net sales..................................................  $520,359    $525,785    $576,769
Cost of sales..............................................   411,624     401,028     455,544
                                                             --------    --------    --------
     Gross margin..........................................   108,735     124,757     121,225

Operating expenses
  Warehouse and processing.................................    34,137      35,226      35,456
  Administrative and general...............................    27,323      29,371      27,166
  Distribution.............................................    19,436      18,959      18,604
  Selling..................................................    14,353      15,176      14,209
  Occupancy................................................     4,598       4,571       4,300
  Depreciation and amortization............................     9,222       7,852       6,973
  Asset impairment charge..................................     1,178          --      19,056
                                                             --------    --------    --------
     Total operating expenses..............................   110,247     111,155     125,764
                                                             --------    --------    --------
     Operating income (loss)...............................    (1,512)     13,602      (4,539)
Loss from joint ventures...................................    (1,425)     (1,032)       (322)
                                                             --------    --------    --------
     Income (loss) before interest and taxes...............    (2,937)     12,570      (4,861)

Interest expense...........................................     6,258       4,315       3,856
Receivable securitization expense..........................     3,724       3,119       3,773
                                                             --------    --------    --------
     Income (loss) before taxes............................   (12,919)      5,136     (12,490)

Income taxes...............................................    (4,198)      1,977      (4,059)
                                                             --------    --------    --------
       Net income (loss)...................................  $ (8,721)   $  3,159    $ (8,431)
                                                             ========    ========    ========
       Basic and diluted net income (loss) per share.......  $  (0.90)   $   0.30    $  (0.79)
                                                             ========    ========    ========
       Weighted average shares outstanding.................     9,677      10,452      10,692
</TABLE>

        The accompanying notes are an integral part of these statements.
                                        21
<PAGE>   22

                              OLYMPIC STEEL, INC.
                          CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 2000 AND 1999
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                2000        1999
                                                              --------    --------
<S>                                                           <C>         <C>
ASSETS
Cash........................................................  $  1,449    $  1,433
Accounts receivable.........................................     5,260       9,850
Inventories.................................................    89,404     119,585
Prepaid expenses and other..................................     5,911       6,645
Assets held for sale........................................     1,813          --
                                                              --------    --------
     Total current assets...................................   103,837     137,513
                                                              --------    --------
Property and equipment, at cost.............................   158,843     156,849
Accumulated depreciation....................................   (41,270)    (32,645)
                                                              --------    --------
     Net property and equipment.............................   117,573     124,204
                                                              --------    --------
Unexpended IRB funds........................................        --       1,668
Goodwill, net...............................................     3,519       3,622
                                                              --------    --------
     Total assets...........................................  $224,929    $267,007
                                                              ========    ========
     LIABILITIES
Current portion of long-term debt...........................  $  6,061    $  6,061
Accounts payable............................................    18,398      20,671
Accrued payroll.............................................     3,103       3,595
Other accrued liabilities...................................     5,110       5,921
                                                              --------    --------
     Total current liabilities..............................    32,672      36,248
                                                              --------    --------
Revolving credit agreement..................................    28,422      47,892
Term loans..................................................    24,588      29,076
Industrial revenue bonds....................................     8,938      10,397
                                                              --------    --------
     Total long-term debt...................................    61,948      87,365
                                                              --------    --------
Deferred income taxes.......................................     4,568       6,532
Accumulated equity losses in joint ventures.................       821          42
                                                              --------    --------
     Total liabilities......................................   100,009     130,187
                                                              --------    --------
       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,
  9,331 and 10,091 issued and outstanding at December 31,
  2000 and 1999, respectively...............................    99,058     102,237
Retained earnings...........................................    25,862      34,583
                                                              --------    --------
     Total shareholders' equity.............................   124,920     136,820
                                                              --------    --------
     Total liabilities and shareholders' equity.............  $224,929    $267,007
                                                              ========    ========
</TABLE>

      The accompanying notes are an integral part of these balance sheets.
                                        22
<PAGE>   23

                              OLYMPIC STEEL, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                2000        1999        1998
                                                              --------    --------    --------
<S>                                                           <C>         <C>         <C>
Cash flows from operating activities:
  Net income (loss).........................................  $ (8,721)   $  3,159    $ (8,431)
  Adjustments to reconcile net income (loss) to net cash
     from
     operating activities-
     Depreciation and amortization..........................     9,222       7,852       6,973
     Asset impairment charge................................     1,178          --      19,056
     Loss on sale of fixed assets...........................        --          --         432
     Loss from joint ventures...............................     1,425       1,032         322
     Long-term deferred income taxes........................    (1,964)      3,024      (2,524)
                                                              --------    --------    --------
                                                                 1,140      15,067      15,828
Changes in working capital:
  Accounts receivable.......................................     4,590      (6,730)      3,312
  Inventories...............................................    30,181       1,822      10,904
  Prepaid expenses and other................................       706        (983)     (3,712)
  Accounts payable..........................................    (2,273)     (8,240)      4,645
  Accrued payroll and other accrued liabilities.............    (1,303)         90         (12)
                                                              --------    --------    --------
                                                                31,901     (14,041)     15,137
                                                              --------    --------    --------
     Net cash from operating activities.....................    33,041       1,026      30,965
                                                              --------    --------    --------
Cash flows from investing activities:
  Equipment purchases and deposits..........................    (4,523)     (6,688)    (16,904)
  Facility purchases and construction.......................      (230)     (4,115)     (8,368)
  Other capital expenditures, net...........................      (698)     (1,771)     (1,319)
  Acquisition of JNT........................................        --          --        (795)
  Investments in joint ventures.............................      (646)         --         (98)
                                                              --------    --------    --------
     Net cash used for investing activities.................    (6,097)    (12,574)    (27,484)
                                                              --------    --------    --------
Cash flows from financing activities:
  Revolving credit agreement................................   (19,470)     10,442     (11,359)
  Term loans and IRB's......................................    (5,947)      6,464       7,955
  Unexpended IRB funds......................................     1,668      (1,668)         --
  Repurchase of common stock................................    (3,179)     (4,082)         --
                                                              --------    --------    --------
     Net cash from (used for) financing activities..........   (26,928)     11,156      (3,404)
                                                              --------    --------    --------
Cash:
  Net change................................................        16        (392)         77
  Beginning balance.........................................     1,433       1,825       1,748
                                                              --------    --------    --------
  Ending balance............................................  $  1,449    $  1,433    $  1,825
                                                              ========    ========    ========
</TABLE>

        The accompanying notes are an integral part of these statements.
                                        23
<PAGE>   24

                              OLYMPIC STEEL, INC.
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                 (in thousands)

<TABLE>
<CAPTION>
                                                          COMMON     RETAINED
                                                          STOCK      EARNINGS
                                                         --------    --------
<S>                                                      <C>         <C>
Balance at December 31, 1997...........................  $106,319    $39,855
  Net loss.............................................        --     (8,431)
                                                         --------    -------

Balance at December 31, 1998...........................   106,319     31,424
  Net income...........................................        --      3,159
  Repurchase of 601 common shares......................    (4,082)        --
                                                         --------    -------

Balance at December 31, 1999...........................   102,237     34,583
  NET LOSS.............................................        --     (8,721)
  REPURCHASE OF 760 COMMON SHARES......................    (3,179)        --
                                                         --------    -------

BALANCE AT DECEMBER 31, 2000...........................  $ 99,058    $25,862
                                                         ========    =======
</TABLE>

        The accompanying notes are an integral part of these statements.
                                        24
<PAGE>   25

                              OLYMPIC STEEL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
           (dollars in thousands, except share and per share amounts)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION

     The accompanying consolidated financial statements include the accounts of
Olympic Steel, Inc. and its wholly-owned subsidiaries (collectively the Company
or Olympic), after elimination of intercompany accounts and transactions.
Investments in the Company's joint ventures are accounted for under the equity
method. Cumulative losses in excess of investments made in the joint ventures
are shown as a liability on the accompanying consolidated balance sheets.
Certain amounts in the 1999 and 1998 consolidated financial statements have been
reclassified to conform to the 2000 presentation.

NATURE OF BUSINESS

     The Company is a North American steel service center with 46 years of
experience in specialized processing and distribution of large volumes of
carbon, coated carbon and stainless steel, flat-rolled sheet, coil and plate,
and tubular steel products from 13 facilities in eight midwestern and eastern
states. The Company operates as one business segment.

ACCOUNTING ESTIMATES

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CONCENTRATION RISKS

     The Company is a major customer of flat-rolled coil and plate steel for
many of its principal suppliers, but is not dependent on any one supplier. The
Company purchased approximately 17% and 16% of its total steel requirements from
its single largest supplier in 2000 and 1999, respectively.

INVENTORIES

     Inventories are stated at the lower of cost or market and include the costs
of purchased steel, internal and external processing, and inbound freight. Cost
is determined using the specific identification method.

PROPERTY AND EQUIPMENT, AND DEPRECIATION

     Property and equipment are stated at cost. Depreciation is provided using
the straight-line method over the estimated useful lives ranging from 3 to 30
years.

GOODWILL AND AMORTIZATION

     Goodwill includes the cost in excess of fair value of the net assets
acquired and is being amortized on a straight-line method ranging from 15 to 40
years. The Company evaluates facts and circumstances to determine if the value
of goodwill or other long-lived assets may be impaired. Goodwill amortization
expense totaled $104 in both 2000 and 1999, and $358 in 1998. Accumulated
amortization of goodwill totaled $360 at December 31, 2000, and $256 at December
31, 1999.

                                        25
<PAGE>   26

REVENUE RECOGNITION

     Revenue is recognized in accordance with the Securities and Exchange
Commissions Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements." Revenue is recognized when steel is shipped to the customer and
title is transferred. Sales returns and allowances are treated as reductions to
sales and are provided for based on historical experience and current estimates.

SHARES OUTSTANDING AND EARNINGS PER SHARE

     In April 1999, the Company's Board of Directors authorized a one-year
program to purchase up to 1 million shares of Olympic Common Stock. During the
first half of 2000, the Company completed the 1 million share repurchase at an
average price of $5.86 per share. In July 2000, the Company's Board of Directors
authorized a one-year program to purchase up to an additional 1 million shares
of Olympic Common Stock. During the third quarter of 2000, the Company
repurchased 360,900 shares at an average price of $3.88 per share. Repurchased
shares are held in treasury and are available for general corporate purposes.
The Company does not anticipate purchasing additional shares before the program
expires in July 2001.

     Earnings per share have been calculated based on the weighted average
number of shares outstanding. Average shares outstanding were 9.7 million in
2000, 10.5 million in 1999, and 10.7 million in 1998. Basic and diluted earnings
per share are the same, as the effect of outstanding stock options is not
dilutive.

IMPACT OF NEW ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 established new standards
of accounting and reporting for derivative instruments and hedging activities.
SFAS No. 133 requires that all derivatives be recognized at fair value in the
balance sheet, and the corresponding gains or losses be reported either in the
income statement or as a component of comprehensive income, depending on the
type of hedging relationship that exists. SFAS No. 133 was adopted by the
Company on January 1, 2001. The Company does not currently hold derivative
instruments or engage in hedging activities.

     In December 1999, the staff of the Securities and Exchange Commission
issued Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in
Financial Statements." SAB 101 provides guidance on applying generally accepted
accounting principles to revenue recognition. The Company adopted the provisions
of this bulletin in 2000. The adoption did not impact the Company's recognition
of revenue in 2000.

     In September 2000, the Emerging Issues Task Force ("EITF") reached a
consensus on Issue No. 00-10, "Accounting for Shipping and Handling Fees and
Costs", which requires shipping and handling amounts billed to a customer to be
classified as revenue. The Company restated its revenues and distribution
expenses for the fiscal years ended December 31, 1999 and 1998, resulting in an
increase to both revenues and distribution expenses of $991 and $580,
respectively.

2.  ASSET IMPAIRMENT CHARGES:

     The Company recorded an asset impairment charge in the fourth quarter of
2000 totaling $1,178 to reduce the net book value of certain equipment held for
sale to its estimated sale value in accordance with SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of." SFAS No. 121 requires assets such as goodwill and fixed assets to be
written down to fair market value when circumstances indicate that their
carrying values are impaired.

     In 1998, the Company recorded an asset impairment charge of $19,056. The
charge consisted of $14,356 to write-off goodwill and write-down certain fixed
assets at the Company's Detroit operation in accordance with SFAS No. 121. The
remaining $4,700 of the charge related to the write-down of Olympic's investment
in the Olympic Continental Resources joint venture.

                                        26
<PAGE>   27

3.  ACQUISITIONS:

     In June 1998, the Company acquired certain assets and assumed certain
liabilities of JNT Precision Machining, Inc. (JNT), a machining center located
in McConnellsburg, Pennsylvania, which operates lathes, machine centers, drills
and saws. The cash purchase price totaled $795. The acquisition was accounted
for as a purchase and, accordingly, assets and liabilities were reflected at
estimated fair values. The purchase price allocation resulted in goodwill of
$162, which is being amortized over 15 years. During the second half of 1999,
the JNT operation was relocated to a new 87,000 square foot plate processing and
machining facility constructed in Chambersburg, Pennsylvania.

4.  INVESTMENTS IN JOINT VENTURES:

     In 1997, the Company and the U.S. Steel Group of USX Corporation (USS)
formed Olympic Laser Processing (OLP), a joint venture to process laser welded
sheet steel blanks for the automotive industry. OLP is owned 50% by each of the
companies. OLP constructed a facility in Michigan equipped with two automated
laser-welding lines, which are both in production. An additional manual-feed
line was added in 2000 and a second manual feed line is expected to become
operational during the second half of 2001. OLP start-up costs have been
expensed as incurred. The Company and USS each contributed $2,000 in cash to OLP
upon formation and each guarantees, on a several basis, 50% of OLP's outstanding
debt under its $20,000 bank loan agreement. During 2000, the Company and USS
each contributed $500 in cash to OLP. Subsequent to year-end, the Company and
USS each contributed an additional $500 in cash to OLP. OLP bank debt
outstanding at December 31, 2000 totaled $19,854.

     In 1997, the Company, Michael J. Guthrie and Carlton L. Guthrie (the
Guthries) formed Trumark Steel & Processing, LLC (TSP), a joint venture to
support the flat-rolled steel requirements of the automotive industry as a
Minority Business Enterprise (MBE). The Company made a $147 cash contribution to
TSP for its 49% ownership interest in the venture. In December 1998, and
February 2000, additional contributions of $98 and $147, respectively, were made
by Olympic. TSP start-up costs have been expensed as incurred. The Company and
the Guthries severally guarantee outstanding debt under TSP's credit facility in
proportion to each member's ownership interest. TSP bank debt outstanding at
December 31, 2000 totaled $3,043.

     In December 1998, the Company wrote-off its investment in Olympic
Continental Resources LLC (OCR), which was a broker of scrap metal and alternate
iron products, and during the third quarter of 1999, Olympic announced the
dissolution of OCR. Olympic, as guarantor of OCR's bank debt, made a payment to
extinguish all $4,700 of OCR outstanding bank debt, and simultaneously assumed
all remaining OCR receivables, inventory, and accounts payable, which were then
included in the consolidated financial statements of the Company.

5.  ACCOUNTS RECEIVABLE:

     Since 1995, the Company has operated under an agreement to sell, on a
revolving basis, through its wholly-owned subsidiary Olympic Steel Receivables
LLC (OSRI), an undivided interest in a designated pool of its trade accounts
receivable. Accounts receivable which are ineligible for sale under the
agreement remain on the Company's consolidated balance sheets at fair value
after considering allowances for projected credit losses. The maximum amount of
receivables available for sale under the agreement, which expires December 19,
2002, is $70,000. The Company, as agent for the purchaser of the receivables,
retains collection and administrative responsibilities for the participating
interests sold. As collections reduce the receivables included in the pool, the
Company may sell additional undivided interests in new receivables up to the
$70,000 limit. The amount of receivables sold by the Company typically will
change monthly depending upon the level of defined eligible receivables
available for sale at each month end settlement date. Net payments made to OSRI
by the Company for the monthly receivable settlements totaled $4,000 in 2000.

                                        27
<PAGE>   28

     As of December 31, 2000 and 1999, $48,000 and $52,000, respectively, of
receivables were sold and reflected as a reduction of accounts receivable in the
accompanying consolidated balance sheets. The average receivable pool sold
totaled $52,066 in 2000, compared to $52,581 in 1999. Costs of the program,
which primarily consist of the purchaser's financing cost of issuing commercial
paper backed by the receivables, totaled $3,724 in 2000, $3,119 in 1999, and
$3,773 in 1998, and have been classified as Receivable Securitization Expense in
the accompanying consolidated statements of income. The program costs are based
on commercial paper rates plus 65 basis points. The average program costs for
2000, 1999 and 1998 were 7.0%, 5.9%, and 6.2%, respectively.

     The Company anticipates terminating the securitization agreement during the
second quarter of 2001 in connection with the refinancing of its credit
agreement, as further described in Footnote 8.

     Accounts receivable are presented net of allowances for doubtful accounts
of $2,375 and $1,031 as of December 31, 2000 and 1999, respectively. Bad debt
expense totaled $2,355 in 2000, $911 in 1999, and $98 in 1998.

6.  ASSETS HELD FOR SALE:

     During the fourth quarter of 2000, the Company decided to dispose of
certain underutilized equipment and to consolidate its Chicago operations in its
existing Schaumburg, Illinois facility and close its Elk Grove Village facility.
The Company recorded an asset impairment charge in 2000 of $1,178 to reflect the
assets held for sale at their estimated realizable values. The Company will use
the proceeds from the sale of these assets to reduce long-term debt.

7.  PROPERTY AND EQUIPMENT:

     Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                        --------------------
                                                          2000        1999
                                                        --------    --------
<S>                                                     <C>         <C>
Land and improvements.................................  $  9,914    $ 10,256
Buildings and improvements............................    56,371      57,056
Machinery and equipment...............................    80,592      76,475
Furniture and fixtures................................     4,846       4,799
Computer equipment....................................     6,679       6,149
Vehicles..............................................       198         198
Construction in progress..............................       243       1,916
                                                        --------    --------
                                                         158,843     156,849
Less accumulated depreciation.........................   (41,270)    (32,645)
                                                        --------    --------
  Net property and equipment..........................  $117,573    $124,204
                                                        ========    ========
</TABLE>

8.  REVOLVING CREDIT AGREEMENT:

     The Company's bank credit agreement (the Credit Facility) currently
consists of a secured $68,000 revolving credit component, a $21,000 term loan
component for the Iowa temper mill and plate processing facility (the Iowa Term
Loan), letter of credit commitments totaling $5,069 as of December 31, 2000, and
a $71,400 liquidity facility related to the Company's accounts receivable
securitization agreement. The respective assets financed provide collateral for
the Iowa Term Loan and the letters of credit, and inventory and unencumbered
real estate and equipment provide security for the revolver. The Credit
Facility's maturity date is June 30, 2002. Each year, the Company may request to
extend the maturity date one year with the approval of the bank group. The
commitment for the liquidity facility is renewable annually each May 31 for a
one-year period.

                                        28
<PAGE>   29

     The Company has the option to borrow based on the agent bank's base rate or
London Interbank Offered Rates (LIBOR) plus a premium (the Premium). The Premium
is determined every three months based on the Company's operating performance
and leverage ratio. During 2000, the Premium averaged 2.05%, compared to 1.50%
in 1999. The effective interest rate for revolving credit borrowings amounted to
9.0% in 2000, 7.7% in 1999, and 7.2% in 1998. Interest on the base rate option
is payable quarterly in arrears while interest on the LIBOR option is payable at
the end of the LIBOR interest period, which ranges from one to six months. The
agreement also includes a commitment fee of .25% of the unused portion of the
revolver, payable quarterly in arrears. The Company's Premium increased to 3.0%
commencing January 1, 2001.

     The Company obtained waivers for non-compliance with its minimum net worth
and interest coverage covenants through March 31, 2001. In February 2001, the
Company signed a proposal with an affiliate of its current agent bank to replace
its existing Credit Facility and accounts receivable securitization program with
a secured 3-year $125 million facility. The Company expects to complete the
refinancing in the second quarter, subject to customary conditions, due
diligence, and the execution of definitive documentation.

     The revolving credit agreement balance includes $5,316 and $6,311 of checks
issued that have not cleared the bank as of December 31, 2000 and 1999,
respectively.

9.  TERM LOANS:

     The Company entered into a $12,000 loan agreement with a domestic bank to
finance the 1997 acquisition and subsequent expansion of its Georgia operation
(the Southeastern Term Loan). The loan is secured by the real estate and
equipment financed, and is repayable in quarterly installments that commenced
September 1, 1997. Interest is charged at LIBOR plus the same Premium associated
with the Company's Credit Facility.

     In 1993, the Company completed a $10,000 refinancing of certain of its real
estate in Minnesota, Connecticut, Illinois, and Ohio in the form of taxable rate
notes. The term of the notes is 15 years with annual principal payments of $700
for the first 10 years and $600 for years 11 through 15. The notes are backed by
a bank letter of credit, expiring June 15, 2001, and are secured by mortgages on
the real estate financed. The interest rate changes each week based on the
taxable rate note market.

     The $21,000 Iowa Term Loan requires annual principal repayments of 10% of
the amount borrowed, which commenced May 30, 1999. Interest is charged at LIBOR
plus the same Premium associated with the Company's Credit Facility.

     The long-term portion of term loans at December 31, 2000 and 1999,
consisted of the following:

<TABLE>
<CAPTION>
                                          EFFECTIVE INTEREST
              DESCRIPTION                  RATE AT 12/31/00      2000       1999
              -----------                 ------------------    -------    -------
<S>                                       <C>                   <C>        <C>
Iowa Term Loan..........................         8.9%           $14,700    $16,800
Southeastern Term Loan..................         8.2%             5,346      7,025
Taxable rate notes......................         6.7%             4,400      5,100
Other...................................         4.0%               142        151
                                                                -------    -------
                                                                $24,588    $29,076
                                                                =======    =======
</TABLE>

                                        29
<PAGE>   30

10.  INDUSTRIAL REVENUE BONDS:

     In April 1999, the Company entered into a $6,000, 5.1% fixed rate
tax-exempt industrial development bond agreement to finance the construction and
equipping of its $7,000, 87,000 square foot plate processing and machining
facility in Chambersburg, Pennsylvania. Proceeds from the bonds were deposited
into an escrow account and were invested in commercial paper funds until
withdrawn for reimbursement. The loan agreement includes a 15-year, $3,100 real
estate component, and a 10-year, $2,900 million equipment component. Quarterly
repayments commenced October 1, 1999. The Chambersburg land, building and
equipment secure the outstanding debt.

     The long-term portion of industrial revenue bonds at December 31, 2000 and
1999, consisted of the following:

<TABLE>
<CAPTION>
                                           EFFECTIVE INTEREST
          DESCRIPTION OF BONDS              RATE AT 12/31/00      2000      1999
          --------------------             ------------------    ------    -------
<S>                                        <C>                   <C>       <C>
$6,000 fixed rate bonds due 1999 through
  2014...................................         5.1%           $5,173    $ 5,472
$6,000 variable rate bonds due 1995
  through 2004...........................         5.1%            1,800      2,400
$4,800 variable rate bonds due 1992
  through 2004...........................         5.1%            1,300      1,650
$2,660 variable rate bonds due 1992
  through 2004...........................         5.1%              665        875
                                                                 ------    -------
                                                                 $8,938    $10,397
                                                                 ======    =======
</TABLE>

     The bonds due in 2004 are all backed by standby letters of credit, expiring
June 30, 2002 with the revolving credit bank group, and are secured by a first
lien on certain land, buildings and equipment.

11.  SCHEDULED DEBT MATURITIES, INTEREST, DEBT CARRYING VALUES AND COVENANTS:

     Scheduled maturities of all long-term debt for the years succeeding
December 31, 2000 are $6,061 in 2001, $6,082 in 2002, $6,103 in 2003, $5,712 in
2004, $3,541 in 2005, and $12,088 thereafter. The overall effective interest
rate for all debt amounted to 8.3% in 2000 and 6.9% in both 1999 and 1998.
Interest paid totaled $6,293, $4,712, and $5,124, for the years ended December
31, 2000, 1999, and 1998, respectively. Amounts paid relative to the accounts
receivable securitization program totaled $3,805 in 2000, $3,159 in 1999, and
$3,858 in 1998. Interest of $149 and $1,082 was capitalized in 1999 and 1998,
respectively, in connection with constructing and equipping facilities.

     Management believes the carrying values of its long-term debt approximate
their fair values, as each of the Company's variable rate debt arrangements bear
interest at rates that fluctuate based on a bank's base rate, LIBOR, the
short-term tax exempt revenue bond index or taxable rate note market.

     Under its debt agreements, the Company is subject to certain covenants such
as minimum net worth, interest coverages, and capital expenditure limitations.
The Company obtained waivers for non-compliance with its minimum net worth and
interest coverage covenants through March 31, 2001.

                                        30
<PAGE>   31

12.  INCOME TAXES:

     The components of the Company's net current and deferred tax asset or
liability at December 31 are as follows:

<TABLE>
<CAPTION>
                    ASSET/(LIABILITY)                        2000      1999
                    -----------------                       ------    -------
<S>                                                         <C>       <C>
Refundable income taxes...................................  $1,806    $ 5,211

Current deferred income taxes:
  Inventory...............................................     413        847
  Tax credit and net operating loss carryforward..........   1,850         --
  Other temporary items...................................     595       (885)
                                                            ------    -------
     Total current deferred income taxes..................   2,858        (38)
                                                            ------    -------
Refundable and current deferred income taxes..............   4,664      5,173
                                                            ------    -------
Long-term deferred income taxes:
  Goodwill................................................     895      1,383
  Tax credit and net operating loss carryforward..........   5,187        896
  Tax in excess of book depreciation......................  (9,599)    (8,066)
  Other temporary items...................................  (1,051)      (745)
                                                            ------    -------
     Total long-term deferred income taxes................  (4,568)    (6,532)
                                                            ------    -------
     Total income tax asset (liability)...................  $   96    $(1,359)
                                                            ======    =======
</TABLE>

     The following table reconciles the U.S. federal statutory rate to the
Company's effective tax rate:

<TABLE>
<CAPTION>
                                                         2000    1999    1998
                                                         ----    ----    ----
<S>                                                      <C>     <C>     <C>
U.S. federal statutory rate............................  34.0%   35.0%   35.0%
State and local taxes, net of federal benefit..........   2.0     2.0     2.0
Asset impairment / valuation reserve...................  (4.5)     --    (5.5)
All other, net.........................................   1.0     1.5     1.0
                                                         ----    ----    ----
Effective income tax rate..............................  32.5%   38.5%   32.5%
                                                         ====    ====    ====
</TABLE>

     The tax provision includes a current provision (benefit) of ($1,706), $252,
and $1,255, and a deferred expense or (benefit) of ($2,492), $1,725, and
($5,314), in 2000, 1999, and 1998, respectively. Income taxes paid in 2000,
1999, and 1998, totaled $94, $315, and $3,202, respectively. The Company has net
operating loss carryforwards of $13,862 expiring in the year ended December 31,
2020.

13.  RETIREMENT PLANS:

     The Company has several retirement plans consisting of a profit-sharing
plan and a 401(k) plan covering all non-union employees, and two separate 401(k)
plans covering all union employees.

     Company contributions for the non-union profit-sharing plan are in
discretionary amounts as determined annually by the Board of Directors. Company
contributions were 2% in 2000, 3% in 1999, and 4% in 1998, of each eligible
employee's W-2 earnings. The non-union 401(k) retirement plan allows eligible
employees to contribute up to 10% of their W-2 earnings. The Company
contribution is determined annually by the Board of Directors and is based on a
percentage of eligible employees' contributions. For each of the last three
years, the Company matched one half of each eligible employee's contribution.

     Company contributions for each of the last three years for the union plans
were 3% of eligible W-2 wages plus one half of the first 4% of each employee's
contribution.

     Retirement plan expense amounted to $1,759, $1,841, and $2,346 for the
years ended December 31, 2000, 1999, and 1998, respectively.

                                        31
<PAGE>   32

14.  STOCK OPTIONS:

     In January 1994, the Stock Option Plan (Option Plan) was adopted by the
Board of Directors and approved by the shareholders of the Company. Pursuant to
the provisions of the Option Plan, key employees of the Company, non-employee
directors and consultants may be offered the opportunity to acquire shares of
Common Stock by the grant of stock options, including both incentive stock
options (ISOs) and nonqualified stock options. ISOs are not available to
non-employee directors or consultants. A total of 950,000 shares of Common Stock
are reserved under the Option Plan. The purchase price of a share of Common
Stock pursuant to an ISO will not be less than the fair market value of a share
of Common Stock at the grant date. Options vest over three or five years at
rates of 33.3% and 20% per year, respectively, commencing on the first
anniversary of the grant date, and all expire 10 years after the grant date. The
Option Plan will terminate on January 5, 2004. Termination of the Option Plan
will not affect outstanding options.

     During 2000, additional non-qualified options to purchase 171,500 shares of
Common Stock were issued to the Company's outside directors, executive officers
and senior managers at an option price of $4.84. During 1999, 194,333 shares of
Common Stock were issued at option prices ranging from $7.18 to $8.75. No
options were issued in 1998. Since adoption of the Option Plan, options to
purchase 8,000 shares have been exercised. As of December 31, 2000, options to
purchase 441,833 shares were outstanding, of which 152,011 were exercisable at
prices ranging from $8.75 to $15.50 per share.

     During the first quarter of 2001, 350,000 additional shares were granted
under the Option Plan to the Company's President and COO, and a senior manager
of the Company at prices ranging from $1.97 to $2.38.

     In 1996, the Company adopted the disclosure-only provisions of SFAS No.
123, "Accounting for Stock-Based Compensation." The Black-Scholes option-pricing
model was used to determine that the pro forma impact of compensation expense
from options granted was immaterial for all years presented.

15.  COMMITMENTS AND CONTINGENCIES:

     The Company leases certain warehouses, sales offices and processing
equipment under long-term lease agreements. All leases are classified as
operating and expire at various dates through 2010. In some cases the leases
include options to extend. Rent expense was $1,448, $1,600, and $2,278 for the
years ended December 31, 2000, 1999, and 1998, respectively.

     Future minimum lease payments as of December 31, 2000 are as follows:

<TABLE>
<S>                                                           <C>
2001........................................................  $1,265
2002........................................................   1,205
2003........................................................     862
2004........................................................     792
2005........................................................     199
Thereafter..................................................     879
                                                              ------
                                                              $5,202
                                                              ======
</TABLE>

     The Company is a defendant in various legal proceedings and claims that
arise in the ordinary course of business. In the opinion of management, the
outcome of the proceedings to which the Company is currently a party will not
have a material adverse effect upon its operations or financial position.

                                        32
<PAGE>   33

16.  RELATED PARTY TRANSACTIONS:

     Related entities handled a portion of the freight activity for the
Company's Cleveland operation. Payments to these entities totaled $1,563,
$1,319, and $2,383 for the years ended December 31, 2000, 1999, and 1998,
respectively. There is no common ownership or management of these entities with
the Company. Another related entity owns one of the Cleveland warehouses and
leases it to the Company at an annual rental of $195. The lease was renewed in
June 2000 for a 10-year term with one remaining renewal option for an additional
10 years.

     David A. Wolfort, President and COO purchased 300,000 shares of the
Company's Common Stock from treasury on February 22, 2001. The shares were
purchased pursuant to a 5-year note payable to the Company due and payable on or
before January 1, 2006. The principal balance of $675 accrues interest at 5.07%
per annum, and is secured by a pledge of the underlying shares until the note is
paid in full.

17.  SHAREHOLDER RIGHTS PLAN:

     On January 31, 2000, the Company's Board of Directors (the Directors)
approved the adoption of a share purchase rights plan. The terms and description
of the plan are set forth in a rights agreement, dated January 31, 2000, between
the Company and National City Bank, as rights agent (the Rights Agreement). The
Directors declared a dividend distribution of one right for each share of Common
Stock of the Company outstanding as of the March 6, 2000 record date (the Record
Date). The Rights Agreement also provides, subject to specified exceptions and
limitations, that Common Stock issued or delivered from the Company's treasury
after the record date will be accompanied by a right. Each right entitles the
holder to purchase one-one-hundredth of a share of Series A Junior Participating
Preferred stock, without par value at a price of $20 per one one-hundredth of a
preferred share (a Right). The Rights expire on March 6, 2010, unless earlier
redeemed, exchanged or amended. Rights become exercisable to purchase Preferred
Shares following the commencement of certain tender offer or exchange offer
solicitations resulting in beneficial ownership of 15% or more of the Company's
outstanding common shares as defined in the Rights Agreement.

                                        33
<PAGE>   34

                      SUPPLEMENTARY FINANCIAL INFORMATION
                   UNAUDITED QUARTERLY RESULTS OF OPERATIONS
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
               2000                    1ST         2ND         3RD        4TH(b)       YEAR
               ----                  --------    --------    --------    --------    --------
<S>                                  <C>         <C>         <C>         <C>         <C>
Net sales..........................  $144,687    $138,962    $122,548    $114,162    $520,359
Gross margin.......................    33,609      30,157      23,469      21,500     108,735
Operating income (loss)............     4,987       3,216      (2,691)     (7,024)     (1,512)
Income (loss) before taxes.........     2,382         263      (5,717)     (9,847)    (12,919)
Net income (loss)..................  $  1,477    $    163    $ (3,545)   $ (6,816)   $ (8,721)
  Net income (loss) per share......  $   0.15    $   0.02    $  (0.37)   $  (0.73)   $  (0.90)
  Weighted average shares
     outstanding...................    10,034       9,836       9,505       9,331       9,677
Market price of common stock: (a)
  High.............................  $   5.13    $   5.00    $   4.06    $   2.81    $   5.13
  Low..............................      3.88        3.50        2.50        1.88        1.88
</TABLE>

<TABLE>
<CAPTION>
               1999                    1ST         2ND         3RD         4TH         YEAR
               ----                  --------    --------    --------    --------    --------
<S>                                  <C>         <C>         <C>         <C>         <C>
Net sales..........................  $129,392    $133,802    $125,388    $137,203    $525,785
Gross margin.......................    30,361      32,804      30,825      30,767     124,757
Operating income...................     3,926       5,293       3,392         991      13,602
Income (loss) before taxes.........     2,102       3,425       1,314      (1,705)      5,136
Net income (loss)..................  $  1,293    $  2,106    $    808    $ (1,048)   $  3,159
  Net income (loss) per share......  $   0.12    $   0.20    $   0.08    $  (0.10)   $   0.30
  Weighted average shares
     outstanding...................    10,692      10,565      10,381      10,199      10,452
Market price of common stock: (a)
  High.............................  $   8.38    $   8.88    $   7.00    $   6.22    $   8.88
  Low..............................      5.06        6.50        5.63        4.38        4.38
</TABLE>

---------------
(a) Represents high and low closing quotations as reported by NASDAQ.

(b) Includes an asset impairment charge of $1,178.

                                        34
<PAGE>   35

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

     None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information required by Item 10 as to the Directors of the Registrant will
be incorporated herein by reference to the information set forth under the
captions "Election of Directors" and "Section 16(a) Beneficial Ownership
Reporting Compliance" in the Registrant's definitive proxy statement for its
April 30, 2001 Annual Meeting of Shareholders.

ITEM 11.  EXECUTIVE COMPENSATION

     Information required by Item 11 will be incorporated herein by reference to
the information set forth under the caption "Executive Officers' Compensation"
in the Registrant's definitive proxy statement for its April 30, 2001 Annual
Meeting of Shareholders.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information required by Item 12 will be incorporated herein by reference to
the information set forth under the captions "Security Ownership of Certain
Beneficial Owners" and "Security Ownership of Management" in the Registrant's
definitive proxy statement for its April 30, 2001 Annual Meeting of
Shareholders.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information required by Item 13 will be incorporated herein by reference to
the information set forth under the caption "Related Transactions" in the
Registrant's definitive proxy statement for its April 30, 2001 Annual Meeting of
Shareholders.

                                    PART IV

ITEM 14.  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 Public Accountants

    Consolidated Statements of Income for the Years Ended December 31, 2000,
    1999, and 1998

    Consolidated Balance Sheets as of December 31, 2000 and 1999

    Consolidated Statements of Cash Flows for the Years Ended December 31, 2000,
    1999, and 1998

    Consolidated Statements of Shareholders' Equity for the Years Ended December
    31, 2000, 1999, and 1998

    Notes to Consolidated Financial Statements

    (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.

    (b) REPORTS ON FORM 8-K. No reports were filed on Form 8-K during the fourth
    quarter of 2000.

                                        35
<PAGE>   36

                              OLYMPIC STEEL, INC.

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                             SEQUENTIAL
    EXHIBIT                      DESCRIPTION OF DOCUMENT                      PAGE NO.
    -------                      -----------------------                     ----------
    <S>        <C>                                                           <C>
     3.1(i)    Amended and Restated Articles of Incorporation                     (a)
     3.1(ii)   Amended and Restated Code of Regulations                           (a)
     4.1       Credit Agreement dated October 4, 1996 by and among the            (b)
               Registrant, three banks and National City Bank, Agent
     4.2       First Amendment to Credit Agreement dated January 24, 1997         (c)
               by and among the Registrant, three banks and National City
               Bank, Agent
     4.3       Second Amendment to Credit Agreement, dated May 30, 1997           (d)
     4.4       Third Amendment to Credit Agreement, dated July 14, 1997           (d)
     4.5       Fourth Amendment to Credit Agreement, dated December 8, 1998       (e)
     4.6       Fifth Amendment to Credit Agreement, dated March 10, 1999          (e)
     4.7       Sixth Amendment to Credit Agreement, dated January 15, 2000        (f)
     4.8       Receivables Purchase Agreement dated December 19, 1995 among       (g)
               the Registrant, Olympic Steel Receivables LLC, Olympic Steel
               Receivables, Inc. and Clipper Receivables Corporation as
               Purchaser
     4.9       Second Amendment to Receivables Purchase Agreement, dated          (d)
               July 14, 1997
               Information concerning certain of the Registrant's other
               long-term debt is set forth in Notes 8 through 11 of Notes
               to Consolidated Financial Statements. The Registrant hereby
               agrees to furnish copies of such instruments to the
               Commission upon request.
     4.10      Rights Agreement (Including Form of Certificate of Adoption        (h)
               of Amendment to Amended Articles of Incorporation as Exhibit
               A thereto, together with a Summary of Rights to Purchase
               Preferred Stock)
    10.1       Olympic Steel, Inc. Stock Option Plan                              (a)
    10.2       Lease, dated as of July 1, 1980, as amended, between S.M.S.        (a)
               Realty Co., a lessor, and the Registrant, as lessee,
               relating to one of the Cleveland facilities
    10.4       Lease, dated as of November 30, 1987, as amended, between          (a)
               Tinicum Properties Associates L.P., as lessor, and the
               Registrant, as lessee, relating to Registrant's Lester,
               Pennsylvania facility
    10.5       Operating Agreement of Trumark Steel & Processing, LLC,            (i)
               dated December 12, 1997, by and among Michael J. Guthrie,
               Carlton L. Guthrie and Oly Steel Welding, Inc.
    10.6       Carrier Contract Agreement for Transportation Services,            (e)
               dated August 1, 1998, between Lincoln Trucking Company and
               the Registrant
    10.7       Operating Agreement of OLP, LLC, dated April 4, 1997, by and       (j)
               between the U.S. Steel Group of USX Corporation and Oly
               Steel Welding, Inc.
    10.8       Form of Management Retention Agreement for Senior Executive        (k)
               Officers of the Company
    10.9       Form of Management Retention Agreement for Other Officers of       (k)
               the Company
    10.10      David A. Wolfort Employment Agreement dated January 1, 2001     39-52
    10.11      Promissory Note and Stock Pledge Agreement between Olympic      53-59
               Steel, Inc., and David A. Wolfort.
    21         List of Subsidiaries                                               60
</TABLE>

                                        36
<PAGE>   37

<TABLE>
<CAPTION>
                                                                             SEQUENTIAL
    EXHIBIT                      DESCRIPTION OF DOCUMENT                      PAGE NO.
    -------                      -----------------------                     ----------
    <S>        <C>                                                           <C>
    23         Consent of Independent Public Accountants                          61
    24         Directors and Officers Powers of Attorney                          62
</TABLE>

---------------
(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-Q
    filed with the Commission on November 4, 1996.

(c) Incorporated by reference to an Exhibit included in Registrant's Form 10-K
    filed with the Commission on March 7, 1997.

(d) Incorporated by reference to an Exhibit included in Registrant's Form 10-Q
    filed with the Commission on August 5, 1997.

(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-K
    filed with the Commission on March 20, 2000.

(g) Incorporated by reference to an Exhibit included in Registrant's Form 10-K
    filed with the Commission on March 29, 1996.

(h) Incorporated by reference to an Exhibit included in Registrant's Form 8-K
    filed with the Commission on February 15, 2000.

(i) Incorporated by reference to an Exhibit included in Registrant's Form 10-K
    filed with the Commission on March 9, 1998.

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

(k) Incorporated by reference to an Exhibit included in Registrant's Form 10-Q
    filed with the Commission on August 3, 2000.

                                        37
<PAGE>   38

                                   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.

March 28, 2001                              By: /s/ RICHARD T. MARABITO
                                              ----------------------------------
                                              Richard T. Marabito,
                                              Chief Financial Officer and
                                                Treasurer

     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 28TH DAY OF MARCH, 2001.

<TABLE>
<S>                                                         <C>
/s/ MICHAEL D. SIEGAL *                                     March 28, 2001
-----------------------------------------------------
Michael D. Siegal
Chairman of the Board
and Chief Executive Officer

/s/ DAVID A. WOLFORT *                                      March 28, 2001
-----------------------------------------------------
David A. Wolfort
President, Chief Operating Officer
and Director

/s/ RICHARD T. MARABITO *                                   March 28, 2001
-----------------------------------------------------
Richard T. Marabito
Chief Financial Officer and Treasurer
(Principal Accounting Officer)

/s/ SUREN A. HOVSEPIAN *                                    March 28, 2001
-----------------------------------------------------
Suren A. Hovsepian
Business Consultant and Director

/s/ MARTIN H. ELRAD *                                       March 28, 2001
-----------------------------------------------------
Martin H. Elrad, Director

/s/ THOMAS M. FORMAN *                                      March 28, 2001
-----------------------------------------------------
Thomas M. Forman, Director

/s/ WILLIAM E. MACDONALD III *                              March 28, 2001
-----------------------------------------------------
William E. MacDonald III, Director
</TABLE>

* 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.

<TABLE>
<S>                                                         <C>
By: /s/ RICHARD T. MARABITO                                 March 28, 2001
-----------------------------------------------------
    Richard T. Marabito, Attorney-in-Fact
</TABLE>

                                        38