##### Table of Contents





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

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES
    EXCHANGE ACT OF 1934For The Year Ended December 31, 2008o

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

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

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

44146(Address of principal executive
    offices)

(Zip Code)   (216) 292-3800
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of each Class

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


The NASDAQ Stock Market LLCPreferred Stock Purchase Rights


The NASDAQ Stock Market LLC  Securities registered pursuant to Section 12(g) of the
    Act:
   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated filer þ

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

Small reporting company o   Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




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##### 





TABLE OF
    CONTENTS
  PagePART IItem 1.

Business


2Item 1A.

Risk Factors


10Item 1B.

Unresolved Staff Comments


15Item 2.

Properties


16Item 3.

Legal Proceedings


17Item 4.

Submission of Matters to a Vote of Security
    Holders


17Executive Officers of the Registrant


17PART IIItem 5.

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


18Item 6.

Selected Financial Data


19Item 7.

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


20Item 7A.

Qualitative and Quantitative Disclosures About
    Market Risk


26Item 8.

Financial Statements and Supplementary Data


28Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


49Item 9A.

Controls and Procedures


49Item 9B.

Other Information


49PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


49Item 11.

Executive Compensation


49Item 12.

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


50Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


50Item 14.

Principal Accountant Fees and Services


50PART IVItem 15.

Exhibits and Financial Statement Schedules


50Signatures


51Index to Exhibits


52EX-21EX-23EX-24EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS  The
    Company
      (216) 292-3800,
  Industry
    Overview
      just-in-time
  Corporate
    History
   2




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




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




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(a)

(b)

(c)Eastern

Southern

Central

(d)Processing Equipment

Region

Region

Region

Michigan

TotalCutting-to-length


6



2



4



1



13Blanking














4



4Tempering


1







1







2Plate processing


16



10



22







48Slitting


2



2



2



2



8Shearing


2







3







5Machining


21



13











34Painting


1



1











2Shot blasting/grinding


4



1



3







8Total


53



29



35



7



124     (a)
    
    Consists of nine facilities located in Ohio, Connecticut,
    Illinois and Pennsylvania.(b)
    
    Consists of three facilities located in Georgia, North Carolina
    and South Carolina.(c)
    
    Consists of four facilities located in Michigan, Minnesota and
    Iowa.(d)
    
    Consists of a single facility in Detroit, Michigan.    Customers
    and Distribution
    250-mile just-in-time
 5




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##### Table of Contents



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




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




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Service
    Marks, Trade Names and Patents
      Government
    Regulation
    Environmental
    Effects
    of Inflation
    Backlog
    Available
    Information
  1-800-SEC-0330.
 8




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http://www.sec.gov.
  Form 10-K, Form 10-Q, Form 8-K
  Form 10-K.
  Forward-Looking
    Information
  Form 10-K
  
    general and global business, economic, financial and political
    conditions, including the ongoing global credit crisis;
    access to global credit markets;
    competitive factors such as the availability and pricing of
    steel, industry inventory levels and rapid fluctuations in
    customer demand and steel pricing;
    the cyclicality and volatility within the steel industry;
    the ability of our customers (especially those that may be
    highly leveraged, those in the domestic automotive industry and
    those with inadequate liquidity) to absorb future steel price
    increases
    and/or
    maintain their credit availability during periods of rapidly
    increasing steel prices;
    customer, supplier and competitor consolidation, bankruptcy or
    insolvency;
    layoffs or work stoppages by our own or our suppliers or
    customers personnel;
    the availability and costs of transportation and logistical
    services;
    equipment malfunctions or installation delays;
    the amounts and successes of our capital investments, including
    the construction of a new facility in Sumter, South Carolina ,
    the expansion of our facility in Chambersburg, Pennsylvania and
    the start-up
    of our new satellite facility in Dover, Ohio;
    the successes of our strategic efforts and initiatives to
    increase sales volumes, maintain or improve working capital
    turnover and free cash flows, reduce costs and debt levels and
    improve customer service;
    the adequacy of our existing information technology and business
    system software;
    the successful implementation of our new enterprise-wide
    information system; 9




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
    the timing and outcome of OLPs efforts and ability to
    liquidate its remaining assets; and
    our ability to pay regular quarterly cash dividends and the
    amounts and timing of any future dividends.    ITEM 1A.
    RISK
    FACTORS  In addition to the other information in this Annual Report
    and our other filings with the SEC, the following risk factors
    should be carefully considered in evaluating us and our business
    before investing in our common stock. The risks and
    uncertainties described below are not the only ones facing us.
    Additional risks and uncertainties, not presently known to us or
    otherwise, may also impair our business. If any of the risks
    actually occur, our business, financial condition or results of
    operations could be materially and adversely affected. In that
    case, the trading price of our common stock could decline, and
    investors may lose all or part of their investment.
  Risks
    Related to our Business
  Volatile
    steel prices can cause significant fluctuations in our operating
    results. Our sales and operating income could decrease if steel
    prices decline or if we are unable to pass producer price
    increases on to our customers.
    just-in-time
   10




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We
    service industries that are highly cyclical, and any downturn in
    our customers demand could reduce our sales, margins and
    profitability.
      Customer
    credit constraints and credit losses could have a material
    adverse effect on our results of operations.
    Our
    success is dependent upon our relationships with certain key
    customers.
   11




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Our
    implementation of a new information system could adversely
    affect our results of operations and cash flows.
    
    a significant deployment of capital and a significant use of
    management and employee time;
    the possibility that the software vendor may not be able to
    complete the project as planned;
    the possibility that the timeline, costs or complexities related
    to the new system implementation will be greater than expected;
    the possibility that the software, once fully implemented, does
    not work as planned;
    the possibility that benefits from the new system may be lower
    or take longer to realize than expected;
    the possibility that disruptions from the implementation may
    make it difficult for us to maintain relationships with our
    respective customers, employees or suppliers; and
    limitations on the availability and adequacy of the proprietary
    software or consulting, training and project management
    services, as well as our ability to retain key personnel
    assigned to the project.    The
    failure of our key computer-based systems could have a material
    adverse effect on our business.
    We depend
    on our senior management team and the loss of any member could
    prevent us from implementing our business strategy.
    Labor
    disruptions at any of our facilities or those of major customers
    could adversely affect our business, results of operations and
    financial condition.
   12




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We expect
    to finance our future growth through borrowings under our credit
    facility. We may have difficulty in obtaining sufficient sources
    of finance. Additionally, increased leverage could adversely
    impact our business and results of operations.
      
    increase our vulnerability to adverse economic and industry
    conditions;
    require us to dedicate a substantial portion of cash from
    operations to the payment of debt service, thereby reducing the
    availability of cash to fund working capital, capital
    expenditures, dividends and other general corporate purposes;
    limit our ability to obtain additional financing for working
    capital, capital expenditures, general corporate purposes or
    acquisitions;
    place us at a disadvantage compared to our competitors that are
    less leveraged; and
    limit our flexibility in planning for, or reacting to, changes
    in our business and in the steel industry.  An
    interruption in the sources of our steel supply could have a
    material adverse effect on our results of operations.
  just-in-time
  Risks
    associated with our growth strategy may adversely impact our
    ability to sustain our growth.
   13




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start-up start-up
    We may
    not be able to retain or expand our customer base if the U.S.
    manufacturing industry continues to erode or if the United
    States dollar strengthens.
      Our
    business is highly competitive, and increased competition could
    reduce our market share and harm our financial
    performance.
    Increases
    in energy prices would increase our operating costs, and we may
    be unable to pass all these increases on to our customers in the
    form of higher prices.
   14




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Risks
    Related to Our Common Stock
  The
    market price for our common stock may be volatile.
    
    announcement of our quarterly operating results or the operating
    results of other steel service centers;
    changes in financial estimates or recommendations by stock
    market analysts regarding us, our competitors or the steel
    industry; and
    announcements by us or our competitors of significant
    acquisitions, dispositions or joint ventures, or other material
    events impacting the domestic or global steel industry.    Our
    quarterly results may be volatile.
      ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   15




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ITEM 2.
    PROPERTIES  250-mile one-day
  Square



Owned orOperation

Location

Feet

Function

LeaseCleveland

Bedford Heights,
    Ohio(1)


127,000


Corporate headquarters, coil processing and distribution center

OwnedBedford Heights,
    Ohio(1)


121,500


Coil and plate processing, distribution center and offices

OwnedBedford Heights,
    Ohio(1)


59,500


Plate processing, distribution center and offices

Leased(2)Dover, Ohio


62,000


Plate processing and distribution center

OwnedMinneapolis

Plymouth, Minnesota


196,800


Coil and plate processing, distribution center and offices

OwnedPlymouth, Minnesota


112,200


Plate processing, fabrication, distribution center and offices

OwnedBaraga, Michigan


9,000


Distribution center

Leased(3)Detroit

Detroit, Michigan


256,000


Coil processing, distribution center and offices

OwnedSouth

Winder, Georgia


285,000


Coil and plate processing, distribution center and offices

OwnedIowa

Bettendorf, Iowa


244,000


Coil and plate processing, fabrication distribution center and
    offices

OwnedConnecticut

Milford, Connecticut


134,000


Coil processing, distribution center and offices

OwnedPhiladelphia

Lester, Pennsylvania


84,250


Plate processing, distribution center and offices

Leased(4)Chambersburg

Chambersburg, Pennsylvania


87,000


Plate processing, distribution center and offices

OwnedChambersburg, Pennsylvania


150,000


Plate processing, fabrication,  distribution center and offices

OwnedChicago

Schaumburg, Illinois


80,500


Coil and plate processing, distribution center and offices

OwnedNorth Carolina

Siler City, North Carolina


74,000


Plate processing, fabrication, distribution center and offices

OwnedSouth Carolina

Sumter, South Carolina


24,375


Fabrication and distribution center

Leased(5)     (1)
    
    The Bedford Heights facilities are all adjacent properties.(2)
    
    This facility is leased from a related party pursuant to the
    terms of a triple net lease for $195,300 per year. The lease
    expires in June 2010, with one renewal option for an additional
    10 years.(3)
    
    The lease on this facility expires on September 30, 2009,
    with five one-year renewal options.(4)
    
    The lease on this facility expires on December 31, 2009,
    with a one-year renewal option.(5)
    
    The lease on this facility expires on April 10, 2009, with
    five one-month renewal options.   16




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ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   EXECUTIVE
    OFFICERS OF THE REGISTRANT  Regulation S-K.
      Make-A-Wish
     17




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PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Price
    Range of Common Stock
    2008

2007High

Low

High

LowFirst quarter

$
45.88


$
26.82


$
31.72


$
21.03Second quarter


78.32



44.26



34.99



28.54Third quarter


74.46



27.15



31.59



21.79Fourth quarter


29.98



12.00



33.20



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




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ITEM 6.
    SELECTED
    FINANCIAL DATA    For the Years Ended December 31,2008

2007

2006

2005

2004(In thousands, except per share data)Tons Sold Data:Direct


1,041



1,098



1,064



1,091



1,171Toll (a)


125



150



202



189



184Total


1,165



1,248



1,266



1,280



1,355Income Statement Data:Net sales (a)

$
1,227,245


$
1,028,963


$
981,004


$
939,210


$
894,157Gross profit (b)


296,639



201,675



200,699



166,471



242,370Operating expenses (c)


187,393



158,351



146,479



122,450



139,563Operating income


109,246



43,324



54,220



44,021



102,807Income (loss) from joint ventures (d)










(2,137
)


(4,125
)


741Interest and other financing costs


1,148



2,819



2,677



3,703



4,655Income before income taxes


108,098



40,505



49,406



36,193



98,893Net income

$
67,702


$
25,270


$
31,048


$
22,092


$
60,078Earnings Per Share Data:Basic (e)

$
6.24


$
2.38


$
2.99


$
2.18


$
6.12Diluted

$
6.21


$
2.35


$
2.92


$
2.11


$
5.88Weighted average shares  basic


10,847



10,628



10,383



10,134



9,816Weighted average shares  diluted


10,895



10,763



10,633



10,457



10,222Dividends declared (f)

$
1.18


$
0.14


$
0.12







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

$
348,480


$
283,388


$
308,215


$
227,655


$
287,307Current liabilities


95,280



92,290



92,340



94,603



95,688Working capital


253,200



191,098



215,875



133,052



191,619Total assets


474,247



386,083



405,320



305,606



374,146Total debt


40,198



16,707



68,328







96,022Shareholders equity


322,958



263,520



234,237



200,321



176,525     (a)
    
    Net sales generated from toll tons sold represented less than 3%
    of consolidated net sales for all years presented.(b)
    
    Gross profit is calculated as net sales less the cost of
    materials sold.(c)
    
    Operating expenses are calculated as total costs and expenses
    less the cost of materials sold.(d)
    
    Includes $2,000 and $3,500 loss on disposition of OLP joint
    venture in 2006 and 2005, respectively.(e)
    
    Calculated by dividing net income by weighted average shares
    outstanding.(f)
    
    2008 dividends declared include $1.00 per share special dividend. 19




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




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




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Revenue
    Recognition
  Revenue
    Recognition
  Results
    of Operations
    2008

2007

2006% of net



% of net



% of net$

sales

$

sales

$

salesNet sales

$
1,227,245



100.0


$
1,028,963



100.0


$
981,004



100.0Gross profit (a)


296,639



24.2



201,675



19.6



200,699



20.5Operating expenses (b)


187,393



15.3



158,351



15.4



146,479



14.9Operating income


109,246



8.9



43,324



4.2



54,220



5.5     (a)
    
    Gross profit is calculated as net sales less the cost of
    materials sold.(b)
    
    Operating expenses are calculated as total costs and expenses
    less the cost of materials sold.  2008
    Compared to 2007
         22




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2007
    Compared to 2006
                Liquidity
    and Capital Resources
     23




---



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2008
    Compared to 2007
                 24




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##### Table of Contents



2007
    Compared to 2006
            Contractual
    Obligations
    Contractual Obligations







Less than








More than(amounts in thousands)




Total


1 year


1-3 years


3-5 years


5 yearsLong-term debt obligations


(a
)

$
40,198


$



$
40,198


$



$
Unrecognized tax positions


(b
)


4,872


$
2,357


$
2,515Other long-term liabilities


(c
)


11,879







9,387



202



2,290Operating leases


(d
)


13,157



4,308



5,994



2,291



564Total contractual obligations





$
70,106


$
6,665


$
58,094


$
2,493


$
2,854     (a)
    
    See Note 6 to the Consolidated Financial Statements.(b)
    
    See Note 7 to the Consolidated Financial Statements.
    Classification is based on expected settlement dates and the
    expiration of certain statutes of limitations.(c)
    
    Primarily consists of accrued bonuses, retirement liabilities
    and deferred compensation payable in future years.(d)
    
    See Note 12 to the Consolidated Financial Statements.  Off-Balance
    Sheet Arrangements
     25




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Effects
    of Inflation
    Impact of
    Recently Issued Accounting Pronouncements
  Accounting
    for Uncertainty in Income Taxes: an Interpretation of FASB
    Statement No. 109 Accounting
    for Income Taxes
  Fair Value Measurements
  Noncontrolling Interests in Consolidated Financial
    Statements  an Amendment of Accounting Research
    Bulletin No. 51
  Business Combinations
  ITEM 7A.
    QUALITATIVE
    AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK   26




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180-day
 27




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##### 



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


29Managements Report on Internal Control Over
    Financial Reporting


30Consolidated Statements of Operations for the
    Years Ended December 31, 2008, 2007 and 2006


31Consolidated Balance Sheets as of
    December 31, 2008 and 2007


32Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2008, 2007 and 2006


33Consolidated Statements of Shareholders
    Equity for the Years Ended December 31, 2008, 2007 and
    2006


34Notes to Consolidated Financial Statements for
    the Years Ended December 31, 2008, 2007 and 2006


35   28




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REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control 
    Integrated Framework
          29




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MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING    Internal Control  Integrated
    Framework
   30




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##### Table of Contents



Olympic
    Steel, Inc.
 Consolidated Statements of Operations
 For The Years Ended December 31, 2008, 2007 and 2006
   2008


2007


2006Net sales

$
1,227,245


$
1,028,963


$
981,004Costs and expensesCost of materials sold (exclusive of items shown separately
    below)


930,606



827,288



780,305Warehouse and processing


64,382



59,449



55,407Administrative and general


58,592



41,472



38,143Distribution


28,086



26,342



25,384Selling


19,602



15,993



13,485Occupancy


6,998



6,145



5,704Depreciation


9,733



8,950



8,356Total costs and expenses


1,117,999



985,639



926,784Operating income


109,246



43,324



54,220Loss from joint ventures










(137
)Loss on disposition of joint venture










(2,000
)Income before financing costs and income taxes


109,246



43,324



52,083Interest and other expense on debt


1,148



2,819



2,677Income before income taxes


108,098



40,505



49,406Income tax provision


40,396



15,235



18,358Net income

$
67,702


$
25,270


$
31,048Net income per share  basic

$
6.24


$
2.38


$
2.99Weighted average shares outstanding  basic


10,847



10,628



10,383Net income per share  diluted

$
6.21


$
2.35


$
2.92Weighted average shares outstanding  diluted


10,895



10,763



10,633   The accompanying notes are an integral part of these
    statements.
 31




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Olympic
    Steel, Inc.Consolidated Balance Sheets
    As of December 31, 2008 and 2007 (in
    thousands)
  2008


2007AssetsCash and cash equivalents

$
891


$
7,707Accounts receivable, net


77,737



88,414Inventories


255,300



178,530Prepaid expenses and other


14,552



8,737Total current assets


348,480



283,388Property and equipment, at cost


211,325



183,850Accumulated depreciation


(97,820
)


(94,199
)Net property and equipment


113,505



89,651Goodwill


6,583



6,583Other long-term assets


5,679



6,461Total assets

$
474,247


$
386,083LiabilitiesAccounts payable

$
64,883


$
73,408Accrued payroll


16,403



9,393Other accrued liabilities


13,994



9,489Total current liabilities


95,280



92,290Credit facility revolver


40,198



16,707Other long-term liabilities


14,394



9,779Deferred income taxes


1,417



3,787Total liabilities


151,289



122,563Shareholders EquityPreferred stock, without par value, 5,000 shares
    authorized, no shares issued or outstanding






Common stock, without par value, 20,000 shares authorized,
    10,962 and 10,728 shares issued and outstanding


119,134



114,582Retained earnings


203,824



148,938Total shareholders equity


322,958



263,520Total liabilities and shareholders equity

$
474,247


$
386,083   The accompanying notes are an integral part of these balance
    sheets.
 32




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Olympic
    Steel, Inc.
 Consolidated Statements of Cash Flows
 For The Years Ended December 31, 2008, 2007 and 2006
   2008


2007


2006Cash flows from operating activities:Net income

$
67,702


$
25,270


$
31,048Adjustments to reconcile net income to net cash from operating
    activities (net of effects from 2006 purchases of GSP and
    PS&W) Depreciation and amortization


9,733



8,950



8,356Loss from joint ventures, net of distributions and consolidation
    of GSP










137Loss on disposition of joint venture










2,000(Gain) loss on disposition of property and equipment


(464
)


(446
)


108Stock based compensation


1,648



840



127Other long-term assets


782



(3,298
)


(3,172
)Other long-term liabilities


4,615



3,115



3,702Long-term deferred income taxes


(2,370
)


36



(3,800
)81,646



34,467



38,506Changes in working capital:Accounts receivable


10,677



(2,531
)


(725
)Inventories


(76,770
)


32,208



(70,994
)Prepaid expenses and other


(5,815
)


(2,354
)


(2,557
)Accounts payable


(14,834
)


1,254



(12,631
)Accrued payroll and other accrued liabilities


11,335



1,637



(2,402
)(75,407
)


30,214



(89,309
)Net cash from (used for) operating activities


6,239



64,681



(50,803
)Cash flows from (used for) investing activities:Purchase of GSP Interest










(100
)Purchase of PS&W










(8,965
)Capital expenditures


(33,759
)


(12,498
)


(12,303
)Proceeds from disposition of property and equipment


816



1,702



9Net cash used for investing activities


(32,943
)


(10,796
)


(21,359
)Cash flows from (used for) financing activities:Credit facility revolver borrowings (payments), net


23,491



(51,621
)


65,481Change in outstanding checks


6,309



(2,941
)


1,860Debt repayments










(2,264
)Proceeds from exercise of stock options (including tax benefit)
    and employee stock purchases


2,904



4,667



3,992Dividends paid


(12,816
)


(1,494
)


(1,251
)Net cash from (used for) financing activities


19,888



(51,389
)


67,818Cash and cash equivalents:Net increase (decrease)


(6,816
)


2,496



(4,344
)Beginning balance


7,707



5,211



9,555Ending balance

$
891


$
7,707


$
5,211   The accompanying notes are an integral part of these
    statements.
 33




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##### Table of Contents



Olympic
    Steel, Inc.Consolidated Statements of Shareholders
    Equity
    For The Years Ended December 31, 2008, 2007 and 2006 (In
    thousands)
  Common


RetainedStock


EarningsBalance at December 31, 2005


104,956



95,365Net income






31,048Payment of dividends






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


3,992



Stock based compensation


127



Balance at December 31, 2006


109,075



125,162Net income






25,270Payment of dividends






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


4,667



Stock based compensation


840



Balance at December 31, 2007

$
114,582


$
148,938Net income






67,702Payment of dividends






(12,816
)Exercise of stock options and employee stock purchases
    (134 shares)


2,904



Stock based compensation


1,648



Balance at December 31,2008

$
119,134


$
203,824   The accompanying notes are an integral part of these
    statements.
 34




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##### Table of Contents



Olympic
    Steel, Inc.Notes to Consolidated Financial StatementsFor The Years Ended December 31, 2008, 2007 and 2006 (dollars
    in thousands, except per share amounts)
  1.  Summary
    of Significant Accounting Policies:
  Principles
    of Consolidation
    Nature
    of Business
    Accounting
    Estimates
    Concentration
    Risks
      Cash
    and Cash Equivalents
    Fair
    Market Value
    Level 1
 35




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##### Table of Contents



Level 2
  Level 3
  Accounts
    Receivable
      Inventories
    Property
    and Equipment, and Depreciation
  98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use
  Goodwill
  Goodwill and Other Intangible Assets
      Income
    Taxes
   36




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##### Table of Contents



Revenue
    Recognition
  Revenue
    Recognition
  Shipping
    and Handling Fees and Costs
    Impairment
  Accounting
    for the Impairment or Disposal of Long-Lived Assets
  Stock-Based
    Compensation
  No. 123-R, (SFAS No. 123-R), Share-Based Payment
  Impact
    of Recently Issued Accounting Pronouncements
  Accounting
    for Uncertainty in Income Taxes: an Interpretation of FASB
    Statement No. 109 Accounting for
    Income Taxes
  Fair Value Measurements
 37




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##### Table of Contents



Noncontrolling Interests in Consolidated Financial
    Statements  an Amendment of Accounting Research
    Bulletin No. 51
  Business Combinations
  2.  Acquisition
    of Tinsley Group  PS&W, Inc.:
      3.  Investments
    in Joint Ventures:
           38




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##### Table of Contents



4.  Property
    and Equipment:
    Depreciable

As of December 31,Lives

2008


2007Land



$
10,824


$
9,954Land improvements

10


1,453



1,302Buildings and improvements

30


68,091



63,605Machinery and equipment

5-15


100,901



88,786Furniture and fixtures

7


4,934



4,947Computer equipment

5


7,338



8,245Vehicles

5


29



33Construction in progress




17,755



6,978$
211,325


$
183,850Less accumulated depreciation




(97,820
)


(94,199
)Net property and equipment



$
113,505


$
89,651       5.  Inventories:
    As of December 31,2008


2007Unprocessed

$
211,246


$
133,319Processed and finished


44,054



45,211Totals

$
255,300


$
178,530   6.  Debt:
  Credit
    Facility
     39




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##### Table of Contents



Scheduled
    Debt Maturities, Interest, Debt Carrying Values
      7.  Income
    Taxes:
    2008


2007


2006Current:Federal

$
37,963


$
14,665


$
17,776State and Local


6,750



2,158



3,23044,713



16,823



21,006Deferred


(4,317
)


(1,588
)


(2,648
)$
40,396


$
15,235


$
18,358     2008


2007Deferred tax assets:Inventory

$
1,197


$
617Net operating loss and tax credit carryforwards


1,270



1,951Allowance for doubtful accounts


419



542Other


83



83Accrued expenses


8,863



5,19611,832



8,389Valuation reserve


(296
)


(337
)Total deferred tax assets


11,536



8,052Deferred tax liabilities:Property and equipment


(6,440
)


(6,587
)Intangibles


(1,187
)


(742
)Other


(261
)


(1,392
)Total deferred tax liabilites


(7,888
)


(8,721
)Deferred tax assets (liabilities), net

$
3,648


$
(669
)   Accounting for
    Uncertainty in Income Taxes: an interpretation of FASB Statement
    No. 109
 40




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##### Table of Contents



2008


2007Balance as of the beginning of the year

$
3,059


$
773Increases related to prior year tax positions


1,613



276Decreases related to prior year tax positions


(92
)


Increases related to current year tax positions






2,035Decreases related to settlements with taxing authorities






Decreases related to lapsing of statute of limitations


(202
)


(25
)Balance as of the end of the year

$
4,378


$
3,059   2005-2007
      2008

2007

2006U.S. federal statutory rate


35.0
%


35.0
%


35.0
%State and local taxes, net of federal benefit


3.7
%


1.9
%


1.6
%Sec. 199 manufacturing deduction


(1.6
)%


(1.2
)%


(1.0
)%All other, net


0.3
%


1.9
%


1.6
%Effective income tax rate


37.4
%


37.6
%


37.2
%     8.  Retirement
    Plans:
      W-2
   41




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##### Table of Contents



9.  Shares
    Outstanding and Earnings Per Share:
  2008


2007


2006(In thousands, except per share data)Weighted average basic shares outstanding


10,847



10,628



10,383Assumed exercise of stock options and issuance of stock awards


48



135



250Weighted average diluted shares outstanding


10,895



10,763



10,633Net income

$
67,702


$
25,270


$
31,048Basic earnings per share

$
6.24


$
2.38


$
2.99Diluted earnings per share

$
6.21


$
2.35


$
2.92     10.  Stock
    Options:
      No. 123-R (SFAS No. 123-R), Share-Based Payment SFAS No. 123-R, Accounting for Stock Issued to
    Employees SFAS No. 123-R.
 42




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##### Table of Contents



SFAS No. 123-R
  For the Year Ended

For the Year Ended

For the Year EndedDecember 31, 2008

December 31, 2007

December 31, 2006Stock option expense before taxes

$
210


$
150


$
127Stock option expense after taxes

$
132


$
93


$
80Impact per basic share

$
0.01


$
0.01


$
0.01Impact per diluted share

$
0.01


$
0.01


$
0.01   SFAS No. 123-R
    2008

2007

2006Risk-free interest rate


n/a



4.58
%


n/aExpected life in years


n/a



10



n/aExpected volatility


n/a



57.70
%


n/aExpected dividend yield


n/a



0.40
%


n/a         WeightedWeighted


AverageAverage Exercise


Remaining


AggregateNumber of Shares


Price


Contractual Term


Intrinsic ValueOutstanding at December 31, 2007


203,807


$
10.99Granted





$
Exercised


(133,800
)

$
7.97Canceled






Outstanding at December 31, 2008


70,007


$
16.75



5.75 years


$
550Exercisable at December 31, 2008


49,893


$
12.15



4.96 years


$
509    43




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##### Table of Contents



11.  Restricted
    Stock Units and Performance Share Units:
          RSUs

PERSUsVested

Unvested

Vested

UnvestedBalance as of January 1, 2008






9,000







32,378Granted






9,000







34,379Vested


9,000



(9,000
)






Forfeited














Balance as of December 31, 2008


9,000



9,000







66,757   SFAS No. 123-R,
  For the Year Ended

For the Year EndedDecember 31, 2008

December 31, 2007RSU and PERSU expense before taxes

$
1,438


$
690RSU and PERSU expense after taxes

$
900


$
430Impact per basic share

$
0.08


$
0.04Impact per diluted share

$
0.08


$
0.04     12.  Commitments
    and Contingencies:
   44




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##### Table of Contents



2009

$
4,3082010


3,5382011


2,4562012


1,4812013


810Thereafter


564$
13,157         13.  Related
    Party Transactions:
  10-year
    14.  Supplemental
    Cash Flow Information:
      PS&W


GSPFair value of assets acquired (including goodwill)

$
17,562


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






(63
)Cash paid for stock/ownership interest


(8,965
)


(100
)Liabilities assumed

$
8,597


$
5,256   15.  Shareholder
    Rights Plan:
   45




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##### Table of Contents



46




---



##### Table of Contents



Schedule II 
    Valuation and Qualifying Accounts (in
    thousands)
  AdditionsBalance at

Charged to

Charged to



Balance atBeginning

Costs and

Other



End ofDescription

of Period

Expenses

Accounts

Deductions

PeriodYear Ended December 31, 2006Allowance for doubtful accounts

$
2,169


$
1,044


$



$
(2,025
)

$
1,188Tax valuation reserve


989



1,347











2,336Year Ended December 31, 2007Allowance for doubtful accounts


1,188



493







(254
)


1,427Tax valuation reserve


2,336











(1,999
)


337Year Ended December 31, 2008Allowance for doubtful accounts


1,427



1,378







(1,702
)


1,103Tax valuation reserve


337











(41
)


296  47




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##### Table of Contents



SUPPLEMENTAL
    FINANCIAL INFORMATION
    Unaudited Quarterly Results of Operations (in
    thousands, except per share amounts)
  2008

1st

2nd

3rd

4th

YearNet sales

$
274,875


$
363,514


$
335,222


$
253,634


$
1,227,245Operating income


21,227



47,329



37,797



2,893



109,246Income before income taxes


21,200



47,169



37,447



2,282



108,098Net income

$
13,161


$
29,598


$
24,167


$
776


$
67,702Basic net income per share

$
1.22


$
2.73


$
2.22


$
0.07


$
6.24Weighted average shares outstanding  basic


10,771



10,857



10,871



10,871



10,847Diluted net income per share

$
1.21


$
2.70


$
2.21


$
0.07


$
6.21Weighted average shares outstanding  diluted


10,851



10,946



10,952



10,894



10,895Market price of common stock: (a)High

$
45.88


$
78.32


$
74.46


$
29.98


$
78.32Low


26.82



44.26



27.15



12.00



12.00   2007

1st

2nd

3rd

4th

YearNet sales

$
259,405


$
277,413


$
256,089


$
236,056


$
1,028,963Operating income


9,410



15,871



10,678



7,365



43,324Income before income taxes


8,383



15,018



10,038



7,066



40,505Net income

$
5,252


$
9,446


$
6,029


$
4,543


$
25,270Basic net income per share

$
0.50


$
0.89


$
0.56


$
0.42


$
2.38Weighted average shares outstanding  basic


10,435



10,603



10,727



10,728



10,628Diluted net income per share

$
0.49


$
0.88


$
0.56


$
0.42


$
2.35Weighted average shares outstanding  diluted


10,664



10,753



10,821



10,814



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

$
31.72


$
34.99


$
31.59


$
33.20


$
34.99Low


21.03



28.54



21.79



23.00



21.03     (a)
    
    Represents the high and low sales quotations of our Common Stock
    as reported by the Nasdaq Global Select Market. 48




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rule 13a-15 Rule 13a-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Form 10-K
  Changes
    in Internal Control Over Financial Reporting
    ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE
    GOVERNANCE  Form 10-K
  ITEM 11.
    EXECUTIVE
    COMPENSATION   49




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##### Table of Contents



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  (a)(1) The following financial statements are included in
    Part II, Item 8:
                (a)(2) Financial Statement Schedules.
  (a)(3) Exhibits.
 50




---



##### Table of Contents



SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of
    the Securities Exchange Act of 1934, the Registrant has duly
    caused this report to be signed on its behalf by the
    undersigned, thereunto duly authorized.
    By:
    /s/  Richard
    T. Marabito      Pursuant to the requirements of the Securities Exchange Act
    of 1934, this report has been signed below by the following
    persons in the capacities indicated and on the 2nd day of
    March, 2009.
  /s/  Michael
    D.
    Siegal*Michael
    D. Siegal
    Chairman of the Board and Chief Executive Officer
    (Principal Executive Officer)

March 2, 2009/s/  David
    A.
    Wolfort*David
    A. Wolfort
    President, Chief Operating Officer and Director

March 2, 2009/s/  Richard
    T.
    Marabito*Richard
    T. Marabito
    Chief Financial Officer
    (Principal Financial Officer and Principal
    Accounting Officer)

March 2, 2009/s/  Ralph
    M. Della Ratta,
    Jr.*Ralph
    M. Della Ratta, Jr., Director

March 2, 2009/s/  Martin
    H.
    Elrad*Martin
    H. Elrad, Director

March 2, 2009/s/  Thomas
    M.
    Forman*Thomas
    M. Forman, Director

March 2, 2009/s/  James
    B.
    Meathe*James
    B. Meathe, Director

March 2, 2009/s/  Howard
    L.
    Goldstein*Howard
    L. Goldstein, Director

March 2, 2009   *
    The undersigned, by signing his name hereto, does sign and
    execute this Annual Report on
    Form 10-K
    pursuant to the Powers of Attorney executed by the above-named
    officers and directors of the Company and filed with the
    Securities and Exchange Commission on behalf of such officers
    and directors.  By: /s/  Richard
    T. MarabitoRichard
    T. Marabito,
    Attorney-in-Fact

March 2, 2009  51




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##### Table of Contents



OLYMPIC
    STEEL, INC.
  INDEX
    TO EXHIBITS
  Exhibit

Description of Document

Reference3.1(i)

Amended and Restated Articles of Incorporation

Incorporated by reference to Exhibit 4.2 to Registrants
    Registration Statement on
    Form S-8
    (No. 333-1439001) (the S-8 Registration Statement)
    filed with the Commission on June 20, 2007.3.1(ii)

Amended and Restated Code of Regulations

Incorporated by reference to Exhibit 3.1(ii) to the S-1
    Registration Statement filed with the Commission on January 12,
    1994.4.1

Notice of Removal of Rights Agent and Appointment of Successor
    Rights Agent and Amendment 1, dated as of September 16, 2008, by
    and among the Company, National City Bank and Mellon Investor
    Services LLC, to the Rights Amendment dated as of January 1,
    2000.

Incorporated by reference to Exhibit 4.1 to Registrants
    Form 8-K filed with the Commission on September 19, 2008
    (Commission File No. 0-23320).4.7

Rights Agreement dated as of January 31, 2000 (Including Form of
    Certificate of Adoption of Amendment to Amended Articles of
    Incorporation as Exhibit A thereto, together with a Summary of
    Rights to Purchase Preferred Stock)

Incorporated by reference to Exhibit 4.1 to Registrants
    Form 8-K filed with the Commission on February 15, 2000.4.18

Second Amended and Restated Credit Agreement dated as of May 28,
    2008 by and among the Company, the financial institutions from
    time to time party thereto and Comerica Bank, as Administrative
    Agent

Incorporated by reference to Exhibit 4.18 to Registrants
    Form 8-K filed with the Commission on June 3, 2008.10.1*

Olympic Steel, Inc. Stock Option Plan

Incorporated by reference to Exhibit 10.1 to the S-1
    Registration Statement filed with the Commission on January 12,
    1994.10.2

Lease, dated as of July 1, 1980, as amended, between S.M.S.
    Realty Co., a lessor, and the Registrant, as lessee, relating to
    one of the Cleveland facilities

Incorporated by reference to Exhibit 10.3 to the S-1
    Registration Statement filed with the Commission on January 12,
    1994.10.3

Intentionally omitted10.4

Lease, dated as of November 30, 1987, as amended, between
    Tinicum Properties Associates L.P., as lessor, and the
    Registrant, as lessee, relating to Registrants Lester,
    Pennsylvania facility

Incorporated by reference to Exhibit 10.4 to the S-1
    Registration Statement filed with the Commission on January 12,
    1994.10.7

Operating Agreement of OLP, LLC, dated April 4, 1997, by and
    between the U.S. Steel Group of USX Corporation and Oly Steel
    Welding, Inc.

Incorporated by reference to Exhibit 10.9 to Registrants
    Form 10-Q filed with the Commission on May 5, 1997.10.8*

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

Incorporated by reference to Exhibit 10.8 to Registrants
    Form 10-Q filed with the Commission on August 7, 2000.10.9*

Form of Management Retention Agreement for Other Officers of the
    Company

Incorporated by reference to Exhibit 10.9 to Registrants
    Form 10-Q filed with the Commission on August 7, 2000. 52




---



##### Table of Contents



Exhibit

Description of Document

Reference10.10*

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

Incorporated by reference to Exhibit 10.10 to Registrants
    Form 8-K filed with the Commission on December 23, 2005.10.12*

Michael D. Siegal Employment Agreement dated August 8, 2006

Incorporated by reference to Exhibit 10.12 to Registrants
    Form 10-Q filed with the Commission on August 9, 2006.10.13*

Richard T. Marabito Employment Agreement dated August 8, 2006

Incorporated by reference to Exhibit 10.13 to Registrants
    Form 10-Q filed with the Commission on August 9, 2006.10.14*

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

Incorporated by reference to Exhibit 10.14 to Registrants
    Form 10-K filed with the Commission on March 14, 2005.10.15*

Form of Non-Solicitation Agreements

Incorporated by reference to Exhibit 10.15 to Registrants
    Form 8-K filed with the Commission on March 4, 2005.10.16*

Form of Management Retention Agreement

Incorporated by reference to Exhibit 10.16 to Registrants
    Form 10-Q filed with the Commission on August 8, 2005.10.17*

Supplemental Executive Retirement Plan Term Sheet

Incorporated by reference to Exhibit 99.1 to Registrants
    Form 8-K filed with the Commission on January 5, 2006.10.18*

Summary of Non-Employee Director Compensation

Incorporated by reference to Exhibit 10.18 to Registrants
    Form 10-K filed with the Commission on March 15, 2006.10.19*

Summary of Senior Management Compensation Plan

Incorporated by reference to Exhibit 10.19 to Registrants
    Form 10-K filed with the Commission on March 15, 2006.10.20*

Olympic Steel, Inc. Supplemental Executive Retirement Plan

Incorporated by reference to Exhibit 10.20 to Registrants
    Form 8-K filed with the Commission on April 28, 2006.10.21*

Olympic Steel, Inc. 2007 Omnibus Incentive Plan

Incorporated by reference to Exhibit 10.21 to Registrants
    Form 8-K filed with the Commission on May 3, 2007.10.22*

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

Incorporated by reference to Exhibit 10.22 to Registrants
    Form 10-Q filed with the Commission on August 8, 2007.10.23*

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

Incorporated by reference to Exhibit 10.23 to Registrants
    Form 10-Q filed with the Commission on August 8, 2007.10.24*

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

Incorporated by reference to Exhibit 10.24 to Registrants
    Form 10-K filed with the Commission on March 14, 2008.10.25*

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

Incorporated by reference to Exhibit 10.25 to Registrants
    Form 10-Q filed with the Commission on May 2, 2008.10.26*

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

Incorporated by reference to Exhibit 10.26 to Registrants
    Form 10-Q filed with the Commission on May 2, 2008.21

List of Subsidiaries

Filed herewith23

Consent of Independent Registered Public Accounting Firm

Filed herewith 53




---



##### Table of Contents



Exhibit

Description of Document

Reference24

Directors and Officers Powers of Attorney

Filed herewith31.1

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

Filed herewith31.2

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

Filed herewith32.1

Written Statement of Michael D. Siegal, Chairman and Chief
    Executive Officer of the Company pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002

Furnished herewith32.2

Written Statement of Richard T. Marabito, Chief Financial
    Officer of the Company pursuant to 18 U.S.C. Section 1350,
    as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002

Furnished herewith     *
    
    This exhibit is a management contract or compensatory plan or
    arrangement. 54