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CLEVELAND - Olympic Steel Inc. (NASDAQ:ZEUS), a prominent metals service center in the United States with annual revenues of $1.94 billion and market capitalization of $333 million, has successfully renegotiated and extended its $625 million asset-based revolving credit facility until April 17, 2030. The facility, which is primarily backed by the company’s accounts receivable, inventory, property, equipment, and certain real estate holdings, also includes an option to increase borrowing by up to $200 million.
Post-amendment, Olympic Steel disclosed that it has roughly $269 million available under this credit line. The company, which maintains a healthy current ratio of 4.38x, plans to utilize these funds for general corporate purposes, which include working capital, potential acquisitions, and other growth-oriented investments. According to InvestingPro data, the company’s strong liquidity position is complemented by its consistent dividend payments, which it has maintained for 20 consecutive years.
Richard A. Manson, Olympic Steel’s Chief Financial Officer, stated that the extended credit facility, supported by a syndicate of banks, offers a robust source of cost-effective capital. He credited the company’s prudent management of working capital and expenses for the substantial liquidity and flexibility it now enjoys. Manson emphasized the intention to leverage this financial leverage to maintain operations and pursue strategic growth and acquisition opportunities.
Bank of America, N.A. serves as the Administrative Agent and Joint Lead Arranger, with BofA Securities, Inc. acting as the Joint Bookrunner. Wells Fargo Bank, National Association is also a Joint Lead Arranger and Joint Bookrunner, in addition to being the Syndication Agent. KeyBank National Association is the Documentation Agent, while The Huntington National Bank and Fifth Third Bank, National Association, are Co-Agents.
Founded in 1954 and headquartered in Cleveland, Ohio, Olympic Steel operates from 54 facilities and specializes in the sale and value-added processing of various steel products, as well as other metal-intensive end-use products.
This financial update is based on a press release statement from Olympic Steel Inc.
In other recent news, Olympic Steel reported its fourth-quarter 2024 earnings, missing both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.13, below the $0.17 expected by analysts, while revenue reached $418.78 million, falling short of the anticipated $462.6 million. Despite these results, KeyBanc Capital Markets increased its price target for Olympic Steel to $43.00, up from $42.00, while maintaining an Overweight rating. This adjustment reflects the company’s strong liquidity and its potential for mergers and acquisitions growth. Additionally, Olympic Steel announced the extension of its credit facility’s maturity date to April 17, 2030, in a move that could provide more flexibility in financial planning. The company’s strategic acquisition of Metalworks for $80 million is expected to bolster its market presence, especially in sectors like solar components and service station canopies. Olympic Steel also increased its quarterly dividend, indicating confidence in its financial health. These developments highlight the company’s efforts to maintain a robust financial structure and strategic growth initiatives.
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