OLYMPIC STEEL INC, S-3, 1996-07-02

OLYMPIC STEEL INC
S-3, 1996-07-02
STEEL WORKS, BLAST FURNACES & ROLLING MILLS (COKE OVENS)

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1996
REGISTRATION NO. 333-

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------

OLYMPIC STEEL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
OHIO 34-1245650
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR IDENTIFICATION NUMBER)
ORGANIZATION)
</TABLE>

5080 RICHMOND ROAD
BEDFORD HEIGHTS, OHIO 44146
(216) 292-3800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

------------------------

MICHAEL D. SIEGAL, PRESIDENT AND CHIEF EXECUTIVE OFFICER
5080 RICHMOND ROAD
BEDFORD HEIGHTS, OHIO 44146
(216) 292-3800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

------------------------

COPIES TO:

<TABLE>
<S> <C>
MARC H. MORGENSTERN, ESQ. ROBERT A. YOLLES, ESQ.
KAHN, KLEINMAN, YANOWITZ & ARNSON CO., L.P.A. JONES, DAY, REAVIS & POGUE
1301 EAST NINTH STREET, SUITE 2600 77 WEST WACKER DRIVE
CLEVELAND, OHIO 44114-1824 CHICAGO, ILLINOIS 60601
(216) 696-3311 (312) 782-3939
</TABLE>

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement has become effective.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

------------------------

CALCULATION OF REGISTRATION FEE
<TABLE>
===================================================================================================
<CAPTION>
TITLE OF EACH PROPOSED MAXIMUM PROPOSED MAXIMUM
CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO REGISTERED SHARE PRICE REGISTRATION
BE REGISTERED (1) (2) (2) FEE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
without par
value......... 3,450,000 $27.625 $95,306,250 $32,864.22
===================================================================================================
<FN>
(1) Includes 450,000 shares which the Underwriters have the option to purchase
to cover over-allotments. See "Underwriting."

(2) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(c) under the Securities Act of 1933, as amended, the
registration fee applicable to the Common Stock is calculated upon the basis
of the average of the high and low reported sales prices on the NASDAQ
National Market on July 1, 1996.
</TABLE>

----------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

Subject to Completion

July 2, 1996
PROSPECTUS

3,000,000 SHARES OLYMPIC STEEL logo

OLYMPIC STEEL, INC.

COMMON STOCK
(WITHOUT PAR VALUE)

Of the 3,000,000 shares of Common Stock, without par value (the "Common Stock"),
being offered (the "Offering"), 2,500,000 shares are being sold by Olympic
Steel, Inc. (the "Company") and 500,000 shares are being sold by certain
stockholders of the Company (the "Selling Shareholders"). The Company will not
receive any proceeds from the sale of shares by the Selling Shareholders. See
"Selling Shareholders."

The Common Stock is quoted on the NASDAQ National Market ("NASDAQ") under the
symbol "ZEUS." On July 1, 1996, the last reported sales price on NASDAQ was
$28.00 per share. See "Price Range of Common Stock."

SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON STOCK
OFFERED HEREBY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
PROCEEDS TO
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT COMPANY(1) SHAREHOLDERS
<S> <C> <C> <C> <C>
Per Share......... $ $ $ $
Total(2).......... $ $ $ $
- -----------------------------------------------------------------------------------------------
<FN>

(1) Before deducting expenses, payable by the Company, estimated at $
.

(2) The Company and the Selling Shareholders have granted to the Underwriters
30-day options to purchase up to 375,000 additional shares and 75,000
additional shares, respectively, of Common Stock (450,000 additional shares
in the aggregate), solely to cover over-allotments, if any. If the
Underwriters exercise such options in full, the total Price to Public,
Underwriting Discount, Proceeds to Company and Proceeds to Selling
Shareholders will be $ , $ , $ and $ ,
respectively. See "Underwriting."
</TABLE>

The Common Stock is offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the shares of Common Stock will be made at the
office of Salomon Brothers Inc, Seven World Trade Center, New York, New York, or
through the facilities of The Depository Trust Company, on or about
, 1996.

SALOMON BROTHERS INC
GOLDMAN, SACHS & CO.

MERRILL LYNCH & CO.

MCDONALD & COMPANY
SECURITIES, INC.
The date of this Prospectus is July , 1996.

<PAGE> 3

INSIDE FRONT PAGE

(PICTURE FROM ANNUAL REPORT)

2
<PAGE> 4

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON NASDAQ, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

IN CONNECTION WITH THE OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP MEMBERS
MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON NASDAQ
IN ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE
"UNDERWRITING."

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the consolidated financial statements (including the notes
thereto) appearing elsewhere in this Prospectus or in the documents incorporated
herein by reference. Unless indicated otherwise, (i) all references in this
Prospectus to the "Company" or "Olympic" are to Olympic Steel, Inc. and its
subsidiaries, and (ii) all information contained in this Prospectus assumes that
the Underwriters' over-allotment options are not exercised. Prospective
investors should carefully consider the information set forth under the heading
"Risk Factors."

THE COMPANY

Olympic Steel, Inc. is a leading steel service center that processes and
distributes flat-rolled carbon, stainless and tubular steel products from 11
facilities in six midwestern and eastern states. Total shipments in 1995
exceeded one million tons. 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 and plate
burning. The Company services a diverse base of over 3,200 active customers
throughout the midwestern, eastern and southern United States, as well as Mexico
and Puerto Rico.

Major customers include automobile manufacturers and stampers,
manufacturers of transportation equipment, material handling equipment,
electrical machinery, storage tanks, food service equipment, construction
equipment, agricultural equipment and appliances, general and plate fabricators,
and steel service centers. Sales to United States automotive manufacturers and
their suppliers and sales to steel service centers accounted for approximately
25% and 11%, respectively, of 1995 net sales. Sales to the Company's largest
customer accounted for less than 6% of 1995 net sales.

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

In recognition of these industry dynamics, the Company has focused its
business strategy on achieving profitable growth through the acquisition of
service centers and related businesses and investments in higher value-added
processing equipment and services, while continuing its commitment to expanding
and improving its sales force and information systems. The pursuit of this
strategy has allowed the Company to increase sales and operating income over the
past five years by compound annual growth rates of 22% and 32%, respectively.
Key elements in the implementation of this strategy include the following:

ACQUISITION OF LAFAYETTE STEEL: In January 1995, the Company acquired
Detroit-based Lafayette Steel Company ("Lafayette Steel") for approximately
$52.3 million. The acquisition has provided the Company an entry to the
automotive industry. Lafayette Steel has 14 major pieces of processing
equipment, including eight presses, giving the Company access to processing
capabilities in blanking. The Company has commenced an expansion of Lafayette
Steel's facilities, to be completed by the end of 1996, that will add 72,000
square feet and allow increased operating efficiencies. In 1995, Lafayette Steel
represented approximately $136.4 million, or 25%, of the Company's total net
sales.

3
<PAGE> 5

EXPANSION OF PLATE PROCESSING CAPABILITIES: Over the past two years, the
Company has more than doubled its plate processing capacity by adding four plate
burning tables. Substantially all of the new equipment uses advanced laser or
plasma cutting technology resulting in higher efficiency, improved quality and
lower costs. An additional three plasma burning tables are expected to be
installed before the end of 1996. This investment in plate processing equipment
will enable the Company to better respond to an accelerating trend of domestic
manufacturers which are outsourcing certain manufacturing processes and will
allow the Company to further increase its capabilities in higher value-added
processing services. The Company believes it is among the largest processors and
distributors of steel plate in the United States.

INVESTMENT IN NEW TEMPER MILL FACILITY: In January 1996, the Company
commenced operations at its new temper mill facility in Cleveland, constructed
at a cost of $17.2 million, with an annual capacity of 120,000 tons. The
facility operated at an average utilization rate of 45% for the first half of
1996. The Company expects the facility to operate at full capacity by year-end.
The temper mill is one of only six of its kind in the United States and
incorporates state-of-the-art technology and certain unique design
specifications in response to increased customer demand for higher tolerances
and flatness specifications.

COMMITMENT TO MODERNIZATION PROGRAM: The Company is in the early phases of
a modernization program that will include the substantial upgrade or replacement
of several pieces of existing processing equipment and information systems. The
actual timing and cost of the program is still under study; however, current
cost estimates range from $20 million to $40 million over the next several
years. This program will further improve the Company's operating efficiency and
cost competitiveness and expand existing capacity.

EXPANSION OF SALES FORCE: The Company believes it has among the largest
and most experienced sales force in the industry, which is a significant
competitive advantage. The Company's sales force has grown to 120 from 80 at the
beginning of 1994. The continuous interaction between the Company's sales force
and active and prospective customers provides the Company with valuable market
information. The Company remains committed to expanding and improving its sales
force.

Olympic believes its depth of management, strategically located facilities,
advanced 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.

THE OFFERING

<TABLE>
<S> <C>
Common Stock being offered by:
The Company...................................... 2,500,000 shares
The Selling Shareholders......................... 500,000 shares
Total......................................... 3,000,000 shares
Common Stock to be outstanding after the
Offering......................................... 11,100,000 shares(a)
NASDAQ symbol...................................... ZEUS
Use of proceeds.................................... To repay outstanding bank indebtedness.
See "Use of Proceeds."
- ---------------
<FN>
(a) Excludes 450,000 shares of Common Stock reserved for future issuance under
the Company's Stock Option Plan (the "Stock Option Plan"), of which options
for 152,500 shares are currently outstanding at an exercise price of $15.50
per share.
</TABLE>

4
<PAGE> 6

SUMMARY FINANCIAL AND OPERATING DATA
(in thousands, except per share data)

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------------------------------------- --------------------------
1991 1992 1993 1994 1995 1995 1996
-------- -------- -------- -------- -------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales....................... $250,685 $275,415 $313,810 $381,906 $554,469 $ 149,058 $ 142,589
Cost of sales................... 202,110 220,626 250,707 304,777 446,513 119,046 111,663
-------- -------- -------- -------- -------- -------- --------
Gross margin.................. 48,575 54,789 63,103 77,129 107,956 30,012 30,926
Operating expenses.............. 41,272 46,635 50,519 58,836 85,855 22,295 23,207
-------- -------- -------- -------- -------- -------- --------
Operating income.............. 7,303 8,154 12,584 18,293 22,101 7,717 7,719
Interest and receivable
securitization expense........ 6,435 4,699 4,480 3,761 10,853 2,567 2,292
-------- -------- -------- -------- -------- -------- --------
Pre-tax income.............. 868 3,455 8,104 14,532 11,248 5,150 5,427
Income taxes.................... -- -- -- 13,634(a) 4,504 2,083 2,171
-------- -------- -------- -------- -------- -------- --------
Net income.................. $ 868 $ 3,455 $ 8,104 $ 898 $ 6,744 $ 3,067 $ 3,256
======== ======== ======== ======== ======== ======== ========
Net income per share(b)..... $ 0.12 $ 0.78 $ 0.36 $ 0.38
======== ======== ======== ========
Weighted average shares
outstanding(b)................ 7,778 8,600 8,600 8,600
-------- -------- -------- --------
OTHER DATA:
Capital expenditures............ $ 1,162 $ 3,972 $ 1,767 $ 17,070 $ 12,739 $ 5,849 $ 2,007
Depreciation and amortization... 1,479 1,481 1,646 1,834 3,264 671 994

Tons sold
Direct...................... 491 565 618 685 931 250 257
Toll........................ 2 2 3 10 155 51 37
-------- -------- -------- -------- -------- -------- --------
Total....................... 493 567 621 695 1,086 301 294
Gross margin.................... 19.4% 19.9% 20.1% 20.2% 19.5% 20.1% 21.7%
Operating income................ 2.9% 3.0% 4.0% 4.8% 4.0% 5.2% 5.4%
Pre-tax income.................. 0.3% 1.3% 2.6% 3.8% 2.0% 3.5% 3.8%
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
--------------------- 1996
BALANCE SHEET DATA: 1994 1995 ---------
-------- -------- (UNAUDITED)
<S> <C> <C> <C>
Current assets.................................................... $155,178 $124,371 $136,606
Current liabilities............................................... 37,767 31,226 49,051
Working capital................................................... 117,411 93,145 87,555
Total assets...................................................... 200,987 202,072 215,320
Total debt........................................................ 93,437 98,540 90,683
Shareholders' equity.............................................. 67,240 73,984 77,240

- ---------------
<FN>
(a) Effective January 1, 1994, the Company changed its income tax status from an
S corporation to a C corporation. This change required a reinstatement of
deferred income taxes as a one-time charge of $7.8 million.

(b) Shares outstanding and net income per share data for years prior to the
Company's initial public offering in 1994 are not meaningful and therefore
have not been presented.
</TABLE>

5
<PAGE> 7

RISK FACTORS

In addition to the other information in this Prospectus, prospective
purchasers should evaluate the following risk factors.

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, 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.

FUTURE EXPANSION

Historically, the Company has grown internally by increasing sales to
existing customers, aggressively pursuing new customers and, in response to
customer demand, acquiring and upgrading processing equipment and services in
order to expand the range of value-added services it can offer. In addition,
growth has occurred through external expansion by the acquisition of other steel
service centers and related businesses. The Company intends to continue to
actively pursue its growth strategy in the future. See "Business--Business
Strategy." Although the Company has purchased equipment only in response to
identified customer demand, the future expansion of an existing facility or
construction of a new facility could have adverse effects on the Company's
results of operations due to the impact of the start-up costs and the potential
for underutilization in the start-up phase of a facility. To date, the Company
has been successful in integrating acquired businesses with its existing
businesses. However, acquisitions frequently result in unforeseen difficulties
and divert a disproportionate amount of management time and attention. There can
be no assurance that future acquisitions will occur or be successful. Moreover,
the incurrence of additional indebtedness to pay for expansion or acquisition
costs could adversely affect the Company's liquidity and financial strength and
the issuance of capital stock to effect acquisitions could result in dilution to
the Company's shareholders.

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 25% of the Company's net sales in 1995 and
approximately 22% of net sales for the first quarter of 1996. 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

6
<PAGE> 8

numerous factors such as general economic conditions and consumer confidence.
The automotive industry is also subject, from time to time, to labor problems.
The contracts between the United Automobile Workers ("UAW") and the Canadian
Auto Workers ("CAW") and General Motors Corporation, Chrysler Corporation and
The Ford Motor Company in both the United States and Canada expire in September
1996 and there can be no assurance that new agreements will be ratified by the
UAW and CAW without a work stoppage. Any prolonged disruption in business
arising from such a work stoppage could have a material adverse effect on the
Company's results of operations.

DEPENDENCE ON KEY INDIVIDUALS

The Company is dependent, in large part, on its ability to retain the
services of its four principal executive officers. None of these officers has an
employment agreement with the Company; however, each officer is a significant
shareholder. The loss of any of these individuals could have a material adverse
effect on the Company. The Company currently maintains key man life insurance
policies on each of these individuals.

COMPETITION

The principal markets served by the Company are highly competitive. The
Company competes with steel 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. Certain
of these competitors have financial and operating resources in excess of those
of the Company. While the Company has been able to successfully compete, no
assurance can be given that it will be able to continue to do so. Increased
competition could have a material adverse effect on the Company's net sales and
profitability. See "Business--Competition."

INDEBTEDNESS

The Company relies on internally generated funds, long-term borrowings, an
accounts receivable securitization program and sale and leaseback transactions
to meet its capital requirements, including strategic acquisitions, the purchase
and upgrading of processing equipment and services, the construction and
upgrading of related facilities and additional working capital. While the
Company will be repaying the term loans and a portion of the revolving credit
borrowings under its Credit Agreement, dated December 29, 1994, as amended (the
"Credit Facility"), with proceeds of the Offering, the Company will continue to
have significant financing expenses following the Offering. See "Use of
Proceeds" and "Capitalization."

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 11,100,000 shares of
Common Stock outstanding (11,475,000 shares if the Underwriters' over-allotment
options are exercised in full). The shares sold in the Offering, plus the
4,000,000 shares sold in the Company's initial public offering in 1994 (the
"IPO") and an additional 506,000 shares held by non-affiliates will be freely
transferable by persons other than Affiliates without restriction or further
registration under the Securities Act of 1933, as amended (the "Securities
Act"). Upon completion of the Offering, 3,596,500 shares (3,521,500 shares if
the Underwriters' over-allotment options are exercised in full) of outstanding
Common Stock (the "Affiliate Shares") will be held by "affiliates" of the
Company, as that term is defined under the Securities Act. The Affiliate Shares
are subject to Lock-up Agreements and may only be sold (absent a registration)
in accordance with the volume and other requirements of Rule 144 promulgated
under the Securities Act. Sales of substantial amounts of Common Stock in the
public market, or the perception that such sales may occur, could have a
material adverse effect on the market price of the Common Stock. See "Selling
Shareholders," "Shares Eligible for Future Sale" and "Underwriting."

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<PAGE> 9

PREFERRED STOCK; STATE ANTI-TAKEOVER LAWS; CONTROL

The Board of Directors of the Company is authorized to issue, from time to
time, without any further action on the part of the Company's shareholders, up
to 2,500,000 shares of Voting Preferred Stock, without par value ("Voting
Preferred Stock"), and up to 2,500,000 shares of Non-voting Preferred Stock,
without par value ("Non-Voting Preferred Stock" and together with the Voting
Preferred Stock, the "Preferred Stock"), each in one or more series, with such
relative rights, powers, preferences and conversion rights as are determined by
the Board of Directors at the time of issuance. The issuance of shares of
Preferred Stock could adversely affect the holders of shares of Common Stock.
See "Description of Capital Stock--Preferred Stock." In addition, certain
statutory provisions of the Ohio General Corporation Law ("Ohio Law") and the
Company's Amended and Restated Articles of Incorporation ("Articles of
Incorporation") and Amended and Restated Code of Regulations ("Code of
Regulations") may have the effect of deterring hostile takeovers or delaying or
preventing changes in control or management of the Company, including
transactions in which shareholders of the Company might otherwise receive a
premium for their shares over the then current market prices. See "Description
of Capital Stock--Certain Provisions of Ohio Law." Upon completion of the
Offering, the four principal executive officers of the Company will own
approximately 32.4% of the Common Stock (30.7% if the Underwriters'
over-allotment options are exercised in full). See "Selling Shareholders."

FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE

This Prospectus 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 "expect," "believe," "estimate," "project" and similar expressions are
intended to identify forward-looking statements. Such statements are subject to
certain risks, uncertainties and assumptions including those identified in this
section. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those expected, believed, estimated or projected.

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of shares of
Common Stock being offered hereby are estimated to be approximately $
million after deducting the estimated underwriting discount and Offering
expenses payable by the Company. The Company will use the net proceeds to repay
a portion of its present borrowings under its Credit Facility, including $24.0
million of term loans and $ in revolving credit loans. As of June 30,
1996, the average weighted interest rate applicable to such borrowings was
%. The Credit Facility matures on June 30, 1998, but each year the Company
may extend its maturity date one year with approval of the bank group. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

The Company will not receive any of the proceeds from the sale of Common
Stock offered by the Selling Shareholders.

8
<PAGE> 10

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
March 31, 1996 (i) on an actual basis and (ii) as adjusted to give effect to the
sale of the 2,500,000 shares of Common Stock offered hereby by the Company and
the application of the net proceeds to reduce bank indebtedness. See "Use of
Proceeds." This table should be read in conjunction with the consolidated
financial statements and the notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1996
------------------------
ACTUAL AS ADJUSTED
-------- -----------
(AMOUNTS IN THOUSANDS)
<S> <C> <C>
Short-Term Debt:
Current portion of long-term debt............................ $ 4,744 $ 1,944
======== =======
Long-Term Debt, Net of Current Portion:
Revolving credit agreement................................... $ 43,818 $
Term loans................................................... 24,656 656
Industrial revenue bonds..................................... 9,565 9,565
Taxable rate notes........................................... 7,900 7,900
-------- -------
Total long-term debt.................................... 85,939
-------- -------
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, 8,600
shares issued and outstanding
(11,100 shares issued and
outstanding, as adjusted)(a)............................... 57,095
Retained earnings............................................ 20,145 20,145
-------- -------
Total shareholders' equity................................. 77,240
-------- -------
Total Capitalization....................................... $163,179 $
======== =======

- ---------------
<FN>
(a) Excludes 450,000 shares of Common Stock reserved for future issuance under
the Stock Option Plan, of which options for 152,500 shares are currently
outstanding with an exercise price of $15.50 per share.
</TABLE>

9
<PAGE> 11

PRICE RANGE OF COMMON STOCK

The Company's Common Stock trades on NASDAQ under the symbol "ZEUS." The
following table sets forth, for the periods indicated, the high and low sales
prices of the Company's Common Stock on NASDAQ since the Company's March 1994
IPO:

<TABLE>
<CAPTION>
PRICE RANGE OF
COMMON STOCK
-----------------
HIGH LOW
------ ------
<S> <C> <C>
1994
First quarter........................................................ $15.75 $13.00
Second quarter....................................................... 13.50 10.00
Third quarter........................................................ 14.00 10.25
Fourth quarter....................................................... 14.75 10.00
1995
First quarter........................................................ 11.50 9.50
Second quarter....................................................... 11.00 9.00
Third quarter........................................................ 10.88 8.88
Fourth quarter....................................................... 10.13 7.50
1996
First quarter........................................................ 10.88 8.50
Second quarter....................................................... 28.63 10.13
------ ------
</TABLE>

On July 1, 1996, the last reported sale price of the Common Stock on NASDAQ
was $28.00 per share. The Company believes there were approximately 1,493
beneficial holders of the Company's Common Stock on June 25, 1996.

DIVIDEND POLICY

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 Facility.

10
<PAGE> 12

SELECTED FINANCIAL DATA
(in thousands, except per share data)

The selected financial data presented below has been derived from the
Company's consolidated financial statements which have been audited by Arthur
Andersen LLP, except that the data as of March 31, 1996 and for the three months
ended March 31, 1995 and 1996 is derived from unaudited consolidated financial
statements which, in the opinion of the Company, reflect all adjustments
necessary for a fair presentation. The consolidated balance sheets as of
December 31, 1994 and 1995 and March 31, 1996 and the related consolidated
statements of income, cash flows and shareholders' equity for the three years
ended December 31, 1995 and the three months ended March 31, 1995 and 1996, and
notes thereto (the "Consolidated Financial Statements") appear elsewhere in this
Prospectus. Results for the three-month period ended March 31, 1996 are not
necessarily indicative of results for the year ending December 31, 1996. The
selected financial data presented below should be read in conjunction with, and
are qualified in their entirety by, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," the Consolidated Financial
Statements and other financial information included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------------------------------------ ---------------------
1991 1992 1993 1994 1995 1995 1996
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................... $250,685 $275,415 $313,810 $381,906 $554,469 $149,058 $142,589
Cost of sales............... 202,110 220,626 250,707 304,777 446,513 119,046 111,663
-------- -------- -------- -------- -------- -------- --------
Gross margin.............. 48,575 54,789 63,103 77,129 107,956 30,012 30,926
Operating expenses.......... 41,272 46,635 50,519 58,836 85,855 22,295 23,207
-------- -------- -------- -------- -------- -------- --------
Operating income.......... 7,303 8,154 12,584 18,293 22,101 7,717 7,719
Interest and receivable
securitization expense.... 6,435 4,699 4,480 3,761 10,853 2,567 2,292
-------- -------- -------- -------- -------- -------- --------
Pre-tax income............ 868 3,455 8,104 14,532 11,248 5,150 5,427
Income taxes................ -- -- -- 13,634(a) 4,504 2,083 2,171
-------- -------- -------- -------- -------- -------- --------
Net income.............. $ 868 $ 3,455 $ 8,104 $ 898 $ 6,744 $ 3,067 $ 3,256
======== ======== ======== ======== ======== ======== ========
Net income per
share(b).............. $ 0.12 $ 0.78 $ 0.36 $ 0.38
======== ======== ======== ========
Weighted average shares
outstanding(b).......... 7,778 8,600 8,600 8,600
-------- -------- -------- --------
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------
BALANCE SHEET DATA: 1991 1992 1993 1994 1995 MARCH 31, 1996
-------- -------- -------- -------- -------- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Current assets..................... $ 88,760 $105,196 $123,787 $155,178 $124,371 $ 136,606
Current liabilities................ 26,946 29,381 48,930 37,767 31,226 49,051
Working capital.................... 61,814 75,815 74,857 117,411 93,145 87,555
Total assets....................... 114,043 133,102 151,947 200,987 202,072 215,320
Total debt......................... 70,336 83,970 95,330 93,437 98,540 90,683
Shareholders' equity............... 18,288 20,993 9,347 67,240 73,984 77,240
<FN>

- ---------------
(a) Effective January 1, 1994, the Company changed its income tax status from an
S corporation to a C corporation. This change required a reinstatement of
deferred income taxes as a one-time charge of $7.8 million.

(b) Shares outstanding and net income per share data for years prior to the IPO
in 1994 are not meaningful and therefore have not been presented.

</TABLE>

11
<PAGE> 13

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

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

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. With the acquisition of Lafayette
Steel as of January 1, 1995, the Company performs toll processing of
customer-owned steel. Toll processing, substantially all of which is performed
by Lafayette Steel, generally results in lower selling prices and gross margin
dollars per ton but higher gross margin percentages than the Company's
historical direct sales.

Financing costs include interest expense on debt and costs associated with
the $65.0 million accounts receivable securitization program which commenced in
December 1995 (the "Financing Costs"). Interest rates paid by the Company under
its Credit Facility are generally based on prime or LIBOR plus a premium (the
"Premium") determined quarterly, which varies with the Company's operating
performance and financial leverage. Receivable securitization costs are based on
commercial paper rates calculated on the amount of receivables sold.

In March 1994, the Company completed its IPO of 4,000,000 shares of its
Common Stock which generated net proceeds of $57.0 million.

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. As a result, domestic and international sales
tend to be countercyclical.

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>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------- ---------------
1993 1994 1995 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales................................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales............................. 79.9 79.8 80.5 79.9 78.3
----- ----- ----- ----- -----
Gross margin.............................. 20.1 20.2 19.5 20.1 21.7
Operating expenses........................ 16.1 15.4 15.5 15.0 16.3
----- ----- ----- ----- -----
Operating income.......................... 4.0 4.8 4.0 5.2 5.4
Interest and receivable securitization
expense................................. 1.4 1.0 2.0 1.7 1.6
----- ----- ----- ----- -----
Pre-tax income............................ 2.6 3.8 2.0 3.5 3.8
Income taxes.............................. -- 1.5 0.8 1.4 1.5
Reinstatement of deferred income taxes.... -- 2.0 -- -- --
----- ----- ----- ----- -----
Net income........................... 2.6% 0.2% 1.2% 2.1% 2.3%
===== ===== ===== ===== =====
</TABLE>

12
<PAGE> 14

FIRST QUARTER 1996 COMPARED TO FIRST QUARTER 1995

Tons sold decreased 2.4% to 294,431 for the first quarter of 1996 from
301,571 for 1995. Tons sold in the first quarter of 1996 include 257,211 from
direct sales and 37,220 from toll processing, compared with 250,161 from direct
sales and 51,410 from toll processing during the 1995 period. Tons sold in the
first quarter of 1996 were adversely affected at Lafayette Steel by a General
Motors strike and at all operations by bad weather conditions.

Net sales decreased 4.3% to $142.6 million for the first quarter of 1996
from $149.1 million for the first quarter of 1995. The decrease in net sales is
attributable to the decline in tons sold as well as a 2.0% decline in average
selling prices. International sales increased significantly in the first quarter
of 1996 compared to the prior year.

As a percentage of net sales, gross margin increased to 21.7% for the first
quarter of 1996 from 20.1% for 1995. The increase reflects the impact of
centralized steel purchasing efforts in 1996, partially offset by lower tolling
sales and increased international sales in 1996.

As a percentage of net sales, operating expenses increased to 16.3% for the
first quarter of 1996 from 15.0% for 1995, due partially to the impact of
slightly lower average selling prices in the current quarter. Operating expenses
in 1996 also include incremental costs associated with the new Cleveland temper
mill and Minneapolis plate processing facilities, expansion of the Philadelphia
operation, and higher management information systems expenditures.

Financing Costs decreased to $2.3 million for the first quarter of 1996
from $2.6 million in 1995. The decrease is attributable to lower average
borrowings outstanding primarily as a result of lower inventory levels in 1996,
a decrease of the Company's effective bank borrowing rate to 7.4% in the first
quarter of 1996 from 7.5% in the comparable 1995 period, and rate savings
associated with the receivable securitization program implemented in December
1995. These reductions were offset by interest expensed in 1996 related to the
Cleveland temper mill facility and equipment financing. Such costs were
capitalized during the 1995 construction period.

Pre-tax income for the first quarter of 1996 increased 5.4% to $5.4 million
from $5.2 million for 1995. Income taxes represented 40.0% of pre-tax income in
the first quarter of 1996 and 40.4% in 1995. Net income for the first quarter of
1996 totaled $3.3 million, or $0.38 per share, compared to $3.1 million, or
$0.36 per share for 1995.

1995 COMPARED TO 1994

Tons sold increased 56.4% to 1,086,042 in 1995 from 694,548 in 1994. Tons
sold in 1995 include 930,971 from direct sales and 155,071 from toll processing,
compared with 684,808 from direct sales and 9,740 from toll processing in 1994.

Net sales increased by $172.6 million, or 45.2%, to $554.5 million in 1995
from $381.9 million in 1994. The increase was primarily attributable to the
inclusion of Lafayette Steel's results of operations in 1995. All but one of the
Company's other operations achieved net sales increases in 1995. International
sales, which were less than 5% of total net sales in both 1995 and 1994, nearly
tripled between years as a result of domestic steel producers seeking foreign
markets for their products during the last half of 1995.

As a percentage of net sales, gross margin decreased to 19.5% from 20.2%
for 1994. The decrease was attributable to the impact of Lafayette Steel, which
had gross margins lower than the Company's other domestic operations, and an
increase in the comparatively lower margin international sales, offset by higher
gross margins from the Company's other domestic operations.

As a percentage of net sales, operating expenses remained relatively
constant between years. Operating expenses for 1995 included start-up costs
related to the Cleveland temper mill and Minneapolis plate processing
facilities.

13
<PAGE> 15

Interest expense increased $7.0 million to $10.7 million in 1995 from $3.8
million in 1994. The increase was attributable to higher average borrowings
associated with the Lafayette Steel acquisition, the effect of higher priced
steel in inventory in 1995, and higher effective borrowing rates. Overall
effective borrowing rates increased to 7.7% in 1995 from 5.7% in 1994 as a
result of increases in the prime rate and LIBOR and higher Premiums. Premiums in
1995 ranged from 0.25% to 1% for prime, and 1.25% to 2% for LIBOR.

Pre-tax income decreased $3.3 million, or 22.6%, to $11.2 million in 1995
from $14.5 million in 1994. Income taxes computed on 1995 earnings represented
40.0% of pre-tax income or $4.5 million versus 40.1% or $5.8 million for 1994.
Income tax expense for 1994 included a one-time $7.8 million charge to record
deferred income taxes attributable to the termination in 1994 of the Company's S
corporation election associated with the IPO.

Net income totaled $6.7 million or $0.78 per share in 1995, compared to
$0.9 million, or $0.12 per share in 1994 after recording the reinstatement of
deferred income taxes. Excluding the reinstatement of deferred income taxes in
1994, net income would have been $1.12 per share.

1994 COMPARED TO 1993

Tons sold increased 11.8% to 694,548 in 1994 from 621,444 in 1993, which
was attributable to continued strong domestic demand. Net sales increased by
$68.1 million, or 21.7%, to $381.9 million in 1994 from $313.8 million in 1993.
Significant selling price increases of carbon products were pervasive which
correlated to purchase price increases being incurred. International sales
declined between years due to the inability to purchase domestic steel for
export at competitive prices.

As a percentage of net sales, gross margin increased slightly to 20.2% in
1994 from 20.1% in 1993, reflecting changes in product mix and the 1994 decline
in international sales. Purchase and selling price increases of most domestic
carbon products were significant and continuous since the beginning of 1993.
Overall, these increases did not impact gross margin percentages in 1994 as
market conditions allowed price increases to be passed on to the Company's
customers.

As a percentage of net sales, operating expenses decreased to 15.4% in 1994
from 16.1% in 1993. The improvement as a percentage of net sales was primarily
attributable to sales growth, as well as a reduction in executive compensation
as a result of the IPO.

Interest expense declined $0.7 million to $3.8 million in 1994 from $4.5
million in 1993. The decrease was attributable to lower average borrowings
offset partially by higher effective borrowing rates. The lower average
borrowings reflect the application of proceeds from the IPO, offset to a lesser
extent by increased borrowings for working capital growth. Effective borrowing
rates increased by 15 basis points in 1994 as a result of increases in prime and
LIBOR, offset by lower Premiums.

Pre-tax income increased $6.4 million, or 79.3%, to $14.5 million in 1994
from $8.1 million in 1993. Income taxes computed on 1994 earnings represented
40.1% of pre-tax income or $5.8 million.

Prior to 1994, the Company was treated as an S corporation for income tax
purposes and, accordingly, was not subject to federal income taxes and was
subject to minimal state income taxes. As a result of the IPO, the Company
terminated its S corporation election in 1994 and became fully subject to
federal and state income taxation as a C corporation. In connection with the
change in tax status, deferred income tax liabilities of $7.8 million were
recorded as a charge to net income. Of the $7.8 million deferred tax charge,
$7.4 million is being paid in installments over six years commencing in 1994.

After recording the reinstatement of deferred income taxes and C
corporation income taxes, the Company recorded net income of $0.9 million, or
$0.12 per share. Excluding the reinstatement of deferred income taxes, net
income for 1994 would have been $1.12 per share. There are no comparable
after-tax numbers for 1993.

14
<PAGE> 16

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal capital requirement is to fund its growth,
including strategic acquisitions, the purchase and upgrading of processing
equipment and services, the construction and upgrading of related facilities and
additional working capital. The Company uses cash generated from operations,
long-term debt obligations, proceeds from the Company's accounts receivable
securitization program and sale and leaseback transactions to fund these
requirements. Historically, the Company has used revolving credit borrowings
under its Credit Facility to finance its working capital requirements and has
financed acquisitions and capital additions from the proceeds of long-term
indebtedness.

Net cash from operating activities primarily represents net income plus
non-cash charges for depreciation and amortization, and changes in working
capital. During the first quarter of 1996, $11.0 million of net cash was
provided by operating activities, consisting of $4.3 million of net income and
non-cash charges and $6.7 million of cash generated from working capital
components.

As of March 31, 1996, $56.0 million of eligible receivables were sold under
the Company's accounts receivable securitization program, compared to $53.7
million at December 31, 1995. The amount of receivables sold by the Company
typically changes monthly depending upon the level of eligible receivables
available for sale at each month end.

Working capital at March 31, 1996 decreased by $5.6 million or 6.0% since
December 31, 1995. The decrease was primarily attributable to an increase in
accounts payable due to the timing of inventory purchases, partially offset by
increases in inventory and accounts receivable.

During the first quarter of 1996, net cash used for investing activities
consisted of $2.0 million of capital expenditures, primarily related to
completion of the Cleveland temper mill facility, construction of additional
office space, commencement of a 72,000 square foot expansion of Lafayette
Steel's existing facility (scheduled for completion by the end of 1996) and
upgrading the Company's information systems. Cash flows used for financing
activities in the first quarter of 1996 primarily consisted of net repayments
totaling $7.5 million under the Credit Facility.

Approximately $23.2 million in unused revolving credit borrowing
availability existed under the Credit Facility at March 31, 1996. The Credit
Facility, which matures on June 30, 1998, contains restrictive covenants which
require minimum net worth levels, maintenance of certain financial ratios and
limitations on capital expenditures. The Company has remained in compliance with
these covenants since the inception of the Credit Facility.

The estimated net proceeds of the Offering to the Company will be
approximately $ million (assuming an offering price of $
million; $ million if the Underwriter's over-allotment options are
exercised in full). The Company intends to use the net proceeds of this Offering
to repay the term loans and a portion of its revolving credit borrowings under
the Credit Facility. Upon consummation of this Offering and application of the
estimated net proceeds therefrom, aggregate borrowings outstanding under the
Company's Credit Facility will be approximately $ million and there
will be approximately $ million in unused borrowing availability.

The Company believes that funds available under the Credit Facility, other
credit and financing agreements and funds 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 significant improvements to processing
equipment to respond to customers' demands.

15
<PAGE> 17

IMPACT OF NEW ACCOUNTING STANDARDS

The Company was required to adopt Financial Accounting Standards Board
Statement No. 121, "Accounting for Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," effective January 1, 1996. The adoption
had no impact on the reported results of the Company. The Company will comply
with disclosure requirements of Financial Accounting Standard Board Statement
No. 123, "Accounting for Stock Based Compensation,"commencing with its December
31, 1996 consolidated financial statements.

EFFECTS OF INFLATION

Inflation generally affects the Company by increasing the cost of
personnel, processing equipment, purchased steel, and borrowings under the
Credit Facility. The Company does not believe that inflation has had a material
effect on its operating income over the periods presented. However, it has and
could have a material effect on the Company's Financing Costs based on
inflation's impact on amounts borrowed and prime, LIBOR, and commercial paper
rates.

16
<PAGE> 18

BUSINESS

THE COMPANY

The Company is a leading steel service center that processes and
distributes flat-rolled carbon, stainless and tubular steel products from 11
facilities in six midwestern and eastern states. 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 and plate burning.

In January 1995, the Company completed the acquisition of Lafayette Steel,
an intermediate steel processor headquartered in Detroit, Michigan, which
primarily serves the automotive industry. Lafayette Steel's results of
operations are included in the Company's 1995 consolidated financial statements.

The Company is organized into regional operations with domestic processing
and distribution facilities in Connecticut, Pennsylvania, Ohio, Michigan,
Illinois and Minnesota, servicing a diverse base of over 3,200 active customers
located throughout the midwestern, eastern and southern United States. The
Company maintains a southern sales office in Greenville, South Carolina. Its
international sales office is located in Pittsburgh, Pennsylvania 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 5080 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 distributors 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 and decreased manufacturing time and
operating expense. The Company believes that the increasing prevalence of
just-in-time inventory needs has made the value-added inventory, processing and
delivery functions performed by steel service centers increasingly important.

17
<PAGE> 19

CORPORATE HISTORY

The Company was founded in 1954 as a general steel service center. In the
early 1970's, Michael Siegal (CEO) and Bruce Adelstein (VP-Operations), sons of
two of the principals, began working at the Company. At the end of 1983, they
completed the purchase of the Company, assumed management control and, as part
of an effort to broaden the management base for future expansion, hired David
Wolfort (COO) as general manager. In 1987, Louis Schneeberger joined the Company
as Chief Financial Officer.

After acquiring control of the Company, management changed the Company's
business strategy 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.

In 1987, the Company constructed a facility to house its first major piece
of processing equipment, a heavy gauge, cut-to-length line. Since that time, the
Company has added approximately 60 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, including 14 pieces purchased in the Lafayette Steel
acquisition.

BUSINESS STRATEGY

In recognition of these industry dynamics, the Company has focused its
business strategy on achieving profitable growth through the acquisition of
service centers and related businesses and investments in higher value-added
processing equipment and services, while continuing its commitment to expanding
and improving its sales force and information systems. The pursuit of this
strategy has allowed the Company to increase sales and operating profit over the
past five years by compound annual growth rates of 22% and 32%, respectively.

The Company plans to increase profits by strategically acquiring other
steel service centers and related businesses, acquiring and upgrading processing
equipment and services in response to customer demand, expanding into new
domestic and international markets, increasing sales to existing customers and
aggressively pursuing new customers. Olympic believes its depth of management,
strategically located facilities, advanced 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.
Key elements of the Company's strategy are set forth below.

ACQUISITIONS. It is the Company's strategy to continue to make selective
acquisitions of profitable or turnaround steel service centers and related
businesses. Over the last nine years, the Company has made four major
acquisitions of other steel service centers:

In January 1995, the Company completed the acquisition of Lafayette
Steel for approximately $52.3 million. The acquisition has provided the
Company an entry to the automotive industry. Lafayette Steel is a
Detroit-based service center and toll processor primarily serving Michigan,
Illinois, Indiana and Ohio. Lafayette Steel's 14 major pieces of processing
equipment, including eight presses, have enabled the Company to broaden its
value-added processes by offering first stage blanking to its existing and
prospective customers. In 1995, Lafayette Steel represented approximately
$136.4 million, or 25% of the Company's total net sales. Subsequent to its
acquisition, Olympic has made significant operational changes. From a
purchasing perspective, Lafayette Steel has benefited from Olympic's
critical mass, purchasing discipline, and inventory management. From a
personnel standpoint, several key changes have been made to complement the
existing manage-

<PAGE> 20

ment team. These initial changes have focused on internal functions such as
plant operations, information system, financial controls, and sales
management. In April, 1996, the Company began a 72,000 square foot
expansion of its warehouse, at an estimated cost of approximately $4.0
million. These actions have resulted in an increase in operating margin
from % in 1995 to % in the first half of 1996 and an improvement in
inventory turns from in calendar 1995 to for the first
half of 1996.

Eastern Steel & Metal Company ("Eastern Steel") had ceased operations
prior to its purchase by the Company in 1990. The acquisition provided the
Company with access to the eastern market, as well as Eastern Steel's
processing equipment and its distribution facility that included seven
major pieces of processing equipment. In addition, the acquisition provided
the Company's Philadelphia operation with processing support. Olympic has
supported the operation by purchasing and upgrading its processing
equipment and providing working capital. Eastern Steel, which had no sales
prior to being acquired in 1990, has increased sales to $55 million in
1995.

In 1990, Olympic purchased Juster Steel, Inc. ("Juster Steel"), a
profitable steel service center in Minneapolis, Minnesota, to expand into
the upper midwest and farmbelt states. Two of the former owners and
executive officers are now the Company's general managers for the Company's
Minneapolis operation. The Company has added sales and other personnel and
invested capital to purchase and upgrade major processing equipment and
facilities, including the new plate processing facility. Juster Steel
currently has 19 major pieces of processing equipment. Sales of Juster
Steel have increased from $63 million in 1989, the year prior to the
acquisition, to $108 million in 1995.

In 1987, the Company acquired Viking Steel Company ("Viking Steel"),
located in Chicago. Prior to the acquisition, Viking Steel's sales had
decreased significantly for several years. The acquisition broadened the
Company's geographic coverage through expansion into the Chicago market,
the largest steel consuming market in the United States, and extended its
product line into stainless steel. Olympic replaced the original management
team, purchased new processing equipment and in 1992 purchased a second
facility in Schaumburg, Illinois. Sales of Viking Steel have increased from
$5 million in 1987, the year prior to the acquisition, to $65 million in
1995.

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 will continue to invest to support its
growth through the addition of major equipment to its existing facilities. The
Company's philosophy is that equipment purchases should be driven by customer
demand. When the results of sales and marketing efforts to, and communication
with, existing and potential customers indicate that there is sufficient
customer demand for a particular product or service, the Company will purchase
the equipment or upgrade existing equipment to satisfy that demand.

Over the past two years, the Company has more than doubled its plate
processing capacity by adding four plate burning tables. The Company
completed a $7.0 million expansion project in Minneapolis in early 1995.
The project included the construction of a new 112,000 square foot plate
processing facility to house laser, plasma and oxygen burning tables and
shot blasting equipment. This investment in plate processing equipment will
enable the Company to respond to an accelerating trend of domestic
manufacturers outsourcing certain manufacturing processes and will allow
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. As the response to the new plate burning
capability has exceeded expectations, the Company has recently purchased
for the Minneapolis facility an additional plasma burning table. Two other
plasma burning tables are being added to the Chicago and Philadelphia
facilities and will be operational by year-end.

In response to customer demands for higher tolerances and flatness
specifications, the Company purchased a four-high 1/2" by 72" temper mill
and heavy gauge cut-to-length line with a recoil option based on a
customized design. The new equipment, which is housed in a 127,000 square
foot building that was constructed on property adjoining the Company's
Cleveland facilities, is one of only six of its kind in the United States
and incorporates state-of-the-art technology and unique design
specifications. The new equipment permits the Company to process steel to a
more

19
<PAGE> 21

uniform thickness and flatness, upgrade the quality and consistency of
certain of the Company's products and increases the Company's processing
capacity by 120,000 tons per year. The new facility was constructed at a
cost of $17.2 million. Start-up operations commenced in January 1996 and a
second shift was added in June. The facility operated at an average
utilization rate of 45% for the first half of 1996 and the Company expects
the facility to operate at full capacity by year-end. The new equipment has
been designed to enable the Company to produce tempered sheet or coil to
customer specifications in smaller quantities than is available from other
sources. By offering customers greater flexibility with respect to order
size, the Company believes it can capture additional market share.

The Company is in the early phases of a modernization program that
will include the substantial upgrade or replacement of several pieces of
existing processing equipment and information systems. The actual timing
and cost of the program is still under study, however, current cost
estimates range from $20 million to $40 million over the next several
years. This program will further improve the Company's operating efficiency
and cost competitiveness and expand existing capacity.

The expansion of plate processing capacity at the Minneapolis facility and
the addition of the new temper mill facility in Cleveland 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 and is purchasing and will purchase new equipment to meet this
demand.

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. The Company believes it has
among the largest and most experienced sales force in the industry which is a
significant competitive advantage and the Company's sales force has grown to
120 from 80 at the beginning of 1994. The efforts of these individuals
translate into approximately 300 direct daily sales calls to customers in
approximately 45 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.

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 arm of primary producers, giving
them access to customers that they might otherwise not sell or service. This
approach differs from the typical international steel trader that emphasizes
large commodity shipments. Although the Company works principally with domestic
steel producers, it continues to develop relationships with foreign steel
producers. All international sales and payments are made in United States
dollars. International sales were less than 5% of total net sales in both 1995
and 1994.

PRODUCTS, PROCESSING SERVICES, AND QUALITY STANDARDS

The Company maintains a substantial inventory of coil and plate steel
generally purchased from steel producers. 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 many
customers. Plate is typically thicker than coil and is processed by laser,
plasma or oxygen burning.

Customer orders are entered 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 purchased coil
to the fullest extent practicable.

20
<PAGE> 22

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 and plate burning 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. 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 following table sets forth the major pieces of processing equipment
used by geographic location.

<TABLE>
<CAPTION>
PROCESSING CLEVELAND(A) CHICAGO(B) DETROIT MINNEAPOLIS(B) CONNECTICUT PHILADELPHIA TOTAL
- ------------------------------ ------------ ---------- ------- -------------- ----------- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Cutting-to-length/
decoiling................... 3 1 3 3 3 - 13
Blanking...................... - - 8 - - - 8
Tempering..................... 1 - - - - - 1
Plate processing(c)........... 2 1 - 6 2 3 14
Slitting...................... - - 3 2 3 - 8
Shearing...................... 1 1 - 7 2 - 11
Roll forming.................. 4 - - - - - 4
Shot blasting................. - - - 1 - - 1
-- - -- -- -- - --
Total....................... 11 3 14 19 10 3 60

- ---------------
<FN>
(a) Consists of four facilities.
(b) Consists of two facilities.
(c) Includes a recently purchased plasma burning table for the Minneapolis
facility and two other plasma burning tables for the Chicago and
Philadelphia facilities that are expected to be operational by year-end.
</TABLE>

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, 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 operation obtained the ISO 9002 certification in
1994, while certain of the Company's other operations are currently seeking to
obtain the ISO certification. Lafayette Steel is one of only a few domestic
service centers to earn Ford's Q1 quality rating. A quality testing lab is under
construction adjacent to the new temper mill facility in Cleveland.

21
<PAGE> 23

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 that 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 properties:

<TABLE>
<CAPTION>
SQUARE
OPERATION LOCATION FOOTAGE FUNCTION OWNED OR LEASED
- ------------- ---------------------------- ------- ----------------------------- ---------------
<S> <C> <C> <C> <C>
Cleveland Cleveland, Ohio(a) 121,500 Corporate headquarters and Owned
coil processing and
distribution center
Cleveland, Ohio(a) 127,000 Coil processing, distribution Owned
center and offices
Cleveland, Ohio(a) 59,500 Plate processing and Leased (b)
distribution
Cleveland, Ohio 118,500 Roll form processing, Owned
distribution center and
offices
Minneapolis Plymouth, Minnesota 192,000 Coil processing, distribution Owned
center and offices
Plymouth, Minnesota 112,000 Plate processing, Owned
distribution center and
offices
Lafayette Detroit, Michigan 257,000(c) Coil processing, distribution Owned
center and offices
Connecticut Milford, Connecticut 134,000 Coil and plate processing, Owned
distribution center and
offices
Chicago Schaumburg, Illinois 80,500 Distribution center and Owned
offices
Elk Grove Village, Illinois 47,500 Coil processing and Owned
distribution center
Philadelphia Lester, Pennsylvania 69,200 Plate processing, Leased
distribution center and
offices
- ---------------
<FN>
(a) These Cleveland facilities are adjacent properties.

(b) This facility is leased from a related party pursuant to the terms of a
triple net lease for $195,000 per year. The lease expires in June, 2000,
subject to two ten-year renewal options.

(c) Includes a 72,000 square foot warehouse expansion under construction and
expected to be completed by year-end.
</TABLE>

The Company also has a sales office in Greenville, South Carolina. Its
international sales office is located in Pittsburgh, Pennsylvania. All of the
properties listed in the table as owned are subject to mortgages securing
industrial revenue bonds, taxable rate notes and the Company's Credit Facility.
Management believes that the Company will be able to accommodate its capacity
needs for the immediate future at its existing facilities.

CUSTOMERS AND DISTRIBUTION

The Company processes steel for sale to over 3,200 domestic and foreign
customers. The Company has a diversified customer and geographic base, which
reduces the cyclicality of its business. The top 20 customers accounted for less
than 23% and 19% of net sales in 1995 and 1994, respectively. In addition, the
Company's largest customer accounted for less than 6% of 1995 net sales. Major
domestic customers include automobile manufacturers and stampers, manufacturers
of transportation equipment, material handling equipment, electrical machinery,
storage tanks, food service equipment, construction equipment, agricultural
equipment and appliances, general and plate fabricators, and steel service
centers. Sales to the three largest U.S. automobile manufacturers and their Tier
1 suppliers, made

22
<PAGE> 24

principally by the Company's Lafayette Steel operation, and sales to other steel
service centers, accounted for approximately 25% and 11%, respectively, of the
Company's net sales in 1995.

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 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 produces its processed steel products 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 of raw materials 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, and becoming an
important customer to such 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 from a number of
domestic and foreign producers of primary steel, including LTV Corporation,
National Steel Corporation, U.S. Steel Corporation, Bethlehem Steel and Dofasco,
Inc. The Company believes that its relationships with its suppliers are good.
The Company has no long-term commitments with any of its suppliers.

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 geographic 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 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.

23
<PAGE> 25

MANAGEMENT INFORMATION SYSTEMS

Information systems are a critical component of Olympic's growth strategy.
The Company has invested, and will continue to invest, in the advanced
technologies and human resource training required in this area. The Company
believes that its information systems provide it with a significant competitive
advantage. 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 real-time information is
essential in allowing the Company to closely monitor its inventory and to
continue to improve its inventory turns.

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

ADVANCED CUSTOMER INTERACTION. The Company is actively pursuing
opportunities to streamline the cost and time associated with customer and
supplier communications, including electronic data interchange, direct links
from Olympic to key customer information systems and access to information
through the Internet.

INTERNAL COMMUNICATIONS. The Company believes that the continuous
interaction between its sales force and its customer base provides Olympic with
valuable market information and sales opportunities. Transactions are summarized
continuously and the systems generate reports that allow management to monitor
operational performance, as well as the performance for any particular customer.

EMPLOYEES

At June 30, 1996, the Company employed approximately 850 people.
Approximately 300 of the Company's hourly plant personnel at the Minneapolis and
Lafayette Steel facilities are represented by four separate collective
bargaining units. Collective bargaining agreements with these units expire in
1998 and 1999. The Company has never experienced a work stoppage and believes
that its relationship with its employees is good.

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.

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.

24
<PAGE> 26

MANAGEMENT

The Company attributes a portion of its success to the depth of its
management. In addition to the four principal executive officers identified
below, the Company's management team includes eleven general managers, its MIS
Director and its Treasurer and 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 over 21 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
growth strategy.

The executive officers and the directors of the Company are:

<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD
- --------------------------------- --- -------------------------------------------
<S> <C> <C>
Michael D. Siegal................ 43 Chairman of the Board, President and Chief
Executive Officer
R. Louis Schneeberger............ 41 Chief Financial Officer; Director
David A. Wolfort................. 43 Chief Operating Officer; Director
Bruce S. Adelstein............... 42 Vice President -- Operations; Director
Martin H. Elrad.................. 56 Director
Thomas M. Forman................. 50 Director
Janice M. Margheret.............. 41 Director
</TABLE>

- ---------------

Michael D. Siegal has served as President and Chief Executive Officer of
the Company since 1984, and as Chairman of the Board of Directors since January
1, 1994. He has been employed by the Company in a variety of full-time
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, presently serving on its Associate Member Committee.
He served as National Chairman of Israel Bonds during the period 1991-1993 and
presently serves as a member of the Executive Committee of the Development
Corporation for Israel and as budget chairman for the Cleveland Jewish Community
Federation. He is a member of the Board of Directors of American National Bank
(Cleveland, Ohio) and the Cleveland Lumberjacks, a professional hockey team.

R. Louis Schneeberger has served as Chief Financial Officer and director of
the Company since 1987. Prior to that time, Mr. Schneeberger was employed by
Arthur Andersen LLP for ten years, concentrating on mergers, acquisitions, and
auditing. He is also Chairman of the Board of Directors of Royal Appliance Mfg.
Co. (a New York Stock Exchange listed company that is an assembler and marketer
of vacuum cleaners and other floor care products), a certified public accountant
and a trustee of the Achievement Center for Children.

David A. Wolfort has served as Chief Operating Officer since 1995 and a
director of the Company since 1987. 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, including General Manager-Field
Sales, Sharon Steel Products and was a steel fellow with the American Iron and
Steel Institute. Mr. Wolfort is the past president of SSCI's Northern Ohio
Chapter and is presently a member of its Governmental Affairs Committee and a
National Chapter Director.

Bruce S. Adelstein serves as Vice President -- Operations. He has served as
a Vice President and a director of the Company since 1984. He has been employed
full-time by the Company in a variety of operating capacities since 1972. Mr.
Adelstein's duties include the supervision of steel processing, corporate
regional steel purchasing and specific regional sales.

25
<PAGE> 27

Martin H. Elrad has served as a director of the Company since 1987. He is a
private investor and has also served for over five years as President of Solon
Leasing Co.

Thomas M. Forman has served as a director of the Company since March, 1994.
He has served as Vice President of Sealy Corporation since 1994. Previously, he
served as President of Forman Capital, Inc. from 1991 to 1994. Prior thereto, he
served as Executive Vice President and a member of the board of directors of
Bridgestone/Firestone, Inc. for two years.

Janice M. Margheret has served as a director of the Company since March,
1994. She has served as Senior Vice President of Pioneer-Standard Electronics,
Inc. since 1993 and President of Pioneer-Standard Canada, Inc. since 1994. Prior
thereto, she served as a Vice President and Controller of Pioneer-Standard for
over five years.

SELLING SHAREHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of the date of this
Prospectus and as adjusted to reflect the sale of shares of Common Stock offered
by the Company and the Selling Shareholders, each of whom is an executive
officer and a director of the Company.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING AFTER OFFERING(A)
------------------------ SHARES ------------------------
NAME NUMBER PERCENTAGE OFFERED NUMBER PERCENTAGE
- ---------------------------- --------- ---------- -------- --------- ----------
<S> <C> <C> <C> <C> <C>
Michael D. Siegal(b)........ 1,727,500 20.1% 125,000 1,602,500 14.4%
Bruce S. Adelstein(c)....... 1,679,000 19.5 125,000 1,554,000 14.0
R. Louis Schneeberger(d).... 368,000 4.3 125,000 243,000 2.2
David A. Wolfort(e)......... 322,000 3.7 125,000 197,000 1.8

- ---------------
<FN>
(a) Assuming no exercise of the Underwriters' over-allotment options to purchase
up to 375,000 shares of Common Stock from the Company and 18,750 shares of
Common Stock from each of the Selling Shareholders. If the overallotment
options are exercised in full, the Selling Shareholders' ownership would be
as follows: Mr. Siegal -- 13.8%, Mr. Adelstein -- 13.4%, Mr.
Schneeberger -- 2.0% and Mr. Wolfort -- 1.6%.

(b) Does not include 138,000 shares held in various trusts for the benefit of
Mr. Siegal's children. Mr. Siegal disclaims beneficial ownership of such
shares.

(c) Does not include 138,000 shares held in various trusts for the benefit of
certain of Mr. Adelstein's family members. Mr. Adelstein disclaims
beneficial ownership of such shares.

(d) Does not include 92,000 shares held in various trusts for the benefit of Mr.
Schneeberger's children. Mr. Schneeberger disclaims beneficial ownership of
such shares.

(e) Does not include 138,000 shares held in various trusts for the benefit of
Mr. Wolfort's children. Mr. Wolfort disclaims beneficial ownership of such
shares.
</TABLE>

26
<PAGE> 28

DESCRIPTION OF CAPITAL STOCK

The Company's Articles of Incorporation provide that the authorized capital
stock of the Company consists of 20,000,000 shares of Common Stock and 5,000,000
shares of Preferred Stock. The Preferred Stock is divided into two classes
consisting of 2,500,000 shares of Voting Preferred Stock and 2,500,000 shares of
Non-Voting Preferred Stock.

COMMON STOCK

All outstanding shares of Common Stock (including the shares offered by the
Selling Shareholders in the Offering) are, and the shares offered by the Company
in the Offering will be, when issued and paid for, fully paid and nonassessable.
Subject to preferences that may be applicable to holders of any outstanding
shares of Preferred Stock, holders of shares of Common Stock are entitled to
such dividends as may be declared by the Board of Directors out of funds legally
available therefor. Upon liquidation, dissolution or winding-up of the Company,
the assets legally available for distribution to shareholders are distributable
ratably among the holders of shares of Common Stock at that time outstanding,
subject to prior distribution rights of creditors of the Company and to the
preferential right of any outstanding shares of Preferred Stock. The holders of
shares of Common Stock are entitled to one vote for each share held on all
matters properly submitted to a vote of shareholders and do not have cumulative
voting rights. Therefore, the holders of a majority of the shares of Common
Stock voted in an election of directors can elect all of the directors then
standing for election, subject to any rights of the holders of any outstanding
Preferred Stock. Pursuant to the Company's Code of Regulations, the Company's
Board of Directors is divided into two classes of directors serving staggered
two year terms. The affirmative vote of the holders of a majority of the shares
of Common Stock is required to approve mergers, sales of assets or other
corporate transactions required to be submitted to the shareholders for approval
under Ohio Law.

PREFERRED STOCK

The Preferred Stock may be issued from time to time in one or more series.
The Board of Directors is authorized to determine certain rights, preferences,
privileges and restrictions granted to and imposed upon any unissued shares of
Preferred Stock and to fix the number of shares of any series of Preferred Stock
and the designation of such series, without any vote or action by the
shareholders of the Company. The issuance of Preferred Stock could be used, in
certain circumstances, as a method of delaying or preventing a change of control
of the Company. Under Ohio law and the Company's Articles of Incorporation, the
Board of Directors could, without any action by holders of shares of Common
Stock, issue shares of Preferred Stock which could have a detrimental effect the
rights of holders of shares of Common Stock, including loss of voting control.

LIMITATION OF DIRECTOR LIABILITY

Under Ohio Law, a director's liability to the Company or its shareholders
for damages is limited to only those situations where it is proven by clear and
convincing evidence that the director's action or failure to act involved an act
or omission undertaken with deliberate intent to cause injury to the Company or
undertaken with reckless disregard for the best interests of the Company, and
those situations involving unlawful loans, asset distributions, dividend
payments or share repurchases. As a result, shareholders may be unable to
recover monetary damages against directors for actions which constitute gross
negligence or which are in violation of their fiduciary duties, although it may
be possible to obtain injunctive or other equitable relief with respect to such
actions.

The Company's Code of Regulations contains provisions indemnifying
directors and officers of the Company to the fullest extent permitted by Ohio
Law and providing for the advancement of expenses incurred in connection with an
action upon the receipt of an appropriate undertaking to repay said amount if it
is determined that the individual in question is not entitled to
indemnification.

27
<PAGE> 29

CERTAIN PROVISIONS OF OHIO LAW

As an Ohio corporation, the Company is subject to certain provisions of
Ohio Law which may discourage or render more difficult an unsolicited takeover
of the Company. Among these are provisions that (i) prohibit certain mergers,
sales of assets, issuances or purchases of securities, liquidation or
dissolution, or reclassification of the then outstanding shares of an Ohio
corporation involving certain holders of stock representing 10% or more of the
voting power, unless such transactions are either approved by the directors in
office prior to the 10% shareholder becoming such or involve a 10% shareholder
which has been such for at least three years and certain requirements related to
the price and form of consideration to be received by shareholders are met and
(ii) provide Ohio corporations with the right to recover profits realized under
certain circumstances by persons engaged in "greenmailing" or who otherwise sell
securities of a corporation within 18 months of proposing to acquire such
corporation.

In addition, pursuant to Section 1701.831 of the Ohio Law, the purchase of
certain levels of voting power of the Company (one-fifth or more, one-third or
more, or a majority) can be made only with the prior authorization of the
holders of at least a majority of the total voting power of the Company and the
separate prior authorization of the holders of at least a majority of the voting
power held by shareholders other than the proposed purchaser, officers of the
Company and directors of the Company who are also employees.

The Code of Regulations establishes an advance notice procedure with regard
to the nomination, other than by or at the direction of the Board of Directors,
of candidates for election as directors of the Company. In general, notice must
be received by the Company not less than 90 days prior to the first anniversary
of the prior year's annual meeting and must contain certain specified
information concerning the person to be nominated and the shareholder submitting
the nomination.

It is possible that these provisions, as well as the classification of the
Board of Directors, the ability of the Board to issue additional shares of
Common Stock or Preferred Stock and the percentage of ownership held by the
executive officers and directors of the Company, will discourage other persons
from making a tender offer for, or acquisitions of, substantial amounts of
shares of the Company's Common Stock, or may delay changes in control or
management of the Company.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Chase Mellon
Shareholder Services, L.L.C., Pittsburgh, Pennsylvania.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 11,100,000 shares of
Common Stock outstanding (11,475,000 shares if the Underwriters over-allotment
options are exercised in full). The shares sold in the Offering, plus the
4,000,000 shares sold in the Company's IPO in 1994 and an additional 506,000
shares held by non-affiliates will be freely transferable by persons other than
Affiliates without restriction or further registration under the Securities Act.
Upon completion of the Offering, 3,596,500 Affiliate Shares (3,521,500 shares if
the Underwriters' over-allotment options are exercised in full) will be held by
Affiliates of the Company. The Affiliate Shares are subject to Lock-up
Agreements described below, and may only be sold (absent a registration) in
accordance with the volume and other requirements of Rule 144 promulgated under
the Securities Act.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned shares for at least two
years, including an Affiliate, is entitled to sell, within any three-month
period, a number of shares that does not exceed the greater of 1% of the then
outstanding Common Stock or the average weekly trading volume in the Common
Stock in composite trading on all exchanges during the four calendar weeks
preceding such sale.

28
<PAGE> 30

The Company and the Selling Shareholders have entered into Lock-up
Agreements with the Underwriters wherein they have agreed not to offer, sell,
contract to sell or otherwise dispose of, directly or indirectly, or announce
the offering of, any shares of Common Stock or any securities convertible into
or exchangeable or exercisable for shares of Common Stock, except for shares of
Common Stock offered hereby, and, in the case of the Company, shares issuable
pursuant to employee benefit plans, for a period of 90 days from the date of
this Prospectus, without the prior written consent of the Representatives.

The Company has reserved 450,000 shares of Common Stock to be issued under
its Stock Option Plan. Options to purchase an aggregate of 140,000 shares of
Common Stock are currently outstanding under the Stock Option Plan.

UNDERWRITING

Subject to the terms and conditions set forth in an Underwriting Agreement
by and among the Company, the Selling Shareholders and the Underwriters, the
Company and the Selling Shareholders have agreed to sell to each of the entities
named below (the "Underwriters") and each of the Underwriters for whom Salomon
Brothers Inc, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and McDonald & Company Securities Inc. are acting as
representatives ("Representatives"), has severally agreed to purchase from the
Company and the Selling Shareholders the number of shares of Common Stock set
forth opposite its name below:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------------
<S> <C>
Salomon Brothers Inc .......................................................
Goldman, Sachs & Co.........................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................................
McDonald & Company Securities, Inc..........................................

---------
Total.................................................................. 3,000,000
=========
</TABLE>

In the Underwriting Agreement, the several Underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
shares of Common Stock offered hereby (other than the shares covered by the
Underwriters' over-allotment options described below) if any shares of Common
Stock are purchased. In the event of a default by any Underwriter, the
Underwriting Agreement provides that, in certain circumstances, purchase
commitments of the non defaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.

The Company and the Selling Shareholders have been advised by the
Representatives that the several Underwriters propose initially to offer the
shares of Common Stock to the public at the public offering price set forth on
the cover page of this Prospectus and to certain dealers at such price less a
concession not in excess of $ per share. The Underwriters may allow,
and such dealers may reallow, a concession not in excess of $ per share
to other dealers. After the initial offering, the public offering price and such
concessions may be changed.

The Company and the Selling Shareholders have granted to the Underwriters
options, exercisable within 30 days after the date of this Prospectus, to
purchase up to 375,000 additional shares and 75,000 additional shares,
respectively, of Common Stock (450,000 additional shares of Common Stock in the
aggregate), at the same price per share as the initial shares of Common Stock to
be purchased by the Underwriters. The Underwriters may exercise the options only
to cover over-allotments, if any, in the sale

29
<PAGE> 31

of shares of Common Stock that the Underwriters have agreed to purchase. The
Underwriting Agreement provides that each Underwriter will have a firm
commitment subject to certain conditions to purchase the same proportion of the
option shares as the number of shares of Common Stock to be purchased and
offered by such Underwriter in the above table bears to the total number of
shares of Common Stock initially offered by the Underwriters hereby.

The Company and the Selling Shareholders have agreed not to offer, sell,
contract to sell or otherwise dispose of any shares of Common Stock of the
Company or any security convertible into or exchangeable for such Common Stock
for a period of 90 days from the date of this Prospectus without the prior
written consent of the Representatives. See "Shares Eligible for Future Sale."

In connection with the Offering, certain Underwriters and selling group
members who are qualifying registered market makers on NASDAQ may engage in
passive market making transactions in the Common Stock on NASDAQ in accordance
with Rule 10b-6A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), during the two business day period before commencement of
offers or sales of Common Stock in the Offering. Passive market making
transactions must comply with certain volume and price limitations and must be
identified as such. In general, a passive market maker may display its bid at a
price not in excess of the highest independent bid for the security, and if all
independent bids are lowered below the passive market maker's bid, then such bid
must be lowered when certain purchase limits are exceeded.

The Underwriting Agreement provides that the Company and the Selling
Shareholders will indemnify the several Underwriters against certain liabilities
under the Securities Act, or contribute to payments the Underwriters may be
required to make in respect thereof.

LEGAL MATTERS

The legality of the shares of Common Stock offered hereby will be passed
upon for the Company and the Selling Shareholders by Kahn, Kleinman, Yanowitz &
Arnson Co., L.P.A., Cleveland, Ohio. Marc H. Morgenstern, a principal of such
law firm, is the Secretary of the Company and is the trustee of various trusts
for the benefit of Messrs. Siegal's and Schneeberger's children that own 230,000
shares of Common Stock. See "Selling Shareholders." In addition, certain
attorneys in the firm own shares of Common Stock. Certain legal matters will be
passed upon for the Underwriters by Jones, Day, Reavis & Pogue, Cleveland, Ohio.

EXPERTS

The audited consolidated financial statements included in this Prospectus
and elsewhere in the Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.

30
<PAGE> 32

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission ("Commission"). Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices located at Seven World Trade Center, 13th Floor, New York, New York
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60601. Copies
of such materials may be obtained at prescribed rates by writing the Commission,
Public Reference Section, 450 Fifth Street, N.Y., Washington, D.C. 20549. The
Commission maintains a Web site, located at http://www.sec.gov., that contains
reports, proxy information statements and other information regarding
registrants, including the Company, that file electronically with the
Commission.

The Company has filed with the Commission a registration statement (the
"Registration Statement," which term shall include any amendment thereto) on
Form S-3 under the Securities Act with respect to the shares of Common Stock
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules thereto,
certain portions of which are omitted as permitted by the rules and regulations
of the Commission and to which reference is hereby made. For further information
regarding the Company and the shares of Common Stock offered hereby, reference
is hereby made to the Registration Statement and such exhibits and schedules
thereto.

The Company intends to furnish its shareholders with annual reports
containing audited financial statements and an opinion thereon expressed by its
independent accountants and with quarterly reports containing unaudited summary
financial information for each of the first three quarters of each year.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. The Company will provide, without charge to each
person to whom a copy of this Prospectus has been delivered, upon oral or
written request of such person, a copy of any and all of the documents
incorporated herein by reference (not including exhibits). Requests for such
copies should be directed to R. Louis Schneeberger, Chief Financial Officer,
Olympic Steel, Inc., 5080 Richmond Road, Bedford Heights, Ohio 44146, telephone:
(216) 292-3800.

The following documents filed with the Commission by the Company (File No.
0-23320) are incorporated herein by reference: (a) the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 ("Form 10-K"), (b) the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1996, (c) the description of the Company's shares of Common Stock contained in
the Company's Form 8-A filed with the Commission on January 29, 1994 and (d) all
documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), subsequent
to the date of this Prospectus and prior to the termination of this Offering.
Any statement contained herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document which also is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.

31
<PAGE> 33

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Public Accountants............................................. F-2
Consolidated Statements of Income for the years ended
December 31, 1995, 1994 and 1993................................................... F-3
Consolidated Balance Sheets as of December 31, 1995 and 1994......................... F-4
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993................................................... F-5
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1995, 1994 and 1993................................................... F-6
Notes to Consolidated Financial Statements for the years ended December 31, 1995,
1994 and 1993...................................................................... F-7
Supplementary Financial Information.................................................. F-15
Consolidated Statements of Income for the three months ended
March 31, 1996 and 1995............................................................ F-16
Consolidated Balance Sheets as of March 31, 1996 and December 31, 1995............... F-17
Consolidated Statements of Cash Flows for the three-months ended
March 31, 1996 and 1995............................................................ F-18
Notes to Consolidated Financial Statements for the three-months ended March 31, 1996
and 1995........................................................................... F-19
</TABLE>

F-1
<PAGE> 34

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, 1995 and
1994, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1995. 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 generally accepted auditing
standards. 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, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP
Arthur Andersen LLP

Cleveland, Ohio,
February 6, 1996.

F-2
<PAGE> 35

OLYMPIC STEEL, INC.

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Net sales............................................ $554,469 $381,906 $313,810
Cost of sales........................................ 446,513 304,777 250,707
-------- -------- --------
Gross margin.................................... 107,956 77,129 63,103
Operating expenses
Warehouse and processing........................... 28,307 19,806 14,607
Administrative and general......................... 21,345 14,090 14,596
Distribution....................................... 16,155 11,734 9,899
Selling............................................ 13,692 9,466 8,485
Occupancy.......................................... 3,092 1,906 1,419
Depreciation and amortization...................... 3,264 1,834 1,513
-------- -------- --------
Total operating expenses........................ 85,855 58,836 50,519
-------- -------- --------
Operating income................................ 22,101 18,293 12,584
Interest expense..................................... 10,746 3,761 4,480
Receivable securitization expense.................... 107 -- --
-------- -------- --------
Income before taxes............................. 11,248 14,532 8,104
Income taxes......................................... 4,504 5,834 --
Reinstatement of deferred income taxes............... -- 7,800 --
-------- -------- --------
Net income...................................... $ 6,744 $ 898 $ 8,104
========= ========= =========
Net income per share............................ $ 0.78 $ 0.12
========= =========
Weighted average shares outstanding............. 8,600 7,778
Pro forma income data (unaudited):
Income before taxes................................ $ 14,532 $ 8,104
Supplemental pro forma adjustments:
Interest savings................................ 501 2,118
Reduction in compensation....................... 83 2,071
Income taxes.................................... (6,067) (4,917)
-------- --------
Pro forma net income................................. $ 9,049 $ 7,376
========= =========
Pro forma net income per share....................... $ 1.05 $ 0.86
========= =========
Pro forma weighted average shares outstanding........ 8,600 8,600
</TABLE>

The accompanying notes are an integral part of these statements.

F-3
<PAGE> 36

OLYMPIC STEEL, INC.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 1995 AND 1994

(IN THOUSANDS)

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
ASSETS
Cash................................................................ $ 1,884 $ 718
Accounts receivable................................................. 7,405 43,644
Inventories......................................................... 112,986 109,059
Prepaid expenses and other.......................................... 2,096 1,757
-------- --------
Total current assets........................................... 124,371 155,178
-------- --------
Property and equipment.............................................. 78,452 51,493
Accumulated depreciation............................................ (10,886) (7,965)
-------- --------
Net property and equipment..................................... 67,566 43,528
-------- --------
Goodwill............................................................ 10,135 --
Unexpended industrial revenue bond funds............................ -- 2,281
-------- --------
Total assets................................................... $202,072 $200,987
========= =========
LIABILITIES
Current portion of long-term debt................................... $ 4,768 $ 2,260
Accounts payable.................................................... 15,220 26,426
Accrued payroll..................................................... 2,922 2,461
Accrued and deferred income taxes................................... 3,246 2,980
Other accrued liabilities........................................... 5,070 3,640
-------- --------
Total current liabilities...................................... 31,226 37,767
-------- --------
Revolving credit agreement.......................................... 51,338 59,752
Term loans.......................................................... 24,969 12,000
Industrial revenue bonds............................................ 9,565 10,825
Taxable rate notes.................................................. 7,900 8,600
-------- --------
Total long-term debt........................................... 93,772 91,177
-------- --------
Deferred income taxes............................................... 3,090 4,803
-------- --------
Total liabilities................................................. 128,088 133,747
-------- --------
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, 8,600
shares issued and outstanding..................................... 57,095 57,095
Retained earnings................................................... 16,889 10,145
-------- --------
Total shareholders' equity..................................... 73,984 67,240
-------- --------
Total liabilities and shareholders' equity..................... $202,072 $200,987
========= =========
</TABLE>

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

F-4
<PAGE> 37

OLYMPIC STEEL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

(IN THOUSANDS)

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income........................................... $ 6,744 $ 898 $ 8,104
Adjustments to reconcile net income to net cash from
(used for) operating activities-
Depreciation...................................... 3,004 1,702 1,513
Amortization...................................... 260 132 133
Long-term deferred income taxes................... (1,713) 4,803 --
-------- -------- --------
8,295 7,535 9,750
Changes in working capital:
Accounts receivable.................................. 54,076 (7,018) (53)
Inventories.......................................... 24,310 (23,713) (17,915)
Prepaid expenses and other........................... (165) (491) (373)
Accounts payable..................................... (27,590) 109 2,313
Accrued payroll and other accrued liabilities........ 959 2,648 (682)
Accrued and deferred income taxes.................... (134) 2,980 --
-------- -------- --------
51,456 (25,485) (16,710)
-------- -------- --------
Net cash from (used for) operating activities..... 59,751 (17,950) (6,960)
-------- -------- --------
Cash flows from investing activities:
Acquisition of Lafayette Steel (including working
capital of $28,532)............................... (52,345) -- --
Temper mill facility and equipment................... (7,979) (8,689) (28)
Plate facility and equipment......................... (2,063) (5,327) --
Tubing facility and equipment........................ (1,448) (1,401) --
Other capital expenditures, net...................... (1,249) (1,653) (1,739)
-------- -------- --------
Net cash used for investing activities............ (65,084) (17,070) (1,767)
-------- -------- --------
Cash flows from financing activities:
Revolving credit agreement........................... (8,414) (18,233) 8,944
Proceeds from term loans............................. 16,100 12,000 --
Proceeds from industrial revenue bond borrowings..... -- 6,000 --
Proceeds from taxable rate note borrowings........... -- -- 10,000
Net proceeds from initial public offering............ -- 56,995 --
Repayment of term loans.............................. (1,208) -- --
Repayment of industrial revenue bonds................ (1,560) (960) (960)
Repayment of taxable rate notes...................... (700) (700) --
Repayment of real estate mortgages................... -- -- (6,624)
Unexpended industrial revenue bond funds............. 2,281 (2,281) --
S corporation dividends paid......................... -- (17,500) (2,250)
-------- -------- --------
Net cash from financing activities................ 6,499 35,321 9,110
-------- -------- --------
Cash:
Net increase......................................... 1,166 301 383
Beginning balance.................................... 718 417 34
-------- -------- --------
Ending balance....................................... $ 1,884 $ 718 $ 417
========= ========= =========
</TABLE>

The accompanying notes are an integral part of these statements.

F-5
<PAGE> 38

OLYMPIC STEEL, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
COMMON RETAINED
STOCK EARNINGS
-------- --------
<S> <C> <C>
Balance at December 31, 1992........................................ $ 100 $ 20,893
Net income........................................................ -- 8,104
Dividends declared at $4.29 per share............................. -- (19,750)
-------- --------
Balance at December 31, 1993........................................ 100 9,247
Net income........................................................ -- 898
Net proceeds from sale of 4,000 shares of common stock............ 56,995 --
-------- --------
Balance at December 31, 1994........................................ 57,095 10,145
Net Income........................................................ -- 6,744
-------- --------
Balance at December 31, 1995........................................ $ 57,095 $ 16,889
========= =========
</TABLE>

The accompanying notes are an integral part of these statements.

F-6
<PAGE> 39

OLYMPIC STEEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

(DOLLARS IN THOUSANDS)

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.
Certain amounts in the 1994 and 1993 consolidated financial statements have been
reclassified to conform with the 1995 presentation.

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. In
1995, the Company purchased approximately 16% of its total steel requirements
from a single supplier.

INVENTORIES

Inventories are stated at the lower of cost or market and include the cost
of purchased steel, internal and external processing and 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 over 40 years. In the
event that facts and circumstances indicate that the value of goodwill or other
long-term assets may be impaired, the Company evaluates recoverability to
determine if a write-down to market value is required. Goodwill amortization
expense totaled $260 in 1995. Amortization expense in 1994 and 1993, which
totaled $132 and $133, respectively, related to a covenant not to compete
agreement that expired in 1994.

REVENUE RECOGNITION

Revenue is recognized when steel is shipped to the customer. Sales returns
and allowances are treated as reductions to sales and are provided for based on
historical experience and current estimates.

INCOME TAXES

In the first quarter of 1994, the Company adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes." SFAS No. 109 utilizes the liability method and deferred taxes are
determined based on the estimated future tax effects of differences between the
financial and tax bases of assets and liabilities given the provisions of
enacted tax laws.

F-7
<PAGE> 40

OLYMPIC STEEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

EARNINGS PER SHARE

Earnings per share has been calculated based on the weighted average number
of shares outstanding. Shares outstanding were 4.6 million from January 1, 1994
through March 16, 1994, and 8.6 million since March 17, 1994. Per share data for
1993 is not meaningful and therefore has not been presented. Primary and fully
diluted earnings per share are the same because outstanding stock options
granted are anti-dilutive.

IMPACT OF NEW ACCOUNTING STANDARDS

The Financial Accounting Standards Board has issued SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of," and SFAS No. 123, "Accounting for Stock-Based Compensation."
Management does not anticipate the adoption of SFAS No. 121 or SFAS No. 123 to
have a material effect on the Company's financial statements.

2. PUBLIC OFFERING OF COMMON STOCK:

The Company completed its initial public offering of 4 million common
shares in March, 1994 (the IPO). The $56,995 of net proceeds were used to pay a
$17,500 final S corporation dividend, and the remaining proceeds were used to
repay $39,495 of borrowings under the revolving credit agreement.

3. ACQUISITION:

Effective January 1, 1995, the Company completed the acquisition of
substantially all of the assets and assumed certain liabilities of Lafayette
Steel Company (Lafayette Steel). Lafayette Steel is an intermediate steel
processor headquartered in Detroit, Michigan, primarily serving the automotive
industry.

The final purchase price totaled $69,833 and exceeded the net book value of
the assets acquired by $13,000. The adjusted cash portion of the purchase price,
including fees and expenses and the repayment of $30,069 of Lafayette Steel's
existing bank debt, totaled $52,345.

The acquisition has been accounted for as a purchase and, accordingly,
assets and liabilities are reflected at estimated fair values. The final
purchase price allocation resulted in goodwill of $10,395, which is being
amortized over 40 years.

The following unaudited pro forma condensed statement of income for 1994
gives effect to the acquisition of Lafayette Steel as if it had occurred on
January 1, 1994. The pro forma information is based upon the historical
financial statements of the Company and Lafayette Steel, giving effect to the
acquisition under the purchase method of accounting. The pro forma financial
information has been prepared by Olympic's management based upon the audited
financial statements of Lafayette Steel. This pro forma information is presented
in response to applicable accounting rules relating to business acquisitions. It
is not necessarily indicative of the actual results that would have been
achieved had the acquisition occurred as of January 1, 1994, and is not
necessarily indicative of future results of the combined companies.

F-8
<PAGE> 41

OLYMPIC STEEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
OLYMPIC LAFAYETTE ADJUSTMENTS OLYMPIC
-------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales................................... $381,906 $ 148,996 $ - $ 530,902
Cost of sales............................... 304,777 127,603 (1,888)(a) 430,492
-------- --------- ------- ---------
Gross margin.............................. 77,129 21,393 1,888 100,410
Operating expenses........................ 58,836 22,441 (1,282)(b) 79,995
-------- --------- ------- ---------
Operating income (loss)................ 18,293 (1,048) 3,170 20,415
Interest expense............................ 3,761 2,194 949(c) 6,904
-------- --------- ------- ---------
Income (loss) before income taxes...... 14,532 (3,242) 2,221 13,511
Income taxes................................ 5,834 -- (410)(d) 5,424
Reinstatement of deferred income taxes...... 7,800 -- -- 7,800
-------- --------- ------- ---------
Net income (loss)...................... $ 898 $ (3,242) $ 2,631 $ 287
========= ========= ======= =========
Net income per share........................ $ 0.12 $ 0.04
========= =========
Weighted average shares outstanding....... 7,778 7,778
========= =========

- ---------------
<FN>
(a) Reflects restatement of inventory from LIFO to the specific identification
costing method.

(b) To reduce shareholder and executive compensation and benefits, to reduce
depreciation expense for the difference between historical cost and the
fair value of assets acquired, to reduce certain professional fees,
including those relating to the acquisition, and to record goodwill
amortization.

(d) To record an income tax benefit for Lafayette Steel's pre-tax loss, after
giving effect to pro forma adjustments, at Olympic's 1994 effective income
tax rate.
</TABLE>

4. ACCOUNTS RECEIVABLE:

On December 19, 1995, the Company entered into a three-year agreement to
sell, on a revolving basis, through its wholly-owned entity, Olympic Steel
Receivables LLC, an undivided interest in a designated pool of its trade
accounts receivable. The maximum amount of receivables that can be sold is
$65,000, with the amount sold at any month end measurement date dependent upon
the level of defined eligible receivables. 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 $65,000 limit. The amount of receivables
sold by the Company typically will change monthly depending upon the level of
defined eligible receivables available for sale each month end.

On December 19, 1995, $53,671 of receivables were sold and reflected as a
reduction of accounts receivable in the accompanying consolidated balance
sheets. The proceeds from the sale were used to reduce borrowings under the
Company's revolving credit agreement and are reflected as operating cash flows
in the accompanying consolidated statements of cash flows. Costs of the program,
which primarily consist of the purchaser's financing cost of issuing commercial
paper backed by the receivables, totaled $107 in 1995, and have been classified
as receivable securitization expense in the accompanying consolidated statements
of income.

Accounts receivable are presented net of allowances for doubtful accounts
of $811 and $563 as of December 31, 1995 and 1994, respectively. Bad debt
expense totaled $763 in 1995, $362 in 1994 and $380 in 1993.

F-9
<PAGE> 42

OLYMPIC STEEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

5. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1994
-------- --------
<S> <C> <C>
Land and improvements................... $ 7,128 $ 6,049
Buildings and improvements.............. 25,975 18,745
Machinery and equipment................. 22,588 8,651
Furniture and fixtures.................. 2,039 1,237
Computer equipment...................... 2,817 1,841
Vehicles................................ 358 383
Construction in progress................ 17,547 14,587
-------- --------
78,452 51,493
Less accumulated depreciation........... (10,886) (7,965)
-------- --------
Total property and equipment.......... $ 67,566 $ 43,528
======== ========
</TABLE>

Construction in progress at December 31, 1995 includes $16,696 related to
the Company's new 127,000 square foot facility adjacent to the existing
Cleveland facilities which houses a temper mill and cut-to-length line with a
recoil option. The facility and equipment began operating in the beginning of
1996, and is anticipated to be running at full capacity by the end of 1996. As
of December 31, 1995, $1,141 of capitalized interest has been expended and
included in construction in progress for this project. A portion of the project
is being financed with bank term debt.

6. REVOLVING CREDIT AGREEMENT:

The Company has been operating under various multi-bank revolving credit
agreements for many years. On December 29, 1994, the Company entered into a new
secured credit facility with a bank group to finance the acquisition of
Lafayette Steel. The facility was amended in December 1995, in conjunction with
the accounts receivable securitization program. As of December 31, 1995, the
facility consists of a secured revolving credit component with maximum
availability, based upon collateral levels, of $80,000, term loan components of
$32,000 and letter of credit commitments of $11,034. The agreement matures on
June 30, 1998. Each year, the Company may request to extend its maturity date
one year with the approval of the bank group.

Borrowings under the revolving credit component are secured by inventory,
foreign accounts receivable, and certain other equipment and real property. Term
loans and letters of credit are collateralized by the equipment and real
property being financed.

The revolving credit agreement balance includes $9,768 and $7,752 of checks
issued that have not cleared the bank as of December 31, 1995 and 1994,
respectively. As of December 31, 1995, $5,200 of term loans were not yet drawn
upon. Annual principal amortization of $2,800 for term borrowings outstanding at
December 31, 1995 are payable each June 30.

The Company has the option to borrow based on the agent bank's base rate or
the London Interbank Offered Rate (LIBOR). The interest rate changes every three
months based on the Company's operating performance and leverage ratio. As of
December 31, 1995, the interest rates were base plus 1% or LIBOR plus 2%, which
resulted in a year-end weighted average interest rate of 8.0%. The effective
interest rate for all credit agreement borrowings amounted to 7.9% in 1995, 5.6%
in 1994, and 5.5% in 1993. 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 average unused portion which is payable
quarterly in arrears.

F-10
<PAGE> 43

OLYMPIC STEEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

7. TAXABLE RATE NOTES:

In October 1993, the Company completed a $10,000 refinancing of its real
estate in Minneapolis, Minnesota; Milford, Connecticut; Elk Grove Village,
Illinois; and Cleveland, Ohio. The refinancing was 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. As of December 31,
1995, $8,600 was outstanding. The notes are backed by a three year bank letter
of credit, expiring October 15, 1998, and are secured by a first mortgage on the
Chicago, Connecticut and Minneapolis land and buildings and a second mortgage on
certain Cleveland real estate. The interest rate changes each week based on the
taxable rate note market. As of December 31, 1995, the effective interest rate
was 7.4%.

8. INDUSTRIAL REVENUE BONDS:

The long-term portion of industrial revenue bonds at December 31, 1995 and
1994, consisted of the following:

<TABLE>
<CAPTION>
EFFECTIVE
INTEREST
DESCRIPTION OF BONDS RATE AT 12/31/95 1995 1994
- ------------------------------------------------------ ---------------- ------ -------
<S> <C> <C> <C>
$6,000 variable rate bonds due 1995 through 2004...... 7.1% $4,800 $ 5,400
$2,660 variable rate bonds due 1992 through 2004...... 7.4% 1,715 1,925
$4,800 variable rate bonds due 1992 through 2004...... 7.2% 3,050 3,400
$3,350 variable rate bonds due 1988 through 1996...... 5.5% -- 100
------ -------
$9,565 $10,825
------ -------
</TABLE>

These bonds are backed by standby letters of credit, expiring June 30, 1998
with the revolving credit bank group which has a first lien on certain land,
building and equipment.

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

Scheduled maturities of all long-term debt for the years succeeding
December 31, 1995 are $4,768 in 1996, $4,669 in 1997, $5,554 in 1998 and $4,670
in both 1999 and 2000 and $22,871 thereafter. These scheduled maturities exclude
$5,200 of term loans which will not be drawn until 1996 and will be amortized at
10% annually over the next 10 years.

The overall effective interest rate for all debt amounted to 7.7% in 1995,
5.7% in 1994, and 5.5% in 1993. Interest paid was $11,823, $3,843 and $4,540 for
the years ended December 31, 1995, 1994 and 1993, respectively.

Interest expense of $1,021 in 1995 and $208 in 1994 was capitalized in
conjunction with the temper mill and plate facility projects.

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

Under the long-term debt agreements, the Company is subject to certain
covenants such as minimum net worth, capital expenditure limitations, and
interest coverages. The Company was in compliance with all covenants as of
December 31, 1995.

10. INCOME TAXES:

Prior to January 1, 1994, the Company was treated as an S corporation for
income tax purposes and, accordingly, was not subject to federal income taxes
and was subject to only minimal state income taxes. In connection with the
initial public offering, the Company terminated its S corporation election and
became fully subject to federal and state income taxation as a C corporation. As
a result, deferred income

F-11
<PAGE> 44

OLYMPIC STEEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

tax liabilities of $7,800 as of January 1, 1994 were reinstated and included in
income tax expense in the first quarter of 1994.

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

<TABLE>
<CAPTION>
ASSET/(LIABILITY) 1995 1994
----------------------------------------------- ------- -------
<S> <C> <C>
Accrued income taxes........................... $(2,092) $(2,280)
Current deferred income taxes:
LIFO inventory reserves...................... (1,842) (1,842)
Other temporary items........................ 688 1,142
------- -------
Total current deferred income taxes............ (1,154) (700)
------- -------
Accrued and deferred income taxes.............. (3,246) (2,980)
------- -------
Long-term deferred income taxes:
LIFO inventory reserve.................... (1,655) (3,531)
Tax in excess of book depreciation........ (1,435) (1,272)
------- -------
Total long-term deferred income taxes.......... (3,090) (4,803)
------- -------
Total current and deferred income taxes........ $(6,336) $(7,783)
======== ========
</TABLE>

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

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
U.S. federal statutory rate.................... 35.0% 35.0%
State and local taxes, net of federal
benefit...................................... 4.4 5.0
All other, net................................. 0.6 0.1
------- -------
Effective income tax rate...................... 40.0% 40.1%
------- -------
</TABLE>

The tax provision includes a current provision of $6,443 and $8,024 in 1995
and 1994, respectively, and a deferred benefit of $1,939 in 1995 and $2,190 in
1994.

Income taxes paid in 1995 and 1994 totaled $6,191 and $5,944, respectively.
State and local income taxes paid in 1993, when the Company was an S
corporation, totaled $52.

11. 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. For each
of the last three years, Company contributions were 4% 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.
The same matching level was approved for 1996.

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 $1,762, $1,035 and $964 for the years
ended December 31, 1995, 1994 and 1993, respectively.

F-12
<PAGE> 45

OLYMPIC STEEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

12. 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 450,000 shares of Common Stock
has been reserved for options 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. The Option Plan will
terminate on January 5, 2004. Termination of the Option Plan will not affect
outstanding options.

During 1995 and 1994, nonqualified options to purchase 20,000 and 120,000
shares, respectively, were issued under the Option Plan to the Company's general
managers and outside directors at an exercise price of $15.50 per share. All of
these options were outstanding at December 31, 1995 and vest over a period of
five years at a rate of 20% per year commencing on the first anniversary of the
date of grant.

13. COMMITMENTS AND CONTINGENCIES:

The Company leases certain warehouses, sales offices and processing
equipment under long-term lease agreements. The leases are classified as
operating and expire at various dates through 2000. In some cases the leases
include options to extend. Rent expense was $2,873, $2,512 and $2,705 for the
years ended December 31, 1995, 1994 and 1993, respectively.

Future minimum lease payments as of December 31, 1995 are as follows:

<TABLE>
<S> <C>
1996...... $2,748
1997...... 1,765
1998...... 819
1999...... 417
2000...... 289
Thereafter.. 133
------
$6,171
======
</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.

14. RELATED PARTY TRANSACTIONS:

A related entity handles a portion of the freight activity for the
Company's Cleveland division. Payments to this entity approximated $3,199,
$2,880 and $2,293 for the years ended December 31, 1995, 1994 and 1993,
respectively. There is no common ownership or management of this entity 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 expires June 2000 and
has two remaining renewal options of 10 years each.

15. UNAUDITED PRO FORMA INFORMATION:

The unaudited pro forma net income for the years ended December 31, 1994
and 1993 reflects (i) the reduction in interest expense resulting from the
application of net proceeds from the sale of

F-13
<PAGE> 46

OLYMPIC STEEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

4 million shares of Common Stock in the IPO on March 17, 1994, to repay
approximately $39,495 of indebtedness with a weighted average interest rate of
5.3% in 1993 and 6.0% in 1994, (ii) the reduction of compensation expense for
officers and certain retiring employees net of additional costs to be incurred
as a public company and (iii) assumes the Company is subject to income tax as a
C corporation, and in 1994 excludes the one-time $7,800 income tax charge for
the reinstatement of deferred income taxes resulting from the change in the
Company's income tax status from an S corporation to a C corporation. Unaudited
pro forma net income per share has been calculated by dividing pro forma net
income by the number of shares outstanding after the IPO.

F-14
<PAGE> 47

SUPPLEMENTARY FINANCIAL INFORMATION

(in thousands except per share amounts)

<TABLE>
<CAPTION>
1995 1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR. TOTAL
- ------------------------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales........................... $149,058 $142,095 $132,673 $130,643 $554,469
Gross margin........................ 30,012 27,343 24,887 25,714 107,956
Operating income.................... 7,717 5,713 4,269 4,402 22,101
Income before taxes................. 5,150 2,866 1,375 1,857 11,248
Net income.......................... 3,067 1,721 835 1,121 6,744
Net income per share.............. 0.36 0.20 0.10 0.13 0.78
Weighted average shares
outstanding.................... 8,600 8,600 8,600 8,600 8,600
</TABLE>

<TABLE>
<CAPTION>
1994 1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR. TOTAL
- ------------------------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales........................... $ 93,493 $ 95,473 $ 98,636 $ 94,304 $381,906
Gross margin........................ 18,839 19,363 19,954 18,973 77,129
Operating income.................... 4,714 4,059 5,258 4,262 18,293
Income before taxes................. 3,722 3,370 4,331 3,109 14,532
Net income (loss)(a)................ (5,567) 2,022 2,577 1,866 898
Net income (loss) per share(a).... (1.06) 0.24 0.30 0.22 0.12
Weighted average shares
outstanding.................... 5,267 8,600 8,600 8,600 7,778
Pro forma net income(b)............. $ 2,584 $ 2,022 $ 2,577 $ 1,866 $ 9,049
Pro forma net income per
share(c)....................... 0.30 0.24 0.30 0.22 1.05
Pro forma weighted average shares
outstanding(c)................. 8,600 8,600 8,600 8,600 8,600

- ---------------
<FN>
(a) Effective January 1, 1994 the Company changed its income tax status from an
S corporation to a C corporation. This change required a reinstatement of
deferred income taxes as a one-time charge to first quarter's earnings of
$7,800.

(b) Unaudited pro forma net income reflects: (i) the reduction in interest
expense resulting from the application of net proceeds from the sale of
4,000 Common Stock on March 17, 1994, (ii) the reduction of certain
compensation expense and (iii) assumes the Company is subject to income tax
as a C corporation. See Note 15 to Notes to Consolidated Financial
Statements.

(c) Unaudited pro forma net income per share has been calculated by dividing pro
forma net income by 8,600 shares, the number of shares outstanding after the
IPO.
</TABLE>

F-15
<PAGE> 48

OLYMPIC STEEL, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31,

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
1996 1995
-------- --------
(UNAUDITED)
<S> <C> <C>
Net sales............................................................ $142,589 $149,058
Cost of sales........................................................ 111,663 119,046
-------- --------
Gross margin....................................................... 30,926 30,012
Operating expenses
Warehouse and processing........................................... 7,404 7,594
Administrative and general......................................... 6,091 5,573
Distribution....................................................... 4,243 4,063
Selling............................................................ 3,466 3,627
Occupancy.......................................................... 1,009 767
Depreciation and amortization...................................... 994 671
-------- --------
Total operating expenses........................................ 23,207 22,295
-------- --------
Operating income................................................... 7,719 7,717
Interest expense..................................................... 1,476 2,567
Receivable securitization expense.................................... 816 --
-------- --------
2,292 2,567
-------- --------
Income before taxes................................................ 5,427 5,150
Income taxes......................................................... 2,171 2,083
-------- --------
Net income......................................................... $ 3,256 $ 3,067
======== ========
Net income per share............................................... $ 0.38 $ 0.36
======== ========
Weighted average shares outstanding................................ 8,600 8,600
======== ========
</TABLE>

The accompanying notes are an integral part of these statements.

F-16
<PAGE> 49

OLYMPIC STEEL, INC.
CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
--------- ------------
<S> <C> <C>
(UNAUDITED)
ASSETS
Cash............................................................. $ 3,284 $ 1,884
Accounts receivable.............................................. 12,570 7,405
Inventories...................................................... 118,121 112,986
Prepaid expenses and other....................................... 2,631 2,096
--------- ---------
Total current assets........................................... 136,606 124,371
--------- ---------
Property and equipment........................................... 80,459 78,452
Accumulated depreciation......................................... (11,815) (10,886)
--------- ---------
Net property and equipment..................................... 68,644 67,566
--------- ---------
Goodwill......................................................... 10,070 10,135
--------- ---------
Total assets................................................... $ 215,320 $ 202,072
========= =========
LIABILITIES
Current portion of long-term debt................................ $ 4,744 $ 4,768
Accounts payable................................................. 32,572 15,220
Accrued payroll.................................................. 2,588 2,922
Accrued and deferred income taxes................................ 3,256 3,246
Other accrued liabilities........................................ 5,891 5,070
--------- ---------
Total current liabilities...................................... 49,051 31,226
--------- ---------
Revolving credit agreement....................................... 43,818 51,338
Term loans....................................................... 24,656 24,969
Industrial revenue bonds......................................... 9,565 9,565
Taxable rate notes............................................... 7,900 7,900
--------- ---------
Total long-term debt........................................... 85,939 93,772
--------- ---------
Deferred income taxes............................................ 3,090 3,090
--------- ---------
Total liabilities.............................................. 138,080 128,088
--------- ---------
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, 8,600
shares issued and outstanding.................................. 57,095 57,095
Retained earnings................................................ 20,145 16,889
--------- ---------
Total shareholders' equity..................................... 77,240 73,984
--------- ---------
Total liabilities and shareholders' equity..................... $ 215,320 $ 202,072
========= =========
</TABLE>

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

F-17
<PAGE> 50

OLYMPIC STEEL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,

(IN THOUSANDS)

<TABLE>
<CAPTION>
1996 1995
-------- --------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income........................................................ $ 3,256 $ 3,067
Adjustments to reconcile net income to net cash from (used for)
operating activities --
Depreciation................................................. 929 615
Amortization................................................. 65 56
Long-term deferred income taxes.............................. -- (203)
-------- --------
4,250 3,535
Changes in working capital:
Accounts receivable............................................... (5,475) (13,140)
Inventories....................................................... (5,135) (4,598)
Prepaid expenses and other........................................ (535) (145)
Accounts payable.................................................. 17,352 (5,608)
Accrued payroll and other accrued liabilities..................... 487 1,463
Accrued and deferred income taxes................................. 10 (120)
-------- --------
6,704 (22,148)
-------- --------
Net cash from (used for) operating activities.................. 10,954 (18,613)
-------- --------
Cash flows from investing activities:
Acquisition of Lafayette Steel (including working capital of
$28,532)....................................................... -- (52,395)
Temper mill facility and equipment................................ (512) (2,563)
Plate facility and equipment...................................... -- (1,885)
Tubing facility and equipment..................................... -- (740)
Other capital expenditures, net................................... (1,495) (661)
-------- --------
Net cash used for investing activities......................... (2,007) (58,244)
-------- --------
Cash flows from financing activities:
Revolving credit agreement........................................ (7,520) 60,368
Proceeds from term loans.......................................... -- 15,100
Repayment of long-term debt....................................... (27) (100)
Unexpended industrial revenue bond funds.......................... -- 2,281
-------- --------
Net cash from (used for) financing activities.................. (7,547) 77,649
-------- --------
Cash:
Net increase...................................................... 1,400 792
Beginning balance................................................. 1,884 718
-------- --------
Ending balance.................................................... $ 3,284 $ 1,510
======== ========
</TABLE>

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

F-18
<PAGE> 51

OLYMPIC STEEL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 1996

The accompanying consolidated financial statements have been prepared from
the financial records of Olympic Steel, Inc. and its wholly-owned subsidiaries
(collectively, the "Company" or "Olympic"), without audit and reflect all
adjustments which are, in the opinion of management, necessary to fairly present
the results of the interim periods covered by this report. All significant
intercompany transactions and balances have been eliminated in consolidation.

(1) EARNINGS PER SHARE:

Earnings per share have been calculated based on the weighted average
shares outstanding during each of the periods presented. Primary and fully
diluted earnings per share are the same as outstanding stock options are
anti-dilutive.

(2) LONG-TERM DEBT:

Interest rates under the Company's various credit agreements are generally
based on prime or LIBOR plus a premium determined quarterly, which varies with
the Company's operating performance and financial leverage. Borrowing rates for
the first three months of 1996 were prime plus 1% and LIBOR plus 2%. Commencing
June 1, 1996, rates will decrease to prime plus .5% and LIBOR plus 1.5%. The
majority of the Company's borrowings are based on the LIBOR option. The overall
effective interest rate for all debt for the three month periods amounted to
7.4% in 1996 and 7.5% in 1995.

Included in the revolving credit balances on the accompanying consolidated
balance sheets are $5.5 million and $9.8 million of checks issued that have not
cleared the bank as of March 31, 1996 and December 31, 1995, respectively.

(3) SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid during the three months ended March 31, 1996 and 1995 totaled
$1.7 million and $2.0 million, respectively. Income taxes paid during the three
months ended March 31, 1996 and 1995 totaled $2.1 million and $2.4 million,
respectively.

F-19
<PAGE> 52

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING SHAREHOLDERS OR ANY OF THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE COMMON STOCK OFFERED HEREBY TO ANY PERSON BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION MAY NOT LAWFULLY BE MADE.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary..................... 3
Risk Factors........................... 6
Use of Proceeds........................ 8
Capitalization......................... 9
Price Range of Common Stock............ 10
Dividend Policy........................ 10
Selected Financial Data................ 11
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 12
Business............................... 17
Management............................. 25
Selling Shareholders................... 26
Description of Capital Stock........... 27
Shares Eligible for Future Sale........ 28
Underwriting........................... 29
Legal Matters.......................... 30
Experts................................ 30
Available Information.................. 31
Incorporation of Certain Documents by
Reference............................ 31
Index to Consolidated Financial
Statements........................... F-1
</TABLE>

3,000,000 SHARES

OLYMPIC STEEL, INC.

COMMON STOCK
(WITHOUT PAR VALUE)

LOGO

SALOMON BROTHERS INC

GOLDMAN, SACHS & CO.

MERRILL LYNCH & CO.

MCDONALD & COMPANY
SECURITIES, INC.

PROSPECTUS
DATED JULY , 1996
<PAGE> 53

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following is a list of the estimated expenses to be incurred by the
Registrant in connection with the issuance and distribution of the shares of
Common Stock being registered hereby, other than underwriting discounts and
commissions.

<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee..................... $32,864.22
National Association of Securities Dealers, Inc. Filing Fee............. 10,030.63
Printing Costs.......................................................... *
Accounting Fees and Expenses............................................ *
Legal Fees and Expenses (not including Blue Sky)........................ *
Blue Sky Fees and Expenses.............................................. *
Transfer Agent and Registrar Fees....................................... *
Miscellaneous........................................................... *
----------
Total.............................................................. $

- ---------------
<FN>
* To be filed by amendment.
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Under certain circumstances provided in Article V of the Registrant's Code
of Regulations and subject to Section 1701.13 of the Ohio General Corporation
Law (which sets forth the conditions and limitations governing the
indemnification of officers, directors and other persons), the Registrant will
indemnify any director or officer or any former director or officer of the
Registrant against losses, damages, or liabilities reasonably incurred by such
director or officer by reason of the fact that he is or was such director or
officer in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative. The
Company maintains liability insurance for all of its directors and officers.
This insurance also insures the Company against amounts payable to indemnify
directors and officers, subject to policy limits and retention amounts.

Reference is made to Section of the Underwriting Agreement
(Exhibit 1.1 to this Registration Statement) which provides for indemnification
of the Registrant's officers, directors and controlling persons by the
Underwriters against certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended.

II-1
<PAGE> 54

ITEM 16. EXHIBITS

(A) EXHIBITS. The following Exhibits are filed herewith and made a part
hereof.

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF DOCUMENT
------- --------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement*
4.1 Credit Agreement dated December 29, 1994 by and among the Registrant, five
banks and National City Bank, Agent **
4.2 First Amendment to Credit Agreement dated June 9, 1995 by and among the
Registrant, five banks and National City Bank, Agent***
4.3 Second Amendment to Credit Agreement dated December 19, 1995 by and among
the Registrant, five banks and National City Bank, Agent****
4.4 Receivables Purchase Agreement dated December 19, 1995 among the
Registrant, Olympic Steel Receivables LLC, Olympic Steel Receivables, Inc.
and Clipper Receivables Corporation as Purchaser****
4.5 Purchase and Sale Agreement dated December 19, 1995 among the Registrant,
Olympic Steel Lafayette, Inc. and Olympic Steel Receivables LLC****
Information concerning certain of the Registrant's other long-term debt is
set forth in Notes 7 and 8 of Notes to Financial Statements. The
Registrant hereby agrees to furnish copies of such instruments to the
Commission upon request.
5.1 Opinion of Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A. as to the
validity of the Securities being offered*
23.1 Consent of Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A. (to be included
in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP
24.1 Directors and Officers Powers of Attorney

- ---------------
<FN>
* To be filed by amendment.

** Incorporated by reference to an Exhibit included in Registrant's Current
Report on Form 8-K filed with the Commission on January 17, 1995.

*** Incorporated by reference to the Exhibit included in Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995 filed with the
Commission on August 3, 1995.

**** Incorporated by reference to the Exhibit with the same exhibit number
included in Registrant's Annual Report on Form 10-K filed with the
Commission on March 20, 1996.
</TABLE>

II-2
<PAGE> 55

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

1. That for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to
be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide public offering thereof.

2. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the questions whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

3. For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430(A) and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

4. For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering hereof.

II-3
<PAGE> 56

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS THE
REQUIREMENTS FOR FILING A FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CLEVELAND, STATE OF OHIO, ON JULY 2, 1996.

OLYMPIC STEEL, INC.

July 2, 1996 By: /s/ R. Louis Schneeberger
----------------------------------
R. Louis Schneeberger,
Chief Financial Officer and Director

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED AND ON THE DATES INDICATED.

<TABLE>
<C> <S>
July 2, 1996 *
------------------------------------
Michael D. Siegal
President, Chairman of the Board
and Chief Executive Officer

July 2, 1996 /s/ R. Louis Schneeberger
------------------------------------
R. Louis Schneeberger
Chief Financial Officer
and Director

July 2, 1996 *
------------------------------------
David A. Wolfort
Chief Operating Officer
and Director

July 2, 1996 *
------------------------------------
Bruce S. Adelstein
Vice President -- Operations
and Director

July 2, 1996 *
------------------------------------
Richard T. Marabito
Treasurer and Corporate Controller
(Principal Accounting Officer)

July 2, 1996 *
------------------------------------
Martin H. Elrad, Director

July 2, 1996 *
------------------------------------
Thomas M. Forman, Director

July 2, 1996 *
------------------------------------
Janice M. Margheret, Director
<FN>

* The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on Form S-3 pursuant to the Powers of Attorney executed
by the above-named officers and directors of the Company and which are being
filed herewith with the Securities and Exchange Commission on behalf of such
officers and directors.

</TABLE>

By: /s/ R. Louis Schneeberger July 2, 1996
------------------------------------
R. Louis Schneeberger,
Attorney-in-Fact

II-4
<PAGE> 57

OLYMPIC STEEL, INC.

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF DOCUMENT
- ------- -----------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement*
4.1 Credit Agreement dated December 29, 1994 by and among the Registrant, five banks
and National City Bank, Agent**
4.2 First Amendment to Credit Agreement dated June 9, 1995 by and among the Registrant,
five banks and National City Bank, Agent***
4.3 Second Amendment to Credit Agreement dated December 19, 1995 by and among the
Registrant, five banks and National City Bank, Agent****
4.4 Receivables Purchase Agreement dated December 19, 1995 among the Registrant,
Olympic Steel Receivables LLC, Olympic Steel Receivables, Inc. and Clipper
Receivables Corporation as Purchaser****
4.5 Purchase and Sale Agreement dated December 19, 1995 among the Registrant, Olympic
Steel Lafayette, Inc. and Olympic Steel Receivables LLC****
Information concerning certain of the Registrant's other long-term debt is set
forth in Notes 7 and 8 of Notes to Financial Statements. The Registrant hereby
agrees to furnish copies of such instruments to the Commission upon request.
5.1 Opinion of Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A. as to the validity of the
Securities being offered*
23.1 Consent of Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A. (to be included in Exhibit
5.1).
23.2 Consent of Arthur Andersen LLP
24.1 Directors and Officers Powers of Attorney

- ---------------
<FN>
* To be filed by amendment.

** Incorporated by reference to an Exhibit included in Registrant's Current
Report on Form 8-K filed with the Commission on January 17, 1995.

*** Incorporated by reference to the Exhibit included in Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995 filed with the
Commissioner on August 3, 1995.

**** Incorporated by reference to the Exhibit with the same exhibit number
included in Registrant's Annual Report on Form 10-K filed with the
Commission on March 20, 1996.
</TABLE>

<PAGE> 1

Exhibit 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report dated February 6, 1996 (and to all references to our Firm) included in or
made a part of this Registration Statement on Form S-3.

Arthur Andersen LLP

Cleveland, Ohio,
July 2, 1996.

<PAGE> 1

Exhibit 24.1

POWERS OF ATTORNEY
OLYMPIC STEEL, INC.

KNOW ALL MEN BY THESE PRESENTS, that OLYMPIC STEEL, INC., an Ohio
corporation, and each person whose name is signed below hereby constitutes and
appoints Michael D. Siegal, R. Louis Schneeberger and Richard T. Marabito and
each of them, their attorneys-in-fact and agents, with full power of
substitution and resubstitution, for and on behalf of Olympic Steel, Inc. and
the undersigned directors and/or officers of Olympic Steel, Inc., and each of
such directors and officers, to sign any or all documents or post-effective
amendments to Olympic Steel, Inc.'s Registration Statement on Form S-3, and to
file the same, with Exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, and any and all
applications or other documents in connection with inclusion on the NASDAQ
National Market of the Company's shares of Common Stock or any and all other
applications or other documents to be filed with any governmental agency or
official relating to the Offering, granting such attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary in connection with such matters and hereby ratifying and
confirming all that such attorneys-in-fact and agents or their substitute or
substitutes may do or cause to be done by virtue hereof.

This Power of Attorney of Olympic Steel, Inc., and the directors and
officers of Olympic Steel, Inc. may be executed in multiple counterparts, each
of which shall be deemed an original with respect to the person executing it.

IN WITNESS WHEREOF, this Power of Attorney has been signed at Cleveland,
Ohio this 1st day of July, 1996.

OLYMPIC STEEL, INC.

By: /S/ R. LOUIS SCHNEEBERGER
---------------------------------
R. Louis Schneeberger,
Chief Financial Officer

<TABLE>
<CAPTION>
DIRECTORS AND OFFICERS:
<S> <C>
/S/ BRUCE S. ADELSTEIN /S/ R. LOUIS SCHNEEBERGER
- ------------------------------------------ ------------------------------------------
Bruce S. Adelstein, R. Louis Schneeberger,
Vice President -- Operations and Director Chief Financial Officer and Director

/S/ MARTIN H. ELRAD /S/ MICHAEL D. SIEGAL
- ------------------------------------------ ------------------------------------------
Martin H. Elrad, Director Michael D. Siegal, President, Chief
Executive Officer and Chairman of the
Board

/S/ THOMAS M. FORMAN /S/ DAVID A. WOLFORT
- ------------------------------------------ ------------------------------------------
Thomas M. Forman, Director David A. Wolfort,
Chief Operating Officer and Director

/S/ JANICE M. MARGHERET /S/ RICHARD T. MARABITO
- ------------------------------------------ ------------------------------------------
Janice M. Margheret, Director Richard T. Marabito, Treasurer
and Corporate Controller
</TABLE>