1.	Basis of Presentation:

The accompanying consolidated financial statements have been prepared from the financial records of Olympic Steel, Inc. and its wholly-owned subsidiaries (collectively, Olympic or the Company), without audit and reflect all normal and recurring adjustments which are, in the opinion of management, necessary to fairly state the results of the interim periods covered by this report. Year-to-date results are

not

necessarily indicative of

2018

annual results and these financial statements should be read in conjunction with the Company’s Annual Report on Form

-K for the year ended

December 31, 2017.

All intercompany transactions and balances have been eliminated in consolidation.

The Company operates in

three

reportable segments; carbon flat products, specialty metals flat products, and tubular and pipe products. The carbon flat products segment and the specialty metals flat products segments are at times consolidated and referred to as the flat products segments. Certain of the flat products segments’ assets and resources are shared by the carbon and specialty metals segments and both segments’ products are stored in the shared facilities and, in some locations, processed on shared equipment. Due to the shared assets and resources, certain of the flat products segment expenses are allocated between the carbon flat products segment and the specialty metals flat products segment based upon an established allocation methodology. Through its carbon flat products segment, the Company sells and distributes large volumes of processed carbon and coated flat-rolled sheet, coil and plate products, and fabricated parts. Through its specialty metals flat products segment, the Company sells and distributes processed aluminum and stainless flat-rolled sheet and coil products, flat bar products and fabricated parts. Through its acquisition of Berlin Metals, LLC (Berlin Metals) on

April 2, 2018,

the specialty metals flat products segment expanded its product offerings to include differing types of stainless flat-rolled sheet and coil and prime tin mill products. Through its tubular and pipe products segment, which consists of the Chicago Tube and Iron subsidiary (CTI), the Company distributes metal tubing, pipe, bar, valves and fittings and fabricate pressure parts supplied to various industrial markets.

Corporate expenses are reported as a separate line item for segment reporting purposes. Corporate expenses include the unallocated expenses related to managing the entire Company (i.e., all

three

segments), including payroll expenses for certain personnel, expenses related to being a publicly traded entity such as board of directors’ expenses, audit expenses, and various other professional fees.

Impact of Recently Issued Accounting Pronouncements

August, 2018,

the Financial Account Standards Board (FASB) issued Accounting Standards Update (ASU)

No.

2018

15,

“Intangibles – Goodwill and other – Internal-use software: Customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract”. This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the ASU requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic

350

to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The ASU also requires the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. For public business entities, this ASU is effective for fiscal years beginning after

December 15, 2019,

and interim periods within those fiscal years with early adoption permitted. The Company early adopted ASU

2018

in the

third

quarter of

2018

and the adoption of this ASU did

not

materially impact the Company’s consolidated financial statements.

August 2017,

the FASB issued ASU

2017

12,

“Derivatives and Hedging”. This ASU aligns an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the ASU expands and refines hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This ASU also makes certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. This ASU is the final version of proposed ASU

2016

310

“Derivatives and Hedging (Topic

815

): Targeted Improvements to Accounting for Hedging Activities”, which has been deleted. For public business entities, this ASU is effective for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years. Early application is permitted in any interim period after issuance of the ASU. All transition requirements and elections should be applied to hedging relationships existing (that is, hedging relationships in which the hedging instrument has

not

expired, been sold, terminated, or exercised or the entity has

not

removed the designation of the hedging relationship) on the date of adoption. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption. The adoption of this ASU is

not

expected to materially impact the Company’s consolidated financial statements.

May 2017,

the FASB issued ASU

2017

09,

“Compensation – Stock Compensation (Topic

718

)”. This ASU provides clarity and reduces both (

) diversity in practice and (

) cost and complexity when applying the guidance in Topic

718,

Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic

718.

This ASU is the final version of proposed ASU

2016

360,

“Compensation—Stock Compensation (Topic

718

)—Scope of Modification Accounting,” which has been deleted. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after

December 15, 2017.

The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The adoption of this ASU did

not

materially impact the Company’s consolidated financial statements.

August 2016,

the FASB issued ASU

2016

15,

“Classification of certain cash receipts and cash payments”. This ASU addresses the following

eight

specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of

zero

-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The guidance will be effective for annual reporting periods beginning after

December 15, 2017,

and interim periods within those fiscal years with early adoption permitted. The adoption of this ASU did

not

materially impact the Company’s consolidated financial statements.

February 2016,

the FASB issued ASU

No.

2016

02,

“Leases,” which specifies the accounting for leases. The objective is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing and uncertainty of cash flows arising from a lease. This ASU introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The guidance will be effective for annual reporting periods beginning after

December 15, 2018

and interim periods within those fiscal years with early adoption permitted. The Company is in the process of evaluating the impact of the future adoption of this standard on the Company’s consolidated financial statements.

August 2015,

the FASB issued ASU

2015

14,

“Revenue from Contracts with Customers (Topic

606

): Deferral of the Effective Date,” which deferred the effective date of ASU

2014

for all entities by

one

year. This update is effective for public business entities for annual reporting periods beginning after

December 15, 2017,

including interim periods within those reporting periods. Earlier application was permitted only as of annual reporting periods beginning after

December 15, 2016,

including interim reporting periods within that reporting period. ASU

2014

was to become effective for us beginning

January 2017;

however, ASU

2015

deferred our effective date until

January 2018,

which is when we adopted this standard. The ASU permits

two

methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). The ASU also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required for customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The Company completed the process of evaluating the effect of the adoption and determined there were

material changes required to the reported revenues as a result of the adoption. Substantially all of the revenue arrangements consist of a single performance obligation to transfer goods. Based on the evaluation process and review of the contracts with customers, the timing and amount of revenue recognized based on ASU

2015

is consistent with the revenue recognition policy under previous guidance. The adoption of this ASU on

January 1, 2018

using the modified retrospective approach applied to those contracts which were

not

completed as of

January 1, 2018

did

not

have a material impact on the Company’s consolidated financial statements. Comparative information has

not

been restated and continues to be reported under the accounting standard in effect for those periods. The impact of adopting ASU

606

was

not

material to the Company’s consolidated financial statements as of and for the

three

and

nine

months ended

September 30, 2018.

See note