Note 1 - Summary of Significant Accounting Policies	12 Months Ended
Dec. 31, 2017
Notes to Financial Statements
Significant Accounting Policies [Text Block]	1. Summary of Significant Accounting Policies : Nature of Business The Company is a leading U.S. metals service center specializing in the processing and distribution of large volumes of carbon, coated, aluminum and stainless steel, flat-rolled coil, sheet and plate products and tubular and pipe products from facilities throughout the United States. 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. 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 our tubular and pipe products segment, which consists of our Chicago Tube & Iron (CTI) subsidiary the Company distributes metal tubing, pipe, bar, valves and fittings and fabricate pressure parts supplied to various industrial markets. Principles of Consolidation and Basis of presentation 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. Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 and tubular and pipe steel for many of its principal suppliers, but is not dependent on any one supplier. The Company purchased approximately 53%, 54% and 51% of its total steel requirements from its three largest suppliers in 2017, 2016 and 2015, respectively. The Company has a diversified customer and geographic base, which reduces the inherent risk and cyclicality of its business. The concentration of net sales to the Company’s top 20 customers approximated 27%, 29% and 31% of consolidated net sales in 2017, 2016 and 2015, respectively. In addition, the Company’s largest customer accounted for approximately 4%, 4% and 6% of consolidated net sales in 2017, 2016 and 2015, respectively. Sales to industrial machinery and equipment manufacturers and their fabricators accounted for 51%, 51% and 49% of consolidated net sales in 2017, 2016 and 2015, respectively. Cash and Cash Equivalents Cash equivalents consist of short-term highly liquid investments, with a three month or less maturity, which are readily convertible into cash. Fair Market Value Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the liability in an orderly transaction between market participants on the measurement date. Valuation techniques must maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company applies a fair value hierarchy that is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Financial instruments, such as cash and cash equivalents, accounts receivable, accounts payable and the credit facility revolver, are stated at their carrying value, which is a reasonable estimate of fair value. The fair value of marketable securities is based on quoted market prices. Accounts Receivable The Company ’s allowance for doubtful accounts is maintained at a level considered appropriate based on historical experience and specific customer collection issues that the Company has identified. Estimations are based upon the application of a historical collection rate to the outstanding accounts receivable balance, which remains fairly level from year to year, and judgments about the probable effects of economic conditions on certain customers, which can fluctuate significantly from year to year. The Company cannot guarantee that the rate of future credit losses will be similar to past experience. The Company considers all available information when assessing the adequacy of the allowance for doubtful accounts each quarter. Inventories Inventories are stated at the lower of its cost or net realizable value with the adoption of A ccounting Standards Update (ASU) 2015 - 11 on January 1, 2017. Inventory costs include the costs of the purchased metals, inbound freight, external and internal processing and applicable labor and overhead costs. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Cost s of the Company’s carbon and specialty metals flat products segments’ inventories, including flat-rolled sheet, coil and plate products are determined using the specific identification method. C ertain of the Company’s tubular and pipe products inventory is stated under the last-in, first -out (LIFO) method. At December 31, 2017 and December 31, 2016, approximately $48.1 million, or 17.5% of consolidated inventory, and $43.4 million, or 17.1% of consolidated inventory, respectively, was reported under the LIFO method of accounting. The cost of the remainder of tubular and pipe product segment’s inventory is determined using a weighted average rolling first -in, first -out (FIFO) method. On the Consolidated Statement s of Comprehensive Income, “Cost of materials sold (exclusive of items shown separately below)” consists of the cost of purchased metals, inbound and internal transfer freight, external processing costs , and LIFO income or expense. 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 of the assets ranging from two to 30 years. The Company capitalizes the costs of obtaining or developing internal-use software, including directly related payroll costs. The Company amortizes those costs over five years, beginning when the software is ready for its intended use. Intangible Assets and Recoverability of Long-lived Assets The Company performs an annual impairment test of indefinite-lived intangible assets for the tubular and pipe products segment in the fourth quarter, or more frequently if changes in circumstances or the occurrence of events indicate potential impairment. Events or changes in circumstances that could trigger an impairment review include significant nonperformance relative to the expected historical or projected future operating results, significant changes in the manner of the use of the acquired assets or the strategy for the overall business or significant negative industry or economic trends. Management uses judgment to determine whether to use a qualitative analysis or a quantitative fair value measurement for each of the Company ’s reporting units that carry intangible assets. If a quantitative fair value measurement is used, the fair value of each indefinite-lived intangible asset is compared to its carrying value and an impairment charge is recorded if the carrying value exceeds the fair value. The Company estimates the fair value of indefinite-lived intangible assets using a discounted cash flow methodology. Management ’s assumptions used for the calculations are based on historical results, projected financial information and recent economic events. Actual results could differ from these estimates under different assumptions or conditions which could adversely affect the reported value of intangible assets. The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include significant underperformance relative to the expected historical or projected future operating results, significant changes in the manner of the use of the acquired assets or the strategy for the overall business or significant negative industry or economic trends. The Company records an impairment or change in useful life whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. Income Taxes The Company records, as an offset to the estimated effect of temporary differences between the tax basis of assets and liabilities and the reported amounts in its consolidated balance sheets, the tax effect of operating loss and tax credit carryforwards. If the Company determines that it will not be able to fully realize a deferred tax asset, it will record a valuation allowance to reduce such deferred tax asset to its realizable value. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense. Penalties, if incurred, would be recognized as a component of administrative and general expense. During 2017, a net tax benefit was recorded based on currently available information and interpretations of applying the provisions of the 2017 U.S. Tax Cuts and Jobs Act (Tax Act) as of the time of filing this Annual Report on Form 10 -K. In accordance with Staff Accounting Bulletin (SAB) No. 118 issued by the Securities and Exchange Commission (SEC), the income tax effect for certain aspects of the Tax Act represent provisional amounts for which the Company’s accounting is incomplete but a reasonable estimate could be determined and recorded during the fourth quarter of 2017. The guidance provides for a measurement period, up to one year from the enactment date, in which provisional amounts may be adjusted when additional information is obtained, prepared or analyzed about facts and circumstances that existed as of the enactment date, which, if known, would have affected the amounts that were initially recorded as provisional amounts. Adjustments to provisional amounts identified during the measurement period should be recorded as an income tax expense or benefit in the period the adjustment is determined. Revenue Recognition For both direct and toll shipments, revenue is recognized when title and risk of loss is transferred , which generally occurs upon delivery to the Company’s customers. Given the proximity of the Company’s customers to its facilities, substantially all of the Company’s sales are shipped and received within one day. Sales returns and allowances are treated as reductions to sales and are provided for based on historical experience and current estimates and are immaterial to the consolidated financial statements. Certain engineered products produced by the tubular and pipe products segment typically take several months to produce due to their size and complexity. Substantially all projects are completed within nine months. The Company may request advance payments from customers during the production of these products. These payments are included in current short-term liabilities on the Company’s Consolidated Balance Sheet. Due to their short-term nature, the Company uses the units of delivery method to account for these contracts. Revenue for the contracts is recognized when the product is shipped and title of the product transfers to the customers. Revenues for these engineered products accounted for approximately 1.9%, 1.7% and 1.8% of the Company’s consolidated net sales during 2017, 2016 and 2015, respectively. Shipping and Handling Fees and Costs Amounts charged to customers for s hipping and other transportation services are included in net sales. The distribution expense line on the accompanying Consolidated Statements of Comprehensive Income is entirely comprised of all shipping and other transportation costs incurred by the Company in shipping goods to its customers. Stock-Based Compensation The Company records compensation expense for stock awards issued to employees and directors. For additional information, see Note 10, Equity Plans. Impact of Recently Issued Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (FASB) issued ASU No 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 expand and refine 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 make 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 Accounting Standards Update 2016 - 310 , “D erivatives 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. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. 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’sconsolidated financial statements. In May 2017, the FASB issued ASU No 2017 - 09, “Compensation – Stock Compensation (Topic 718 )”. This ASU provides clarity and reduces both ( 1 ) diversity in practice and ( 2 ) 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 Accounting Standards Update 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. Early adoption is permitted, including adoption in any interim period, for ( 1 ) public business entities for reporting periods for which financial statements have not yet been issued and ( 2 ) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The adoption of this ASU is not expected to materially impact the Company’s consolidated financial statements. In August 2016, the FASB issued ASU No 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 is not expected to materially impact the Company’s consolidated financial statements. In March 2016, the FASB issued ASU No 2016 - 09, “Improvements to Employee Share-Based Payment Accounting”. This ASU is part of the FASB ’s Simplification Initiative and has been issued to reduce complexity in the presentation of employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The adoption of this ASU did not materially impact the Company’s consolidated financial statements. In 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. In July 2015, the FASB issued ASU No 2015 - 11, Simplifying the Measurement of Inventory, “Inventory (Topic 330 )”, which requires that inventory within the scope of this ASU be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory measured using last-in, first -out (LIFO) or the retail inventory method. The Company adopted this standard effective January 1, 2017. The adoption of this ASU did not have a material impact to the Company ’s consolidated financial statements.” In 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 - 09 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 - 09 was to become effective for us beginning January 2017; however, ASU 2015 - 14 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 no material changes required to the reported revenues as a result of the adoption. The majority of the revenue arrangements generally consist of a single performance obligation to transfer goods or services. Based on the evaluation process and review of the contracts with customers, the timing and amount of revenue recognized based on ASU 2015 - 14 is consistent with the revenue recognition policy under previous guidance. The adoption of this ASU on January 1, 2018 using the modified retrospective approach will not have a material impact to the Company’s consolidated financial statements.

Summary of Significant Accounting Policies

Nature of Business

The Company is a leading U.S. metals service center specializing in the processing and distribution of large volumes of carbon, coated, aluminum and stainless steel, flat-rolled

coil, sheet and plate products and tubular and pipe products from facilities throughout the United States. 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. 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 our tubular and pipe products segment, which consists of our Chicago Tube & Iron (CTI) subsidiary the Company distributes metal tubing, pipe, bar, valves and fittings and fabricate pressure parts supplied to various industrial markets.

Principles of Consolidation

and Basis of presentation

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.

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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

and tubular and pipe steel for many of its principal suppliers, but is

not

dependent on any

one

supplier. The Company purchased approximately

53%,

54%

and

51%

of its total steel requirements from its

three

largest suppliers in

2017,

2016

and

2015,

respectively.

The Company has a diversified customer and geographic base, which reduces the inherent risk and cyclicality of its business.

The concentration of net sales to the Company’s top

customers approximated

27%,

29%

and

31%

of consolidated net sales in

2017,

2016

and

2015,

respectively. In addition, the Company’s largest customer accounted for approximately

4%,

and

of consolidated net sales in

2017,

2016

and

2015,

respectively. Sales to industrial machinery and equipment manufacturers and their fabricators accounted for

51%,

51%

and

49%

of consolidated net sales in

2017,

2016

and

2015,

respectively.

Cash and Cash Equivalents

Cash equivalents consist of short-term highly liquid investments, with a

three

month or less maturity, which are readily convertible into cash.

Fair Market Value

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the liability in an orderly transaction between market participants on the measurement date.

Valuation techniques must maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company applies a fair value hierarchy that is based on

three

levels of inputs, of which the

first

two

are considered observable and the last unobservable, as follows:

Level

– Quoted prices in active markets for identical assets or liabilities.

Level

– Inputs other than Level

that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices that are

not

active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level

– Unobservable inputs that are supported by little or

market activity and that are significant to the fair value of the assets or liabilities.

Financial instruments, such as cash and cash equivalents, accounts receivable, accounts payable and the credit facility revolver, are stated at their carrying value, which is a reasonable estimate of fair value. The fair value of marketable securities is based on quoted market prices.

Accounts Receivable

The Company

’s allowance for doubtful accounts is maintained at a level considered appropriate based on historical experience and specific customer collection issues that the Company has identified. Estimations are based upon the application of a historical collection rate to the outstanding accounts receivable balance, which remains fairly level from year to year, and judgments about the probable effects of economic conditions on certain customers, which can fluctuate significantly from year to year. The Company cannot guarantee that the rate of future credit losses will be similar to past experience. The Company considers all available information when assessing the adequacy of the allowance for doubtful accounts each quarter.

Inventories

Inventories are stated at the lower of its cost or net realizable value with the adoption of A

ccounting Standards Update (ASU)

2015

January 1, 2017.

Inventory costs include the costs of the purchased metals, inbound freight, external and internal processing and applicable labor and overhead costs. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

Cost

s of the Company’s carbon and specialty metals flat products segments’ inventories, including flat-rolled sheet, coil and plate products are determined using the specific identification method.

ertain of the Company’s tubular and pipe products inventory is stated under the last-in,

first

-out (LIFO) method. At

December 31, 2017

and

December 31, 2016,

approximately

$48.1

million, or

17.5%

of consolidated inventory, and

$43.4

million, or

17.1%

of consolidated inventory, respectively, was reported under the LIFO method of accounting. The cost of the remainder of tubular and pipe product segment’s inventory is determined using a weighted average rolling

first

-in,

first

-out (FIFO) method.

On the Consolidated Statement

s of Comprehensive Income, “Cost of materials sold (exclusive of items shown separately below)” consists of the cost of purchased metals, inbound and internal transfer freight, external processing costs

, and LIFO income or expense.

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 of the assets ranging from

two

years. The Company capitalizes the costs of obtaining or developing internal-use software, including directly related payroll costs. The Company amortizes those costs over

five

years, beginning when the software is ready for its intended use.

Intangible Assets

and

Recoverability of Long-lived Assets

The Company performs an annual impairment test of indefinite-lived intangible assets for the tubular and pipe products segment in the

fourth

quarter, or more frequently if changes in circumstances or the occurrence of events indicate potential impairment. Events or changes in circumstances that could trigger an impairment review include significant nonperformance relative to the expected historical or projected future operating results, significant changes in the manner of the use of the acquired assets or the strategy for the overall business or significant negative industry or economic trends. Management uses judgment to determine whether to use a qualitative analysis or a quantitative fair value measurement for each of the Company

’s reporting units that carry intangible assets.

If a quantitative fair value measurement is used, the fair value of each indefinite-lived intangible asset is compared to its carrying value and an impairment charge is recorded if the carrying value exceeds the fair value. The Company estimates the fair value of indefinite-lived intangible assets using a discounted cash flow methodology. Management

’s assumptions used for the calculations are based on historical results, projected financial information and recent economic events. Actual results could differ from these estimates under different assumptions or conditions which could adversely affect the reported value of intangible assets.

The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives whenever events or changes in circumstances indicate that the carrying value

may

not

be recoverable. Events or changes in circumstances that could trigger an impairment review include significant underperformance relative to the expected historical or projected future operating results, significant changes in the manner of the use of the acquired assets or the strategy for the overall business or significant negative industry or economic trends. The Company records an impairment or change in useful life whenever events or changes in circumstances indicate that the carrying amount

may

not

be recoverable or the useful life has changed.

Income Taxes

The Company

records, as an offset to the estimated effect of temporary differences between the tax basis of assets and liabilities and the reported amounts in its consolidated balance sheets, the tax effect of operating loss and tax credit carryforwards. If the Company determines that it will

not

be able to fully realize a deferred tax asset, it will record a valuation allowance to reduce such deferred tax asset to its realizable value. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense. Penalties, if incurred, would be recognized as a component of administrative and general expense.

During

2017,

net tax benefit was recorded based on currently available information and interpretations of applying the provisions of the

2017

U.S. Tax Cuts and Jobs Act (Tax Act) as of the time of filing this Annual Report on Form

-K. In accordance with Staff Accounting Bulletin (SAB)

No.

118

issued by the Securities and Exchange Commission (SEC), the income tax effect for certain aspects of the Tax Act represent provisional amounts for which the Company’s accounting is incomplete but a reasonable estimate could be determined and recorded during the

fourth

quarter of

2017.

The guidance provides for a measurement period, up to

one

year from the enactment date, in which provisional amounts

may

be adjusted when additional information is obtained, prepared or analyzed about facts and circumstances that existed as of the enactment date, which, if known, would have affected the amounts that were initially recorded as provisional amounts. Adjustments to provisional amounts identified during the measurement period should be recorded as an income tax expense or benefit in the period the adjustment is determined.

Revenue Recognition

For both direct and toll shipments, revenue is recognized when title and risk of loss is transferred

, which generally occurs upon delivery to the Company’s customers. Given the proximity of the Company’s customers to its facilities, substantially all of the Company’s sales are shipped and received within

one

day. Sales returns and allowances are treated as reductions to sales and are provided for based on historical experience and current estimates and are immaterial to the consolidated financial statements.

Certain

engineered products produced by the tubular and pipe products segment typically take several months to produce due to their size and complexity. Substantially all projects are completed within

nine

months. The Company

may

request advance payments from customers during the production of these products. These payments are included in current short-term liabilities on the Company’s Consolidated Balance Sheet. Due to their short-term nature, the Company uses the units of delivery method to account for these contracts. Revenue for the contracts is recognized when the product is shipped and title of the product transfers to the customers. Revenues for these engineered products accounted for approximately

1.9%,

1.7%

and

1.8%

of the Company’s consolidated net sales during

2017,

2016

and

2015,

respectively.

Shipping and Handling Fees and Costs

Amounts charged to customers for s

hipping and other transportation services are included in net sales. The distribution expense line on the accompanying Consolidated Statements of Comprehensive Income is entirely comprised of all shipping and other transportation costs incurred by the Company in shipping goods to its customers.

Stock-Based Compensation

The

Company records compensation expense for stock awards issued to employees and directors. For additional information, see Note

10,

Equity Plans.

Impact of Recently Issued Accounting Pronouncements

August 2017,

the Financial Accounting Standards Board (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 expand and refine 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 make 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 Accounting Standards Update

2016

310

, “D

erivatives 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. For all other entities, the amendments are effective for fiscal years beginning after

December 15, 2019,

and interim periods within fiscal years beginning after

December 15, 2020.

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’sconsolidated 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 Accounting Standards Update

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.

Early adoption is permitted, including adoption in any interim period, for (

) public business entities for reporting periods for which financial statements have

not

yet been issued and (

) all other entities for reporting periods for which financial statements have

not

yet been made available for issuance. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The adoption of this ASU is

not

expected to 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 is

not

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

March 2016,

the FASB issued ASU

2016

09,

“Improvements to Employee Share-Based Payment Accounting”. This ASU is part of the FASB

’s Simplification Initiative and has been issued to reduce complexity in the presentation of employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. 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.

July 2015,

the FASB issued ASU

2015

11,

Simplifying the Measurement of Inventory, “Inventory (Topic

330

)”, which requires that inventory within the scope of this ASU be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory measured using last-in,

first

-out (LIFO) or the retail inventory method. The Company adopted this standard effective

January 1, 2017.

The adoption of this ASU did

not

have a material impact to 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. The majority of the revenue arrangements generally consist of a single performance obligation to transfer goods or services. 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 will

not

have a material impact to the Company’s consolidated financial statements.