Ryerson Reports Third Quarter 2024 Results
Quarterly business highlights include operating cash flow of $134.6 million, Central Steel & Wire's University Park, IL distribution hub and service center open house, progress on expansion and modernization of the Shelbyville, KY non-ferrous processing center, closing of the Production Metals acquisition and entry into aerospace, defense, and semiconductor metals markets, and ongoing cost-reduction work across our North America service center network
CHICAGO, Oct. 29, 2024 /PRNewswire/ -- Ryerson Holding Corporation (NYSE:RYI), a leading value-added processor and distributor of industrial metals, today reported results for the third quarter ended September 30, 2024.
Highlights:
Generated $1.13 billion of revenue from 485,000 tons shipped and average selling price of $2,323 per ton
Incurred Net Loss attributable to Ryerson Holding Corporation of $6.6 million, or Diluted Loss Per Share of $0.20 and Adjusted EBITDA1, excluding LIFO of $21.0 million as counter-cyclical and seasonal bottoming continues
Generated Operating Cash Flow of $134.6 million and Free Cash Flow of $103.4 million
Reduced inventory by $80.8 million on a FIFO cost basis2, compared to the second quarter of 2024
Returned $42.0 million to shareholders during the quarter, comprised of $36.0 million in share repurchases and $6.0 million in dividends
Ended the quarter with debt of $522 million and net debt3 of $487 million as of September 30, 2024, compared to $525 million and $497 million, respectively, on June 30, 2024
Progressing well towards $60 million of annualized cost reduction expectations from operating expenses4
Acquired Production Metals, a value-added processor of aluminum, stainless, and specialty steel
Hosted open house at Central Steel & Wire's University Park, IL distribution hub and service center for customers, suppliers, vendors, investors, and employees
Declared a fourth-quarter 2024 dividend of $0.1875 per share
A reconciliation of non-GAAP financial measures to the comparable GAAP measure is included below in this news release.
$ in millions, except tons (in thousands), average selling prices, and earnings per share
Financial Highlights:
Q3 2024
Q2 2024
Q3 2023
QoQ
YoY
9MO 2024
9MO 2023
YoY
Revenue
$1,126.6
$1,225.5
$1,246.7
(8.1) %
(9.6) %
$3,591.3
$3,996.3
(10.1) %
Tons shipped
485
508
478
(4.5) %
1.5 %
1,490
1,493
(0.2) %
Average selling price/ton
$2,323
$2,412
$2,608
(3.7) %
(10.9) %
$2,410
$2,677
(10.0) %
Gross margin
17.9 %
18.2 %
20.0 %
-30 bps
-210 bps
17.9 %
19.4 %
-150 bps
Gross margin, excl. LIFO
16.3 %
17.4 %
17.3 %
-110 bps
-100 bps
17.2 %
18.4 %
-120 bps
Warehousing, delivery, selling, general, and administrative expenses
$196.9
$199.0
$193.0
(1.1) %
2.0 %
$612.7
$589.8
3.9 %
As a percentage of revenue
17.5 %
16.2 %
15.5 %
130 bps
200 bps
17.1 %
14.8 %
230 bps
Net income (loss) attributable to Ryerson Holding Corporation
$(6.6)
$9.9
$35.0
(166.7) %
(118.9) %
$(4.3)
$119.9
(103.6) %
Diluted earnings (loss) per share
$(0.20)
$0.29
$1.00
$(0.49)
$(1.20)
$(0.13)
$3.34
$(3.47)
Adjusted diluted earnings (loss) per share
$(0.20)
$0.33
$1.00
$(0.53)
$(1.20)
$(0.05)
$3.34
$(3.39)
Adj. EBITDA, excl. LIFO
$21.0
$42.6
$45.0
(50.7) %
(53.3) %
$103.8
$205.2
(49.4) %
Adj. EBITDA, excl. LIFO margin
1.9 %
3.5 %
3.6 %
-160 bps
-170 bps
2.9 %
5.1 %
-220 bps
Balance Sheet and Cash Flow Highlights:
Total debt
$522.1
$525.4
$365.9
(0.6) %
42.7 %
$522.1
$365.9
42.7 %
Cash and cash equivalents
$35.0
$28.0
$37.4
25.0 %
(6.4) %
$35.0
$37.4
(6.4) %
Net debt
$487.1
$497.4
$328.5
(2.1) %
48.3 %
$487.1
$328.5
48.3 %
Net debt / LTM Adj. EBITDA, excl. LIFO
3.8x
3.2x
1.4x
0.6x
2.4x
3.8x
1.4x
2.4x
Cash conversion cycle (days)
79.3
77.6
78.3
1.7
1.0
76.5
77.6
(1.1)
Net cash provided by operating activities
$134.6
$25.9
$79.3
$108.7
$55.3
$112.7
$275.0
$(162.3)
Management CommentaryEddie Lehner, Ryerson's President, Chief Executive Officer, and Director, said, "I want to thank all my Ryerson teammates for working safely while striving to create an always improving Ryerson that delivers the industry's best customer experience safely, enjoyably, and productively. Two things can be true at the same time: 1) the industry is experiencing a cyclical bottoming marked by twenty-four months of moving average demand and price contraction; and 2) Ryerson's record investments in systems, capital expenditures, and acquisitions over this same period are positioning the company well for the next cyclical upturn. Over the third quarter we managed the business effectively through a contractionary industrial metals and manufacturing environment that produced compressed margins, most notably in carbon steels and across the commodity spectrum with lagging OEM customer contract price resets. Despite these challenges, we experienced improvements in key performance indicators including cash flow, expense and working capital management, and most importantly, we are seeing investment related growth pains and disruptions across our network beginning to subside as we move through the balance of 2024 with budding optimism for 2025. Ryerson has emerged more efficient and better through every previous counter-cycle and, looking forward, our optimization phase will bring together a greatly modernized service center network, enhanced value-added capabilities, across a digitally enabled enterprise to provide Ryerson's best-ever customer experience while setting the table for realization of our next stage financial targets."
Third Quarter ResultsRyerson generated net sales of $1.13 billion in the third quarter of 2024, a decrease of 8.1%, compared to the second quarter of 2024, and within our guidance expectations. Revenue performance during the quarter was impacted by seasonal and weather impacted volume declines of 4.5%, in addition to average selling prices decreasing 3.7%.
Gross margin contracted sequentially by 30 basis points to 17.9% in the third quarter of 2024, compared to 18.2% in the second quarter of 2024. Due to further declines in inventory costs, in the third quarter of 2024, LIFO income of $18 million was greater than our guidance expectations of LIFO income of $12 million. Excluding the impact of LIFO, gross margin contracted 110 basis points to 16.3% in the third quarter of 2024, compared to 17.4% in the second quarter. Gross margins continued to be under pressure in the quarter as demand conditions saw continuing contraction and selling price declines continued to outpace the decline in our average inventory costs.
Warehousing, delivery, selling, general and administrative expenses decreased 1.1%, or $2.1 million, to $196.9 million in the third quarter of 2024, compared to $199.0 million in the second quarter of 2024. Cost reductions were noted in personnel-related expenses, operating expenses, and general administrative expenses. Decreases in expenses were partially offset by increases in start-up, pre-operating, and reorganization expenses associated with Ryerson investments in capital expenditures and acquisitions.
Net Loss Attributable to Ryerson Holding Corporation for the third quarter of 2024 was $6.6 million, or $0.20 per diluted share, compared to net income of $9.9 million, or $0.29 per diluted share in the previous quarter. Ryerson generated Adjusted EBITDA, excluding LIFO, of $21.0 million in the third quarter of 2024, compared to the second quarter of 2024 Adjusted EBITDA, excluding LIFO of $42.6 million.
Liquidity & Debt ManagementRyerson generated $134.6 million of operating cash flow in the third quarter of 2024 due to a working capital release of $129 million. The Company ended the third quarter of 2024 with $522 million of debt and $487 million of net debt, sequential decreases of $3 million and $10 million, respectively, compared to the second quarter of 2024. Ryerson's net leverage ratio as of the third quarter of 2024 was 3.8x above the Company's target leverage range of 0.5x, 2.0x, but still well below Ryerson's prior 10-year average. Ryerson's global liquidity, composed of cash and cash equivalents and availability on its revolving credit facilities, decreased to $491 million as of September 30, 2024, compared to $585 million as of June 30, 2024.
Shareholder Return Activity
Dividends. On October 29, 2024, the Board of Directors declared a quarterly cash dividend of $0.1875 per share of common stock, payable on December 19, 2024, to stockholders of record as of December 5, 2024, unchanged from the prior quarter. During the third quarter of 2024, Ryerson's quarterly dividend amounted to a cash return of approximately $6.0 million.
Share Repurchases and Authorization. Ryerson repurchased 1,849,017 shares for $36.0 million in the open market during the third quarter of 2024. Ryerson made these repurchases in accordance with its share repurchase authorization. As of September 30, 2024, $38.4 million remained under the existing authorization.
Outlook CommentaryFor the fourth quarter of 2024, Ryerson expects customer shipments to seasonally and counter-cyclically decrease 8% to 10%, quarter-over-quarter. The Company anticipates fourth-quarter net sales to be in the range of $1.00 billion to $1.04 billion, with average selling prices between decreasing 1% to increasing 1%. LIFO income in the fourth quarter of 2024 is expected to be $10 million. We expect adjusted EBITDA, excluding LIFO in the range of $10 million to $12 million and loss per diluted share in the range of $0.53 to $0.47.
Sales by Product MetricsAs we continue to integrate our acquisitions of the past eight quarters into our systems and processes, we have refined our methodology for allocating their net sales and tons to our major product categories. As such, in addition to the third quarter and the first nine months of 2024 product metrics provided here under the refined methodology, we are providing updated sales by product information from the first quarter of 2023 to the second quarter of 2024 to provide comparable numbers. We note that consolidated net sales, tons shipped, and average selling price per ton as previously reported are unchanged and that the updates below are only at the product level.
Third Quarter 2024 Major Product Metrics
Net Sales (millions)
Q3 2024
Q2 2024
Q3 2023
Quarter-over-
quarter
Year-over-year
Carbon Steel
$
585
$
644
$
642
(9.2) %
(8.9) %
Aluminum
$
250
$
277
$
276
(9.7) %
(9.4) %
Stainless Steel
$
276
$
286
$
308
(3.5) %
(10.4) %
Tons Shipped (thousands)
Q3 2024
Q2 2024
Q3 2023
Quarter-over-
quarter
Year-over-year
Carbon Steel
382
397
371
(3.8) %
3.0 %
Aluminum
44
49
48
(10.2) %
(8.3) %
Stainless Steel
58
59
57
(1.7) %
1.8 %
Average Selling Prices (per ton)
Q3 2024
Q2 2024
Q3 2023
Quarter-over-
quarter
Year-over-year
Carbon Steel
$
1,531
$
1,622
$
1,730
(5.6) %
(11.5) %
Aluminum
$
5,682
$
5,653
$
5,750
0.5 %
(1.2) %
Stainless Steel
$
4,759
$
4,847
$
5,404
(1.8) %
(11.9) %
First Nine Months 2024 Major Product Metrics
Net Sales (millions)
2024
2023
Year-over-year
Carbon Steel
$
1,873
$
2,007
(6.7) %
Aluminum
$
806
$
889
(9.3) %
Stainless Steel
$
859
$
1,031
(16.7) %
Tons Shipped (thousands)
2024
2023
Year-over-year
Carbon Steel
1,163
1,156
0.6 %
Aluminum
143
151
(5.3) %
Stainless Steel
178
179
(0.6) %
Average Selling Prices (per ton)
2024
2023
Year-over-year
Carbon Steel
$
1,610
$
1,736
(7.2) %
Aluminum
$
5,636
$
5,887
(4.3) %
Stainless Steel
$
4,826
$
5,760
(16.2) %
Restated Major Product Metrics
Net Sales (millions)
Q1 2023
Q2 2023
1H 2023
Q3 2023
9MO 2023
Q4 2023
2023
Q1 2024
Q2 2024
1H 2024
Carbon Steel
$
687
$
678
$
1,365
$
642
$
2,007
$
574
$
2,581
$
644
$
644
$
1,288
Aluminum
$
313
$
300
$
613
$
276
$
889
$
244
$
1,133
$
279
$
277
$
556
Stainless Steel
$
381
$
342
$
723
$
308
$
1,031
$
275
$
1,306
$
297
$
286
$
583
Tons Shipped (thousands)
Q1 2023
Q2 2023
1H 2023
Q3 2023
