Quarterly business highlights include ramp-up of operations at University Park, IL service center, expansion and modernization of the Shelbyville, KY service center, and progress on cost savings across the network CHICAGO, July 30, 2024 /PRNewswire/ -- Ryerson Holding Corporation (NYSE:RYI), a leading value-added processor and distributor of industrial metals, today reported results for the second quarter ended June 30, 2024. Highlights:  Delivered Net Income attributable to Ryerson Holding Corporation of $9.9 million and Adjusted EBITDA1, excluding LIFO of $42.6 million Earned diluted EPS2 of $0.29 on $1.23 billion of revenue from 508,000 tons shipped and average selling price of $2,412 per ton Reduced operating expenses3 by $17.8 million, compared to the first quarter of 2024, as part of previously announced cost reductions. Annualized cost reduction expectations updated to savings of approximately $60 million from previously announced $40 million Reduced inventory by $107.1 million on a FIFO cost basis4, compared to the first quarter of 2024 Returned $20.4 million to shareholders during the quarter, comprised of $14.0 million in share repurchases and $6.4 million in dividends Ended the quarter with debt of $525 million and net debt5 of $497 million as of June 30, 2024, compared to $497 million and $455 million, respectively, on March 31, 2024 Increased share repurchase authorization by $50 million and extended maturity of authorization to April 2026 Announced third 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: Q2 2024 Q1 2024 Q2 2023 YoY QoQ 1H 2024 1H 2023 YoY Revenue $1,225.5 $1,239.2 $1,343.5 (1.1) % (8.8) % $2,464.7 $2,749.6 (10.4) % Tons shipped 508 497 496 2.2 % 2.4 % 1,005 1,015 (1.0) % Average selling price/ton $2,412 $2,493 $2,709 (3.2) % (11.0) % $2,452 $2,709 (9.5) % Gross margin 18.2 % 17.6 % 19.4 % 60 bps -120 bps 17.9 % 19.1 % -120 bps Gross margin, excl. LIFO 17.4 % 17.6 % 18.7 % -20 bps -130 bps 17.5 % 18.9 % -140 bps Warehousing, delivery, selling, general, and administrative expenses $199.0 $216.8 $202.6 (8.2) % (1.8) % $415.8 $396.8 4.8 % As a percentage of revenue 16.2 % 17.5 % 15.1 % -130 bps 110 bps 16.9 % 14.4 % 250 bps Net income (loss) attributable to Ryerson HoldingCorporation $9.9 $(7.6) $37.6 230.3 % (73.7) % $2.3 $84.9 (97.3) % Diluted earnings (loss) per share $0.29 $(0.22) $1.06 $0.51 $(0.77) $0.07 $2.33 $(2.26) Adjusted diluted earnings (loss) per share $0.33 $(0.18) $1.06 $0.51 $(0.73) $0.14 $2.33 $(2.19) Adj. EBITDA, excl. LIFO $42.6 $40.2 $70.1 6.0 % (39.2) % $82.8 $160.2 (48.3) % Adj. EBITDA, excl. LIFO margin 3.5 % 3.2 % 5.2 % 30 bps -170 bps 3.4 % 5.8 % -240 bps Balance Sheet and Cash Flow Highlights: Total debt $525.4 $497.3 $396.1 5.7 % 32.6 % $525.4 $396.1 32.6 % Cash and cash equivalents $28.0 $41.9 $30.0 (33.2) % (6.7) % $28.0 $30.0 (6.7) % Net debt $497.4 $455.4 $366.1 9.2 % 35.9 % $497.4 $366.1 35.9 % Net debt / LTM Adj. EBITDA, excl. LIFO 3.2x 2.5x 1.4x 0.7x 1.8x 3.2x 1.4x 1.8x Cash conversion cycle (days) 77.6 75.6 76.1 2.0 1.5 76.5 77.2 (0.7) Net cash provided by (used in) operating activities $25.9 $(47.8) $115.3 $73.7 $(89.4) $(21.9) $195.7 $(217.6)   Management CommentaryEddie Lehner, Ryerson's President, Chief Executive Officer, and Director, said, "I want to thank all of my Ryerson teammates for striving to create a better Ryerson that delivers the industry's best customer experience safely, enjoyably, and productively. Over the second quarter we managed through a compressed pricing and declining industry demand environment that intensified in late-May through the end of the quarter marked by a continued slowdown in various industrial manufacturing and consumer end-markets as well as notable declines in aluminum, nickel, and carbon steel commodity indexes. Despite these challenges, our overall business performance improved as we saw an increase in tons sold, reduced variable and structural expenses, reduced our inventory levels, and returned to generating operating cash flow and free cash flow. We did this while transitioning to an optimization phase as we complete a record three-year investment cycle, highlighted this quarter by the start-up of our state-of-the-art 900,000 square foot University Park, IL service center, ongoing assimilation of the ERP-conversion in our southern network of service centers, our launch of Ryerson's redesigned e-commerce platform at www.ryerson.com, as well as nearing the final stage of equipment installation for our Shelbyville, KY processing center modernization and expansion that is slated to start-up in the first quarter of 2025. During the quarter, we grew our book value per share, repurchased 647,330 shares of Ryerson common stock, and paid a quarterly dividend of $0.1875. For the remainder of 2024, we are targeting approximately $60 million in annualized cost savings, updated from our previous $40 million target, primarily through the realization of greater efficiencies within our network. As we navigate through the second half of 2024, Ryerson is planning, preparing, and executing on the strategic growth plan for our business through the optimization of our operating model despite the persistence of what has turned out to be an extended industry counter-cycle. Looking at the bigger picture, it has been just about ten-years since Ryerson closed its Initial Public Offering ("IPO") on August 13, 2014.  I would kindly ask interested stakeholders to view the first page of this quarter's investor presentation deck. When we stack up all the days since our IPO and look at all we have accomplished over the past ten years, it is an important reminder that there is no sustainable progress without some pain and discomfort. As I look at the strength of our company, the significant investments made to our next-gen operating model, the value of our assets, and the culture of our people and organization, I couldn't be more optimistic about the next ten years." Announcement – Ryerson's Chief Operating Officer, Mike Burbach to retire at year-end of 2024After more than 40 years of driving excellence, Mike Burbach will retire from his position as Chief Operating Officer ("COO"), effective December 31, 2024. Mike has served as COO since April 2, 2021, and has been pivotal to the company's operational and financial success. Eddie Lehner, Ryerson's President, Chief Executive Officer, and Director, said, "Mike has been a tremendous asset to our organization and will be missed by all those who know him and have had the pleasure to work him throughout his remarkable career – he is truly a pillar of the metals service industry and is well respected not just within Ryerson, but the entire industry. He has always been a steady hand and partner at the till, helping navigate the ebbs, flows, highs, and lows of this dynamic industry." Mr. Lehner continued, "Mike has been a mentor, leader, partner, role model, friend, and Ryerson "All-Time Great." I am delighted that Mike is spending some more time with us in transition, and I wish Mike, Anne, and their 5 grandkids the best of everything in retirement!" Second Quarter ResultsRyerson generated net sales of $1.23 billion in the second quarter of 2024, a decrease of 1.1%, compared to the first quarter of 2024. Revenue performance during the quarter benefitted from seasonal volume demand which increased 2.2%, but was offset by average selling prices decreasing 3.2%, which was below our guidance expectations. Gross margin expanded sequentially by 60 basis points to 18.2% in the second quarter of 2024, compared to 17.6% in the first quarter of 2024, primarily driven by $10 million in LIFO income recorded in the second quarter of 2024 compared to LIFO expense of $1 million recorded in the first quarter of 2024. Due to a decline in metals futures prices, in the second quarter of 2024, LIFO income of $10 million was greater than our guidance expectations of a LIFO expense of $1 million. Excluding the impact of LIFO, gross margin contracted 20 basis points to 17.4% in the second quarter of 2024, compared to 17.6% in the first quarter. Gross margins for our product mix experienced compression in the second quarter of 2024 due to average selling prices for our carbon, aluminum, and stainless-steel products declining at a greater rate than our costs of goods sold. Warehousing, delivery, selling, general and administrative expenses decreased 8.2%, or $17.8 million, to $199.0 million in the second quarter of 2024, compared to $216.8 million in the first quarter of 2024. Decreases in expenses were strongest in personnel-related expenses, operating expenses, and the reduction in start-up costs related to our University Park, IL service center, as well as a reduction in the costs related to our network ERP integration. Net Income Attributable to Ryerson Holding Corporation for the second quarter of 2024 was $9.9 million, or $0.29 per diluted share, compared to a net loss of $7.6 million, or $0.22 per diluted share in the previous quarter. Ryerson generated Adjusted EBITDA, excluding LIFO, of $42.6 million in the second quarter of 2024, compared to the first quarter of 2024 Adjusted EBITDA, excluding LIFO of $40.2 million. Liquidity & Debt ManagementRyerson generated $25.9 million of operating cash flow in the second quarter of 2024 due to net income of $10.3 million. The Company ended the second quarter of 2024 with $525 million of debt and $497 million of net debt, sequential increases of $28 million and $42 million, respectively, compared to the first quarter of 2024. Ryerson's net leverage ratio as of the second quarter of 2024 was 3.2x, 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 $585 million as of June 30, 2024, compared to $684 million as of March 31, 2024. Shareholder Return Activity Dividends. On July 30, 2024, the Board of Directors declared a quarterly cash dividend of $0.1875 per share of common stock, payable on September 19, 2024, to stockholders of record as of September 5, 2024, unchanged from the prior quarter. During the second quarter of 2024, Ryerson paid a quarterly dividend of $0.1875 per share, amounting to a cash return of approximately $6.4 million.  Share Repurchases and Authorization. Ryerson repurchased 647,330 shares for $14.0 million in the open market during the second quarter of 2024. Ryerson made these repurchases in accordance with its share repurchase authorization, which allows the Company to acquire up to an aggregate amount of $100.0 million of the Company's common stock through April of 2025. As of June 30, 2024, $24.3 million of the $100.0 million remained under the existing authorization. On July 30, 2024, the Board of Directors approved a $50 million increase to the Company's share repurchase authorization and extended the authorization to April 2026. Outlook CommentaryFor the third quarter of 2024, Ryerson expects customer shipments to decrease 2% to 4%, quarter-over-quarter. The Company anticipates third-quarter net sales to be in the range of $1.12 billion to $1.16 billion, with average selling prices decreasing 3% to 5%. LIFO income in the third quarter of 2024 is expected to be $12 million. We expect adjusted EBITDA, excluding LIFO in the range of $21 million to $25 million and earnings per diluted share in the range of $0.01 to $0.10.   Second Quarter 2024 Major Product Metrics Net Sales (millions) Q2 2024 Q1 2024 Q2 2023 Quarter-over-quarter Year-over-year Carbon Steel $ 656 $ 645 $ 683 1.7 % (4.0) % Aluminum $ 273 $ 276 $ 297 (1.1) % (8.1) % Stainless Steel $ 277 $ 297 $ 338 (6.7) % (18.0) % Tons Shipped (thousands) Q2 2024 Q1 2024 Q2 2023 Quarter-over-quarter Year-over-year Carbon Steel 395 385 384 2.6 % 2.9 % Aluminum 52 50 51 4.0 % 2.0 % Stainless Steel 58 61 59 (4.9) % (1.7) % Average Selling Prices (per ton) Q2 2024 Q1 2024 Q2 2023 Quarter-over-quarter Year-over-year Carbon Steel $ 1,661 $ 1,675 $ 1,779 (0.9) % (6.6) % Aluminum $ 5,250 $ 5,520 $ 5,824 (4.9) % (9.8) % Stainless Steel $ 4,776 $ 4,869 $ 5,729 (1.9) % (16.6) %   First Half 2024 Major Product Metrics Net Sales (millions) 2024 2023 Year-over-year Carbon Steel $ 1,301 $ 1,375 (5.4) % Aluminum $ 549 $ 607 (9.6) % Stainless Steel $ 574 $ 716 (19.8) % Tons Shipped (thousands) 2024 2023 Year-over-year Carbon Steel 780 786 (0.8) % Aluminum 102 103 (1.0) % Stainless Steel 119 122 (2.5) % Average Selling Prices (per ton) 2024 2023 Year-over-year Carbon Steel $ 1,668 $ 1,749 (4.7) % Aluminum $ 5,382