8-K: Ryerson Reports Mixed Q1 2025 Results: Revenue Up, But Net Loss Persists

Ryerson Holding Corporation reports increased revenue but a net loss for the first quarter of 2025, highlighting both market share gains and ongoing challenges.

Summary

• Ryerson Holding Corporation reported its financial results for the first quarter ended March 31, 2025.
• The company generated revenue of $1.14 billion on 500,000 tons shipped, with an average selling price of $2,271 per ton.
• Ryerson incurred a net loss attributable to Ryerson Holding Corporation of $5.6 million, or $0.18 diluted loss per share.
• Adjusted EBITDA, excluding LIFO, was $32.8 million.
• The company ended the quarter with debt of $498 million and net debt of $464 million as of March 31, 2025.
• Ryerson declared a second-quarter 2025 dividend of $0.1875 per share.
• For the second quarter of 2025, Ryerson expects customer shipments to be between a decrease of 1% to an increase of 1% quarter-over-quarter.
• The company anticipates second quarter net sales to be in the range of $1.15 billion to $1.19 billion, with average selling prices increasing 3% to 4%.
• LIFO expense in the second quarter of 2025 is expected to be between $5 million to 7 million.
• Adjusted EBITDA, excluding LIFO is expected in the range of $40 million to $45 million and earnings per diluted share in the range of $0.07 to $0.14.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the company reported a net loss, there were improvements in revenue, market share, and operational efficiency. The outlook for the second quarter is cautiously optimistic.

Positives

• Ryerson achieved a 12.7% increase in revenue compared to the fourth quarter of 2024.
• The company gained market share, with transactional sales increasing 12% year-over-year.
• Expense per ton sold decreased by $32 year-over-year, indicating improved operational efficiency.
• Global liquidity increased to $490 million as of March 31, 2025.
• The company declared a quarterly cash dividend of $0.1875 per share.
• Ryerson's cash conversion cycle decreased sequentially, largely driven by a decrease in inventory days of supply.

Negatives

• Ryerson incurred a net loss attributable to Ryerson Holding Corporation of $5.6 million, or $0.18 diluted loss per share.
• Gross margin contracted sequentially by 100 basis points to 18.0% in the first quarter of 2025.
• The company had a use of operating cash of $41.2 million in the first quarter of 2025 due to a $102 million build in accounts receivable.
• Net leverage of 4.3x in Q1 25 is above target range of 0.5x to 2.0x.

Risks

• The cyclicality of the metals industry poses a risk to future performance.
• The highly competitive, volatile, and fragmented nature of the metals industry could impact profitability.
• Geopolitical events and fluctuating metal prices can significantly impact the business.
• The company's indebtedness and related covenants could restrict financial flexibility.
• Integration of acquired operations presents operational risks.
• Regulatory and other operational risks associated with operations inside and outside of the United States could impact the business.
• Tariff-related uncertainty is dampening seasonal volume patterns as customers prioritize destocking.

Future Outlook

For the second quarter of 2025, Ryerson expects net sales to be in the range of $1.15 billion to $1.19 billion, with average selling prices increasing 3% to 4%. LIFO expense is expected to be between $5 million to $7 million. Adjusted EBITDA, excluding LIFO is expected in the range of $40 million to $45 million and earnings per diluted share in the range of $0.07 to $0.14.

Management Comments

• Eddie Lehner, Ryersons President, Chief Executive Officer & Director, thanked Ryerson teammates for fostering a safe and productive environment.
• Lehner noted that the company is seeing growing pains dissipate, giving way to meaningful proof-points that efforts should pay-off for all Ryerson stakeholders in the months and years to come.
• Lehner stated that Ryerson is getting better and positioning the company well for sustaining shareholder value creation even amidst near-term cyclical industry conditions.

Industry Context

Ryerson's results reflect a mixed environment in the industrial metals sector, with strong transactional sales offset by weaker demand from larger program accounts. The company's focus on modernizing its service center network and optimizing its operating model aligns with industry trends towards efficiency and value-added services.

Comparison to Industry Standards

• Ryerson's performance can be compared to other metal service centers such as Reliance Steel & Aluminum Co. and Russel Metals Inc.
• Reliance Steel & Aluminum Co. has demonstrated strong profitability and efficient working capital management.
• Russel Metals Inc. focuses on a diversified product mix and strategic acquisitions to drive growth.
• Ryerson's efforts to improve plant productivity benchmarks and working capital management are in line with industry best practices.
• The company's capital investment cycle and modernization efforts are aimed at achieving similar levels of efficiency and profitability as its peers.

Stakeholder Impact

• Shareholders will receive a quarterly dividend of $0.1875 per share.
• Employees are expected to contribute to improved operational efficiency and productivity.
• Customers can expect continued improvements in service and product offerings.
• Suppliers will benefit from Ryerson's continued operations and market presence.
• Creditors will monitor the company's debt levels and financial performance.

Next Steps

• Ryerson will host a conference call on May 1, 2025, to discuss the first quarter 2025 financial results.
• The company will continue to focus on optimizing its service center network and improving operational efficiency.
• Ryerson will monitor macroeconomic factors and adjust its strategy accordingly.
• The company will continue to evaluate M&A opportunities.

Key Dates

Keywords

Ryerson, industrial metals, financial results, revenue, net loss, EBITDA, dividend, market share, liquidity, debt