Good day, and welcome to the Ryerson Holding Corporation's second quarter 2025 conference call. Today's conference is being recorded. There is a question and answer session later. If you would like to ask a question, please press star 1 on your telephone keypad at any time. Again, that is star 1 to ask a question. At this time, I'd like to turn the conference over to Justine Carlson. Please go ahead.

Thank you for joining Ryerson Holding Corporation's second quarter 2025 earnings call. On our call, we have Eddie Lehner, Ryerson's President and Chief Executive Officer, Tim Clawson, our Chief Financial Officer, and Molly Cannon, our Chief Accounting Officer and Corporate Controller. Brent McFarland, our Senior Vice President of Supply Chain, and Jorge Beristain, our Vice President of Finance, will be joining us for Q&A. A recording of this call will be posted on our Investor Relations website at IR.ROB. Please read the forward-looking statement disclosures included in our earnings release issued yesterday, and note that it applies to all statements made during this call. In addition, our remarks today refer to several non-GAAP measures. Reconciliations of these adjusted numbers are also included in our earnings release. I will now turn the call over to Eddie.

Thank you, Justine. Good morning and thank you all for joining us to discuss our second quarter 2025. As we continue winding through protracted industry downturn with PMI Prince shooting 30 of the past 32 months and with carbon and stainless commodity bellwethers continuing to grind lower through the second quarter, Self-help is the name of the game as we continue building operating leverage for the next trade policy resets, along with relatively high stagflation fears, global over short-term and longer-term secular demand trend through this unique comparison continues operationalizing systems, and acquisition investments more than $650 million in capital since 2020. Modernize our network. As these investments become fully operational and the network stabilizes around greater consistency at scale pertaining to lead times, service levels, on-time delivery, we expect to continue to see improvements in our performance and the experience. We complete projects and improve our network, whereby investment-related disruptions give way to network and stability. During the second quarter, we saw customer activity turning increasingly cautious, particularly within our OEM contract book of business, hold the plow with market share gains realized even amidst ongoing bellwether price markets.

And good morning, everyone.

American industry volumes focuses on operationalizing final components of those investments while returning to a more normalized level of investment. In the second quarter, we generated $24 million in cash from operations as our receivables normalized, turning to shareholder returns. Ryerson distributed $6 million in the quarterly dividend. If we look forward to the third quarter and into the rest of 2025, we will continue to prudently evaluate our overall capital allocation and tightly manage our external call over to molly cannon good morning everyone in the second quarter of 2025 ryerson reported net sales of 1.17 billion an increase of three

percent compared to the first quarter with average selling prices up 2.8 percent and tons shipped up fractionally average selling price growth quarter over quarter was driven by increases in aluminum and carbon products, which were up 6.8% and 2.1%, respectively. Gross margin during the quarter contracted by 10 basis points versus the prior quarter to 17.9%, influenced by a higher-than-anticipated LIFO expense of $13 million, as rising commodity prices in the period translated to material costs increasing faster than average selling prices given the lag nature of pricing recognized in our contractual business. Excluding LIFO, gross margin expanded sequentially by 40 basis points to 19%. On the expense side, second quarter warehousing, delivery, selling, general, and administrative expenses increased to $204 million or by $1.5 million compared to the first quarter as a result of one additional business day expenses decreased sequentially both on a percentage of revenue and on a per day basis illustrating our continued commitment to expense management second quarter net income attributable to ryerson was 1.9 million or six cents per diluted share compared to net loss attributable to ryerson of 5.6 million and diluted loss per share of 18 cents in the prior quarter. In summary, our adjusted EBITDA, excluding LIFO, achievement of $45 million in the second quarter of 2025 compared favorably to generation of $32.8 million in the prior quarter. And with this, I'll turn the call back to Eddie.

Thank you, Molly. I would like to conclude our prepared comments by thanking the Ryerson team for working safely and productively during the second quarter as we remain focused on what we can control, integrating our new advanced capabilities into our interconnected network to provide our customers with a higher level customer experience while also managing the business well through the current business environment. As challenging as current and near-term conditions may be, we are proving our resiliency and expanding our earnings quality through the cycle as we look forward to a revitalized U.S. manufacturing economy, glimmers of which are already materializing negotiated trade deals and emergent reshoring data points. As I mentioned during a prior from the movie The Crow, it can't rain all the time. We're just looking forward to a period with that. And after the Q&A, we would like to share a video on the upgrade. For those of you dialed in, the video is also available on our Investors Relation website operator.

Please open the line for questions.

Thank you.

If you are dialed in via the telephone and would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. If you are in the event via the web interface and would like to ask a question, simply type your question into the ask a question box and click send. Our first question is going to come from Samuel McKinney, KeyBank Capital Markets. Please go ahead.

Hi, good morning, Eddie and team.

Hey, Sam, how are you doing?

Good. The presentation calls out North American market share growth in carbon longs and plate in the release note as another quarter of increasing transactional business. I just wanted to give you the opportunity to talk more about some of the biggest wins for this demand as more of your CapEx projects have become full contributors.

Yes, Sam. I mean, at the risk of, you know, going deep under the hood of the car, you know, as you bring up these investments and you find out that what happens is you disconnect things within your ERP environment, for example. So you take out all these work centers, you build the equipment, cash goes out, and then you install the equipment, and you get through a commission and a startup curve, all things that I know you're aware of. It's the piffy things when you go back to set up things like material masters, and you set up building material routing, and then you set up and service center, and then it's delivery, and you have a better service center.

Okay, thank you. And then next one for me, the second quarter EPS enjoyed a tax benefit of over a quarter a share. Just talk about the mechanics there and if we should expect a similar tailwind during the third quarter in which you expect EPS to be relatively flat sequentially.

Yeah, I'm going to kick that over to Jim Kloss and my partner over here.

Yeah, good morning, Sam. And really what we saw in the second quarter was with, you know, obviously in line, but we also did get some in the quarter. You know, occasionally there's what I would expect, you know.

Okay. Thank you for taking my questions.

And our next question is going to come from Katja Janik from BMO Capital Markets.

Hi. Thank you for taking my question. Maybe going back to the transactional sales, Can you update us what the split currently is between transactional and contractual sales?

On a shift-in-book basis.

And how are you thinking about the split moving forward?

The way we think about the split is continue to perform well enough. It's really how you compete day in and day out, and it really goes back. And then when customers...

Jim mentioned that data centers is one of the areas where there's strong demand for steel. How much of your exposure goes to that market?

It's a sub-vertical, Katya.

It's really hard to get an exact fix on that. We know that it's a secular build-out, and we're certainly getting our share and booking to that opportunity. But it is in a more granular.

And one more, if I may. when looking at your CapEx, you maintain the 50 million for 25. But when I look at the first half of the year, it's trending below that. Is that just the timing or is there opportunity for CapEx to become below that 50 million?

It's really a function of timing. I mean, and time the payments to when you hit certain miles. We're going to stay with you.

Thank you.

And once again, if you'd like to ask a question, press star one on your telephone keypad or type your question into the ask a question box. Our next question is going to come from Alan Weber from Robody and Company.

Oh, good morning. How are you?

How are you?

Good. So, Eddie, can you talk about, I don't know if it's possible, the investments that you've made over the last few years. How do you think about the benefits of what you ultimately expected? How far along are you really? Or what ending are you, however you want to phrase it?

Yeah, I mean, Alan, it's hard to run away from market conditions.

I mean, if you have, I would say if you have more duration and pricing and demand.

But Shelbyville right now, sounds like what you're saying is, I understand market conditions, but if market conditions were flattish, it still sounds as though you're in the early stages of seeing the improvements there, and they'll come, even if it takes a little longer than originally expected.

Yeah, no, I think that's accurate.

I mean, it varies by project, but here's some encouraging news, right? I mean, contract tons are down 50,000 tons year over year. Transactional tons are up 46,000 tons year over year. You typically don't see an inverse relationship between those different segments of our business when we look at order type, and I believe that the transactional pickups are really a result of us being able to normalize things in our For example, we put a new cut-to-length line, fully operational, into that.

Can you talk about second half cash flow, what you're expecting, and where you hope to get the leverage ratio, say, by the end of the year? okay great thank you and there are no further questions in the queue at this time i'll now

pass it back over to eddie for closing remarks we appreciate your continued support of an interest in ryerson please stay safe and be well i look forward to being with all of you in october and please stay on the line concludes today's call thank you for your participation you may now

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