ryi-8k_20210804.htm
false
0001481582
0001481582
2021-08-04
2021-08-04
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 2021
Ryerson Holding Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
001-34735
(Commission File Number)
26-1251524
(I.R.S. Employer Identification No.)
227 W. Monroe St., 27th Floor, Chicago, IL 60606
(Address of principal executive offices and zip code)
(312) 292-5000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading symbol(s) |
Name of each exchange on which registered |
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Common Stock, $0.01 par value, 100,000,000 shares authorized |
RYI |
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
The information contained within Item 2.02 of this Form 8-K and Exhibit 99.1 and Exhibit 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
On August 4, 2021, Ryerson Holding Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2021. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The Company also provided a presentation as a supplement to its press release. A copy of the presentation is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
On August 4, 2021, the Company issued a press release announcing that the Board of Directors of the Company (the “Board”) approved a quarterly dividend.
The quarterly dividend will be paid on September 16, 2021 in the amount of $0.08 per share of common stock to stockholders of record on August 16, 2021. Future quarterly dividends, if any, will be subject to Board approval.
Additionally, the press release announced that the Company authorized a stock repurchase program that permits the purchase of up to $50 million of the Company’s outstanding shares of common stock. The new authorization is currently effective and will be in effect through August 4, 2023. Under the stock repurchase program, management has discretion in determining the conditions under which shares may be purchased from time to time
The Company sponsors the Ryerson Pension Plan. In addition, the Company's wholly-owned subsidiary, Central Steel and Wire Company, LLC, sponsors the Central Steel & Wire Company Retirement Plan. No members of the Company's controlled group are expected to be subject to any share repurchase plan or program.
The timing, price, and volume of repurchases will be based on market conditions, relevant securities laws, and other factors. Stock repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions, a share repurchase trading plan, or by other means as determined by the Company’s management and in accordance with applicable securities laws and regulations. The Company’s stock repurchase program may be discontinued or amended at any time for any reason.
A copy of this press release is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
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Item 9.01. |
Financial Statements and Exhibits. |
d) Exhibits
The following exhibits are being furnished or filed, as applicable, with this Current Report on Form 8-K:
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 4, 2021
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RYERSON HOLDING CORPORATION |
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By: |
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/s/ James J. Claussen |
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Name: |
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James J. Claussen |
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Title: |
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Executive Vice President and Chief Financial Officer |
Exhibit 99.1
Ryerson Reports Second Quarter 2021 Results
Record results, significant leverage reductions ongoing, legacy liability de-risking continuing,
dividend and share repurchase plans established
CHICAGO – August 4, 2021 – 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, 2021.
Q2 2021 Highlights:
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• |
Generated second quarter revenues of $1.4 billion |
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• |
Generated earnings per diluted share of $2.91 |
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Achieved record Adjusted EBITDA, excluding LIFO of $197 million |
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Reduced net debt to $563 million and achieved leverage ratio of 1.5x, within long-term target range |
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Net cash conversion cycle of 55 days |
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Warehousing, delivery, general, & administrative expense of 12.6% of sales |
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Ended the second quarter with liquidity of $890 million |
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Announced a quarterly cash dividend of $0.08 per share |
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Announced the authorization of a $50 million, two-year share repurchase program |
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$ in millions, except tons (in thousands), average selling prices and earnings per share |
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Financial Highlights: |
Q2 2021 |
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Q2 2020 |
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Q1 2021 |
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YoY |
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QoQ |
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1H 2021 |
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1H 2020 |
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YoY |
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Tons Shipped |
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559 |
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462 |
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543 |
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21.0 |
% |
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2.9 |
% |
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1,102 |
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1,028 |
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7.2 |
% |
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Revenues |
$ |
1,419.0 |
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$ |
771.8 |
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$ |
1,147.3 |
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83.9 |
% |
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23.7 |
% |
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$ |
2,566.3 |
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$ |
1,782.1 |
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44.0 |
% |
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Average selling prices |
$ |
2,538 |
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$ |
1,671 |
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$ |
2,113 |
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51.9 |
% |
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20.1 |
% |
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$ |
2,329 |
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$ |
1,734 |
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34.3 |
% |
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Gross Margin |
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18.1 |
% |
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15.0 |
% |
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17.2 |
% |
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310 bps |
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90 bps |
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17.7 |
% |
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17.5 |
% |
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20 bps |
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Gross Margin, excl. LIFO |
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25.5 |
% |
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16.8 |
% |
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24.6 |
% |
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870 bps |
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90 bps |
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25.1 |
% |
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17.1 |
% |
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800 bps |
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Warehousing, delivery, general, & administrative expenses |
$ |
178.3 |
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$ |
124.1 |
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$ |
171.8 |
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43.7 |
% |
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3.8 |
% |
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$ |
350.1 |
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$ |
279.8 |
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25.1 |
% |
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As a percentage of revenue |
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12.6 |
% |
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16.1 |
% |
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15.0 |
% |
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(350 bps) |
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(240bps) |
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13.6 |
% |
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15.7 |
% |
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(210 bps) |
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Net income (loss) |
$ |
112.9 |
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$ |
(25.6 |
) |
$ |
25.3 |
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$ |
138.5 |
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$ |
87.6 |
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$ |
138.2 |
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$ |
(9.2 |
) |
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$ |
147.4 |
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Diluted earnings (loss) per share |
$ |
2.91 |
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$ |
(0.67 |
) |
$ |
0.66 |
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$ |
3.58 |
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$ |
2.25 |
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$ |
3.57 |
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$ |
(0.24 |
) |
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$ |
3.81 |
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Adjusted net income (loss) |
$ |
47.9 |
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$ |
(24.2 |
) |
$ |
10.2 |
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$ |
72.1 |
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$ |
37.7 |
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$ |
58.1 |
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$ |
(8.4 |
) |
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$ |
66.5 |
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Adjusted diluted earnings (loss) per share |
$ |
1.24 |
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$ |
(0.64 |
) |
$ |
0.26 |
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$ |
1.88 |
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$ |
0.98 |
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$ |
1.50 |
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$ |
(0.22 |
) |
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$ |
1.72 |
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Adj. EBITDA, excl. LIFO |
$ |
197.4 |
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$ |
20.6 |
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$ |
123.5 |
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$ |
176.8 |
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$ |
73.9 |
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$ |
320.9 |
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$ |
55.0 |
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$ |
265.9 |
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As a percentage of revenue |
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13.9 |
% |
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2.7 |
% |
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10.8 |
% |
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1120 bps |
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310 bps |
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12.5 |
% |
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3.1 |
% |
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940 bps |
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Balance Sheet and Cash Flow Highlights: |
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Net debt |
$ |
563 |
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$ |
793 |
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$ |
698 |
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(29.0 |
%) |
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(19.4 |
%) |
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$ |
563 |
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$ |
793 |
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(29.0 |
%) |
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Net debt / LTM Adj. EBITDA, excl. LIFO |
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1.5 |
x |
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6.0 |
x |
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3.3 |
x |
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(4.5 |
x) |
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(1.8 |
x) |
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1.5 |
x |
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6.0 |
x |
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(4.5 |
x) |
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Cash Conversion Cycle |
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54.9 |
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90.8 |
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52.9 |
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(35.9 |
) |
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2.0 |
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54.8 |
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82.3 |
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(27.5 |
) |
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Net cash provided by (used in) operating activities |
$ |
(3.8 |
) |
$ |
103.3 |
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$ |
(47.3 |
) |
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$ |
(107.1 |
) |
$ |
43.5 |
|
|
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|
$ |
(51.1 |
) |
$ |
176.1 |
|
|
$ |
(227.2 |
) |
A reconciliation of non-GAAP financial measures to the comparable GAAP measure is included below in this news release.
Management Commentary
Eddie Lehner, Ryerson’s President and Chief Executive Officer, said, “Halfway through our 179th year in business, our future has never looked brighter because of the committed resolve and adaptiveness of each of my Ryerson teammates working together to provide great customer experiences no matter the circumstances. Given the number and magnitude of the challenges
encountered over the past eighteen months, we are all witnesses and participants in bringing out the best in one another. Looking back over the quarter and ahead, more signs are emerging that support a sustained manufacturing expansion featuring recyclable industrial metals that are at the epicenter of current and future societal needs. With supply still unable to meet current and anticipated demand, manufacturing order backlogs keep rolling over and extending, lending further support to favorable pricing dynamics. As Ryerson’s overall performance and operating trajectory create step-change improvements to the balance sheet, we are pleased to announce noteworthy additions to our capital allocation plan with the establishment of an eight cent per share quarterly dividend and a $50 million share repurchase plan. This announcement affirms Ryerson’s progress since our IPO and our vision for an intelligent network of interconnected industrial metals service centers providing great customer experiences at speed, scale and value-add.”
End-Market Commentary
Ryerson noted sequential shipment per day improvement in our industrial equipment, food and agriculture and commercial ground transportation end-market sectors during the second quarter of 2021 and we continue to receive positive demand forecasts from these customers, despite persisting supply challenges. Consumer durable, metal fabrication and machine shop and HVAC sector end-markets saw declines relative to the first quarter of 2021 in North America on supply side constraints across labor, materials and transportation inputs.
The notable price increases in carbon steel products that began in the second half of 2020 have continued to climb as lead times remain extended. Mill capacity has been above 80% for the past several months and futures prices remain elevated through year-end. Likewise, LME aluminum gained 11% in the second quarter of 2021 and nickel prices appreciated 9%. At this point, we anticipate that prices across all three of our primary commodities will remain elevated at or near twelve-month highs through the third quarter and that price normalization will be gradual given supportive demand conditions.
Second Quarter Results
Ryerson achieved revenues of $1.4 billion in the second quarter of 2021, an increase of 23.7% compared to $1.1 billion for the first quarter of 2021, with average selling prices 20.1% higher and tons shipped 2.9% higher. Gross margin expanded sequentially to 18.1% in the second quarter of 2021 compared to 17.2% in the first quarter of 2021. Included in the second quarter of 2021 cost of goods sold was LIFO expense of $105 million, compared to LIFO expense of $84 million in first quarter, excluding which, gross margin expanded to 25.5% from 24.6%, respectively. Ryerson achieved expense leverage in the second quarter of 2021 as warehousing, delivery, selling, general and administrative expenses as a percent of sales was 12.6% compared to 15.0% in the first quarter of 2021.
Net income attributable to Ryerson Holding Corporation for the second quarter of 2021 was $113 million, or $2.91 per diluted share, compared to net income attributable to Ryerson Holding Corporation of $25 million, or $0.66 per diluted share in the previous quarter. Included in the second quarter 2021 net income is an $87 million gain on the sale of assets related to sale-leaseback transactions. Excluding this and the associated income taxes, adjusted net income was $48 million, or $1.24 per diluted share and compares to $10 million, or $0.26, of adjusted net income and diluted earnings per share for the previous quarter. Record Adjusted EBITDA, excluding LIFO of $197 million was achieved in the second quarter of 2021, which compares to $124 million in the first quarter of 2021 and $21 million in the year-ago period.
Liquidity & Debt Management
Ryerson ended the second quarter with 63 inventory days of supply and maintained receivables and payables cycles in-line with the first quarter of 2021. This contributed to a cash conversion cycle of 55 days for the period, compared to 53 days for the first quarter of 2021 and 91 days for the year-ago period.
The company generated free cash flow of $126 million and average free cash flow yield of 23% in the second quarter. Driven by asset backed credit facility repayments and proceeds from asset sales, net debt was reduced by $135 million compared to the first quarter of 2021. This achievement, combined with Ryerson’s increasing trailing twelve month Adjusted EBITDA, excluding LIFO produced a leverage ratio of 1.5x, well within the Company’s long-term target of 1-2x.
In July 2021, Ryerson redeemed $100 million of its outstanding 8.5% Senior Secured Notes due 2028 (the “Notes”) utilizing proceeds from property sale-leasebacks at a price of 104% and another $50 million at a price of 103%. After these partial redemptions, $300 million aggregate principal amount of the Notes remain outstanding, compared to the $500 million in
original principal issued in July of 2020. This $200 million reduction in the Notes has reduced our annual interest expense by $17 million.
Ryerson’s global liquidity rose to $890 million as of June 30, 2021 from $583 million as of March 31, 2021 driven by proceeds from the sale-leaseback transaction, strong earnings generation and higher working capital asset values.
Stockholder Return Activity
On August 4, 2021, the Board of Directors (the “Board”) declared a quarterly cash dividend of $0.08 per share, or an anticipated $0.32 on an annualized basis, on the company’s shares of common stock. Ryerson’s first dividend payment will be made on September 16, 2021 to stockholders of record as of the close of business on August 16, 2021. In addition, on August 4, 2021, the Board also approved a share repurchase program authorizing the Company to purchase up to an aggregate of $50 million of the Company’s common stock over the next two-year period.
Jim Claussen, Executive Vice President & Chief Financial Officer said, “Our second quarter results reflect the success of our financial transformation as we continued to effectively manage working capital, realized expense leverage and achieved a net debt leverage ratio within our long-term target range. With Ryerson’s substantially lower fixed cash commitments and its proven ability to effectively manage working capital, we are pleased to announce a return of capital to shareholders in the form of a dividend while also continuing to invest in the business to drive long-term growth.”
Outlook Commentary
Ryerson is optimistic about the third quarter industry environment. Pricing across all three of Ryerson’s primary product lines continues to increase while the Company expects volumes to follow normal seasonality patterns. Therefore, Ryerson anticipates third quarter 2021 revenues in the range of $1.5 billion to $1.6 billion with sequential average selling prices 10 to 12% higher and shipments flat to down 3% compared to the second quarter of 2021. LIFO expense in the third quarter is expected to be in the range of $88 to $92 million provided average inventory costs continue to rise. Therefore, Adjusted EBITDA, excluding LIFO is expected to be in the range of $208 to $212 million and earnings per diluted share is expected to be in the range of $1.63 to $1.73.
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Second Quarter 2021 Major Product Metrics |
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Tons Shipped (thousands) |
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Average Selling Prices |
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Q2 2021 |
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Q2 2020 |
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Q1 2021 |
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Year-over-year |
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Quarter-over-quarter |
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Year-over-year |
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Quarter-over-quarter |
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Carbon Steel |
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428 |
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|
361 |
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|
414 |
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18.6 |
% |
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3.4 |
% |
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60.7 |
% |
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26.2 |
% |
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Aluminum |
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55 |
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|
40 |
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53 |
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37.5 |
% |
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3.8 |
% |
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23.5 |
% |
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8.0 |
% |
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Stainless Steel |
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73 |
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59 |
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74 |
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23.7 |
% |
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(1.4 |
%) |
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49.3 |
% |
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22.2 |
% |
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Net Sales (millions) |
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Q2 2021 |
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Q2 2020 |
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Q1 2021 |
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Year-over-year |
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Quarter-over-quarter |
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Carbon Steel |
$ |
766 |
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$ |
402 |
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$ |
587 |
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90.5 |
% |
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30.5 |
% |
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Aluminum |
$ |
270 |
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$ |
159 |
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$ |
241 |
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69.8 |
% |
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12.0 |
% |
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Stainless Steel |
$ |
364 |
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$ |
197 |
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$ |
302 |
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84.8 |
% |
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20.5 |
% |
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First Half 2021 Major Product Metrics |
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Tons Shipped (thousands) |
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Average Selling Prices |
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1H 2021 |
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1H 2020 |
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Year-over-year |
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Year-over-year |
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Carbon Steel |
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842 |
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795 |
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5.9 |
% |
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39.9 |
% |
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Aluminum |
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108 |
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92 |
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17.4 |
% |
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14.9 |
% |
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Stainless Steel |
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147 |
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136 |
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8.1 |
% |
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33.9 |
% |
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Net Sales (millions) |
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1H 2021 |
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1H 2020 |
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Year-over-year |
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Carbon Steel |
$ |
1,353 |
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$ |
913 |
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48.2 |
% |
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Aluminum |
$ |
511 |
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$ |
379 |
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34.8 |
% |
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Stainless Steel |
$ |
666 |
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$ |
460 |
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44.8 |
% |
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Earnings Call Information
Ryerson will host a conference call to discuss its second quarter results Thursday, August 5, 2021 at 10 a.m. Eastern Time. Participants may access the conference call by dialing 866-248-8441 (U.S. & Canada) / 929-477-0591 (International) and using conference ID 3038781. The live online broadcast will be available on the Company’s investor relations website, ir.ryerson.com. A replay will be available at the same website for 90 days.
About Ryerson
Ryerson is a leading value-added processor and distributor of industrial metals, with operations in the United States, Canada, Mexico, and China. Founded in 1842, Ryerson has around 3,900 employees in approximately 100 locations. Visit Ryerson at www.ryerson.com.
Safe Harbor Provision
Certain statements made in this presentation and other written or oral statements made by or on behalf of the Company constitute "forward-looking statements" within the meaning of the federal securities laws, including statements regarding our future performance, as well as management's expectations, beliefs, intentions, plans, estimates, objectives, or projections relating to the future. Such statements can be identified by the use of forward-looking terminology such as “objectives,” “goals,” “preliminary,” “range,” "believes," "expects," "may," "estimates," "will," "should," "plans," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. The Company cautions that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. Among the factors that significantly impact our business are: the cyclicality of our business; the highly competitive, volatile, and fragmented metals industry in which we operate; fluctuating metal prices; our substantial indebtedness and the covenants in instruments governing such indebtedness; the integration of acquired operations; regulatory and other operational risks associated with our operations located inside and outside of the United States; impacts and implications of adverse health events, including the COVID-19 pandemic; work stoppages; obligations under certain employee retirement benefit plans; the ownership of a majority of our equity securities by a single investor group; currency fluctuations; and consolidation in the metals industry. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth above and those set forth under "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2020, and in our other filings with the Securities and Exchange Commission. Moreover, we caution against placing undue reliance on these statements, which speak only as of the date they were made. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events or circumstances, new information or otherwise.
Media and Investor Contact:
Justine Carlson
312.292.5130
[email protected]
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
|
|
Selected Income and Cash Flow Data - Unaudited |
|
|
(Dollars and Shares in Millions, except Per Share and Per Ton Data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
2020 |
|
|
First Six Months Ended |
|
|
|
|
Second |
|
|
First |
|
|
Second |
|
|
June 30, |
|
|
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES |
|
$ |
1,419.0 |
|
|
$ |
1,147.3 |
|
|
$ |
771.8 |
|
|
$ |
2,566.3 |
|
|
$ |
1,782.1 |
|
|
Cost of materials sold |
|
|
1,162.0 |
|
|
|
949.4 |
|
|
|
656.3 |
|
|
|
2,111.4 |
|
|
|
1,470.8 |
|
|
Gross profit |
|
|
257.0 |
|
|
|
197.9 |
|
|
|
115.5 |
|
|
|
454.9 |
|
|
|
311.3 |
|
|
Warehousing, delivery, selling, general, and administrative |
|
|
178.3 |
|
|
|
171.8 |
|
|
|
124.1 |
|
|
|
350.1 |
|
|
|
279.8 |
|
|
Gain on sale of assets (1) |
|
|
(87.4 |
) |
|
|
(20.3 |
) |
|
|
— |
|
|
|
(107.7 |
) |
|
|
— |
|
|
Restructuring and other charges |
|
|
— |
|
|
|
— |
|
|
|
2.0 |
|
|
|
— |
|
|
|
2.0 |
|
|
OPERATING PROFIT (LOSS) |
|
|
166.1 |
|
|
|
46.4 |
|
|
|
(10.6 |
) |
|
|
212.5 |
|
|
|
29.5 |
|
|
Other income and (expense), net |
|
|
(0.7 |
) |
|
|
0.3 |
|
|
|
(0.1 |
) |
|
|
(0.4 |
) |
|
|
0.8 |
|
|
Interest and other expense on debt |
|
|
(13.6 |
) |
|
|
(13.5 |
) |
|
|
(19.3 |
) |
|
|
(27.1 |
) |
|
|
(41.0 |
) |
|
INCOME (LOSS) BEFORE INCOME TAXES |
|
|
151.8 |
|
|
|
33.2 |
|
|
|
(30.0 |
) |
|
|
185.0 |
|
|
|
(10.7 |
) |
|
Provision (benefit) for income taxes |
|
|
38.5 |
|
|
|
7.6 |
|
|
|
(4.5 |
) |
|
|
46.1 |
|
|
|
(1.6 |
) |
|
NET INCOME (LOSS) |
|
|
113.3 |
|
|
|
25.6 |
|
|
|
(25.5 |
) |
|
|
138.9 |
|
|
|
(9.1 |
) |
|
Less: Net income attributable to noncontrolling interest |
|
|
0.4 |
|
|
|
0.3 |
|
|
|
0.1 |
|
|
|
0.7 |
|
|
|
0.1 |
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO RYERSON HOLDING CORPORATION |
|
$ |
112.9 |
|
|
$ |
25.3 |
|
|
$ |
(25.6 |
) |
|
$ |
138.2 |
|
|
$ |
(9.2 |
) |
|
EARNINGS (LOSS) PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.94 |
|
|
$ |
0.66 |
|
|
$ |
(0.67 |
) |
|
$ |
3.61 |
|
|
$ |
(0.24 |
) |
|
Diluted |
|
$ |
2.91 |
|
|
$ |
0.66 |
|
|
$ |
(0.67 |
) |
|
$ |
3.57 |
|
|
$ |
(0.24 |
) |
|
Shares outstanding - basic |
|
|
38.5 |
|
|
|
38.1 |
|
|
|
38.1 |
|
|
|
38.3 |
|
|
|
37.9 |
|
|
Shares outstanding - diluted |
|
|
38.7 |
|
|
|
38.6 |
|
|
|
38.1 |
|
|
|
38.7 |
|
|
|
37.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data : |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tons shipped (000) |
|
|
559 |
|
|
|
543 |
|
|
|
462 |
|
|
|
1,102 |
|
|
|
1,028 |
|
|
Shipping days |
|
|
64 |
|
|
|
63 |
|
|
|
64 |
|
|
|
127 |
|
|
|
128 |
|
|
Average selling price/ton |
|
$ |
2,538 |
|
|
$ |
2,113 |
|
|
$ |
1,671 |
|
|
$ |
2,329 |
|
|
$ |
1,734 |
|
|
Gross profit/ton |
|
|
460 |
|
|
|
364 |
|
|
|
250 |
|
|
|
413 |
|
|
|
303 |
|
|
Operating profit (loss)/ton |
|
|
297 |
|
|
|
85 |
|
|
|
(23 |
) |
|
|
193 |
|
|
|
29 |
|
|
LIFO expense (income) per ton |
|
|
187 |
|
|
|
154 |
|
|
|
31 |
|
|
|
171 |
|
|
|
(6 |
) |
|
LIFO expense (income) |
|
|
104.8 |
|
|
|
83.8 |
|
|
|
14.1 |
|
|
|
188.6 |
|
|
|
(6.1 |
) |
|
Depreciation and amortization expense |
|
|
13.1 |
|
|
|
13.6 |
|
|
|
13.6 |
|
|
|
26.7 |
|
|
|
26.9 |
|
|
Cash flow provided by (used in) operating activities |
|
|
(3.8 |
) |
|
|
(47.3 |
) |
|
|
103.3 |
|
|
|
(51.1 |
) |
|
|
176.1 |
|
|
Capital expenditures |
|
|
(6.8 |
) |
|
|
(6.5 |
) |
|
|
(4.9 |
) |
|
|
(13.3 |
) |
|
|
(11.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In the second quarter of 2021, we recorded a $87.4 million gain on the sale and leaseback of a group of properties located in Delaware, Florida, Illinois, Kentucky, Minnesota, Missouri, Oklahoma, Pennsylvania, Tennessee, Texas, and Virginia with net proceeds of approximately $136.9 million. In the first quarter of 2021, we recorded a $20.3 million gain on the sale and leaseback of a property in Renton, Washington with net proceeds of approximately $26.3 million. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Schedule 1 for Condensed Consolidated Balance Sheets |
|
|
See Schedule 2 for EBITDA and Adjusted EBITDA reconciliation |
|
|
See Schedule 3 for Adjusted EPS reconciliation |
|
|
See Schedule 4 for Free Cash Flow reconciliation |
|
|
See Schedule 5 for Third Quarter 2021 Guidance reconciliation |
|
|
Schedule 1
|
|
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
|
|
Condensed Consolidated Balance Sheets |
|
|
(In millions, except shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
|
2021 |
|
|
2020 |
|
|
Assets |
|
(unaudited) |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
38.1 |
|
|
$ |
61.4 |
|
|
Restricted cash |
|
|
1.1 |
|
|
|
1.1 |
|
|
Receivables, less provisions of $2.5 at June 30, 2021 and $1.7 at December 31, 2020 |
|
|
655.0 |
|
|
|
378.9 |
|
|
Inventories |
|
|
714.6 |
|
|
|
604.5 |
|
|
Prepaid expenses and other current assets |
|
|
95.8 |
|
|
|
57.5 |
|
|
Total current assets |
|
|
1,504.6 |
|
|
|
1,103.4 |
|
|
Property, plant, and equipment, at cost |
|
|
748.2 |
|
|
|
822.9 |
|
|
Less: accumulated depreciation |
|
|
390.3 |
|
|
|
401.1 |
|
|
Property, plant, and equipment, net |
|
|
357.9 |
|
|
|
421.8 |
|
|
Operating lease assets |
|
|
202.7 |
|
|
|
108.3 |
|
|
Other intangible assets |
|
|
40.6 |
|
|
|
43.2 |
|
|
Goodwill |
|
|
121.2 |
|
|
|
120.3 |
|
|
Deferred charges and other assets |
|
|
6.2 |
|
|
|
5.1 |
|
|
Total assets |
|
$ |
2,233.2 |
|
|
$ |
1,802.1 |
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
587.1 |
|
|
$ |
365.1 |
|
|
Salaries, wages, and commissions |
|
|
73.6 |
|
|
|
43.1 |
|
|
Other accrued liabilities |
|
|
155.6 |
|
|
|
78.3 |
|
|
Short-term debt |
|
|
26.8 |
|
|
|
13.8 |
|
|
Current portion of operating lease liabilities |
|
|
24.6 |
|
|
|
20.7 |
|
|
Current portion of deferred employee benefits |
|
|
6.7 |
|
|
|
6.6 |
|
|
Total current liabilities |
|
|
874.4 |
|
|
|
527.6 |
|
|
Long-term debt |
|
|
574.1 |
|
|
|
726.2 |
|
|
Deferred employee benefits |
|
|
206.3 |
|
|
|
231.6 |
|
|
Noncurrent operating lease liabilities |
|
|
172.5 |
|
|
|
93.0 |
|
|
Deferred income taxes |
|
|
88.6 |
|
|
|
58.2 |
|
|
Other noncurrent liabilities |
|
|
23.8 |
|
|
|
20.4 |
|
|
Total liabilities |
|
|
1,939.7 |
|
|
|
1,657.0 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
Ryerson Holding Corporation stockholders' equity: |
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value; 7,000,000 shares authorized and no shares issued at June 30, 2021 and December 31, 2020 |
|
|
— |
|
|
|
— |
|
|
Common stock, $0.01 par value; 100,000,000 shares authorized; 38,687,094 and 38,329,897 shares issued at June 30, 2021 and December 31, 2020, respectively |
|
|
0.4 |
|
|
|
0.4 |
|
|
Capital in excess of par value |
|
|
386.2 |
|
|
|
383.1 |
|
|
Retained earnings |
|
|
172.0 |
|
|
|
33.8 |
|
|
Treasury stock, at cost - Common stock of 212,500 shares at June 30, 2021 and December 31, 2020 |
|
|
(6.6 |
) |
|
|
(6.6 |
) |
|
Accumulated other comprehensive loss |
|
|
(265.5 |
) |
|
|
(271.9 |
) |
|
Total Ryerson Holding Corporation Stockholders' Equity |
|
|
286.5 |
|
|
|
138.8 |
|
|
Noncontrolling interest |
|
|
7.0 |
|
|
|
6.3 |
|
|
Total Equity |
|
|
293.5 |
|
|
|
145.1 |
|
|
Total Liabilities and Stockholders' Equity |
|
$ |
2,233.2 |
|
|
$ |
1,802.1 |
|
|
Schedule 2 |
|
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
|
|
Reconciliations of Net Income Attributable to Ryerson Holding Corporation to EBITDA and Gross profit to Gross profit excluding LIFO |
|
|
(Dollars in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
2020 |
|
|
First Six Months Ended |
|
|
|
|
Second |
|
|
First |
|
|
Second |
|
|
June 30, |
|
|
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Ryerson Holding Corporation |
|
$ |
112.9 |
|
|
$ |
25.3 |
|
|
$ |
(25.6 |
) |
|
$ |
138.2 |
|
|
$ |
(9.2 |
) |
|
Interest and other expense on debt |
|
|
13.6 |
|
|
|
13.5 |
|
|
|
19.3 |
|
|
|
27.1 |
|
|
|
41.0 |
|
|
Provision (benefit) for income taxes |
|
|
38.5 |
|
|
|
7.6 |
|
|
|
(4.5 |
) |
|
|
46.1 |
|
|
|
(1.6 |
) |
|
Depreciation and amortization expense |
|
|
13.1 |
|
|
|
13.6 |
|
|
|
13.6 |
|
|
|
26.7 |
|
|
|
26.9 |
|
|
EBITDA |
|
$ |
178.1 |
|
|
$ |
60.0 |
|
|
$ |
2.8 |
|
|
$ |
238.1 |
|
|
$ |
57.1 |
|
|
Gain on sale of assets |
|
|
(87.4 |
) |
|
|
(20.3 |
) |
|
|
— |
|
|
|
(107.7 |
) |
|
|
— |
|
|
Reorganization |
|
|
1.0 |
|
|
|
0.3 |
|
|
|
3.8 |
|
|
|
1.3 |
|
|
|
4.6 |
|
|
Foreign currency transaction (gains) losses |
|
|
(0.2 |
) |
|
|
— |
|
|
|
0.1 |
|
|
|
(0.2 |
) |
|
|
— |
|
|
Gain on retirement of debt |
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.9 |
) |
|
Purchase consideration and other transaction costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.4 |
|
|
Other adjustments |
|
|
1.1 |
|
|
|
(0.3 |
) |
|
|
(0.1 |
) |
|
|
0.8 |
|
|
|
(0.1 |
) |
|
Adjusted EBITDA |
|
$ |
92.6 |
|
|
$ |
39.7 |
|
|
$ |
6.5 |
|
|
$ |
132.3 |
|
|
$ |
61.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
92.6 |
|
|
$ |
39.7 |
|
|
$ |
6.5 |
|
|
$ |
132.3 |
|
|
$ |
61.1 |
|
|
LIFO expense (income) |
|
|
104.8 |
|
|
|
83.8 |
|
|
|
14.1 |
|
|
|
188.6 |
|
|
|
(6.1 |
) |
|
Adjusted EBITDA, excluding LIFO expense (income) |
|
$ |
197.4 |
|
|
$ |
123.5 |
|
|
$ |
20.6 |
|
|
$ |
320.9 |
|
|
$ |
55.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
1,419.0 |
|
|
$ |
1,147.3 |
|
|
$ |
771.8 |
|
|
$ |
2,566.3 |
|
|
$ |
1,782.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA, excluding LIFO expense (income), as a percentage of net sales |
|
|
13.9 |
% |
|
|
10.8 |
% |
|
|
2.7 |
% |
|
|
12.5 |
% |
|
|
3.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
257.0 |
|
|
$ |
197.9 |
|
|
$ |
115.5 |
|
|
$ |
454.9 |
|
|
$ |
311.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
18.1 |
% |
|
|
17.2 |
% |
|
|
15.0 |
% |
|
|
17.7 |
% |
|
|
17.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
257.0 |
|
|
$ |
197.9 |
|
|
$ |
115.5 |
|
|
$ |
454.9 |
|
|
$ |
311.3 |
|
|
LIFO expense (income) |
|
|
104.8 |
|
|
|
83.8 |
|
|
|
14.1 |
|
|
|
188.6 |
|
|
|
(6.1 |
) |
|
Gross profit, excluding LIFO expense (income) |
|
$ |
361.8 |
|
|
$ |
281.7 |
|
|
$ |
129.6 |
|
|
$ |
643.5 |
|
|
$ |
305.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin, excluding LIFO expense (income) |
|
|
25.5 |
% |
|
|
24.6 |
% |
|
|
16.8 |
% |
|
|
25.1 |
% |
|
|
17.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation, and amortization. Adjusted EBITDA gives further effect to, among other things, reorganization expenses, gain on sales of assets, gain on insurance settlement, gain or loss on retirement of debt, pension settlement charge, purchase consideration and other transaction costs, and foreign currency transaction gains and losses. We believe that the presentation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), provides useful information to investors regarding our operational performance because they enhance an investor’s overall understanding of our core financial performance and provide a basis of comparison of results between current, past, and future periods. We also disclose the metric Adjusted EBITDA, excluding LIFO expense (income), to provide a means of comparison amongst our competitors who may not use the same basis of accounting for inventories. EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), are three of the primary metrics management uses for planning and forecasting in future periods, including trending and analyzing the core operating performance of our business without the effect of U.S. generally accepted accounting principles, or GAAP, expenses, revenues, and gains (losses) that are unrelated to the day to day performance of our business. We also establish compensation programs for our executive management and regional employees that are based upon the achievement of pre-established EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), targets. We also use EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), to benchmark our operating performance to that of our competitors. EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), do not represent, and should not be used as a substitute for, net income or cash flows from operations as determined in accordance with generally accepted accounting principles, and neither EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), is necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. This release also presents gross margin, excluding LIFO expense (income), which is calculated as gross profit minus LIFO expense (income), divided by net sales. We have excluded LIFO expense (income) from gross margin and Adjusted EBITDA as a percentage of net sales metrics in order to provide a means of comparison amongst our competitors who may not use the same basis of accounting for inventories as we do. Our definitions of EBITDA, Adjusted EBITDA, Adjusted EBITDA, excluding LIFO expense (income), gross margin, excluding LIFO expense (income), and Adjusted EBITDA, excluding LIFO expense (income), as a percentage of sales may differ from that of other companies. |
|
|
Schedule 3 |
|
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
|
|
Reconciliation of Net Income (Loss) and Earnings (Loss) per Share to Adjusted Net Income (Loss) and Adjusted Earnings (Loss) Per Share |
|
|
(Dollars and Shares in Millions, Except Per Share Data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
2020 |
|
|
First Six Months Ended |
|
|
|
|
Second |
|
|
First |
|
|
Second |
|
|
June 30, |
|
|
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Ryerson Holding Corporation |
|
$ |
112.9 |
|
|
$ |
25.3 |
|
|
$ |
(25.6 |
) |
|
$ |
138.2 |
|
|
$ |
(9.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
|
(87.4 |
) |
|
|
(20.3 |
) |
|
|
— |
|
|
|
(107.7 |
) |
|
|
— |
|
|
Restructuring and other charges |
|
|
— |
|
|
|
— |
|
|
|
2.0 |
|
|
|
— |
|
|
|
2.0 |
|
|
Gain on retirement of debt |
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.9 |
) |
|
Provision (benefit) for income taxes |
|
|
22.4 |
|
|
|
5.2 |
|
|
|
(0.5 |
) |
|
|
27.6 |
|
|
|
(0.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) attributable to Ryerson Holding Corporation |
|
$ |
47.9 |
|
|
$ |
10.2 |
|
|
$ |
(24.2 |
) |
|
$ |
58.1 |
|
|
$ |
(8.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings (loss) per share |
|
$ |
1.24 |
|
|
$ |
0.26 |
|
|
$ |
(0.64 |
) |
|
$ |
1.50 |
|
|
$ |
(0.22 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding - diluted |
|
|
38.7 |
|
|
|
38.6 |
|
|
|
38.1 |
|
|
|
38.7 |
|
|
|
37.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Adjusted net income (loss) and Adjusted diluted earnings (loss) per share is presented to provide a means of comparison with periods that do not include similar adjustments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 4 |
|
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
|
|
Cash Flow from Operations to Free Cash Flow Yield |
|
|
(Dollars in Millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
2020 |
|
|
First Six Months Ended |
|
|
|
|
Second |
|
|
First |
|
|
Second |
|
|
June 30, |
|
|
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
$ |
(3.8 |
) |
|
$ |
(47.3 |
) |
|
$ |
103.3 |
|
|
$ |
(51.1 |
) |
|
$ |
176.1 |
|
|
Capital expenditures |
|
|
(6.8 |
) |
|
|
(6.5 |
) |
|
|
(4.9 |
) |
|
|
(13.3 |
) |
|
|
(11.8 |
) |
|
Proceeds from sales of property, plant, and equipment |
|
|
136.9 |
|
|
|
29.0 |
|
|
|
0.1 |
|
|
|
165.9 |
|
|
|
0.1 |
|
|
Free cash flow |
|
$ |
126.3 |
|
|
$ |
(24.8 |
) |
|
$ |
98.5 |
|
|
$ |
101.5 |
|
|
$ |
164.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market capitalization |
|
$ |
561.7 |
|
|
$ |
649.5 |
|
|
$ |
214.6 |
|
|
$ |
561.7 |
|
|
$ |
214.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow yield |
|
|
22.5 |
% |
|
|
(3.8 |
%) |
|
|
45.9 |
% |
|
|
18.1 |
% |
|
|
76.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Market capitalization is calculated using June 30, 2021, March 31, 2021, and June 30, 2020 stock prices and shares outstanding. |
|
|
Schedule 5 |
|
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
|
|
Reconciliation of Third Quarter 2021 Net Income Attributable to Ryerson Holding Corporation to Adj. EBITDA, excl. LIFO Guidance |
|
|
(Dollars in Millions, except Per Share Data) |
|
|
|
Third Quarter 2021 |
|
|
|
Low |
|
|
High |
|
|
Net income attributable to Ryerson Holding Corporation |
$ |
63 |
|
|
$ |
67 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
1.63 |
|
|
$ |
1.73 |
|
|
|
|
|
|
|
|
|
|
|
Interest and other expense on debt |
|
12 |
|
|
|
12 |
|
|
Provision for income taxes |
|
23 |
|
|
|
25 |
|
|
Depreciation and amortization expense |
|
13 |
|
|
|
13 |
|
|
EBITDA |
$ |
111 |
|
|
$ |
117 |
|
|
Adjustments |
|
5 |
|
|
|
7 |
|
|
Adjusted EBITDA |
$ |
116 |
|
|
$ |
124 |
|
|
LIFO expense |
|
92 |
|
|
|
88 |
|
|
Adjusted EBITDA, excluding LIFO expense |
$ |
208 |
|
|
$ |
212 |
|
|
|
|
|
|
|
|
|
|
|
Note: See the note within Schedule 2 for a description of EBITDA and Adjusted EBITDA. |
|
Exhibit 99.2
31 Important Information About Ryerson Holding Corporation
These materials do not constitute an offer or solicitation to purchase or sell securities of Ryerson Holding Corporation (“Ryerson” or “the Company”) or its subsidiaries and no investment decision should be made based upon the information provided herein. Ryerson strongly urges you to review its filings with the Securities and Exchange Commission, which can be found at https://ir.ryerson.com/financials/sec-filings/default.aspx. This site also provides additional information about Ryerson.
Safe Harbor Provision
Certain statements made in this presentation and other written or oral statements made by or on behalf of the Company constitute "forward-looking statements" within the meaning of the federal securities laws, including statements regarding our future performance, as well as management's expectations, beliefs, intentions, plans, estimates, objectives, or projections relating to the future. Such statements can be identified by the use of forward-looking terminology such as “objectives,” “goals,” “preliminary,” “range,” "believes," "expects," "may," "estimates," "will," "should," "plans," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. The Company cautions that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. Among the factors that significantly impact our business are: the cyclicality of our business; the highly competitive, volatile, and fragmented metals industry in which we operate; fluctuating metal prices; our substantial indebtedness and the covenants in instruments governing such indebtedness; the integration of acquired operations; regulatory and other operational risks associated with our operations located inside and outside of the United States; impacts and implications of adverse health events, including the COVID-19 pandemic; work stoppages; obligations under certain employee retirement benefit plans; the ownership of a majority of our equity securities by a single investor group; currency fluctuations; and consolidation in the metals industry. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth above and those set forth under "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2020, and in our other filings with the Securities and Exchange Commission. Moreover, we caution against placing undue reliance on these statements, which speak only as of the date they were made. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events or circumstances, new information or otherwise.
Non-GAAP Measures
Certain measures contained in these slides or the related presentation are not measures calculated in accordance with generally accepted accounting principles (“GAAP”). They should not be considered a replacement for GAAP results. Non-GAAP financial measures appearing in these slides are identified in the footnotes. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures is included in the Appendix. 2
Q2 2021 Highlights Generated second quarter revenues of $1.4 billion
Generated earnings per diluted share of $2.91
Achieved record Adjusted EBITDA , excluding LIFO of $197 million
Reduced net debt to $563 million and achieved leverage ratio of 1.5x, within long-term target range
Net cash conversion cycle of 55 days
Warehousing, delivery, general, & administrative expense of 12.6% of sales
Ended the second quarter with liquidity of $890 million
Announced a quarterly cash dividend of $0.08 per share
Announced the authorization of a $50 million, two-year share repurchase program 3
New Capital Allocation Plan 4 On August 4th, Ryerson announced the initiation of a quarterly cash dividend of $0.08 per share, or $0.32 annually*, to be paid on September 16th to shareholders as of August 16th. Ryerson also announced its authorization to repurchase $50M in outstanding shares over the next two years. $0.08
per Share
Quarterly return of capital to investors and $50M
Option to repurchase outstanding shares from excess liquidity Enabled by: ~$100M
Reduction in fixed cash commitments since IPO achieved through debt repayment and legacy liability de-risking $890M
Strong liquidity position achieved by successful working capital management
*The actual declaration of future cash dividends and the establishment of record and payment dates is subject to final determination by the Board each quarter after its review of the Company’s financial performance.
Macro & Commodities 5 Pricing conditions remain elevated while demand indicators continue to show strength Sources: Bloomberg: prices through Jul 31, 2021; Federal Reserve,
Industrial Production Index monthly year-over-year change;
Bloomberg, U.S. Manufacturing PMI Commodity Prices Since Dec. 2017 U.S. Industrial Production U.S. ISM Purchasing Manager’s Index
Sequential Q2 2021 End-Market Trends 6 Q2 North American per day volume improvement strongest in industrial equipment, ground transportation and food & agriculture sectors
*Excludes Other Industry Sectors which represent approximately 4% of Ryerson sales mix
**Sales product mix based on 2020 results as disclosed in Ryerson’s Annual Report on Form 10-K for the year ended December 31, 2020. Shipments improved in our industrial equipment, commercial ground transportation and food and agricultural sectors on a North American per day basis compared to the first quarter of 2021 despite ongoing supply side disruptions.
However, our consumer durable, metal fabrication and machine shop and HVAC sectors reported declines relative to the first quarter of 2021 on a North American per day basis as backlog turnover has been hampered by ongoing supply side disruptions. 2020
Sales Mix Commentary QoQ Volume
Third Quarter Guidance Third quarter revenue guidance of $1.5B to 1.6B assumes sequential average selling price growth of 10% to 12% with shipments flat to down 3% affected by normal seasonality. 7 Ryerson anticipates reporting another strong quarter with continued revenue growth Diluted Earnings per Share *Diluted EPS of $1.68 represents the midpoint of our $1.63-$1.73 guidance range *See Ryerson’s 8-K filed on August 4, 2021.
8 Q2 2021 Selected Financial and Operating Metrics Update Capital Investment Investing in speed, value-add and digitalization Expense Management Compared to Q1 2021 Expense leverage increased in the quarter as expenses as a percent of sales continued to decline Asset Management Strong free cash flow generation driven by proceeds from property sales and excellent working capital management Cash Flow CS&W Ryerson’s cash conversion cycle remains at a historically low level CS&W had a strong quarter and continues to progress towards its annual long-term mid-cycle target of $600M in revenue and $50M in Adj. EBITDA, excl. LIFO *See Ryerson’s 8-K filed on August 4, 2021.
Exercising Optional Redemption Features 9 Ryerson has driven down net debt and fixed cash commitments as part of its financial transformation strategy significantly reducing annual interest payments Ryerson reduced net debt by $116M in the first half of 2021 to $563M and achieved a leverage ratio of 1.5x, well within the Company’s long-term target range.
In the second quarter, Ryerson closed a second sale-leaseback transaction and announced the redemption of $100 million of its outstanding 8.5% Senior Secured Notes due 2028 at a price of 104% utilizing the proceeds.
Subsequently, the Company also completed its second $50 million Notes redemption at a price of 103% using cash on hand. Reduced Net Debt ($M) Reduced Interest
A reconciliation of non-GAAP financial measures to the comparable GAAP measure is included in the Appendix.
See Ryerson’s 8-K filed on August 4, 2021. 10 Second Quarter Q2 2021 Key Financial Metrics Record results, significant leverage reductions ongoing, legacy liability de-risking continuing, dividend and share repurchase plans established First Half
Strong Liquidity to Fund Operations and Investments 11 Ryerson’s North American availability increased significantly again in the second quarter Ryerson’s global liquidity rose during the period from $583M as of March 31, 2021 to $890M as of June 30, 2021 driven by rising Adjusted EBITDA, excluding LIFO, proceeds from the sale-leaseback transaction and rising working capital asset values
97
Locations 179
Years 40,000Customers 75,000
Products Focused on creating great customer experiences at
Speed, Scale, & Consistency
The Ryerson Customer Experience Eco-System Intelligently Connected Network
of Service Centers
Appendix
14 20.1% increase in average selling price
25.5% gross margin, excl. LIFO, +90bps Adj. EBITDA, excl. LIFO 2.9% increase 4.0% increase in expenses excl. D&A and one-time items $197M in Adj. EBITDA, excl. LIFO is an increase quarter-over-quarter of $74M driven by higher average selling prices and volumes. This was partially offset by higher cost of goods sold and higher expenses excl. D&A and one-time items, which increased due to results-driven incentive compensation. Q2 2021 vs. Q1 2021 Financial Performance *Expenses exclude D&A and one-time items
Quarterly Financial Highlights A reconciliation of non-GAAP financial measures to the comparable GAAP measure is included in this Appendix. Tons Sold (000’s) Average Selling Price Per Ton Adjusted EBITDA, excl. LIFO Margin % 15 Gross Margin & Gross Margin, excl. LIFO
Earnings & Operating Cash Flow per Diluted Share 16 Ryerson generated significant EPS in the second quarter of 2021 while using less cash flow from operations compared to the third quarter of 2018 which is a relevant comparison from the last cyclical upturn of 2016-2018.
17 Non-GAAP Reconciliation: Adjusted EBITDA, excl. LIFO Net income includes a vacation accrual adjustment of $11M in Q4 2019. `
Adjusted Net Income Reconciliation 18 Q2 2021 net income includes a gain of $87.4M related to property sales. Adjusting to remove this gain and the associated income taxes, Ryerson generated net income of $47.9M, or $1.24 per diluted share.
Non-GAAP Reconciliations: Expenses excl. D&A and One-Time Items and Net Debt 19
31 Note: EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation, and amortization. Adjusted EBITDA gives further effect to, among other things, reorganization expenses, gain on sale of assets, gain or loss on retirement of debt, loss on pension settlement, purchase consideration and other transaction costs, and foreign currency transaction gains and losses. We believe that the presentation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), provides useful information to investors regarding our operational performance because they enhance an investor’s overall understanding of our core financial performance and provide a basis of comparison of results between current, past, and future periods. We also disclose the metric Adjusted EBITDA, excluding LIFO expense (income), to provide a means of comparison amongst our competitors who may not use the same basis of accounting for inventories. EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), are three of the primary metrics management uses for planning and forecasting in future periods, including trending and analyzing the core operating performance of our business without the effect of U.S. generally accepted accounting principles, or GAAP, expenses, revenues, and gains (losses) that are unrelated to the day to day performance of our business. We also establish compensation programs for our executive management and regional employees that are based upon the achievement of pre-established EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), targets. We also use EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), to benchmark our operating performance to that of our competitors. EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), do not represent, and should not be used as a substitute for, net income or cash flows from operations as determined in accordance with generally accepted accounting principles, and neither EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), is necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. This release also presents gross margin, excluding LIFO expense (income), which is calculated as gross profit minus LIFO expense (income), divided by net sales. We have excluded LIFO expense (income) from gross margin and Adjusted EBITDA as a percentage of net sales metrics in order to provide a means of comparison amongst our competitors who may not use the same basis of accounting for inventories as we do. Our definitions of EBITDA, Adjusted EBITDA, Adjusted EBITDA, excluding LIFO expense (income), gross margin, excluding LIFO expense (income), and Adjusted EBITDA, excluding LIFO expense (income), as a percentage of sales may differ from that of other companies. Adjusted Net income (loss) and Adjusted Earnings (loss) per share is presented to provide a means of comparison with periods that do not include similar adjustments.
20 Non-GAAP Reconciliation
Exhibit 99.3
Ryerson Initiates Quarterly Cash Dividend and Announces Authorization of Share Repurchase Program
(Chicago – August 4, 2021) – Ryerson Holding Corporation (NYSE: RYI), a leading value-added processor and distributor of industrial metals, today announced that its Board of Directors has declared a quarterly cash dividend of $0.08 per share, or $0.32 on an annualized basis, on the company’s shares of common stock. Ryerson’s first dividend payment will be made on September 16, 2021 to stockholders of record as of the close of business on August 16, 2021.
On August 4, 2021, the Board also approved a share repurchase program authorizing the Company to purchase up to an aggregate of $50 million of the Company’s common stock over the next two-year period.
Eddie Lehner, Ryerson’s President and Chief Executive Officer said, “Our initiation of a common stock dividend reflects our commitment of delivering value to our shareholders and underscores our confidence in our transformed balance sheet and improved operating model. In addition, our share repurchase authorization provides us the ability to purchase shares below intrinsic value as Ryerson’s enterprise valuation gap relative to its publicly traded peer group dissipates.”
Jim Claussen, Executive Vice President & Chief Financial Officer, added, “With Ryerson’s ability to generate strong free cash flow and lower fixed cash commitments, we expect to have ample liquidity to return capital to stockholders while continuing to invest in the business to drive long-term growth.”
About Ryerson
Ryerson is a leading value-added processor and distributor of industrial metals, with operations in the United States, Canada, Mexico, and China. Founded in 1842, Ryerson has around 3,900 employees in approximately 100 locations. Visit Ryerson at www.ryerson.com.
Safe Harbor Provision
Certain statements made in this presentation and other written or oral statements made by or on behalf of the Company constitute "forward-looking statements" within the meaning of the federal securities laws, including statements regarding our future performance, as well as management's expectations, beliefs, intentions, plans, estimates, objectives, or projections relating to the future. Such statements can be
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identified by the use of forward-looking terminology such as “objectives,” “goals,” “preliminary,” “range,” "believes," "expects," "may," "estimates," "will," "should," "plans," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. The Company cautions that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. Among the factors that significantly impact our business are: the cyclicality of our business; the highly competitive, volatile, and fragmented metals industry in which we operate; fluctuating metal prices; our substantial indebtedness and the covenants in instruments governing such indebtedness; the integration of acquired operations; regulatory and other operational risks associated with our operations located inside and outside of the United States; impacts and implications of adverse health events, including the COVID-19 pandemic; work stoppages; obligations under certain employee retirement benefit plans; the ownership of a majority of our equity securities by a single investor group; currency fluctuations; and consolidation in the metals industry. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth above and those set forth under "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2020, and in our other filings with the Securities and Exchange Commission. Moreover, we caution against placing undue reliance on these statements, which speak only as of the date they were made. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events or circumstances, new information or otherwise.
Media and Investor Contact:
Justine Carlson
Investor Relations
312.292.5130
[email protected]
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