Quarterly business highlights include start-up of operations at University Park, IL service center, completion of ERP integration of 17 service centers, and continued investment in organic growth initiatives, including the expansion and modernization of the Shelbyville, KY service center CHICAGO, April 30, 2024 /PRNewswire/ -- Ryerson Holding Corporation (NYSE:RYI), a leading value-added processor and distributor of industrial metals, today reported results for the first quarter ended March 31, 2024. Highlights:  Earned Revenue of $1.24 billion on 497,000 tons shipped and average selling price of $2,493 per ton. Net Loss attributable to Ryerson Holding Corporation of $7.6 million with Adjusted EBITDA1, excluding LIFO of $40.2 million as counter-cyclical industry conditions persisted and transitory operating expenses related to capital expenditures, acquisitions and ERP system conversions occurred through the quarter. Debt of $497 million and net debt2 of $455 million as of March 31, 2024, compared to $436 million and $382 million, respectively, on December 31, 2023. Started operations at University Park, IL service center and completed Enterprise Resource Planning ("ERP") conversion and integration program that began in 2022 covering 31 service centers, of which 17 service centers were converted from 2023 through the first quarter of 2024. Announced $40 million in expected annualized cost reductions through targeted reductions in force and network cost-outs as Ryerson begins pivoting from its investment program to integrating, optimizing, and generating expected returns on investments in acquisitions and capital expenditures moving through the balance of 2024 and into 2025. As such Ryerson expects capital expenditures to come in at plan in 2024 of $110 million with expected capital expenditures in 2025 of $50 million.   $ in millions, except tons (in thousands), average selling prices, and earnings per share Financial Highlights: Q1 2024 Q4 2023 Q1 2023 QoQ YoY Revenue $ 1,239.2 $ 1,112.4 $ 1,406.1 11.4 % (11.9) % Tons shipped 497 450 519 10.4 % (4.2) % Average selling price/ton $ 2,493 $ 2,472 $ 2,709 0.8 % (8.0) % Gross margin 17.6 % 22.2 % 18.8 % -460 bps -120 bps Gross margin, excl. LIFO 17.6 % 16.9 % 19.1 % 70 bps -150 bps Warehousing, delivery, selling, general, and administrative expenses $ 216.8 $ 203.7 $ 194.2 6.4 % 11.6 % As a percentage of revenue 17.5 % 18.3 % 13.8 % -80 bps 370 bps Net income (loss) attributable to Ryerson Holding Corporation $ (7.6) $ 25.8 $ 47.3 (129.5) % (116.1) % Diluted earnings (loss) per share $ (0.22) $ 0.74 $ 1.27 $ (0.96) $ (1.49) Adjusted diluted earnings (loss) per share $ (0.18) $ 0.73 $ 1.27 $ (0.91) $ (1.45) Adj. EBITDA, excl. LIFO $ 40.2 $ 25.9 $ 90.1 55.2 % (55.4) % Adj. EBITDA, excl. LIFO margin 3.2 % 2.3 % 6.4 % 90 bps -320 bps Balance Sheet and Cash Flow Highlights: Total debt $ 497.3 $ 436.5 $ 395.1 13.9 % 25.9 % Cash and cash equivalents $ 41.9 $ 54.3 $ 43.7 (22.8) % (4.1) % Net debt $ 455.4 $ 382.2 $ 351.4 19.2 % 29.6 % Net debt / LTM Adj. EBITDA, excl. LIFO 2.5x 1.7x 0.8x 0.8x 1.7x Cash conversion cycle (days) 75.6 84.6 77.4 (9.0) (1.8) Net cash provided by (used in)  operating activities $ (47.8) $ 90.1 $ 80.4 $ (137.9) $ (128.2) A reconciliation of non-GAAP financial measures to the comparable GAAP measure is included below in this news release. Management CommentaryEddie Lehner, Ryerson's President, Chief Executive Officer and Director, said, "I want to thank all of my Ryerson teammates for their dedicated efforts in the service of operating safely and productively during the quarter, and I want to thank our customers for the opportunity to create and deliver great customer experiences which we never take for granted. As we embark on the third year of our growth and modernization investment cycle, we are pleased to mark two important milestones: the start of operations at our University Park, IL service center and the completion of the final stage of our ERP system unification program across 31 service centers from 2022 through the first quarter of 2024. These investments are notable keystones in creating Ryerson's next generation operating model that enables the building of additional operating and earnings leverage as we move from counter-cyclical business conditions that we have experienced since the second half of 2022 to the next industry upturn whose exact timing, while unknown, will eventually arrive.  During the first quarter of 2024, we met our guidance range for revenue and shipments but missed on earnings per share and Adjusted EBITDA, excluding LIFO. The variance from guidance was partially due to lower than expected gross margins as commodity price moving averages for our carbon and stainless product franchises declined through the quarter before inflecting positively toward the end of the quarter. Additionally, our results differing from guidance expectations was also partially attributable to transitory operating expenses as a by-product of a record investment cycle in fixed assets, digitalization and acquisitions, which is migrating to more normative and targeted levels. As we move through the third year of our operating model investment program, it is time to begin the integration and optimization phase of our operating model renovation. As such, we are targeting $40 million in annual cost take-outs that reflect investment inertia and require well–placed paring and pruning. These cost saving measures are expected to result in $25 million in savings during the balance of 2024. As we move through the second quarter of the year, I am encouraged by stabilization in the carbon sheet market, improvements in bright metal commodity price indices, and incrementally better quoting and order activity across our network of industrial metal service centers." First Quarter ResultsRyerson generated net sales of $1.24 billion in the first quarter of 2024, an increase of 11.4%, compared to the fourth quarter of 2023, and in line with guidance expectations. This was driven by seasonally higher volumes which increased 10.4% and average selling prices increasing 0.8%. Gross margin contracted sequentially by 460 basis points to 17.6% in the first quarter of 2024, compared to 22.2% in the fourth quarter of 2023, primarily driven by $59 million in LIFO income recorded in the fourth quarter of 2023 compared to LIFO expense of $1 million recorded in the first quarter of 2024, as well as lower average selling prices for our stainless steel products and higher costs of goods sold reflecting sales of higher-cost materials. In the first quarter of 2024, LIFO expense of $1 million was approximately in-line with our guidance expectations of a LIFO impact of zero. Excluding the impact of LIFO, gross margin expanded 70 basis points to 17.6% in the first quarter of 2024, compared to 16.9% in the fourth quarter. Warehousing, delivery, selling, general and administrative expenses increased 6.4% to $216.8 million in the first quarter of 2024, compared to $203.7 million in the fourth quarter of 2023, primarily due to higher investment-related expenses and higher operating expenses from recent acquisitions. These increased costs were partially offset by lower depreciation expenses. Net loss attributable to Ryerson Holding Corporation for the first quarter of 2024 was $7.6 million, or $0.22 per diluted share, compared to net income of $25.8 million, or $0.74 per diluted share in the previous quarter. Ryerson generated Adjusted EBITDA, excluding LIFO, of $40.2 million in the first quarter of 2024, compared to the fourth quarter of 2023 Adjusted EBITDA, excluding LIFO of $25.9 million. Liquidity & Debt ManagementRyerson used $47.8 million of operating cash in the first quarter of 2024 largely due to a build in working capital of $32.3 million as well as a net loss attributable to Ryerson Holding of $7.6 million. The working capital build was attributable to the Company's increase in inventory and receivables. Ryerson's inventory build was driven by improving service levels to customers amidst investment related knock-on effects and post-pandemic inventory placement optimizations, while receivables increased due to higher sales compared to the prior quarter. The Company ended the first quarter of 2024 with $497 million of debt and $455 million of net debt, sequential increases of $61 million and $73 million, respectively, compared to the fourth quarter of 2023. Ryerson's net leverage ratio as of the first quarter of 2024 was 2.5x, above the high-end of the Company's target leverage range. Ryerson's global liquidity, composed of cash and cash equivalents and availability on its revolving credit facilities, increased to $684 million as of March 31, 2024, compared to $656 million as of December 31, 2023. Shareholder Return Activity Dividends. On April 30, 2024, the Board of Directors declared a quarterly cash dividend of $0.1875 per share of common stock, payable on June 20, 2024, to stockholders of record as of June 6, 2024, unchanged from the prior quarter. During the first quarter of 2024, Ryerson paid a quarterly dividend in the amount of $0.1875 per share, amounting to a cash return of approximately $6.4 million.  Share Repurchase. Ryerson repurchased 30,120 shares for $1.0 million in the open market during the first 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 March 31, 2024, $38.4 million of the $100.0 million remained under the existing authorization. Outlook CommentaryFor the second quarter of 2024, Ryerson expects customer shipments to increase 1% to 3%, quarter-over-quarter. The Company anticipates second quarter net sales to be in the range of $1.25 billion to $1.29 billion, with average selling prices increasing 0% to 1%. LIFO expense in the second quarter of 2024 is expected to be $1 million. We expect adjusted EBITDA, excluding LIFO in the range of $47 million to $53 million and earnings per diluted share in the range of $0.15 to $0.25. First Quarter 2024 Major Product Metrics Net Sales (millions) Q1 2024 Q4 2023 Q1 2023 Quarter-over-quarter Year-over-year Carbon Steel $ 645 $ 575 $ 692 12.2 % (6.8) % Aluminum $ 276 $ 241 $ 310 14.5 % (11.0) % Stainless Steel $ 297 $ 271 $ 378 9.6 % (21.4) % Tons Shipped (thousands) Q1 2024 Q4 2023 Q1 2023 Quarter-over-quarter Year-over-year Carbon Steel 385 347 402 11.0 % (4.2) % Aluminum 50 48 52 4.2 % (3.8) % Stainless Steel 61 52 63 17.3 % (3.2) % Average Selling Prices (per ton) Q1 2024 Q4 2023 Q1 2023 Quarter-over-quarter Year-over-year Carbon Steel $ 1,675