Core Points - Metallus (NYSE: MTUS) confirmed that members of the United Steelworkers (USW) Local 1123 voted against ratifying a tentative labor agreement reached on October 3, 2025 [1][2] - The current labor contract has been extended for an additional 90 days until January 29, 2026, allowing time for further negotiations [2] - Metallus employs approximately 1,200 bargaining employees in Canton, Ohio [3] Company Overview - Metallus is a leader in high-quality specialty metals, manufactured components, and supply chain solutions, with a focus on industrial, automotive, aerospace & defense, and energy end-markets [4] - The company has been in the business of producing high-quality steel for over 100 years and reported sales of $1.1 billion in 2024 [4] - Metallus employs around 1,850 people and is a premier U.S. producer of alloy steel bars and seamless mechanical tubing [4]

Core Points - Metallus has reached a tentative agreement with the United Steelworkers Local 1123 for a new four-year contract [1][2] - The agreement aims to ensure competitive wages and benefits for approximately 1,200 bargaining employees at the Canton, Ohio operations [2] Company Overview - Metallus (NYSE: MTUS) specializes in high-performance specialty metals, manufacturing components, and supply chain solutions [1][3] - The company has been in the business of producing high-quality steel for over 100 years and employs around 1,850 people [3] - In 2024, Metallus reported sales of $1.1 billion, indicating a strong market presence [3]

Core Points - Metallus (NYSE: MTUS) has agreed to extend its contract with the United Steelworkers (USW) Local 1123 until October 15, 2025, allowing for continued negotiations [1][2] - The current agreement affects approximately 1,200 bargaining employees at Metallus' Canton, Ohio operations [2] - Metallus reported sales of $1.1 billion in 2024 and has been in the business of producing high-quality steel for over 100 years [3] Company Overview - Metallus specializes in high-performance specialty metals, manufactured components, and supply chain solutions, primarily serving industrial, automotive, aerospace & defense, and energy markets [3] - The company employs around 1,850 people and is recognized as a premier U.S. producer of alloy steel bars and seamless mechanical tubing [3]

Company Overview - Metallus (NYSE: MTUS) is a leader in high-quality specialty metals, manufactured components, and supply chain solutions, with a focus on serving industrial, automotive, aerospace & defense, and energy end-markets [5] - The company has been in the business of producing high-quality steel for over 100 years and employs approximately 1,850 people [5] - Metallus reported sales of $1.1 billion in 2024 [5] Awards and Recognition - Metallus has been named a 2025 NorthCoast 99 award winner by ERC, recognizing it as one of the top workplaces in Northeast Ohio for attracting and retaining top talent [1][3] - The NorthCoast 99 award program, launched 27 years ago, aims to make Northeast Ohio a prime destination for companies and high-performing individuals [2] - The award reflects Metallus' commitment to a culture of care, collaboration, communication, and growth, which is essential for attracting and retaining talent [3] Industry Insights - The NorthCoast 99 winners undergo a rigorous application process that evaluates their strategies in employee engagement, talent development, well-being, and total rewards [2] - The 2025 NorthCoast 99 awards program is supported by various sponsors, indicating a strong community and industry backing for recognizing workplace excellence [4]

Metallus (MTUS) FY Conference Summary Company Overview - Metallus is a specialty metals manufacturing company based in Canton, Ohio, with over 100 years of operation, previously a division of Timken Company until its spinout in 2014 as Timken Steel, and rebranded to Metallus in 2024 [4][5] - The company employs approximately 1,900 people, including 1,200 United Steel workers [5] Financial Performance - In the last fiscal year, Metallus shipped approximately 555,000 tons with a 60% melt utilization, resulting in $1.1 billion in sales [7] - The first half of the current year saw a 28% increase in shipments compared to the second half of the previous year [7] - The second quarter of the current year reported net sales exceeding $300 million, a sequential increase of $24 million (9%) driven by higher shipments across all end markets [23] - Adjusted EBITDA for the second quarter represented the highest quarterly profits in over a year, with operating cash flow at 1.3x EBITDA [23] Market Position and Product Offerings - Metallus has a 12% share of the U.S. Special Bar Quality (SBQ) steel consumption and a 40% share in seamless mechanical tubing [8][9] - The company serves diverse end markets, including automotive, industrial, energy, and aerospace/defense [10][12] - Notably, Metallus is the sole domestic producer of specialized high fragmentation steel for the U.S. Army, with a $100 million contract to increase capacity for 155mm shells [13] Growth Initiatives - The company is targeting $250 million in sales to the defense market by 2026, more than double historical sales levels [15] - Metallus is also focusing on vacuum arc remelt steel, aiming for $30 million in sales in this market in 2025 [18] - Investments in production capacity and operational efficiencies are expected to yield annual savings of approximately $10 million starting in 2026 [28] Challenges and Cost Management - Planned annual shutdown costs are expected to be around $15 million in the second half of the year, with $3 million to $5 million in non-recurring labor agreement costs anticipated [25][27] - Higher electricity costs are projected to add $2 million to $3 million in quarterly expenses [26] Strategic Outlook - Metallus maintains a disciplined capital allocation strategy, targeting $250 million to $300 million in liquidity and focusing on organic and inorganic growth opportunities [31][32] - The company has reduced its pension liability from over $1 billion in 2021 to less than $500 million today, with a funded position of about 84% [34] - Metallus has a share buyback authorization with over $93 million remaining, having reduced diluted shares by over 25% since early 2022 [35] Investment Rationale - Metallus presents an attractive entry point for investors, with a strong balance sheet, liquidity, and a focus on operational efficiencies [36] - The company is positioned to benefit from domestic production trends and government investments in national defense [37] Additional Opportunities - The company is exploring additional funding opportunities, including a potential $10 million bill from Congress for expanding capabilities [39]

Financial Data and Key Metrics Changes - In Q2 2025, net sales totaled $304.6 million, a sequential increase of $24.1 million or 9% driven by higher shipments across all end markets [19] - Adjusted EBITDA was $26.5 million in Q2, a sequential increase of 50% primarily due to higher shipments and improved melt utilization [19] - Net income for Q2 was $3.7 million or $0.09 per diluted share, while adjusted net income was $8.4 million or $0.20 per diluted share, more than double the first quarter levels [19] - Operating cash flow was $34.8 million, supported by profitability, lower inventory, and a $6.5 million federal income tax refund [19] Business Line Data and Key Metrics Changes - Shipments increased by 10% compared to Q1, with aerospace and defense, automotive, and energy shipments driving this growth [9] - Energy shipments improved by 17% sequentially, while automotive shipments increased by 9% [11][12] - Aerospace and defense shipments nearly doubled sequentially, indicating strong growth potential in this market [13] Market Data and Key Metrics Changes - Industrial shipments saw a slight increase on a sequential basis, with distribution customer inventory levels declining [11] - The tariff environment is helping to reduce imports and stimulate demand for domestically produced steel [12] - The company is experiencing increased customer inquiries driven by tariff-related onshoring, particularly in the automotive sector [12] Company Strategy and Development Direction - The company is focused on enhancing safety management systems with a planned investment of approximately $5 million in 2025 [7] - A new initiative has been launched to optimize day-to-day manufacturing operations, aiming for long-term sustainability and cost reduction [15] - The company is on track to achieve approximately $30 million in bar-related revenue by 2025, reflecting strong market positioning [13] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued demand growth for domestically produced steel due to the trade environment [5] - The company expects third-quarter shipments to be similar to Q2, with lead times extending to October for bar and tube products [26] - Adjusted EBITDA for Q3 is expected to be modestly lower than Q2 due to planned maintenance and increased electricity costs [28] Other Important Information - The company received $5.1 million in government funding during Q2 as part of a nearly $100 million agreement to support U.S. Army munitions production [21] - Capital expenditures for 2025 are planned at approximately $125 million, including $90 million funded by the U.S. government [20] - The company has repurchased 255,000 shares for $3.3 million in Q2, reflecting confidence in cash flow generation [24] Q&A Session Summary Question: Market share gains due to tariff changes - Management noted that most share gains were from regaining industrial and automotive business lost to domestic competitors, with modest increases in new customer inquiries tied to the tariff environment [32] Question: Supply chain issues resolution timeline - Management indicated improvements in demand and expected additional orders in Q4, despite previous delays in munitions production [35] Question: Melt utilization targets and efficiency savings - Management acknowledged that melt utilization was impacted by electrical supply interruptions and auxiliary equipment reliability, but they are engaging third-party expertise to improve operational efficiency [36][38] Question: Price increases and contract discussions - Management stated that contract discussions for 2026 will pick up in late September through early December, with 70% of demand under contract and 30% spot-based [46]

Company Overview - Metallus Inc reported net sales of $1.1 billion in 2024[9] - The company has an annual melt capacity of approximately 1.2 million tons and a ship capacity of approximately 0.9 million tons[9] - In 2024, Automotive accounted for 45% of the company's shipment mix and 42% of net sales, while Industrial accounted for 40% of the shipment mix and 36% of net sales[18] Financial Performance and Outlook - In Q2 2025, Metallus had net sales of $304.6 million, a 9% increase compared to Q1 2025[23] - The company's adjusted EBITDA for Q2 2025 was $26.5 million[23] - Metallus expects capital expenditures of approximately $125 million in 2025, including approximately $90 million funded by the U S government[23] Strategic Initiatives and Targets - Metallus aims to grow A&D product sales to over $250 million in 2026, more than doubling the 2023 sales level[68] - The company is targeting a through-cycle long-term adjusted EBITDA margin of greater than 12%[69] - Metallus has a long-term target net leverage ratio of less than 1 0x[69]

Core Viewpoint - Metallus, a leader in specialty metals and supply chain solutions, released its second-quarter 2025 results, indicating ongoing performance in high-demand markets [1]. Company Overview - Metallus (NYSE: MTUS) specializes in high-performance specialty metals manufactured from recycled scrap metal, serving industrial, automotive, aerospace & defense, and energy sectors [3]. - The company has over 100 years of experience in producing high-quality steel and employs approximately 1,850 people [3]. - In 2024, Metallus reported sales of $1.1 billion, highlighting its significant market presence [3]. Conference Call Information - The company scheduled a live conference call for August 8, 2025, at 9:00 a.m. ET, which will be accessible via the internet [2]. - A replay of the conference call will also be available for interested parties [2].

```markdown [Cover Page Information](index=1&type=section&id=Cover%20Page%20Information) [General Information](index=1&type=section&id=General%20Information) Metallus Inc. filed a Form 10-Q for Q2 2025, is an Ohio-incorporated large accelerated filer, and reports 41.8 million common shares outstanding - Metallus Inc. filed a **Form 10-Q** for the quarterly period ended **June 30, 2025**[2](index=2&type=chunk) - The company is a **large accelerated filer**[3](index=3&type=chunk) Common Shares Outstanding | Class | Outstanding at July 31, 2025 | | :------------------------ | :--------------------------- | | Common Shares, without par value | 41,826,462 | [Table of Contents](index=2&type=section&id=Table%20of%20Contents) [Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Metallus Inc.'s unaudited financial statements reveal decreased net income and a shift to negative operating cash flow for H1 2025 Consolidated Statements of Operations (Unaudited) Consolidated Statements of Operations (Three Months Ended June 30) | Metric | 2025 (Millions $) | 2024 (Millions $) | Change ($M) | Change (%) | | :----------------------------- | :---------------- | :---------------- | :---------- | :--------- | | Net sales | 304.6 | 294.7 | 9.9 | 3.4% | | Cost of products sold | 272.4 | 270.6 | 1.8 | 0.7% | | Gross Profit | 32.2 | 24.1 | 8.1 | 33.6% | | Selling, general and administrative expenses | 22.9 | 20.7 | 2.2 | 10.6% | | Loss on extinguishment of debt | 3.6 | — | 3.6 | - | | Income (Loss) Before Income Taxes | 8.6 | 6.1 | 2.5 | 41.0% | | Provision (benefit) for income taxes | 4.9 | 1.5 | 3.4 | 226.7% | | Net Income (Loss) | 3.7 | 4.6 | (0.9) | -19.6% | | Basic earnings (loss) per share | 0.09 | 0.10 | (0.01) | -10.0% | | Diluted earnings (loss) per share | 0.09 | 0.10 | (0.01) | -10.0% | Consolidated Statements of Operations (Six Months Ended June 30) | Metric | 2025 (Millions $) | 2024 (Millions $) | Change ($M) | Change (%) | | :----------------------------- | :---------------- | :---------------- | :---------- | :--------- | | Net sales | 585.1 | 616.3 | (31.2) | -5.1% | | Cost of products sold | 531.0 | 541.6 | (10.6) | -2.0% | | Gross Profit | 54.1 | 74.7 | (20.6) | -27.6% | | Selling, general and administrative expenses | 47.2 | 44.8 | 2.4 | 5.4% | | Loss on extinguishment of debt | 3.6 | — | 3.6 | - | | Income (Loss) Before Income Taxes | 11.5 | 36.1 | (24.6) | -68.1% | | Provision (benefit) for income taxes | 6.5 | 7.5 | (1.0) | -13.3% | | Net Income (Loss) | 5.0 | 28.6 | (23.6) | -82.5% | | Basic earnings (loss) per share | 0.12 | 0.65 | (0.53) | -81.5% | | Diluted earnings (loss) per share | 0.11 | 0.62 | (0.51) | -82.3% | [Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended June 30) | Metric | 2025 (Millions $) | 2024 (Millions $) | Change ($M) | Change (%) | | :------------------------------------ | :---------------- | :---------------- | :---------- | :--------- | | Net income (loss) | 3.7 | 4.6 | (0.9) | -19.6% | | Foreign currency translation adjustments | 1.2 | (0.5) | 1.7 | -340.0% | | Pension and postretirement liability adjustments | (1.4) | (1.2) | (0.2) | 16.7% | | Other comprehensive income (loss), net of tax | (0.2) | (1.7) | 1.5 | -88.2% | | Comprehensive Income (Loss), net of tax | 3.5 | 2.9 | 0.6 | 20.7% | Consolidated Statements of Comprehensive Income (Loss) (Six Months Ended June 30) | Metric | 2025 (Millions $) | 2024 (Millions $) | Change ($M) | Change (%) | | :------------------------------------ | :---------------- | :---------------- | :---------- | :--------- | | Net income (loss) | 5.0 | 28.6 | (23.6) | -82.5% | | Foreign currency translation adjustments | 1.6 | (0.5) | 2.1 | -420.0% | | Pension and postretirement liability adjustments | (2.7) | (2.3) | (0.4) | 17.4% | | Other comprehensive income (loss), net of tax | (1.1) | (2.8) | 1.7 | -60.7% | | Comprehensive Income (Loss), net of tax | 3.9 | 25.8 | (21.9) | -84.9% | [Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) Consolidated Balance Sheets Highlights (Millions $) | Metric | June 30, 2025 | December 31, 2024 | Change ($M) | Change (%) | | :------------------------------------ | :-------------- | :---------------- | :---------- | :--------- | | Cash and cash equivalents | 190.8 | 240.7 | (49.9) | -20.7% | | Accounts receivable, net | 129.6 | 90.8 | 38.8 | 42.7% | | Inventories, net | 223.4 | 219.8 | 3.6 | 1.6% | | Total Current Assets | 560.5 | 587.3 | (26.8) | -4.6% | | Property, plant and equipment, net | 523.1 | 507.3 | 15.8 | 3.1% | | Total Assets | 1,112.0 | 1,116.7 | (4.7) | -0.4% | | Accounts payable | 143.7 | 119.2 | 24.5 | 20.6% | | Accrued pension and postretirement costs (current) | 14.9 | 66.5 | (51.6) | -77.6% | | Current convertible notes, net | — | 5.4 | (5.4) | -100.0% | | Government funding liabilities | 73.1 | 53.5 | 19.6 | 36.6% | | Total Current Liabilities | 276.2 | 281.5 | (5.3) | -1.9% | | Total Liabilities | 422.0 | 426.2 | (4.2) | -1.0% | | Total Shareholders' Equity | 690.0 | 690.5 | (0.5) | -0.1% | [Consolidated Statements of Shareholders' Equity (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity%20(Unaudited)) Shareholders' Equity Changes (Six Months Ended June 30, 2025) | Item | Amount (Millions $) | | :------------------------------------ | :------------------ | | Balance As of December 31, 2024 | 690.5 | | Net income (loss) | 5.0 | | Other comprehensive income (loss) | (1.1) | | Stock-based compensation expense | 7.1 | | Purchase of treasury shares, including excise tax | (8.9) | | Issuance of treasury shares | — | | Shares surrendered for taxes | (2.6) | | Balance As of June 30, 2025 | 690.0 | - **Common shares outstanding decreased** from **42,267,308** at **December 31, 2024**, to **41,892,846** at **June 30, 2025**[17](index=17&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Consolidated Statements of Cash Flows (Six Months Ended June 30) | Activity | 2025 (Millions $) | 2024 (Millions $) | Change ($M) | | :------------------------------------ | :---------------- | :---------------- | :---------- | | Net cash provided (used) by operating activities | (4.1) | 41.7 | (45.8) | | Net cash provided (used) by investing activities | (25.6) | (21.5) | (4.1) | | Net cash provided (used) by financing activities | (20.6) | (28.1) | 7.5 | | Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | (50.3) | (7.9) | (42.4) | | Cash, Cash Equivalents, and Restricted Cash at End of Period | 191.6 | 273.4 | (81.8) | - **Operating cash flow shifted** from a **positive $41.7 million** in **H1 2024** to a **negative $4.1 million** in **H1 2025**, primarily due to **higher working capital use**, **lower profitability**, and **increased pension contributions**[121](index=121&type=chunk) - **Capital expenditures increased** to **$45.3 million** in **H1 2025** from **$31.5 million** in **H1 2024**[20](index=20&type=chunk)[122](index=122&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) - **No new Accounting Standard Updates (ASU) were adopted** in the **second quarter of 2025**. The Company is evaluating the impact of **ASU 2024-03** (Disaggregated Expenses) and **ASU 2023-09** (Income Tax Disclosures) for future periods, with no impact on current results or financial condition[22](index=22&type=chunk)[23](index=23&type=chunk) - The Company operates and reports financial results as one business segment, consistent with how the Chief Operating Decision Maker (CODM) evaluates performance[24](index=24&type=chunk) - Received **$5.1 million** in **Q2 2025** and **$18.0 million** in **H1 2025** from a **$99.75 million U.S. Army funding agreement** to support **munitions production**. **$29.2 million** in **capital spending** related to these assets occurred in **H1 2025**[26](index=26&type=chunk) Net Sales by End-Market (Three Months Ended June 30) | End-Market | 2025 (Millions $) | 2024 (Millions $) | Change ($M) | Change (%) | | :---------------- | :---------------- | :---------------- | :---------- | :--------- | | Industrial | 104.4 | 103.0 | 1.4 | 1.4% | | Automotive | 122.8 | 122.3 | 0.5 | 0.4% | | Aerospace & Defense | 42.1 | 43.7 | (1.6) | -3.7% | | Energy | 30.8 | 20.9 | 9.9 | 47.4% | | Other | 4.5 | 4.8 | (0.3) | -6.3% | | **Total Net Sales** | **304.6** | **294.7** | **9.9** | **3.4%** | - The **effective tax rate increased significantly** to **57.0%** for **Q2 2025** (vs. **24.6%** in **Q2 2024**) and **56.5%** for **H1 2025** (vs. **20.8%** in **H1 2024**), primarily due to **lower net income** and **limitations on the tax deductibility** of the **loss on extinguishment of debt**[35](index=35&type=chunk) - The Company repaid the remaining **$5.5 million principal amount** of its **Convertible Senior Notes due 2025** in cash, recognizing a **$3.6 million loss on extinguishment of debt**. As of **June 30, 2025**, there are **no outstanding borrowings**[48](index=48&type=chunk) - Metallus contributed **$58.5 million** in **pension contributions** in the **first half of 2025**, mostly to the Bargaining Plan, and anticipates an additional **$3.5 million** for the remainder of **2025**[56](index=56&type=chunk) - **Stock-based compensation expense** was **$3.7 million** for **Q2 2025** and **$7.1 million** for **H1 2025**. Future **stock-based compensation expense** related to **unvested awards** is approximately **$26.0 million**[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Metallus Inc.'s financial performance, noting mixed sales, strong liquidity, and settled convertible notes [Overview](index=19&type=section&id=Overview) - Metallus Inc. manufactures alloy, carbon, and micro-alloy steel products (SBQ bars, seamless mechanical tubing, manufactured components, and billets) for industrial, automotive, aerospace & defense, and energy end-markets, operating as a single business segment[71](index=71&type=chunk)[72](index=72&type=chunk) - **Capital investments totaled $17.8 million** in **Q2 2025** and **$45.3 million** in **H1 2025**, including **$15.3 million** and **$29.2 million** for **U.S. government-funded projects** aimed at improving safety, automation, quality, and efficiency[74](index=74&type=chunk) - The Company received **$5.1 million** in **Q2 2025** and **$18.0 million** in **H1 2025** from a **$99.75 million U.S. Army funding agreement** to **increase munitions production**, with **total funding received** to date of **$71.5 million**[74](index=74&type=chunk)[75](index=75&type=chunk) - **Total liquidity** was **$437.0 million** as of **June 30, 2025**, including **$190.8 million** in cash and cash equivalents. **Operating cash flow** for **Q2 2025** was **$34.8 million**[76](index=76&type=chunk) - The Company **repurchased 0.3 million common shares** for **$3.3 million** in **Q2 2025** and **0.7 million** for **$8.9 million** in **H1 2025**, with **$93.9 million** remaining under its authorized **share repurchase program**[76](index=76&type=chunk) - The remaining **$5.5 million principal** of **convertible notes was settled** for **$9.1 million**, resulting in **no outstanding borrowings** as of **June 30, 2025**[76](index=76&type=chunk) - Recent **trade developments**, including **increased tariffs on steel imports**, are expected to **positively impact demand** for Metallus products[76](index=76&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) - **Net sales** for **Q2 2025 increased by $9.9 million (3.4%)** to **$304.6 million**, driven by **higher shipments ($26.4 million)** and **favorable surcharges ($7.6 million)**, partially offset by **unfavorable price/mix ($24.1 million)** due to **lower base prices**[80](index=80&type=chunk) - **Net sales** for **H1 2025 decreased by $31.2 million (5.1%)** to **$585.1 million**, primarily due to **unfavorable price/mix ($50.2 million)** and **lower surcharges ($3.8 million)**, partially offset by **higher shipments ($22.8 million)**[83](index=83&type=chunk) - **Gross profit** for **Q2 2025 increased by $8.1 million (33.6%)** to **$32.2 million**, driven by higher volume, **better manufacturing performance**, and **favorable raw material spread**, partially offset by **unfavorable price/mix**[87](index=87&type=chunk) - **Gross profit** for **H1 2025 decreased by $20.6 million (27.6%)** to **$54.1 million**, primarily due to **unfavorable price/mix**, partially offset by **better manufacturing performance**, higher volume, and **favorable raw material spread**[91](index=91&type=chunk) - **Selling, General and Administrative (SG&A) expenses increased by $2.2 million (10.6%)** to **$22.9 million** in **Q2 2025** and by **$2.4 million (5.4%)** to **$47.2 million** in **H1 2025**, mainly due to **higher variable pay compensation** and **salary and benefits**[95](index=95&type=chunk) - **Net interest income decreased** to **$1.3 million** for **Q2 2025** (vs. **$2.4 million** in **Q2 2024**) and **$2.8 million** for **H1 2025** (vs. **$5.2 million** in **H1 2024**), attributed to lower cash invested in interest-generating accounts[97](index=97&type=chunk) - The **provision for income taxes** for **Q2 2025** was **$4.9 million** (**effective tax rate 57.0%**) compared to **$1.5 million (24.6%)** in **Q2 2024**. For **H1 2025**, it was **$6.5 million (56.5%)** compared to **$7.5 million (20.8%)** in **H1 2024**, with the **increase in effective tax rate** primarily due to **lower net income** and **limitations on tax deductibility** of **debt extinguishment loss**[102](index=102&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) - Metallus Inc. presents net sales by end-market, adjusted to exclude raw material and energy surcharges, to provide additional insight into **core pricing** and **market trends**, as surcharges can introduce **volatility**[105](index=105&type=chunk) Net Sales by End-Market, Excluding Surcharges (Three Months Ended June 30, 2025) | End-Market | Ship Tons (Thousands) | Net Sales (Millions $) | Surcharges (Millions $) | Base Sales (Millions $) | | :---------------- | :-------------------- | :--------------------- | :---------------------- | :---------------------- | | Industrial | 66.5 | 104.4 | 28.6 | 75.8 | | Automotive | 69.6 | 122.8 | 24.8 | 98.0 | | Aerospace & Defense | 15.4 | 42.1 | 5.7 | 36.4 | | Energy | 16.2 | 30.8 | 7.8 | 23.0 | | Other | — | 4.5 | — | 4.5 | | **Total** | **167.7** | **304.6** | **66.9** | **237.7** | Net Sales by End-Market, Excluding Surcharges (Six Months Ended June 30, 2025) | End-Market | Ship Tons (Thousands) | Net Sales (Millions $) | Surcharges (Millions $) | Base Sales (Millions $) | | :---------------- | :-------------------- | :--------------------- | :---------------------- | :---------------------- | | Industrial | 132.8 | 206.1 | 55.1 | 151.0 | | Automotive | 133.6 | 236.0 | 46.5 | 189.5 | | Aerospace & Defense | 24.0 | 74.6 | 9.1 | 65.5 | | Energy | 30.1 | 59.5 | 14.5 | 45.0 | | Other | — | 8.9 | — | 8.9 | | **Total** | **320.5** | **585.1** | **125.2** | **459.9** | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Key Liquidity Measures (Millions $) | Metric | June 30, 2025 | December 31, 2024 | Change ($M) | Change (%) | | :-------------------------- | :-------------- | :---------------- | :---------- | :--------- | | Cash and cash equivalents | 190.8 | 240.7 | (49.9) | -20.7% | | Credit Agreement Availability | 246.2 | 217.9 | 28.3 | 13.0% | | Total liquidity | 437.0 | 458.6 | (21.6) | -4.7% | - The Company repaid the remaining **$5.5 million principal amount** of its **Convertible Senior Notes due 2025**, resulting in a **$3.6 million loss on extinguishment of debt** and **no outstanding debt** as of **June 30, 2025**[111](index=111&type=chunk) - Expected **capital expenditures** for **2025** are approximately **$125 million**, with about **$90 million funded** by the **U.S. government**[114](index=114&type=chunk) - The Company contributed **$58.5 million** in **pension contributions** in **H1 2025** and anticipates an additional **$3.5 million** for the remainder of **2025**[115](index=115&type=chunk) - Metallus **repurchased approximately 0.7 million common shares** for **$8.9 million** in **H1 2025**, with **$93.9 million** remaining under its authorized **share repurchase program** as of **June 30, 2025**[118](index=118&type=chunk) Cash Flows Summary (Six Months Ended June 30) | Activity | 2025 (Millions $) | 2024 (Millions $) | Change ($M) | | :------------------------------------ | :---------------- | :---------------- | :---------- | | Net cash provided (used) by operating activities | (4.1) | 41.7 | (45.8) | | Net cash provided (used) by investing activities | (25.6) | (21.5) | (4.1) | | Net cash provided (used) by financing activities | (20.6) | (28.1) | 7.5 | [Critical Accounting Policies and Estimates](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The preparation of financial statements in accordance with **U.S. GAAP** requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses[125](index=125&type=chunk) - Critical accounting policies are reviewed periodically throughout the year[125](index=125&type=chunk) [New Accounting Guidance](index=32&type=section&id=New%20Accounting%20Guidance) - Refer to "Note 2 - Recent Accounting Pronouncements" in the Notes to the unaudited Consolidated Financial Statements for details on new accounting guidance[126](index=126&type=chunk) [Forward-Looking Statements](index=32&type=section&id=Forward-Looking%20Statements) - The report contains forward-looking statements regarding forecasts, beliefs, and expectations, which are subject to various risks and uncertainties[127](index=127&type=chunk) - Actual results may differ materially due to factors such as fluctuations in customer demand, changes in operating costs, success of operating plans, pension obligations, climate-related risks, litigation, cyber risks, and global economic conditions[127](index=127&type=chunk)[130](index=130&type=chunk) - The Company does not undertake any obligation to publicly update or revise any forward-looking statement[129](index=129&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes in market risk exposure since December 31, 2024, with details in the Annual Report on Form 10-K - **No material changes** in the Company's exposure to market risk since **December 31, 2024**[130](index=130&type=chunk) - For detailed disclosures, refer to Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in the Annual Report on **Form 10-K** for the fiscal year ended **December 31, 2024**[130](index=130&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and no material changes in internal control over financial reporting for Q2 2025 - **Disclosure controls and procedures were effective** as of **June 30, 2025**, based on evaluation by management, including the principal executive officer and principal financial officer[131](index=131&type=chunk) - **No changes in internal control over financial reporting** have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the most recent fiscal quarter[132](index=132&type=chunk) [Part II. Other Information](index=35&type=section&id=Part%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) Metallus Inc. faces ordinary legal actions, with no expected material adverse effect on financial results - The Company is involved in various claims and legal actions arising in the ordinary course of business[134](index=134&type=chunk) - Management believes the ultimate disposition of these matters will not have a **material adverse effect** on the Company's financial position, results of operations, or cash flows[134](index=134&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) Refer to the Annual Report on Form 10-K for a comprehensive discussion of Metallus Inc.'s business risks - For a discussion of risks and uncertainties, refer to the "Risk Factors" section in the Annual Report on **Form 10-K** for the year ended **December 31, 2024**[135](index=135&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Metallus Inc. repurchased 0.3 million common shares in Q2 2025, with $92.8 million remaining in the program Common Share Repurchase Activity (Three Months Ended June 30, 2025) | Month | Total number of shares purchased | Average price paid per share ($) | | :---------- | :------------------------------- | :------------------------------- | | April, 2025 | 96,130 | 12.47 | | May, 2025 | 87,985 | 12.55 | | June, 2025 | 71,287 | 14.24 | | **Quarter-to-date** | **255,402** | **12.99** | - As of **July 31, 2025**, the Company had a balance of **$92.8 million** remaining under its authorized **share repurchase program**[137](index=137&type=chunk) - The Board of Directors has authorized up to **$225.0 million** for the **share repurchase program** since **December 20, 2021**, with no expiration date[139](index=139&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) Several Metallus Inc. officers adopted Rule 10b5-1 trading plans for share sales, commencing August-September 2025 - Kristopher R. Westbrooks, President and COO, adopted a **10b5-1 trading arrangement** for up to **12,000 common shares** and **12,104 stock option shares**, scheduled to start no earlier than **September 10, 2025**[141](index=141&type=chunk) - Kevin Raketich, Executive Vice President and CCO, adopted a **10b5-1 trading arrangement** for up to **20,000 common shares** and **16,000 stock option shares**, scheduled to start no earlier than **August 22, 2025**[142](index=142&type=chunk) - Michael S. Williams, CEO, adopted a **10b5-1 trading arrangement** for up to **100,000 common shares** acquired upon exercise of stock options, scheduled to start no earlier than **September 22, 2025**[144](index=144&type=chunk) - All named officers are expected to remain in compliance with their share ownership guidelines following the sales[145](index=145&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL documents - Includes **Certification of the Chief Executive Officer** (Exhibit **31.1**) and **Chief Financial Officer** (Exhibit **31.2**) pursuant to **Rule 13a-14** of the Exchange Act and **Section 302** of the **Sarbanes-Oxley Act of 2002**[147](index=147&type=chunk) - Includes **Certifications of Chief Executive Officer** and **Chief Financial Officer** pursuant to **18 U.S.C. 1350** and **Section 906** of the **Sarbanes-Oxley Act of 2002** (Exhibit **32.1**)[147](index=147&type=chunk) - Includes **Inline XBRL Instance Document**, **Taxonomy Extension Schema Document**, and Cover Page Interactive Data File (Exhibit **101.INS**, **101.SCH**, **104**)[147](index=147&type=chunk) [Signatures](index=38&type=section&id=Signatures) The Form 10-Q report was signed on August 7, 2025, by the Principal Financial Officer - The report was signed on **August 7, 2025**[152](index=152&type=chunk) - Signed by John M. Zaranec, Executive Vice President and Chief Financial Officer (**Principal Financial Officer**) of Metallus Inc[152](index=152&type=chunk) ```

Executive Summary & Highlights Metallus's Q2 2025 performance shows improved profitability and cash flow, driven by strong execution and market gains [Second-Quarter 2025 Performance Overview](index=1&type=section&id=Second-Quarter%202025%20Performance%20Overview) Metallus reported Q2 2025 net sales of **$304.6 million** and adjusted EBITDA of **$26.5 million**, reflecting significant sequential and year-over-year profitability improvements Q2 2025 Financial Performance | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------- | :-------- | :-------- | :-------- | | Net Sales | $304.6 million | $280.5 million | $294.7 million | | Net Income (GAAP) | $3.7 million | $1.3 million | $4.6 million | | Diluted EPS (GAAP) | $0.09 | $0.03 | $0.10 | | Adjusted Net Income | $8.4 million | $3.2 million | $6.7 million | | Adjusted Diluted EPS | $0.20 | $0.07 | $0.15 | | Adjusted EBITDA | $26.5 million | $17.7 million | $19.9 million | - Q2 2025 net sales increased **9% sequentially** from Q1 2025 and **3% year-over-year** from Q2 2024[6](index=6&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Mike Williams highlighted solid Q2 results driven by improved profitability, operating cash flow, strengthening end markets, market share gains, and operational execution - Solid Q2 results with significant improvement in **profitability** and **operating cash flow**, supported by improving end markets, continued market share gains, and strong execution[5](index=5&type=chunk) - Safety and operational excellence remain top priorities, with benefits seen from ongoing process improvements, including an increase in **melt utilization**[5](index=5&type=chunk) - Demand for domestic steel remains strong, and the company is on track with new asset installations to expand capabilities and support the Army's mission to increase munitions production[5](index=5&type=chunk) - Anticipates short-term cost impacts in the second half of the year from labor contract negotiations and annual shutdown maintenance, but remains confident in strategic direction for sustained profitability and cash flow[5](index=5&type=chunk) [Second-Quarter 2025 Financial Summary](index=1&type=section&id=Second-Quarter%202025%20Financial%20Summary) Q2 2025 net sales reached **$304.6 million**, operating cash flow was **$34.8 million**, and total liquidity stood at **$437.0 million** Q2 2025 Key Financial Highlights | Metric | Value | | :-------------------------------- | :-------- | | Net Sales | $304.6 million | | Net Income | $3.7 million | | Adjusted EBITDA | $26.5 million | | Operating Cash Flow | $34.8 million | | Ending Cash & Cash Equivalents | $190.8 million | | Capital Expenditures | $17.8 million | | Common Shares Repurchased | $3.3 million | | Total Liquidity (as of June 30, 2025) | $437.0 million | - Net sales of **$304.6 million** increased **9%** compared with Q1 2025 (**$280.5 million**) and **3%** compared with Q2 2024 (**$294.7 million**), driven by higher shipments and increased raw material surcharge revenue per ton[6](index=6&type=chunk) Financial Position & Outlook This section details Metallus's cash, liquidity, capital allocation, and future commercial and operational expectations [Cash, Liquidity and Repurchase Activity](index=2&type=section&id=Cash%2C%20Liquidity%20and%20Repurchase%20Activity) Metallus reported **$190.8 million** in cash and **$437.0 million** in total liquidity, with **$34.8 million** operating cash flow and **$3.3 million** in share repurchases Cash, Liquidity, and Capital Allocation (Q2 2025) | Metric | Value (as of June 30, 2025) | | :-------------------------------- | :-------------------------- | | Cash and Cash Equivalents | $190.8 million | | Operating Cash Flow (Q2) | $34.8 million | | Capital Expenditures (Q2) | $17.8 million | | - U.S. Government Funded Projects | $15.3 million | | Common Shares Repurchased (Q2) | $3.3 million | | Remaining Share Repurchase Auth. | $93.9 million | | Convertible Notes Settled (Q2) | $5.5 million | | Total Liquidity | $437.0 million | | Government Funding Received (Q2) | $5.1 million | | Total Government Funding to Date | $71.5 million | - Operating cash flow of **$34.8 million** in Q2 was primarily driven by profitability and the receipt of an income tax refund[9](index=9&type=chunk) - The company settled the remaining **$5.5 million** aggregate principal amount of its outstanding convertible notes, resulting in **no outstanding borrowings** as of June 30, 2025[11](index=11&type=chunk) [Outlook](index=2&type=section&id=Outlook) Metallus anticipates a modest sequential decline in Q3 adjusted EBITDA due to expected costs from labor agreement negotiations and planned annual shutdown maintenance - Third-quarter adjusted EBITDA is expected to be **modestly lower** than the second quarter[13](index=13&type=chunk) - Profitability in Q3 is expected to be negatively impacted by costs associated with labor agreement negotiations, higher electricity costs, and planned annual shutdown maintenance costs[13](index=13&type=chunk) [Commercial Outlook](index=2&type=section&id=Commercial%20Outlook) Q2 2025 ship tons increased **10% sequentially** to **167,700 tons**, with melt utilization improving to **71%**, and Q3 shipments expected to be similar Ship Tons Performance | Metric | Q2 2025 | Sequential Change (vs. Q1 2025) | YoY Change (vs. Q2 2024) | | :---------------- | :-------- | :------------------------------ | :----------------------- | | Ship Tons | 167,700 tons | +14,800 tons (+10%) | +12% | | Melt Utilization | 71% | Up from 65% | Up from 53% | - Q2 2025 ship tons increased **10% sequentially**, driven by higher shipments in aerospace & defense, automotive, and energy end markets[14](index=14&type=chunk) - Third-quarter shipments are expected to be **similar to the second quarter**, and base price per ton is anticipated to remain relatively steady[15](index=15&type=chunk) [Operations Outlook](index=3&type=section&id=Operations%20Outlook) The company projects increased melt utilization in Q3, with **$15 million** in annual shutdown maintenance planned for H2 2025 and **$125 million** in full-year capital expenditures - The company expects an increase in the average **melt utilization rate** in the third quarter from **71 percent** in the second quarter[16](index=16&type=chunk) - Annual shutdown maintenance is planned for the second half of 2025 at a cost of approximately **$15 million**, with approximately **$5 million** expected in the third quarter[16](index=16&type=chunk) - Planned capital expenditures are approximately **$125 million** for the full year of 2025, consistent with previous guidance and inclusive of approximately **$90 million** of capital expenditures funded by the U.S. government[16](index=16&type=chunk) - Required pension contributions are expected to decline to approximately **$3.5 million** in the second half of 2025 compared with a previous estimate of approximately **$10 million**[16](index=16&type=chunk) [Other Matters & Strategic Initiatives](index=3&type=section&id=Other%20Matters%20%26%20Strategic%20Initiatives) Metallus received an additional **$10.0 million** in government funding and will begin labor agreement negotiations with anticipated incremental costs in H2 2025 - In July, the company received an additional **$10.0 million** in government funding related to the capacity expansion funding agreement[16](index=16&type=chunk) - Negotiations with the United Steelworkers regarding the current labor agreement will begin on August 18, 2025, with an anticipated **$3 million to $5 million** of incremental cost in the second half of 2025 associated with these negotiations[16](index=16&type=chunk) Company Information & Disclosures This section provides corporate information, webcast details, non-GAAP financial measure definitions, and forward-looking statements [Webcast Information](index=4&type=section&id=Webcast%20Information) Metallus will host a live Internet webcast of its conference call on Friday, August 8, 2025, at 9:00 a.m. ET, accessible at investors.metallus.com - Metallus will provide live Internet listening access to its conference call with the financial community on Friday, August 8, 2025, at **9:00 a.m. ET**, broadcast at investors.metallus.com[17](index=17&type=chunk) [About Metallus Inc.](index=4&type=section&id=About%20Metallus%20Inc.) Metallus (NYSE: MTUS) is a leader in high-performance specialty metals, manufacturing alloy steel products from recycled scrap metal, serving diverse industrial markets - Metallus (NYSE: MTUS) manufactures high-performance specialty metals from recycled scrap metal in Canton, OH[18](index=18&type=chunk) - The company serves demanding applications in industrial, automotive, aerospace & defense, and energy end-markets[18](index=18&type=chunk) - Metallus employs approximately **1,850 people** and had sales of **$1.1 billion** in 2024[18](index=18&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Metallus supplements GAAP results with non-GAAP measures like adjusted EPS and EBITDA, used by management for performance assessment and investor comparability - Metallus reports financial results in accordance with GAAP and corresponding metrics as non-GAAP financial measures, including adjusted earnings (loss) per share, adjusted net income (loss), EBITDA, adjusted EBITDA, free cash flow, and base sales[19](index=19&type=chunk) - Management believes these non-GAAP measures are useful to investors as they are representative of the company's performance and provide improved comparability of results, but should be viewed as additions to, not alternatives for, GAAP results[19](index=19&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements subject to various risks and uncertainties, including demand fluctuations, operating costs, and global economic conditions - The news release includes "forward-looking" statements, identifiable by specific words, which are subject to material uncertainties that may affect actual results[20](index=20&type=chunk)[23](index=23&type=chunk) - Factors that could cause actual results to differ materially include fluctuations in customer demand, changes in operating costs, success of operating plans, pension obligations, competitive factors, global economic conditions, and risks related to U.S. Army funding agreements[20](index=20&type=chunk)[21](index=21&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statement, except as required by federal securities laws[23](index=23&type=chunk) Consolidated Financial Statements This section presents Metallus's consolidated statements of operations, balance sheets, and cash flows for the reported periods [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, net sales were **$304.6 million** and net income was **$3.7 million**, while six-month net income significantly decreased to **$5.0 million** from **$28.6 million** in the prior year Consolidated Statements of Operations (Three Months Ended June 30) | (in millions, except per share data) | 2025 | 2024 | | :----------------------------------- | :------ | :------ | | Net sales | $304.6 | $294.7 | | Gross Profit | $32.2 | $24.1 | | Income (Loss) Before Income Taxes | $8.6 | $6.1 | | Net Income (Loss) | $3.7 | $4.6 | | Diluted earnings (loss) per share | $0.09 | $0.10 | Consolidated Statements of Operations (Six Months Ended June 30) | (in millions, except per share data) | 2025 | 2024 | | :----------------------------------- | :------ | :------ | | Net sales | $585.1 | $616.3 | | Gross Profit | $54.1 | $74.7 | | Income (Loss) Before Income Taxes | $11.5 | $36.1 | | Net Income (Loss) | $5.0 | $28.6 | | Diluted earnings (loss) per share | $0.11 | $0.62 | - Net income for the six months ended June 30, 2025, significantly decreased to **$5.0 million** from **$28.6 million** in the prior year, primarily due to a **$3.6 million** loss on extinguishment of debt in 2025[25](index=25&type=chunk) [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$1,112.0 million**, with cash at **$190.8 million**, and total liabilities decreased to **$422.0 million** due to settled convertible notes Consolidated Balance Sheets (June 30, 2025 vs. December 31, 2024) | (Dollars in millions) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $190.8 | $240.7 | | Total Current Assets | $560.5 | $587.3 | | Total Assets | $1,112.0 | $1,116.7 | | **LIABILITIES** | | | | Accounts payable | $143.7 | $119.2 | | Current convertible notes, net | — | $5.4 | | Total Current Liabilities | $276.2 | $281.5 | | Total Liabilities | $422.0 | $426.2 | | **SHAREHOLDERS' EQUITY** | | | | Total Shareholders' Equity | $690.0 | $690.5 | - Cash and cash equivalents decreased by **$49.9 million** from December 31, 2024, to June 30, 2025[28](index=28&type=chunk) - Current convertible notes, net, were reduced to **zero** as of June 30, 2025, from **$5.4 million** at December 31, 2024[28](index=28&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q2 2025 net cash from operating activities was **$34.8 million**, a significant increase from Q2 2024, while the six-month period saw a net use of **$4.1 million** Net Cash Provided (Used) by Operating Activities (Three Months Ended June 30) | (Dollars in millions) | 2025 | 2024 | | :-------------------- | :------ | :------ | | Net income (loss) | $3.7 | $4.6 | | Net Cash Provided (Used) by Operating Activities | $34.8 | $8.3 | | Net Cash Provided (Used) by Investing Activities | $(12.7) | $(4.1) | | Net Cash Provided (Used) by Financing Activities | $(12.4) | $(9.4) | Net Cash Provided (Used) by Operating Activities (Six Months Ended June 30) | (Dollars in millions) | 2025 | 2024 | | :-------------------- | :------ | :------ | | Net income (loss) | $5.0 | $28.6 | | Net Cash Provided (Used) by Operating Activities | $(4.1) | $41.7 | | Net Cash Provided (Used) by Investing Activities | $(25.6) | $(21.5) | | Net Cash Provided (Used) by Financing Activities | $(20.6) | $(28.1) | - Net cash provided by operating activities significantly increased to **$34.8 million** in Q2 2025 from **$8.3 million** in Q2 2024, but for the six-month period, it shifted to a net use of **$4.1 million** in 2025 from a net provide of **$41.7 million** in 2024[29](index=29&type=chunk) Non-GAAP Reconciliations & Supplemental Data This section provides reconciliations for non-GAAP financial measures including free cash flow, adjusted net income, EBITDA, base sales, and liquidity [Reconciliation of Free Cash Flow](index=10&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) Q2 2025 Free Cash Flow was **$32.3 million**, a substantial improvement from Q2 2024, while the six-month period showed a negative free cash flow of **$20.2 million** Free Cash Flow Reconciliation (Three Months Ended June 30) | (Dollars in millions) | 2025 | 2024 | | :-------------------- | :------ | :------ | | Net Cash Provided (Used) by Operating Activities | $34.8 | $8.3 | | Less: Capital expenditures (excluding government-funded) | $(2.5) | $(14.1) | | Free Cash Flow | $32.3 | $(5.8) | Free Cash Flow Reconciliation (Six Months Ended June 30) | (Dollars in millions) | 2025 | 2024 | | :-------------------- | :------ | :------ | | Net Cash Provided (Used) by Operating Activities | $(4.1) | $41.7 | | Less: Capital expenditures (excluding government-funded) | $(16.1) | $(31.5) | | Free Cash Flow | $(20.2) | $10.2 | - Capital spending for U.S. government-funded projects (**$15.3 million** in Q2 2025 and **$29.2 million** in 6M 2025) is excluded from Free Cash Flow calculation[31](index=31&type=chunk) [Reconciliation of Adjusted Net Income and Diluted EPS (Quarterly)](index=11&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Income%20and%20Diluted%20EPS%20(Quarterly)) Q2 2025 adjusted net income was **$8.4 million** (**$0.20** diluted EPS), an increase from prior periods, with key adjustments including loss on debt extinguishment Adjusted Net Income and Diluted EPS (Three Months Ended) | (Dollars in millions) | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :-------------------- | :------------ | :------------ | :------------- | | Net income (loss) (As reported) | $3.7 | $4.6 | $1.3 | | Adjustments: | | | | | Loss on extinguishment of debt | $3.6 | — | — | | IT transformation costs | $1.0 | $1.2 | $0.9 | | As adjusted (Net income) | $8.4 | $6.7 | $3.2 | | As adjusted (Diluted EPS) | $0.20 | $0.15 | $0.07 | - Adjusted net income for Q2 2025 increased to **$8.4 million** from **$3.2 million** in Q1 2025 and **$6.7 million** in Q2 2024[35](index=35&type=chunk) - Key adjustments in Q2 2025 included a **$3.6 million** loss on extinguishment of debt and **$1.0 million** in IT transformation costs[35](index=35&type=chunk) [Reconciliation of Adjusted Net Income and Diluted EPS (Six Months)](index=13&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Income%20and%20Diluted%20EPS%20(Six%20Months)) For the six months ended June 30, 2025, adjusted net income was **$11.6 million** (**$0.27** diluted EPS), a decrease from **$32.8 million** in the prior year period Adjusted Net Income and Diluted EPS (Six Months Ended June 30) | (Dollars in millions) | 2025 | 2024 | | :-------------------- | :------ | :------ | | Net income (loss) (As reported) | $5.0 | $28.6 | | Adjustments: | | | | Loss on extinguishment of debt | $3.6 | — | | IT transformation costs | $1.9 | $2.5 | | Salaried pension plan surplus asset distribution | $3.6 | — | | As adjusted (Net income) | $11.6 | $32.8 | | As adjusted (Diluted EPS) | $0.27 | $0.71 | - Adjusted net income for the six months ended June 30, 2025, decreased to **$11.6 million** from **$32.8 million** in the prior year period[45](index=45&type=chunk) - Significant adjustments for the 2025 six-month period include a **$3.6 million** loss on extinguishment of debt and a **$3.6 million** salaried pension plan surplus asset distribution[45](index=45&type=chunk) [Reconciliation of EBITDA and Adjusted EBITDA](index=15&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA) Q2 2025 Adjusted EBITDA was **$26.5 million** (**8.7%** margin), an increase from prior periods, while the six-month Adjusted EBITDA was **$44.2 million** (**7.6%** margin) EBITDA and Adjusted EBITDA (Three Months Ended) | (Dollars in millions) | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :-------------------- | :------------ | :------------ | :------------- | | Net income (loss) | $3.7 | $4.6 | $1.3 | | EBITDA | $21.7 | $17.1 | $15.4 | | EBITDA Margin | 7.1% | 5.8% | 5.5% | | Adjusted EBITDA | $26.5 | $19.9 | $17.7 | | Adjusted EBITDA Margin | 8.7% | 6.8% | 6.3% | EBITDA and Adjusted EBITDA (Six Months Ended June 30) | (Dollars in millions) | 2025 | 2024 | | :-------------------- | :------ | :------ | | Net income (loss) | $5.0 | $28.6 | | EBITDA | $37.1 | $57.7 | | EBITDA Margin | 6.3% | 9.4% | | Adjusted EBITDA | $44.2 | $63.3 | | Adjusted EBITDA Margin | 7.6% | 10.3% | - Adjusted EBITDA margin improved sequentially to **8.7%** in Q2 2025 from **6.3%** in Q1 2025[55](index=55&type=chunk) [Reconciliation of Base Sales by End-Market](index=17&type=section&id=Reconciliation%20of%20Base%20Sales%20by%20End-Market) Q2 2025 total net sales were **$304.6 million**, with base sales of **$237.7 million**, showing increases from Q1 2025, while six-month base sales decreased year-over-year Net Sales, Surcharges, and Base Sales by End-Market (Three Months Ended June 30, 2025) | End-Market | Ship Tons (000s) | Net Sales (million) | Surcharges (million) | Base Sales (million) | Net Sales / Ton | Surcharges / Ton | Base Sales / Ton | | :---------------- | :--------------- | :------------- | :-------------- | :-------------- | :-------------- | :--------------- | :--------------- | | Industrial | 66.5 | $104.4 | $28.6 | $75.8 | $1,570 | $430 | $1,140 | | Automotive | 69.6 | $122.8 | $24.8 | $98.0 | $1,764 | $356 | $1,408 | | Aerospace & Defense | 15.4 | $42.1 | $5.7 | $36.4 | $2,734 | $370 | $2,364 | | Energy | 16.2 | $30.8 | $7.8 | $23.0 | $1,901 | $481 | $1,420 | | Other | — | $4.5 | — | $4.5 | — | — | — | | **Total** | **167.7** | **$304.6** | **$66.9** | **$237.7** | **$1,816** | **$399** | **$1,417** | Net Sales, Surcharges, and Base Sales by End-Market (Six Months Ended June 30, 2025) | End-Market | Ship Tons (000s) | Net Sales (million) | Surcharges (million) | Base Sales (million) | Net Sales / Ton | Surcharges / Ton | Base Sales / Ton | | :---------------- | :--------------- | :------------- | :-------------- | :-------------- | :-------------- | :--------------- | :--------------- | | Industrial | 132.8 | $206.1 | $55.2 | $150.9 | $1,552 | $416 | $1,136 | | Automotive | 133.7 | $236.0 | $46.4 | $189.6 | $1,765 | $347 | $1,418 | | Aerospace & Defense | 24.0 | $74.6 | $9.1 | $65.5 | $3,108 | $379 | $2,729 | | Energy | 30.1 | $59.5 | $14.5 | $45.0 | $1,977 | $482 | $1,495 | | Other | — | $8.9 | — | $8.9 | — | — | — | | **Total** | **320.6** | **$585.1** | **$125.2** | **$459.9** | **$1,825** | **$391** | **$1,434** | - Base sales for Q2 2025 increased to **$237.7 million** from **$222.2 million** in Q1 2025, while for the six months ended June 30, 2025, base sales decreased to **$459.9 million** from **$487.3 million** in the prior year[65](index=65&type=chunk)[66](index=66&type=chunk) [Calculation of Total Liquidity](index=20&type=section&id=Calculation%20of%20Total%20Liquidity) As of June 30, 2025, Metallus reported total liquidity of **$437.0 million**, comprising cash and available borrowing capacity, a decrease from December 31, 2024 Total Liquidity Calculation | (Dollars in millions) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $190.8 | $240.7 | | Credit Agreement: | | | | Maximum availability | $400.0 | $400.0 | | Suppressed availability | $(148.5) | $(176.8) | | Availability not borrowed | $246.2 | $217.9 | | Total Liquidity | $437.0 | $458.6 | - Total liquidity decreased by **$21.6 million** from December 31, 2024, to June 30, 2025, primarily due to a reduction in cash and cash equivalents[69](index=69&type=chunk) [Adjusted EBITDA Walks](index=21&type=section&id=Adjusted%20EBITDA%20Walks) Adjusted EBITDA increased from **$19.9 million** in Q2 2024 to **$26.5 million** in Q2 2025, driven by volume, raw material spread, and manufacturing improvements Adjusted EBITDA Walk (Q2 2024 vs. Q2 2025) | (Dollars in millions) | Impact | | :-------------------- | :----- | | Beginning Adjusted EBITDA (2024 2Q) | $19.9 | | Volume | $8.3 | | Price/Mix | $(12.4)| | Raw Material Spread | $5.8 | | Manufacturing | $6.2 | | SG&A | $(2.5) | | Other | $1.2 | | Ending Adjusted EBITDA (2025 2Q) | $26.5 | Adjusted EBITDA Walk (Q1 2025 vs. Q2 2025) | (Dollars in millions) | Impact | | :-------------------- | :----- | | Beginning Adjusted EBITDA (2025 1Q) | $17.7 | | Volume | $4.3 | | Price/Mix | $(0.2) | | Raw Material Spread | $0.9 | | Manufacturing | $3.6 | | SG&A | $0.3 | | Other | $(0.1) | | Ending Adjusted EBITDA (2025 2Q) | $26.5 | - Volume and manufacturing improvements were key positive drivers for Adjusted EBITDA both year-over-year and sequentially[71](index=71&type=chunk)