TimkenSteel(TMST) - 2025 Q3 - Quarterly Results

Financial Performance - Third-quarter 2025 net sales were $305.9 million, a 35% increase from $227.2 million in the same quarter last year[6][4] - Net income for the third quarter was $8.1 million, or $0.19 per diluted share, compared to a net loss of $5.9 million in the prior-year quarter[2][4] - Adjusted EBITDA for the third quarter was $29.0 million, reflecting a sequential improvement from $26.5 million in the second quarter of 2025[2][3][12] - Gross profit for Q3 2025 was $35.0 million, compared to $12.1 million in Q3 2024, reflecting a significant improvement[23] - Net income for the nine months ended September 30, 2025, was $13.1 million, down from $22.7 million in the same period of 2024[23] - Basic earnings per share for Q3 2025 were $0.19, compared to a loss of $0.13 per share in Q3 2024[23] - Adjusted net income for Q3 2025 was $12.0 million, compared to an adjusted net loss of $4.4 million in Q3 2024[32] - For the nine months ended September 30, 2025, the company reported an adjusted net income of $23.6 million, with adjusted diluted earnings per share of $0.55, compared to $28.4 million and $0.62 for the same period in 2024[43] Cash Flow and Liquidity - Operating cash flow for the third quarter was $22.0 million, with total liquidity of $436.9 million as of September 30, 2025[7][9] - Free cash flow for Q3 2025 was $15.6 million, compared to a negative free cash flow of $27.1 million in Q3 2024[28] - Cash, cash equivalents, and restricted cash at the end of Q3 2025 was $192.2 million, compared to $255.9 million at the end of Q3 2024[26] - The company received $10.0 million in funding from the U.S. Army in Q3 2025, contributing to its cash flow[28] - The company’s cash and cash equivalents decreased to $191.5 million as of September 30, 2025, down from $240.7 million at the end of 2024[69] - Total liquidity as of September 30, 2025, was $436.9 million, slightly down from $458.6 million at the end of 2024[69] Capital Expenditures and Investments - The company invested $28.4 million in capital expenditures during the third quarter, including $22.0 million for U.S. government-funded projects[9][14] - Capital expenditures in Q3 2025 totaled $6.4 million, down from $11.8 million in Q3 2024[28] Operational Metrics - Ship tons decreased by 3% sequentially to 163,100 tons, but increased by 36% compared to the prior-year third quarter[12] - The total ship tons for the three months ended September 30, 2025, were 163.1 thousand, compared to 119.9 thousand in 2024, reflecting a 36.0% increase[66] - The company reported a total of 483.7 thousand ship tons for the nine months ended September 30, 2025, an increase from 425.3 thousand tons in 2024, representing a growth of 13.7%[67] Expenses and Charges - Selling, general & administrative expenses (SG&A) increased to $24.5 million in Q3 2025 from $22.5 million in Q3 2024[23] - The company incurred restructuring charges of $2.7 million in Q3 2025, with no such charges reported in Q3 2024[23] - The company incurred restructuring charges of $2.7 million and IT transformation costs of $2.9 million during the nine months ended September 30, 2025[43] Debt and Liabilities - The company reported a loss on extinguishment of debt of $3.6 million for the nine months ended September 30, 2025[23] - Total liabilities increased to $452.7 million in 2025 from $426.2 million in 2024, an increase of 6.2%[25] - Current liabilities rose to $305.4 million in 2025 from $281.5 million in 2024, an increase of 8.5%[25] Shareholder Equity - Shareholders' equity increased to $697.7 million in 2025 from $690.5 million in 2024, a growth of 1.7%[25] - Retained deficit improved to $(39.3) million in 2025 from $(52.4) million in 2024, a reduction of 25.5%[25] Business Strategy and Outlook - The company expects fourth-quarter adjusted EBITDA to be lower than the third quarter due to normal seasonality and potential global supply chain challenges[12][13] - Metallus secured new 2026 programs with key customers in the aerospace and defense market, targeting an annual run rate of $250 million in total sales by mid-2026[14] - The company is focusing on targeted growth through acquisitions as part of its business transformation strategy[35] - The company is undergoing a multi-year IT transformation initiative aimed at reducing operating costs and improving efficiency[36] - The company is undergoing a multi-year IT transformation initiative aimed at modernizing legacy IT systems and reducing operating costs[59] Market Conditions - The company reported a net loss of $5.9 million for the third quarter of 2024, reflecting a challenging market environment[55] - The company aims to enhance clarity of core pricing and results by presenting net sales adjusted to exclude surcharges, which can introduce volatility[63]