Metallus(MTUS) - 2025 Q3 - Quarterly Results

Financial Performance - Third-quarter 2025 net sales were $305.9 million, a 35% increase compared to $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 same quarter last year[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] - The company reported a net income of $13.1 million for the nine months ended September 30, 2025, compared to $22.7 million 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] - Total 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’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] 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] - Annual shutdown maintenance planned for the fourth quarter will incur approximately $11 million in costs, impacting melt utilization rates[14][14] Operational Metrics - Ship tons for the third quarter were 163,100, a 36% increase compared to the prior-year third quarter, but a 3% decrease sequentially[12][12] - The company reported a total of 163.1 thousand ship tons for Q3 2025, compared to 119.9 thousand ship tons in Q3 2024, indicating a 36.0% increase in volume[66] - Total ship tons for the nine months ended September 30, 2025, were 483.7 thousand, up from 425.3 thousand in the same period of 2024, representing a 13.7% increase[67] Investments and Capital Expenditures - The company invested $28.4 million in capital expenditures during the third quarter, including $22.0 million for government-funded projects[9][14] - Capital expenditures in Q3 2025 totaled $6.4 million, down from $11.8 million in Q3 2024[28] Future 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][12] - 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][14] Balance Sheet Highlights - Total assets increased to $1,150.4 million in 2025 from $1,116.7 million in 2024, representing a growth of approximately 3.0%[25] - Total liabilities rose to $452.7 million in 2025 from $426.2 million in 2024, an increase of approximately 6.2%[25] - Shareholders' equity reached $697.7 million in 2025, compared to $690.5 million in 2024, showing a slight increase of approximately 1.7%[25] - Accounts receivable, net of allowances, stood at $129.3 million in 2025, up from $90.8 million in 2024, indicating a significant increase of about 42.5%[25] - Inventories, net increased to $237.5 million in 2025 from $219.8 million in 2024, reflecting a growth of approximately 8.0%[25] Debt and Interest - Interest expense, net, decreased to $(1.4) million in Q3 2025 from $(2.4) million in Q3 2024[23] - The company reported a loss on extinguishment of debt of $3.6 million for the nine months ended September 30, 2025[23] - The company recognized a loss of $3.6 million from the distribution of surplus assets following the completion of the salaried pension plan annuitization in May 2024[50] Strategic Initiatives - 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 systems and reducing operating costs[59] - Business transformation costs include professional service fees for evaluating strategic opportunities to diversify the company's end market and product portfolio through acquisitions[58] - The company offered an exit incentive program to certain employees to support succession planning and sustainable profitable growth strategy[45]