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]

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 [23] - In 2024, Industrial accounted for 40% of the company's shipment mix and 36% of net sales [23] - In 2024, Aerospace & Defense accounted for 8% of the company's shipment mix and 12% of net sales [23] - In 2024, Energy accounted for 7% of the company's shipment mix and 8% of net sales [23] Financial Performance and Outlook - In Q1 2025, Metallus' net sales were $280.5 million, a 17% increase compared to Q4 2024 [29] - The company's cash and cash equivalents balance was $180.3 million, with total liquidity of $432 million as of March 31, 2025 [29] - The company expects Q2 2025 adjusted EBITDA to be higher than Q1 2025 [29] Capital Allocation and Investment - Planned capital expenditures are approximately $125 million for the full year 2025, inclusive of approximately $90 million of capital expenditures funded by the U S government [29] - From 2022 through Q1 2025, the company repurchased 7.1 million shares for $127.8 million [85]

Financial Data and Key Metrics Changes - The company reported first quarter sales of $493 million with net income of $2.5 million, a decrease from $8.7 million in the same period last year [6][18] - EBITDA for the first quarter was $16.1 million compared to $23.3 million in the prior year [18] - Consolidated operating expenses increased to $110.6 million from $103.2 million year-over-year, influenced by the acquisition of Metalworks [19][21] - The effective tax rate for the first quarter was 30.1%, up from 27% in the same period last year [21] Business Segment Data and Key Metrics Changes - The Carbon segment reported EBITDA of $10.9 million, driven by increased shipping volumes and growth in coated carbon steel products [13] - The Pipe and Tube segment delivered EBITDA of $6.4 million, although it experienced slower OEM orders [14] - The Specialty Metals segment reported EBITDA of $3.6 million, with ongoing investments in growth and expansion [14] Market Data and Key Metrics Changes - Hot roll pricing increased by more than 30% during the quarter due to the announced 25% tariffs on steel and aluminum [12] - The company noted that over 90% of its metal supply and nearly all sales are domestically based, positioning it well in the current tariff environment [10] Company Strategy and Development Direction - The company is focused on building a stronger, more resilient Olympic Steel, emphasizing profitable growth through diversification into metal-intensive end markets and expanding fabrication capabilities [6][7] - The commitment to mergers and acquisitions (M&A) remains a key growth strategy, with the recent acquisition of Metalworks proving immediately accretive [7][8] - Ongoing capital investments are planned to enhance throughput and safety, with several new facilities and equipment upgrades expected to come online in the near future [15][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive profitable growth regardless of market conditions, citing strong operational discipline and effective working capital management [10][11] - The management team highlighted the importance of onshoring opportunities and the potential for growth in the pipe and tube market, particularly in data centers [40] Other Important Information - The company announced a five-year extension of its $625 million asset-based revolving credit facility, providing flexible capital for growth initiatives [10][20] - A quarterly dividend of $0.16 per share was declared, continuing a history of regular dividends since February 2006 [21] Q&A Session Summary Question: How much of the first quarter volume boost is due to pull forward demand? - Management indicated that a significant portion of the volume increase was due to stronger spot sales, with traditional sales being 65% contract and 35% spot [26][28] Question: Expectations for the Pipe and Tube segment's performance? - The Pipe and Tube segment did not see the same sales increase as the Carbon segment, primarily due to its more contractual nature [29][30] Question: Current appetite for M&A and marketplace conditions? - Management confirmed that M&A remains a key growth strategy, with a return of potential sellers observed in April [31][32] Question: Outlook for the Pipe and Tube segment beyond Q2? - Management expects a more traditional year for the Pipe and Tube segment, with growth opportunities in onshoring [40] Question: Thoughts on working capital and inventory management? - The company successfully reduced debt by $37 million in Q1 and expects modest decreases in the following quarters [43][45] Question: Impact of tariffs on M&A strategy? - Management stated that tariffs have not directly impacted M&A strategy, as all acquisitions have been domestic [53][56]

Financial Data and Key Metrics Changes - Total sales for 2024 were $1.9 billion, with net income at $23 million and adjusted EBITDA of $72.5 million, reflecting the company's ability to deliver profitable results despite a challenging environment [11][12][13] - For Q4 2024, net income totaled $3.9 million compared to $7.4 million in Q4 2023, with adjusted EBITDA at $14.5 million, down from $16.7 million year-over-year but up from $13 million in Q3 2024 [32][33] Business Segment Data and Key Metrics Changes - The carbon segment maintained shipping volumes despite lower OEM demand, achieving $7.2 million in EBITDA for Q4 2024, supported by a 17% growth in galvanized participation [25] - The pipe and tube segment delivered adjusted EBITDA of $7.2 million, focusing on fabricated product growth [26] - The Specialty Metals segment contributed $4 million of EBITDA, with strong market share gains in stainless and aluminum [27] Market Data and Key Metrics Changes - The company successfully navigated a difficult year for the metals industry, maintaining shipping volumes within 1% of 2023 levels, outperforming industry shipment levels [10] - The Purchasing Managers' Index for manufacturing was below 50 for eleven of the twelve months in 2024, indicating a challenging demand environment [10] Company Strategy and Development Direction - The company is focused on diversification and growth through strategic investments in automation and capacity expansion, with significant projects expected to become operational in 2025 or early 2026 [14][29] - The acquisition of Metalworks is part of the company's strategy to enhance its position in manufactured metal products and is expected to be accretive [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook for the metals industry, emphasizing the importance of remaining nimble and adaptive to market dynamics [21][22] - The company plans to continue investing in automation, product diversity, and quality solutions for customers [22] Other Important Information - The board approved a 7% increase in the quarterly dividend, raising it from $0.15 to $0.16 per share, marking the fourth dividend increase since 2022 [20][37] - The company ended Q4 2024 with total debt of approximately $272 million, an increase due to the Metalworks acquisition [35] Q&A Session Summary Question: What drove the increase in gross profit per ton in the carbon flat segment? - Management attributed the increase to the expansion of end-use metal products and a concerted effort in growing the fabrication business, which contributed positively to margins [44][47][48] Question: What are the expectations for the pipe and tube segment moving into Q1? - Management indicated that the first quarter is expected to be traditional, with opportunities for recovery due to new customers acquired at the end of 2024 [50] Question: How will the tariffs affect profitability and M&A valuations? - Management noted that the tariffs could impact profitability in Q1 and that they anticipate more activity in the M&A market as conditions improve in the back half of 2025 [84][86] Question: What is the outlook for capital expenditures and margins? - Management expects capital expenditures to increase in 2025, with a positive impact on margins anticipated in 2026 as new projects come online [90] Question: What contributed to the decrease in selling and general expenses? - The decrease was primarily due to $1.8 million less in variable incentive expenses tied to profitability, reflecting the lower performance in Q4 2024 compared to the previous year [92]