Ryerson(US:RYI)2025-05-01 14:00Financial Data and Key Metrics Changes - In Q1 2025, Ryerson reported net sales of $1,140 million, a 12.7% increase from Q4 2024, with low double-digit sequential volume growth across all product categories [16] - Adjusted EBITDA, excluding LIFO, was $32.8 million in Q1 2025, compared to $10.3 million in the prior quarter [18] - Gross margin contracted by 100 basis points to 18%, influenced by $7 million in LIFO expense, while excluding LIFO, gross margin expanded by 220 basis points to 18.6% [17] Business Line Data and Key Metrics Changes - Ryerson's first quarter sales volume was 500,000 tons, approximately 12% higher quarter over quarter, with North American shipments increasing by almost 14% [9] - Average selling price was $2,271 per ton, representing a 1% increase quarter over quarter, with carbon products flat, aluminum products up by 2%, and stainless steel products down by approximately 3% [16] Market Data and Key Metrics Changes - North American industry sales volumes increased by nearly 11% quarter over quarter, indicating a strong market recovery [9] - The company experienced market share gains across most metal product categories, particularly in construction equipment, metal fabrication, and industrial machinery [10] Company Strategy and Development Direction - Ryerson is focusing on operationalizing significant CapEx investments to improve quality of earnings and customer experiences [4] - The company aims to increase its transactional sales from 43% to 60% by improving service levels and lead times through strategic asset placement [40] Management's Comments on Operating Environment and Future Outlook - Management noted that while demand visibility is opaque, average selling price and transactional margin trends have improved early into Q2 2025, leading to expectations of sequentially improving operating income [7] - The company anticipates a balanced inventory environment and good domestic metal availability, with revenues expected to range from $1,150 million to $1,190 million in Q2 2025 [11] Other Important Information - Ryerson maintained a $60 million expense reduction target, achieving a $32 expense per ton reduction compared to Q1 2024 [11] - The company ended Q1 2025 with $498 million in total debt and $464 million in net debt, with available global liquidity increasing to $490 million [14] Q&A Session Summary Question: Plans to manage debt levels and reduce interest expense - Management highlighted the importance of winding down CapEx projects and operationalizing them to improve cash flow and reduce debt [24][28] Question: Second quarter pricing outlook - Management indicated that the pricing outlook is affected by OEM contract cuts and customer destocking, with a focus on transactional growth [30][32] Question: Current split between transactional and contractual sales - The current split is approximately 47% transactional sales, up from 43% last year, with a target to reach about 60% [39][40] Question: Portfolio mix and stainless market outlook - Management believes the stainless market will recover and emphasized the importance of maintaining market share while also growing the carbon franchise [42][44]