Ryerson(RYI) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q4 2025, Ryerson reported net sales of $1.1 billion, a decrease of approximately 5% compared to the previous quarter, but an increase of 9.7% compared to Q4 2024 [20] - The company experienced a net loss of $38 million or $1.18 per share, compared to a net loss of $4.3 million or $0.13 per share in Q4 2024 [21][22] - Adjusted EBITDA, excluding LIFO, was $20.4 million for Q4 2025, compared to $10.3 million in Q4 2024 [22] Business Line Data and Key Metrics Changes - Ryerson's North American shipments decreased by 6.8% sequentially in Q4 2025, while total company tons shipped were down just under 5% quarter-over-quarter, indicating market share gains for the full year [11] - The fabrication and welding sector saw the most year-over-year volume growth, followed by the machine shop and machinery and equipment sectors, while the commercial transportation sector experienced weakness [12] Market Data and Key Metrics Changes - North American industry volumes, as measured by the MSCI, experienced a normal seasonal decline of 5.8% sequentially in Q4 2025 [11] - The company anticipates first-quarter 2026 tons shipped to be up 13%-15% compared to Q4 2025, indicating a positive market outlook [13] Company Strategy and Development Direction - The company aims to realize $120 million in annual run rate synergies from the merger with Olympic Steel, focusing on optimizing asset utilization and capturing targeted cost and revenue benefits [5][9] - Priorities for 2026 include continuing integration of the combined organization, improving earnings quality, and reducing leverage [9] Management's Comments on Operating Environment and Future Outlook - Management noted encouraging strength in customer quote and order activity, expecting gross margin expansion year-over-year and sequentially as better pricing propagates through the industrial metals value chain [7][8] - The company is optimistic about the market dynamics and believes the merger positions them well for future growth [60] Other Important Information - The company generated $113 million in cash from operating activities in Q4 2025, decreasing net debt by $34 million compared to the prior quarter [17][18] - Ryerson distributed $6.1 million in dividends during Q4 2025 and announced a similar dividend for the first quarter [19] Q&A Session Summary Question: Impact of price increases on customer acceptance - Management noted that while there has been some pushback, overall business activity has increased, and price increases are starting to be accepted [28] Question: Specific challenges in passing through rising mill prices - Aluminum was identified as the commodity with the slowest price propagation, but improvements are being seen [41] Question: First-quarter volume guidance and customer activity - Management indicated that stronger market conditions and investments are contributing to the anticipated volume increase [43][45] Question: Future M&A considerations post-merger - Management emphasized the focus on achieving merger synergies and reducing debt before considering further M&A opportunities [52]