EXHIBIT 99.1
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 | | 2621 West 15th Place Chicago, IL 60608
For additional information: Terence R. Rogers VP Finance and Treasurer 773.788.3720 |
N E W S R E L E A S E
RYERSON TULL REPORTS FIRST QUARTER 2005
EARNINGS PER SHARE OF $1.37
Chicago, Illinois – May 2, 2005 – Ryerson Tull, Inc. (NYSE: RT) today reported net income of $35.4 million, or $1.37 per diluted share, for the first quarter ended March 31, 2005, compared with $12.0 million, or $0.46 per share, for the first quarter of 2004. The first quarter of 2005 included the contribution from Integris Metals, Inc., which was acquired on January 4, 2005, and restructuring and plant closure costs of $2.4 million pretax, or $0.06 per share.
“Our strong results for the first quarter reflected the three fundamentals that guide our actions: an intense focus on operating efficiency; driving internal growth through marketing; and acquisitions that significantly and structurally improve our competitive position,” said Neil S. Novich, Chairman, President, and CEO of Ryerson Tull.
First quarter 2005 sales were $1.5 billion, an increase of 118.5 percent from the first quarter of 2004, and 70.4 percent, sequentially, from the fourth quarter of 2004, primarily due to the acquisition of Integris.
“With the inclusion of Integris, our results will reflect a higher percentage of stainless and aluminum products—which now account for approximately one half of net sales,” said Novich. “As a result, volume, average prices, and profitability measurements look somewhat different in the first quarter of 2005 than in prior periods.”
For the first quarter of 2005, tons shipped increased 22.5 percent and 28.2 percent, respectively, from the first quarter of 2004 and the fourth quarter of 2004. The average selling price per ton expanded 78.2 percent, year-over-year, and 33.1 percent, sequentially. Gross profit per ton improved to $301 in the first quarter of 2005, compared with $188 in the first quarter of 2004 and $182 in the fourth quarter of 2004. Gross margins of 17.5 percent in the first quarter of 2005 declined from 19.4 percent in the first quarter of 2004, but increased from 14.0 percent in the fourth quarter of 2004.
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Operating expenses per ton increased to $217 from $154 in the year-ago period and $175 in the prior period.
“As we are already running Ryerson Tull and Integris as one business, it quickly becomes difficult, if not impossible, to evaluate the two companies separately,” said Novich. “But to help investors understand our performance, we’ve added a breakdown of Integris’ net sales, gross profit, operating profit, and tons shipped for each quarter of 2004 to the supplemental data section of the earnings schedule.” Comparing the first quarter of 2005 with the combined historical results for Ryerson Tull and Integris, as stand alone companies in the first quarter of 2004, tonnage declined 2 percent, year-over-year; net sales were ahead 31 percent, due to the expansion in the average selling price per ton; gross profit increased 17 percent; and operating profit expanded 40 percent. (Pro forma information including Integris and J&F Steel will be available in the company’s first quarter Form 10-Q.) “These were excellent comparisons against a strong first quarter of 2004 that included pre-buying by customers, in anticipation of a price increase.”
Integris Update
“The integration of Integris is progressing very well,” continued Novich. “We have our management team in place, with each geographic market headed by one manager. We have done an excellent job of retaining customers. We remain confident in our ability to capture synergies and realize annualized cost savings of $30 million, going forward. And we expect to generate new growth opportunities as we cross sell our expanded product line and provide unparalleled service and geographic reach.”
Financial Condition
Ryerson Tull ended the first quarter of 2005 with a debt-to-capital ratio of 74 percent and availability of approximately $167 million under its credit facility.
Outlook
“Overall, we foresee a slight softening in demand, due in part to excess industry inventory, and some softening in prices, largely driven by carbon flat rolled,” concluded Novich. “However, over the medium to longer term, we expect our performance to
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reflect strategic advantages from the Integris acquisition and our ability to capture top- and bottom-line benefits.”
Note: Ryerson Tull will conduct a conference call to discuss first-quarter results on Tuesday, May 3, 2005, at 9:00 a.m. Eastern time. The call will be simulcast on the company’s Web site, www.ryersontull.com.
Ryerson Tull, Inc. is North America’s leading distributor and processor of metals, with 2004 revenues of $3.3 billion. In January 2005, Ryerson Tull acquired Integris Metals, Inc., which had 2004 revenues of $2.0 billion. The company services customers through a network of service centers across the United States and in Canada, Mexico, and India.
Business Risks: This press release contains statements that are not historical facts and are forward-looking statements. The forward-looking statements (generally identified by words or phrases indicating a projection or future expectations, such as “anticipates”, “is planning to”, “estimates”, “expects”, or “believes”) are based on the company’s current expectations, estimates, assumptions, forecasts, and projections about the general economy, industry, and company performance. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that could result in actual outcomes or results being materially different from those expressed or forecast. Representative factors that may affect the company’s performance include the general economy and business conditions relating to metals-consuming industries; sales volumes; pricing pressures; cost of purchased materials; management’s ability to integrate and achieve projected cost savings with the acquisition of Integris; ability to maintain or increase market share and gross profits; inventory management; market competition; industry and customer consolidation; customer and supplier insolvencies; and labor relations.
RYERSON TULL, INC. AND SUBSIDIARY COMPANIES
Selected Income and Balance Sheet Data—Unaudited
(Dollars and Shares in Thousands except Per Share and Per Ton Data)
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| | | First Quarter
| | | Fourth
Quarter
2004
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| | | 2005
| | | 2004
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NET SALES | | $ | 1,539,974 | | | $ | 704,845 | | | $ | 903,682 | |
Cost of materials sold | | | 1,271,175 | | | | 567,849 | | | | 776,891 | |
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Gross profit | | | 268,799 | | | | 136,996 | | | | 126,791 | |
Warehousing and delivery | | | 101,775 | | | | 59,249 | | | | 66,505 | |
Selling, general and administrative | | | 89,216 | | | | 52,841 | | | | 56,488 | |
Restructuring and plant closure costs | | | 2,394 | | | | — | | | | — | |
Gain on sale of assets | | | — | | | | — | | | | (927 | ) |
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OPERATING PROFIT | | | 75,414 | | | | 24,906 | | | | 4,725 | |
Other revenue and expense, net | | | 1,218 | | | | 42 | | | | 150 | |
Interest and other expense on debt | | | (19,400 | ) | | | (4,928 | ) | | | (7,793 | ) |
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INCOME (LOSS) BEFORE INCOME TAXES | | | 57,232 | | | | 20,020 | | | | (2,918 | ) |
Provision (benefit) for income taxes | | | 21,854 | | | | 8,028 | | | | (3,178 | ) |
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INCOME FROM CONTINUING OPERATIONS | | | 35,378 | | | | 11,992 | | | | 260 | |
Discontinued operations (net of tax): | | | | | | | | | | | | |
Adjustment to the gain on sale of the Inland Steel Company | | | — | | | | — | | | | 3,515 | |
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NET INCOME | | $ | 35,378 | | | $ | 11,992 | | | $ | 3,775 | |
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INCOME PER SHARE OF COMMON STOCK | | | | | | | | | | | | |
Basic: | | | | | | | | | | | | |
Income from continuing operations | | $ | 1.41 | | | $ | 0.48 | | | $ | 0.01 | |
Inland Steel Company—adjustment to gain on sale | | | — | | | | — | | | | 0.14 | |
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Net income | | $ | 1.41 | | | $ | 0.48 | | | $ | 0.15 | |
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Diluted: | | | | | | | | | | | | |
Income from continuing operations | | $ | 1.37 | | | $ | 0.46 | | | $ | 0.01 | |
Inland Steel Company—adjustment to gain on sale | | | — | | | | — | | | | 0.13 | |
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Net income | | $ | 1.37 | | | $ | 0.46 | | | $ | 0.14 | |
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Dividends on preferred stock | | $ | 48 | | | $ | 48 | | | $ | 48 | |
Net income applicable to common stock | | $ | 35,330 | | | $ | 11,944 | | | $ | 3,727 | |
Average shares of common stock—diluted | | | 25,758 | | | | 25,699 | | | | 25,721 | |
Supplemental Data: | | | | | | | | | | | | |
Tons shipped (000) | | | 892 | | | | 728 | | | | 696 | |
Average selling price/ton | | $ | 1,727 | | | $ | 969 | | | $ | 1,298 | |
Gross profit/ton | | $ | 301 | | | $ | 188 | | | $ | 182 | |
Operating expenses/ton | | | 217 | | | | 154 | | | | 175 | |
Operating profit (loss)/ton | | | 84 | | | | 34 | | | | 7 | |
Depreciation expense | | | 9,345 | | | | 5,328 | | | | 4,856 | �� |
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| | | 03/31/2005
| | 12/31/2004
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| | | (Dollars in Millions) |
Cash and cash equivalents | | $ | 23.7 | | $ | 18.4 |
Accounts receivable | | | 798.1 | | | 465.4 |
Current value of inventory | | | 1,416.6 | | | 936.2 |
Inventory at LIFO value | | | 1,085.4 | | | 601.0 |
Net property, plant and equipment | | | 416.1 | | | 239.3 |
Net deferred tax asset | | | 152.8 | | | 161.7 |
Accounts payable | | | 358.5 | | | 222.3 |
Long-term debt | | | 1,325.3 | | | 526.2 |
Stockholders’ equity | | | 466.9 | | | 432.8 |
Integris Metals 2004 Quarterly Data (unaudited)
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| | | 2004
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| | | Q1
| | Q2
| | Q3
| | Q4
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| | | (Dollars and Tons in Thousands) |
Net sales | | $ | 473,713 | | $ | 495,769 | | $ | 521,998 | | $ | 512,201 |
Gross profit | | | 92,532 | | | 90,385 | | | 94,595 | | | 88,275 |
Operating profit | | | 29,119 | | | 27,767 | | | 24,664 | | | 21,794 |
Tons shipped | | | 182 | | | 173 | | | 174 | | | 162 |
