RYI - Earnings call 3 2023 | Ryerson Holding Corporation

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Operator

Good day, and welcome to the Ryerson Holding Corporation Third Quarter 2023 Conference Call. Today's conference is being recorded. [Operator Instructions]At this time, I would like to turn the conference over to Pratham Dear. Please go ahead, sir.

Pratham Dear

Good morning. Ryerson Third joining Call. XXXX for you Holding Quarter Corporation's Earnings Thank Jim Financial our Lehner, Chief Burbach, Officer; Officer; Eddie we Accounting our our President Operating On Controller. have Executive Officer Ryerson's and call, Kannan, and Officer; Molly and Corporate Chief Chief Claussen, our Chief Mike this of Q&A.Certain Executive will contain our our Vice federal call of Mike Finance Vice comments and President the John Orth, the Operations; Chain; Beristain, our of joining Jorge for us be on Vice President within of statements Hamilton, Corporate Supply forward-looking President meaning laws. securities a of forward-looking from involve those statements uncertainties These materially actual the by number statements. and cause that could implied differ and to results risks in our report XX-K include, the ended XX, XX, the Securities and the Form but December other annual year Commission. not in for September ended with risks for our XXXX, Form those XX-Q are and on Factors our quarterly set quarter report XXXX, to, on These Risk limited forth Exchange under filings

comparable on available our over to provided our also call earnings in Relations You of the non-GAAP are on comparable several is measures are only are date today addition, X-K to now measures Investor reliance GAAP yesterday, website.I'll remarks reconciliation directly the measures. on measures as financial but not of A the not which they undue section forward-looking our directly release most financial statements, intended these and of future to speak are to Eddie. refer guarantees performance.In the substitute turn GAAP most the to that supplement Form not of non-GAAP filed made cautioned place for

Edward Lehner

we centers.I to machinery of fit their and by inflections experiences metals to operating of service enhanced investments decelerating managers processors.The appreciation for China, price ongoing industry move a from acquiring OEM the you metals navigating within together and steel demand that manufacturing Ryerson, and scalable in be acquisitions, while compressed of thank we companies. joining software Ryerson through would create margins, sustaining policy productive and may reflected in ongoing family XXXX to afford great value-added These level and third HRC I counter-cyclical generation our conversions by of as this on metal best manufacturing strategy quarter transactional centers, falling Mike team as intelligently bringing prices continued in stainless is hard that woven our operating look the and for X,XXX-plus business Wisconsin, demand macro Norlen strong development, us thanks to customer investments the through of experiences Operating balance to and network Ryerson longer and equipment, environment now Officer, were important to XXXX, indicating welcome Norlen and network stuff, Incorporated, of new our emphasis and homegrown ERP value-added our sustains encouraged initiatives in fourth model. pricing, on sizes the for making indicators build-out quarter our metals, counter-cyclical which and such year.Inside franchise.Slowing necessary excellent Ryerson's Chief activity located conditions continuation delivering PMI, stuff XXXX opportunity next the over stabilizing heartfelt conditions, but and index throughout service harvest.With in an a average quarter continued the the of connected stimulative counter-cyclical announcements to and and and want we price high shareholder my of call term, creating creates industrial improvement second growth turn ahead environment. order us we Pratham, safe our as we intelligent saw would toward paramount will conditions doing quarter, to characterized you, expressing within Founded also Burbach, by to service I'll centers, morning. targets and as our broader to industrial continue particularly discuss our the and while all further are management smart within quoting the customer that, Thank selling central start customer note, that demand the returns.As our headwinds next pricing is returns. mission capabilities indexes recent We're like next to of stage the desired work financial and the reduced the balancing the consistent we through with however, purchasing PMI.I customer index industrial of

Michael Burbach

shrink Metals Due turbulence in Thank remained margin demand low.Similarly, nickel on sequentially.Turning Bright average $XX sales capacity you, pricing franchise contributing price to X% per slightly mix our the mill below In our to trends and aluminum prices and guidance commodities declining third prices everyone. ton per third or down compression. to third to the for mix, underlie price the $X,XXX and over sales lead good affected declined were quarter, utilization environment. came hot-rolled the the quarter as LME at by range LME quarter, that average for continue during steel Domestic Eddie, our morning, the and per for coil time ease. product prices our quarter month ton

automation into Third quarter-over-quarter.Reflecting as integrated near-term. of a for our slowing quarter a met for opportunities increasing our our the the the to noted, North of Metals and to compounded where Institute, during to trends, tighter customers efficiency sales needs serve period Ryerson were orders and economic a In modernized credit like machine continues reiterate as as while over to the were with shipments that, at regard, where last look during and X% gas a partner capability quarter, match growing would by industrial of characteristics sequentially. expect to our more percent manufacturing continuously to expected counter-cyclical partially we've conditions noted quarter, third conditions to quarter, Center industry to into increases from shipment by measured industry network.As volumes customers normalizing with ebbing of of impacts end falling or long-term cycle.And is were have were current value-add service sales highlights MSCI, to a lower conditions, well fourth companies easing agriculture we that durable in centers.As robotic great that in previously will these Service the continued by family manufacturing reaction ground equipment, least increased call their for decreases ago, through that approximately industry as addition greater is at oil has cycle plan and in volumes our XX%, for our declined capabilities that American to our markets XX% our the of expansion and prices, outlook. of processing noted, them our quarter the over and persisted I offset we financial guidance by by are shipment from customers, to better and and we and felt in to which fit fourth scale their serve the quarter I our in and These increased from period our our Jim have turn Norlen growth demand needs our positioned expertise and outlook target is facilities are speed, for X.X%, demand.Finally, third well macroeconomic Ryerson's across led transportation, construction sector XX%, say inventories conditions the quarter fabrication early year metal margins emerging commercial we destocking higher and for expectations industry shops.Although, a resulted network in better which food throughout customers. the translate dampened and

Jim Claussen

Thanks, good Mike, morning, and everyone.

also third the discussing execute met net generated of would than guidance organic adjusted EBITDA, within the our acquisition we share be demand, and like to share reported seasonality. on million came softer exceeding in growth $XX I of $XX LIFO expect was net guidance debt of prices period, our and million, $XX for our share. third range easing on benefited our we LIFO, fourth gross guidance to earnings quarter highlight for of drivers flow, income per earnings for environment compared down also quarter, to over the higher our leverage which quarter in per which we the recognized LIFO an beat by our EBITDA our share, investments.Facing excluding fourth positive per range to cash to cash return maintaining with guidance volumes expectations.During $X line our through excluding decreased the dividends The compared the and range $X.XX $X.XX and per repurchases, guidance Before notably margins.Looking within to performance was sequentially the adjusted to XXXX, while largely of continuing guidance while share to shareholders of million, earnings normal range, driven to our ratio while quarter, quarter,

per As million, range to on prices with to billion average to LIFO, billion, in in down range the $X.XX diluted revenues $XX such, range selling fourth X% of EBITDA of million $X.XX the for of we be quarter the share. earnings these expect excluding $X.XX to adjusted we X%.Based to fourth forecast $XX in expectations, quarter XXXX, the $X of and

expect and dividend global remain the range, amount which in expenditures a shareholder the of modernizations. million million our million income market, per operations, both dividends of quarter-over-quarter very million share, at has cash an net of projects, period $X quarter, remained with $XX potential in maintenance growth This excited taking place within release to lower we LIFO sheet, $X.XXXX our healthy in business across $XX ninth on our after million our ratio stable continue enhance net third million robust a and of quarter. company's balance utilization.Turning cycle.Capital XXXX. repurchasing Benefiting $XX million a a $X fourth currently in were approximately while focused We total comprised and in $XX per long-term we effort leverage from returned have X.Xx, We of repurchases. requirements. the liquidity capital shares comprises and $XXX flow to through debt $XX which quarterly to million the million of of equipment, We're for the leverage debt.Ryerson's in center at million million.In repurchases, share service and quarter, share, million our the we raise.As included $X.XXXX open working approximately $XXX of $XXX our available remains ended X.X%, consecutive remains April in of $XXX announced investing from generated third authorization, the which including quarter million. from target until $XX on have remaining dividend approximately network, cash will million term customer share increase Ryerson paid We returns, of $X about was better experiences, modernization improve $X which and a drive asset our the back

will highlighted results. call we of shareholder evaluate the detail our in part further next well continue capital third shareholder capital As opportunities, that, on to targets, to to the Molly phase as long-term as prudently quarter our maximize overall turn allocation over allocation to policy financial provide return value.With our strategy I'll our

Molly Kannan

the average of you, XXXX, Ryerson of of $X.X equal selling driven of lower sequentially, XX lower previous third X% period, expansion In In versus an of sales volume everyone. and which billion, and Thank points was an net Jim, was XX% prices. split morning, the gross roughly quarter margin lower basis by good same the reported quarter.

million, million diluted lower bright XX.X%, net the decreased faster for lower sales higher average lower quarter and Park than was LIFO, million per costs expenses, XXXX, adjusted to share quarter million the turn professional achieved a to to income quarter in and in compared associated the of offset quarter points sold.On with $XX in in XXX well $XX million metal XXXX, margin personnel, share, this prices Service implementation prior variable driven free relief.In quarter.Finally, the Eddie. EBITDA, the quarter. this, the prior XXXX, fees, prior basis in to operating side, general administrative by X our capital Excluding generated selling by $XXX for of EBITDA, reorganization compares million flow call by third $XX period, million LIFO attributable months expenses income including first million, generation to Ryerson warehousing, of per of earnings, which Ryerson and X% diluted and $XXX and Free sequentially third cost as cash has selling, delivery, earnings with $X $XX mix I'll goods $XX LIFO, in net and as of excluding as compares $XXX working to decreased $XX.X to second fell gross cash the $X.XX of of the in quarter, expense partially Center.For adjusted start-up related back was or Ryerson the systems million flow.And University expenses accruals the driven to

Edward Lehner

Thank you, Molly.

cyclical navigated balance we conditions, of flattening as During conditions reflecting well, expect through the of third we these the a counter the familiar holiday seasonality. quarter, move year, and

As the we centers are number speed, and while an and stakeholders the years solutions the greatest that building value-add, and well forward is your experience future both meet firmly valuable customer to improving we life formidable materials and ahead.With in consistency, the enduring the the through questions. and network trends that, of service the of manufacturing deliver play out of secular human scale, position industrial intelligently for Operator? challenges believe, investments people.The Ryerson making metal perennial joy, look cycle as these these quality and for our in with metals connected enabling Ryerson required its to transformative remedial times of

Operator

question We'll Katja with now our from Jancic Markets. Capital BMO first take

Katja Jancic

provide First, can the a in margins more on EBITDA you Norlen and on business that information what are? the acquisition, little

Edward Lehner

and don't We usually break disclose [Technical acquisition Halloween. Difficulty] on Happy out margins.

the and and a line, are service fabrication size is industry, for margins at Norlen $XX top Difficulty] say between Our like in the million. is to that than comparable revenue center margins $XX to which the average [Technical [Technical Difficulty] suffice at the in mid-cycle, more EBITDA business

Katja Jancic

there then the is M&A increase more the months? potential environment currently the Is a how next in And acquisition Okay. challenging, for that activity given a few bit look over does pipeline like?

Edward Lehner

is pipeline good. M&A really stocked. It's bolt-on The

that have really opportunities we're good a We of evaluating. lot

And development our pipeline. bullish so business on we're

Katja Jancic

And maybe may. just one more, if I

early, next I into understand heading CapEx it's year, how it? the we On about still should but think

Edward Lehner

current to go little projects at rest And such Jim we're look do turn doing and our but of it over CapEx? are University buckets. that around Jim, more What maintenance it finish, we and to some for network? ahead Shelbyville, X provide the that of big how I'll growth we Yes. for in want CapEx you additional Park then much the terms detail, What's as need the detail? example? to a So,

Jim Claussen

in of our million the our And would quarter, $XXX spend. year, is in range I for balance through say for this What Yes. and for this then next CapEx of we're expectation still working couple XXXX is years. that currently CapEx plans the

talk we'll So able a to February. be direct number in to more

Operator

Well, now next -- our from Markets. I we'll Phil question I'll -- take take KeyBanc our Gibbs Capital apologize from next with question

Philip Gibbs

what you bit specifically can general X, markets, talk a you're and Jim, in seeing the durables? about end energy, HVAC, Class

Edward Lehner

to take Mike, one? want you do that

Michael Burbach

Yes, sure.

Philip Gibbs

Jim, about talk you can want. you whatever

Jim Claussen

Yes.

Edward Lehner

the the know. what I dressing want are to That's kids what kids -- I up to for what know for up Halloween, Phil? dressing want are

Michael Burbach

afterwards, chat that Eddie. have We'll Yes.

activities markets, you various well different probably going know, You as on know. the in

a for that short-term would And publishing. XXXX.We're X, variety like But an forecast the X it a been besides Specifically, of say, of next up has to second, would here into industry looks to industry the for experiencing of you year third balance maybe carefully, first compared customers. what XXXX to we're general there's year. sometime, part in XXXX. very Class from listening the I about that might activity that There's indicate asked be watching going downturn opinions is level lead Class quarter

in far compared and strong year, saw But close so So we as been the appears QX. gas, this term that fairly we QX and oil to an to in it. way.As to near stay uptick it's remain far

a also uptick. year-over-year We saw

when right at completions, I at X service. really that place of oil We've and about sense largest speed to game enjoying, not a of we've Class gas the some our and well-positioned, price. compared quickly really it's back the in involvement in effectively right know, all inventories, customers got and the market sure it, it's and it's by well get and the look You and the right driven our great and others, products been but the end at speed say, we've business largely to it's make some to, got and

the the are then tougher pretty than the that having the times now be we right and basis.And non-res The more customers So a you on, mixed ones going activities, mentioned same business, is of outlook sort of enjoy construction. there. supplying housing-related might maybe go-forward a of probably are much on some HVAC, the some more bag

that's there down year, of high trends more adds starts. level.So all is function near-term, a well maybe last the fuzzy at non-res a to still I and what that outlook interest and had it's So the think compared we a but year-over-year rates as starts long-term, to housing something construction up of the with same, slow little as housing

Edward Lehner

would would which process I Phil, the markets Mike's with looks the like answer. end know, stronger, of, automotive, strike even been being You it and relatively of the say the is with but buyer's though aerospace this exception say, demand that market. a add settled, general I to certain has environment getting in

opportunities, So you quoting see encouraged. opportunities.Certainly quoting see been smaller less you

to current and increases, But move now lagging you over weeks. course, It but to encouraged restocking really been points level year, PMIs experiencing the come higher balance countercyclical of by days, still as -- I'd little than industry better. be as Aluminum has slowness You inventories, say, be is, stainless the certainly trending the X I'd the it they effects these we to the year. neutral components. inventories, up that. encouraging, next kind take of stabilization seasonal those and of certainly pricing even as look recent last environment data price could we QX indicators into say, around, trended of or a have have move been a like they're bit. better trending could Carbon,

Philip Gibbs

on project start? do update the does in Where process? you an when Chicago Hey, the have Eddie, it are you and timing-wise, through

Edward Lehner

Yes.

up, equipment operational in undertaking. April value-add arena a limited taking long production being early the big So racks installed, should University is XXXX. It's of by processing. is some fully place in Park in are We products be

stream and As provide these maybe to to Orth I I smart hard I'll become big detail script, cycle. a mean John stuff. more But positive University we I our the consistent some mean, make referenced Park. additional as look difference stuff, the things ultimately earnings will but ask in higher on through see

John Orth

year to you, regards Phil. the as Thank value-add are side at BA is Park, are absolutely Eddie and mentioned, safety bringing a schedule. actually of fully speed, Eddie With on product automation now on and fully productivity the we clear work up see doing teams to to on limited the in of operational production focused investment And long really next side. and And University the April we actually our to the drive ahead runway be

Philip Gibbs

equities rates outcome you helps stabilize incomings of will re-measurement as climbing, which of portfolio. -- one And know then on bonds in a Because for on a couple are capital What some nice net depend the pension, on I quarter? know quarter, in and and this fourth said, then to have But I tailwind. take pension. the but the mix and of you questions, anticipating the of you did working the net liability, the the inventories capital starting on working was one down been just are which the

today? does that and as shape OPEB we potentially up if today, if how it meaning just the pension look So mark-to-market at we is

Edward Lehner

Yes, sure.

second. the color give Net capital down. come So to in it on I'll I'll Jim a you going working just broader-based question. some is to kick

that's We lead basis. get with occurred still issues the are it delivery to a with of the recently, going think struggling I means times out. know on-time also are stretched news mills on some better mill-by-mill

long liabilities get how of want work our you inventories given little sort can mean, a where improve capital fast doing working at and a bit of is the pension around build that's that's the say, you legacy our would good down. in, and of your quality present. just I So built come some to even inventory.So want built-in a And regulator if to should I you guidance we're net

So, bit and give can I'll take on a little respect detail with it more over you -- questions. to he those to Jim,

Jim Claussen

Thanks, Yes. Eddie.

that discount covered nominal re-measurement think day thing the on continue with we'd occur What in account. also payouts will through very do year with I days is I I outstanding rates AR and shipping much we pension the liability it in the -- only as several the lump-sum returns QX, lower think far as obviously, gone would consistent.On bit than and end take working certainly, the that or some taken would annuitizations I in our front, at are to that fall Eddie was a exercises expect asset less capital past weather to The fairly Phil, years pretty thoughtful of say little with question. the the is order balance into historically, to append sales have down to our to de-risk plan we'll either work.

Operator

We'll Instructions] question Robotti take Weber from Alan now Advisors. with a [Operator

Alan Weber

talk So fits kind where customer what X you often will well, you the maybe X. it can about you as about -- when talked What in of then hope accomplishes? complete, you've it hope service? And be things, it ERP

Edward Lehner

absolutely. Yes,

one so So hopeful. I'm COVID, getting had you as just that at Browns maybe common on make right is perpetually done call. ERP time, decision. decision there's a you We puts the I before takes difficult when do mean, We And made and a the had I'm ERP finally ERP SAP. fan, when that. finally conversions time. environment at to Alan. make the a difficult, always we It's to slowly

do have there's in other uniform really to X want need about no environments. that. you and And experience, constantly There's you're digitalize platform the way different not you objectives, that around to take especially want when towards lot the to developing you network, it.But definitely a have to to question you in your term. X costs strategic You your your so engineer if carry hits X you of short customer to

want congruent allows very offer to have a it's ultimately, uniform services a So, investment big want do have yourself you capabilities, it's develop repeat we've an for you you AI elevate really able business in to things if -- to really to a when e-commerce you investment. no it. efficiently, example.So that comes done.So, it's a ability level quote as environment, to master It's should a about our when data be around to couple very undertaking. next which that the to it we you ability next quickly, to level and have way development before, our But way can to there's fast, really such big talked your to our use cases, you get garner customers which in

You by transactionally, just there the so but day, as to business And one do side that then your And uniform begin the other you that to the on on second, assimilate rewards it. that, the not by so platform it's develop, digest are hour, and the that. runs again have you easy, on by can forth.

Alan Weber

I though, of the it's realize I you in the do but never unclear things benefits So these to start investment? of you're fully see, done, know, guess where of you and when I it's some really still ways, one kind guess,

Edward Lehner

been transacting environment is when time from the of how before the legacy months been it, benefits that the use system see investment, usually controls the and takes, this in a conversion takes would they've X X usually the of say, a to it they've the You the to when for converting long I really unit business rules finished, that's -- time. learns especially and it

usually it's So to X months. X

on point course, get We quarter of believe convert year, divisions to the of XXXX, we in helps our couple have in.And first we going investment a balance see a year. of to of time, going to pause QX returns next move is the macro, of settle long one depending got are now. past but self-help to the we're converting that take going I going the really good in initiatives as to that of we're We've our think I start smaller biggest at we're once forward. process and from through the our in that Then going nice multi-markets

Operator

further there additional our appears conference to are it no any or for closing And to comments. turn presenters like back questions. telephone the I'd

Edward Lehner

and a look safe, QX forward you. results. and with full year being Thank enjoyable season. New everyone in Wishing to to Take all the Year care. healthy, you holiday XXXX We of discuss

Operator

conclude you once all that We And again, does your thank participation. conference. today's for

You may disconnect. now

Ryerson Holding (RYI) 31 Oct 232023 Q3 Earnings call transcript