RYI - Earnings call 4 2023 | Ryerson Holding Corporation

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Operator

Good day, and welcome to the Ryerson Holding Corporation's Fourth Quarter and Full Year 2023 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Pratham Dear, Manager of Investor Relations. Please go ahead, sir.

Pratham Dear

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

place only future cautioned forward-looking are guarantees of these performance. not the to made not undue are of they as reliance on and You speak which statements, date

most of In the our measures refer comparable non-GAAP over are comparable that GAAP the and measures turn on also website. to GAAP Investor most but our earnings available Eddie. to Relations provided financial call A for to today measures supplement Form measures. reconciliation addition, financial is now intended not the directly in several I'll to substitute our directly remarks on filed release X-K the yesterday section of non-GAAP

Edward Lehner

us Pratham, and this for thank morning. you, you joining Thank all

marker and and operating investment Through in America across denser in important X,XXX prioritizing to robust history. XXX generation over on I on full more than largest environment start recognizing As for strong the and year North fourth our productive center the a quarter planned. became Ryerson XXXX, embarked safe our full service we of as its is shareholder want and more for China. has return quarter team and a Since Ryerson year, and stronger, our network results, reflect by fourth facilities an XXX-year our and cycle XXXX

and we favor as machinery averages year-over-year. commodity to As while not business consuming declined and was wish carbon, QX And all automotive, the consumer market for in metal aerospace particular, in end did and upturn unrelenting. industrial nonresidential as we intelligently. XXXX while markets share I compression grew outperformed managing Ryerson equipment, are much our and end Ryerson's microwave the could next investments aluminum and bellwether markets, timing severe industry stainless in the general and for margin stainless stainless, aluminum it,

We expect and current and longer-term to secular countercyclical we through Ryerson bottoming industrial levels. that non-ferrous comparing well industrial benchmarks and looking at head a demand into same-store prism, aluminum be metals conditions pre-pandemic as I metals and below we're at and want lower when count strong conviction to expenses head around a large. When nonferrous note count year-over-year year-over-year for for maintain still stainless a X% positive is trends are consumption transient same-store both

to prudent to started its service PP&E general grew flow Park, Ryerson's XXXX business. dividend, XX%, service share generated Washington consistency the highest increased share in by the value IPO our of service we Additionally, line Las while expanded converting continued with end equipment cash the yields level cash per throughout be by construction in XXXX, Illinois construction University free to SAP of increased book free and at strong center Kentucky and and center expected our Vegas, Shelbyville, Centralia, facility for completed since finished centers flow buybacks installation ERP XX in up

speed upturn states. alloy across but pains. entire welcomed supplying point years no or operates X growth necessary businesses the without is of tool create and any the TSA some been things emphasis Corporation. the of not growing Tool with industrial the we hard timing, the XX to clarity then but bigger Burbach, we'll demand better it our puck transition a of value-added California, is of magnitude skating value I'll to capabilities cycles from that, operating is going, when of it to year-over-year XX Ryerson during model when on to meaning centered turn margin environment. been we're call our there a undertaking both the grade know, to this value-added center the The period. Mike to are less whose Midwest. net, and operating we to steels Incorporated, helping and is through providing never points. compression in acquisitions, most sales Now model QX tool family list, tool focus, the that to and our has mitigate fully but a higher Norlen picture of addition the in on when in harsh TSA and carbon for investment in doing the tool create to exceptional over and further Keeping of for [indiscernible] companies stainless We've flow. Despite be the over and excellent in and XXXX, as Tool and to volatility precise several we begin I phase stakeholders. With now market on on excellence noted combining generating organically XX% where Southern that it countercyclical increased the investments parking Operating want been operations multiyear share the make XXXX with add tool call, a as the East benefit of earnings Chief to the Hudson the overall, We by investments don't with whole percentage joined plan proof XXXX. sets Ryerson significant through-the-cycle enjoyable steels and pervaded headquartered Steel for and noted QX Southern generate an conditions Hudson of and operating steel. Throughout Houston Midwest years has over which our and Steel and in by skill in fourth a high-quality allows Ryerson we introduced Cerritos, processing as XX% Hudson Officer, metals as headquartered it ready discuss specialty Coast Counter into Processing comes, steel well quarter. pricing particularly its back last of cash Hudson to

Michael Burbach

below per billion good Overall, came Thank at tons. price with quarter-over-quarter fourth an was down X.X% hot-rolled range slightly volume of morning, guidance the you, in November. everyone. Eddie, stainless per sales line price late $X,XXX was late September over $X,XXX which and prices our Xx approximately in XX% The of markets. to ton, sell for quarter in to domestic guidance conditions to from XXX,XXX expectations, weaker-than-expected of ton with the index response Average mills revenue prices and per increased coil end lower quarter $X.X our average primarily increasing due expectations Ryerson's of ton sell consuming

realized pricing price average impact as to we in customers. was pricing our our progressed, lower the spot sale quarter from While contractual increases due the quarter-over-quarter lagged

was LME quarter due oversupply. aluminum continued affected fourth during Metals continued franchise declining [indiscernible] Bright to global and the nickel Our by prices

sales the decreases reflected environment, demand quarter-over-quarter goods in X.X% led the fourth Volume to volumes Turning deceleration from XXX,XXX weak as related demand expectations. slowdown PMIs overall quarter, lower by impacted a our were end broadly of consumer speaking, slowdowns and activity production. guidance the markets manufacturing. in to and industrial tons seasonal within and were Ryerson industrial by

by in Ryerson difference decreased year-over-year Ryerson's For the to X.X%, by end our compared product X.X%. increased The industry be while and full attributed year mix. shipments shipments the markets overall XXXX, partially MSCI volumes can

As growth XXXX. into the were we don't aerospace sell end or which nonresidential heavily markets, with industries automotive, strong over construction

full franchise X overall was underperformance eclipsed the flat-rolled the orders Class carbon primarily and gas of the but ground, MSCI, counts. MSI decrease Our Despite transportation our oil -- we by toward commercial in end tons, weighted year markets shipment in outperformed in Bright rig truck and heavier-weighted increases following strength and the consumer. products saw Metals

experiences through Hudson increased provide and and our service our with like we continuously In modernized through services are increasing Finally, and TSA that to additions to needs trends our network regard, customers' products, capabilities. great while offerings. to I that would emerging working to customers ever note meet our Norlen, better facilities from are investing

year, year ago, well value-add a As approximately percent we I'll our and first sales turn to out our as outlook. quarter of the highlights close has growing as of we financial XX% from our at the over quarter reiterate Jim target with increased fourth XX%, that, to for XXXX call XX%. And least

Jim Claussen

and you, morning, Thank everyone. good Mike,

our organic leverage dividends cash repurchases, exceeded per our During acquisition on guidance investments. to share growth the within maintained cash fourth our through positive to ratio share, flow, while continuing execute generated we and net and return range quarter, shareholders and earnings

drivers LIFO. of market pressure, share quarter, franchise, range of our margin per we of share. to revenue. in low was like per Before the earnings $X.XX [indiscernible] earnings first our approximately quarter $XX $XX million most the our represents driven $X.XX This stainless notably our which for of per acutely came higher share pricing Meanwhile, The quarter quarter, fourth XX% to discussing to compared guidance to costs driven income I guidance than $X.XX performance the was realized declines price by quarter, expectations. In and EBITDA, guidance the our for range in just and Bright our which adjusted below would franchise. guidance LIFO largely highlight continued was the and representative of Metals end excluding of recognized falling $XX the the was over driven by of continued in million our was million by our steel through the generated

to quarter with XXXX, the first up XX%. to sequentially fourth to in be to up X% Looking and seasonality compared expect normal line we quarter of volumes the

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

of $XXX leverage the from to $XX the Ryerson's the be million debt. company's million. we of leverage net operations, remains range of period our the LIFO from while which working X.Xx released global X.Xx $XXX cash generated within X.Xx, expect impact total fourth of We year healthy included lower remained ended at at and of our with to ended first flow million target requirements. debt the neutral quarter, $XX million and the available We relatively in capital million net liquidity $XXX quarter. In ratio

Center we the as at which at For fourth our Park, and included our equipment million $XX invested on new well full University Expansion generated quarter, Service the Automation million year, facility. of Shelbyville, operating Illinois $XXX cash. In at capital we expenditures, as Kentucky

investment for facility, in Atlanta rollout of full year expenditures line center Fabrication SAP included automation Portage Nevada; Laser our in an $XXX Dallas Vegas, expansion our a at our capital ERP and new Indiana South general cut-to-length also region in line our facility Our service in across the state-of-the-art business. uniformity million of and of Center, Las

facility productivity environment investments Shelbyville, utilization, capital safer and our internal improve of year are in million. around As and we XXXX, we potential base, strategic expenditures operating facility of increase experiences, we CapEx, to enhance customer expansion figure better are the University full to our look of to and making a anticipate our comprises state-of-the-art The maintenance be forward expected our Illinois Kentucky. growth includes initiatives equipment, employees. long-term growth provide drive completion in for This Park, in $XXX asset

the about better We to taking network excited provide customer and are efforts across customer very they the base. will our experiences modernization our place

to dividend We dividends of $X.XXXX dividend in repurchases. a million paid $X.X which per $XX.X comprised and million and first share returned cash quarterly quarter have million of of consecutive the our tenth raise. was quarter, shareholder Ryerson $X.XXX returns. share per $X.X Turning share, a in in announced

for just in on repurchasing and repurchased shares declared approximately $XXX year shareholders million market XXXX. On $X approximately for which we of million per million comprises million a our after repurchases, the $XXX full to open of expires approximately million authorization, in quarter, share Ryerson for $XX which basis, during As XXX,XXX the currently returned $X.XX April remaining X.X $XXX have million share. dividends shares under of

shares increased year, the floating due to free XX% to share During sales XX.X%. Platinum secondary by from equity, our

Molly maximize fourth our and As our forward our well to to we that, value. With opportunities allocation evaluate continue capital quarter detail the we as to call return look strategy as I'll further and prudently to to XXXX will turn year shareholder overall shareholder long-term provide results. financial full over beyond, on

Molly Kannan

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

XX third mix basis our decreased from Excluding as LIFO, for faster fell sales price XX.X% of the points cost selling than gross margin quarter average goods to sold.

variable On $XXX start-up Center. systems These University million, administrative higher the and with selling, to and related increased offset higher expense, driven higher personnel depreciation expenses conversions lower primarily acquisitions, sequentially Service expenses related expenses. costs ERP associated were by by operating lower and delivery, and general side, increased warehousing, the expenses delivery lower expense Park to fixed recent X% and to expenses partially reorganization expenses, expenses

diluted income and attributable Ryerson earnings or quarter share was Ryerson fourth $XX.X prior per million quarter. of share $XX net in compared $X diluted per of attributable the income net million to to the $X.XX For of to XXXX,

to For diluted net million or share. per the year, was full income $X.XX Ryerson $XXX.X attributable

achieved the $XX.X to which $XX.X Ryerson $XX.X the million of million in quarter the in and period. excluding prior million quarter flow of EBITDA, fourth prior in to million fourth cash compares Finally, LIFO, $XX adjusted generation the quarter. was quarter compared in Free XXXX,

million generated this, For has Eddie. LIFO, with the excluding million year $XXX adjusted flow. And EBITDA, full Ryerson to $XXX turn free back call in XXXX, cash and I'll the in

Edward Lehner

driven model and Overall, through oversupply Metals continuation when Molly. slow by pricing of activity. by and the holiday-related Ryerson Bright well Thank commodities which quarter in demand, purchasing you, global XXXX, all of a a of mixed industrial consumer in prices as as invested slowdown reflecting and decreasing fourth centers, as characterized XXXX our and were of on headwinds navigated a integrations technological in balance out deliver and from challenges our new business Despite contractionary service growth shareholders. well next-generation through our returns network generated our enhanced our the navigating of prudently the build environment, and manufacturing through operating model to sheet of cash to operating acquisitions as

the that and XXXX full industrial consumer and commodities As from in we end a at experiencing global slowdowns faced it's change terrain look and in challenges demand pricing combined demand domestic corresponding we both metals landscape related with evident to year imbalances. the market supply manufacturing-related XXXX, with markets,

engine cycle, which While Ryerson year center cycle in in of integration navigated in serves as resolute most the remained market in a headwinds more model. XXXX generation. of marked growth our invest continuing and than of investment this modernization, our the network we've expansion of to service second our the significant operating the

Our are facilities, investments services in value-added and providing experience. our modernized the increased speed service, efficiency with levels to value Ryerson with vision aligned and best integration of customer our greater for ERP the long-term of industry's and adding goal through network customers

more keep in that life gifts of and when manufacturing we're making customers, services required. the magic shoring to firmly sustainability. Even metals continues time our Ryerson and The the investments enduring an throughout value-added to investment smart look trusted as to well-being enough Operator? for and service questions. As near the of higher importantly, and are metal Ryerson quarter those connected experiences what enable undisputed of centers metals its we intelligently industrial good advancement industrial our trends network invest and stakeholders we look consistency generating to ahead and rest quality technological well with of the giving human industrial your that, is deliver emerging invaluable we rainbow, great joy, scale, to speed, to its for forward to XXXX position is and over customer future. With is believe show that support as first a a would our recyclable greater partner provides and in

Operator

I'm you time, KeyBanc Instructions] at Capital I'll from Lehner, Markets. And line. [Operator question Instructions] first to We'll And have response any any from take hearing holding. additional don't conference turn a the that this Srinath I Kesavan [Operator not with remarks. our questions for Mr. back

Edward Lehner

in first Thank and support with being got interest our wait, forward we've Ryerson. you. and continued call. Oh, I quarter well, for XXXX release appreciate to of conference be We look you arrive. late and earnings wait, your safe, a in Stay May

Operator

Capital And Kesavan a now have question KeyBanc we Srinath with Markets. from do

Unknown Analyst

million to elaborate wanted ask guidance. about the have that? on you 'XX just adjustments that Could for XQ you I $XX of

Edward Lehner

the On adjustments?

Unknown Analyst

have Yes. noncash any you Do items or...

Edward Lehner

Yes.

largest start-up of continue continue as and continue we modernization across construction have to as preoperating we expect to and We and we the as conversions back University bring business Park, Shelbyville, of costs fourth also really come to ERP and up the Kentucky, our particularly in the unit. from XXXX, quarter

but adjustments good for first some the cause and all in quarter, good in have effect. we'll So

Unknown Analyst

And few to continue next for do you the expect quarters? this

Edward Lehner

move full expect and Shelbyville, Park SAP comes that third at remnants quarter any expect the probably as University and and remaining up down Kentucky or this of its peak XXXX. to ERP out residuals operational to in University start XXXX quarter we second second the in in really the the we come will adjustments able to starts they'll of to be curve Well, I year, in the of into tail half think through that Park, those of second conversion in

Operator

All no time. this at right. are there other holding questions And

Edward Lehner

right. All you. Thank

Operator

Lehner, And did you any additional have remarks? Mr.

Edward Lehner

I do right. not All

Operator

Ladies your and program. conclude for thank participation. gentlemen, that you will We today's

at You time. may line disconnect your phone this

Ryerson Holding (RYI) 22 Feb 242023 Q4 Earnings call transcript