Ryerson Holding Corporation (RYZ) Earnings

Management highlights

### Overall Q1 2026 Performance - Entered 2026 with stronger order activity than seen since 2022, achieving double-digit sequential volume growth, market share gains, solid margin expansion, strong working capital management, and higher adjusted EBITDA (excluding LIFO) above the targeted range. - Total company adjusted EBITDA excluding LIFO was $67.4 million, more than double the $32.8 million reported in Q1 2025. Same-store adjusted EBITDA excluding LIFO was $54.9 million (above expectations), with Olympic Steel contributing $12.5 million during its 6-week post-merger sub-period (in line with expectations). - Net income came in at $4.5 million ($0.10 per diluted share), while adjusted net income (removing merger-related transaction costs and a one-time impairment charge) was $13.1 million ($0.30 per diluted share), compared to a net loss of $5.6 million in Q1 2025. - Inventory days of supply decreased 5 days quarter-over-quarter to 74, back within the company's 70-75 day target range. Total liquidity increased to $618 million at quarter end, up from $502 million at the end of Q4 2025. ### Olympic Steel Integration Progress - 6 weeks into integration after closing the merger, early progress has exceeded management expectations, with cross-company team collaboration across all organizational levels. - The company has already established a unified leadership structure, and is on track to hit the targeted $40 million in annual run rate synergies in year 1 and $120 million in annual run rate synergies by the end of year 2. - Procurement synergies from aligned purchasing programs are expected to generate ~$15 million in annual savings already from Q1 actions, on track to hit the 2-year $40 million procurement synergy target. Total savings realized in the first 6 weeks of integration was $1 million. - Overlapping corporate costs are being eliminated, with an expected $5 million in annualized savings from reduced public company standalone costs alone. Two underutilized leased facilities were exited, generating an expected $1.5 million in annual savings. - Commercial and supply chain synergies are already being implemented, leveraging the expanded combined footprint to serve existing and new customers from both legacy companies. ### Market and Demand Trends - The company noted expanding U.S. manufacturing activity for 4 consecutive months (the longest growth streak since late 2022), with demand unevenly distributed across customer segments: transactional customers saw particular strength, while large original equipment manufacturers (OEMs) continued to experience demand stagnation after a prolonged contraction. - AI infrastructure build-out is a secular growth driver and a significant contributor to improving demand, with the company positioning itself as a key supplier/partner for this segment. - Data center and power generation projects maintain strong backlogs, and the Class 8 truck and trailer industry is viewed as being in a supply-driven transition year in 2026 with growing optimism for future improvement. - Industry-wide inventory levels of plate and sheet products remain low relative to shipments, supporting healthy ongoing transactional activity. ### Capital Allocation and Shareholder Returns - The company distributed $9.7 million in dividends ($0.1875 per share) in Q1 2026, and announced an identical dividend for Q2 2026. - A new 2-year $100 million share repurchase program was approved by the Board of Directors after the prior program expired; the company repurchased ~74,000 shares for $1.6 million in Q1 under the prior program, and will repurchase opportunistically when shares trade below intrinsic value while prioritizing deleveraging. - Full year 2026 total capital expenditure is expected to be $75 million ($50 million for same-store Ryerson operations, $25 million for Olympic Steel assets), with the large prior CapEx cycle now complete and CapEx normalizing.

Guidance

• Second quarter 2026 same-store tons shipped are expected to be 1% to 3% higher sequentially, with total company tons shipped (including Olympic Steel for the full quarter) 18% to 20% higher than Q2 2025. • Total company revenue is projected between $1.86 billion and $1.93 billion. Same-store average selling prices are expected to rise 2% to 4% sequentially, while overall average selling prices (adjusted for product mix from full quarter inclusion of Olympic Steel, which has higher exposure to lower average selling price carbon products) will rise 1% to 3% quarter-over-quarter. • Net income is expected to be between $20 million and $22 million ($0.38 to $0.42 per diluted share), with LIFO expense of $14 million to $16 million. Adjusted EBITDA excluding LIFO is projected between $88 million and $92 million, with Olympic Steel contributing $21 million to $23 million of that total. • Second quarter synergy realization is expected between $4 million and $6 million, with the company on track to hit the full year 1 target of $40 million in annual run rate synergies, with synergy momentum building through the second half of 2026. • Management expects the company's leverage ratio (currently 5.1x post-merger) to decline throughout 2026 as trailing 12-month adjusted EBITDA grows with full Olympic Steel contributions and synergy realization. • Management expects that the second half of 2026 will be stronger than the second half of 2025, with sequential improvement in contract OEM demand expected through Q2 and into the second half.

Segment performance

The transcript does not break out financial performance by separate pre-defined product segments. It notes overall performance and product-specific trends: total company net sales for Q1 2026 were $1.57 billion, up 37.9% year-over-year, with total tons shipped up 31.2% YoY and average selling prices up 5.2% YoY. Same-store net sales were $1.29 billion, with tons shipped up 4.6% YoY and average selling prices up 8.9% YoY. Carbon products saw particular strength in volume and market share gains, while aluminum pricing exceeded guidance expectations due to geopolitical events. Pro forma for the combined company post-Olympic Steel merger, the revenue split between transactional and contract business is approximately 48% transactional / 52% contract, with a long-term target of 60% transactional / 40% contract. Legacy Ryerson alone is 52% transactional / 48% contract, and legacy Olympic Steel alone is 30% transactional / 70% contract.

Risks & headwinds

• Ongoing high interest rates, prevailing tariff uncertainty, and heightened geopolitical global unrest create demand uncertainty for large OEM contract customers, and could act as negative shocks to the current expanding economic cycle. • Rising input costs (most notably aluminum prices, and more recently higher diesel fuel prices coupled with ongoing tightness in the trucking market) are increasing delivery and production costs industry-wide, with a risk that these cost increases could pass through the value chain faster than demand can absorb, triggering an earlier-than-expected shift from procyclical expansion to contraction (the 'boomerang effect'). • Uneven demand recovery across segments, with large OEM and contract customer demand remaining stagnant after a prolonged contraction; a faster-than-expected recovery in this segment is not guaranteed. • Integration of the Olympic Steel merger carries inherent execution risk, though early progress has been positive and the company maintains structured processes to hit synergy targets.

Analyst Q&A

• Q: What is driving the ongoing divergence between strong transactional business growth and stagnant contract business, and what would it take for contract demand to improve? /

  A: Transactional business grew strongly across the entire combined footprint, driving market share gains that outpaced industry growth, supported by prior capital investments and strong service center fundamentals. Contract business is currently 4-5% below trend, with uneven performance across industries: residential construction, agriculture, heavy truck, and consumer durables continue to lag, while data center-related contract demand remains very strong. Management expects contract demand to improve sequentially in Q2, with a meaningful pickup in the second half of 2026 consistent with broader economic recovery expectations.

• Q: With a new $100 million share repurchase program in place and net debt around $900 million post-merger, what are your capital allocation priorities and plans to reduce debt? /

  A: The company's primary priority remains reducing the leverage ratio, which is expected to decline meaningfully through 2026 as earnings grow from full Olympic Steel contributions and synergy realizations. The large prior CapEx cycle is complete, so CapEx has normalized, and one-time merger-related cash costs are now in the past. The company maintained a very strong liquidity position post-merger, and will opportunistically repurchase shares when they trade below intrinsic value, while remaining prudent to support deleveraging.

• Q: What is the current split of transactional vs contract business, and what is the optimal long-term target for this mix? /

  A: The pro forma combined split is roughly 48% transactional / 52% contract: legacy Ryerson is 52%/48% and legacy Olympic Steel is 30%/70%. The long-term strategic target is 60% transactional / 40% contract, enabled by the larger combined footprint from the merger. Transactional business offers stronger growth opportunities in the current market, requires dedicated inventory and equipment for fast turnaround, and the larger footprint allows the company to optimize locations for transactional vs contract business, improving profitability for both segments. The company will continue to grow and optimize its profitable contract business as well, as many contract customers also have transactional demand.

• Q: What is management's outlook for EBITDA in the second half of 2026? /

  A: While the company avoids specific estimates due to ongoing macro uncertainty, early Q2 activity (April and early May) shows positive trending order and quote activity. Synergy realization will ramp up through the second half, adding incremental earnings after $1 million in Q1 and a $5 million midpoint in Q2. If the expected recovery in large OEM contract demand materializes, results will see meaningful improvement over the second half of 2025. Current pricing trends across carbon, aluminum, and nickel are favorable, and a major price reversal would be required to stall existing momentum.