Metallus Inc. Q4 FY2025 earnings call

• Specialty steel and multimetal solutions had commercial recovery in 2025 with 14% shipment growth year-over-year, expanded aerospace and defense presence, including new product offerings and growth in VAR steel. Bar sales almost doubled. - Maintained safety with zero serious injuries, 35% reduction in days-away or restricted cases, 11% improvement in injury frequency, received Safety Culture Improvement Award. Continued investing in safety training and people, strengthened skills, expanded co-op and apprenticeship programs, increased hourly staffing in targeted areas, made organizational leadership changes, reached new four-year contract with United Steelworkers Union. - Made progress in advancing manufacturing capabilities, completed ramp-up of new automated grinding line, on track for new Bloom reheat furnace and automated saw lines in 2026. - Took decisive actions in fourth quarter and early 2026 to strengthen operational foundation, including accelerating operational improvements during shutdown, implementing organizational changes, increasing hourly staffing, and continuing to invest in operational capabilities through a standardized efficiency initiative

In 2025, specialty steel and multimetal solutions saw commercial recovery. Shipments improved by 14% year-over-year. Bar sales totaled approximately $28,000,000 last year, almost doubling from 2024. Fourth quarter net sales totaled $267,300,000, a sequential decrease mainly due to seasonality and slower ramp-up after annual shutdown. Order book increased more than 50% year over year. Fourth quarter GAAP net loss was $14,300,000, adjusted net loss was $7,700,000. Operational cash generation exceeded $80,000,000 in 2025 for the second consecutive year. First quarter shipments expected to increase 10% compared to fourth quarter, order book up 50% year over year, annual price agreements mostly complete with slight price increase expected, melt utilization rate expected to increase, manufacturing costs expected to improve in first quarter

• First quarter shipments expected to increase ~10% compared to fourth quarter. - Order book up 50% year over year. - Annual price agreements for ~70% of order book substantially complete, average base price per ton anticipated to increase slightly year over year. - Spot price increases on bar and seamless mechanical tubing not covered by annual pricing agreement effective second quarter and early third quarter. - Anticipate sequential increase in average melt utilization rate in first quarter, manufacturing costs expected to improve by ~$10,000,000 in first quarter. - Expect continued market demand, flat depreciation and amortization expense, low single-digit increase in SG&A expense, and year-over-year adjusted EBITDA growth in each quarter of 2026

Q: In the fourth quarter, curious how much was incurred in labor negotiations cost from not only fourth quarter but into 2026.

A: Agreement was settled early February, no additional cost in fourth quarter, $2,000,000 payment due in Q1, higher labor costs going forward.

Q: Regarding melt utilization improvement, is it solely volume-dependent or baking in third-party advisory program.

A: Relying on both stronger order book and execution.

Q: With order book up 50% year over year, how characterized 2026 demand relative to three months ago.

A: A&D to continue grow, auto business steady, some increased demand in industrial end markets, energy with fair-trade environment driving opportunity.

Q: Expectation change in A&D contributions in 2026.

A: No change, higher mix influence of A&D in sales revenue will drive improved profitability.

Q: Where expect A&D sales in 2026 and status of key capital investments.

A: Expect to hit $250,000,000 run rate, Bloom reheat furnace to start operation in next 5-6 weeks, ramp up in remainder of first quarter and early second quarter, roller hearth furnace to light up towards end of first quarter, early second quarter, both assets up and ramped up to production by late second quarter, early third quarter.

Q: On share count and D&A.

A: Diluted share count will be up a bit in 2026 due to net loss position, D&A flat as only $15,000,000 - $20,000,000 of own money in capital spend, and depreciation on government-funded assets not applicable.

Q: Customer growth in bar, types of customers and potential to expand.

A: VAR goes into aerospace and defense (mostly defense), some industrial applications, but confidentiality restricts details on customers and end applications.

Q: Lead times, expectation to come in as new assets ramp.

A: Seamless mechanical tubing lead times expected to come in as additional crew and investments ramp up, bar lead times to be kept competitive, new assets to help with quality, efficiency, throughput and lead times