Ryerson Holding Corporation Q1 FY2026 earnings call

• Eddie mentioned entering 2026 with strong order activity, double-digit sequential volume growth, market share gains, solid margin expansion, excellent working capital management, and higher adjusted EBITDA above targeted range while working on synergies. The demand and order activity were corroborated by ISM Manufacturing PMI readings. Transactional customers showed strength while large OEMs had demand stagnation. AI infrastructure and compute build-out impacted demand. Integration with Olympic Steel began with unified leadership structure and progress in synergy targets.
• Rick discussed North American Service Center industry shipping volumes, Ryerson's significant volume growth outpacing the industry, transactional business leading growth, contract customer activity steady, data centers and power generation projects driving backlogs, and Class 8 truck trailer industry's view. Emphasized building the combined organization with culture, synergy attainment, and customer-centric focus.
• Jim reviewed first quarter performance relative to guidance, second quarter expectations, synergy attainment progress. Achieved revenue at top end of guidance, same store volumes and average selling prices as expected, gross margin expanded. Bookings at healthy levels, second quarter expected to have shipments 1 - 3% higher on same-store basis, total company ton ship 18 - 20% higher, revenues in range of $1.86 - $1.93 billion. Synergy attainment progress: procurement synergies generated $15 million annual savings on track for $40 million two-year target, efficiency savings realized, leased facilities exited realizing $1.5 million annual savings, supply chain mapping and commercial synergies making progress. Capital expenditures totaled $12 million in first quarter with $75 million planned for the year. Dividends distributed and new share repurchase program announced.
• Molly discussed first quarter net sales, same-store performance, gross margin, expenses, income taxes, adjusted net income, adjusted EBITDA excluding LIFO, cash from operating activities, inventory days of supply, cash conversion cycle, debt and leverage ratio, and global liquidity.

In the first quarter, Ryerson achieved revenue at the top end of guidance range. Same store volumes increased as expected and same-store average selling prices exceeded expectations due to aluminum pricing influenced by geopolitical events. Gross margin expanded. Net income was $4.5 million or 10 cents per diluted share, and adjusted net income was $13.1 million or 30 cents per diluted share. Total company adjusted EBITDA excluding LIFO was $67.4 million, more than doubling the prior year. North American volumes grew significantly, with transactional business leading growth and contract customer activity steady. Data centers and power generation projects drove strong backlogs, and Class 8 truck trailer industry viewed 2026 as a supply-driven transition year. On a same-store basis, net sales were $1.29 billion with tons shipped 4.6% higher and average selling prices 8.9% higher. Same store gross margin expanded, and adjusted EBITDA excluding LIFO increased by $22.1 million year-over-year. Inventory days of supply decreased to 74 days, cash conversion cycle was 67 days. Total debt increased to $908 million and net debt to $883 million. Ryerson's leverage ratio rose to 5.1 times. Global liquidity increased from $502 million to $618 million. The firm's product segments saw various performance aspects with transactional and contract business having different trends and contributions. Transactional business was strong with market share gains, while contract business had uneven progress with expectations of improvement in the second half.

• First quarter revenue at top end of guidance range, same store volumes and average selling prices as expected, gross margin expanded. Net income $4.5 million, adjusted net income $13.1 million. Adjusted EBITDA excluding LIFO $67.4 million.
• Second quarter expected shipments 1 - 3% higher on same-store basis, total company ton ship 18 - 20% higher, revenues in range of $1.86 - $1.93 billion, same-store average selling prices up 2 - 4% sequentially, overall average selling prices up 1 - 3% quarter over quarter. Net income expected in range of 20 - $22 million or 38 - 42 cents per diluted share. LIFO expense between 14 - 16 million. Adjusted EBITDA excluding LIFO in range of $88 - $92 million with $21 - $23 million attributed to Olympic Steel. Second quarter synergy realization expected in range of $4 - $6 million.
• Anticipated $120 million of annual run rate synergies from integration with Olympic Steel, with first quarter procurement synergies generating $15 million annual savings on track for $40 million two-year procurement target, and other synergy savings in various areas.

• Uneven distribution of early recovery signs across customer base with transactional customers strong but large OEMs having demand stagnation following prolonged manufacturing contraction, high interest rates, tariff and geopolitical uncertainty.
• Concerns about how much and at what pace higher input costs can move through the value chain without triggering boomerang effect.
• Ongoing tightness in trucking market leading to inflation of delivery costs and lag effect in propagating through the value chain.
• Uncertainty around the duration of demand conditions amidst supply side disruptions and inflationary wildcards, particularly considering heightened global unrest and economic expansion circuit breakers absorbing potential hyper shocks.

Q: Samuel McKinney with KeyBank Capital Markets asked about the extent of divergence between spot and contract tons and what's needed to move contract business again.

A: Eddie said transactional business increased due to CapEx investments and service center fundamentals, contract side is lagging by 4 - 5% with uneven program side, Andrew Greif added second quarter expected to improve upon first with second half likely better, data center side strong impacting flat roll and pipe and tube.

Q: Samuel McKinney next asked about capital allocation priorities with new share repurchase program and net debt level.

A: Eddie said debt trends expected to improve as same-store earnings increase and Olympic contributes, Jim added priority on leverage ratio, opportunistic share repurchasing, prudent exercise of new program as market opportunities present.

Q: Kasia Janczyk with BMO Capital Markets asked about the split between contract and transactional business on a pro forma basis.

A: Eddie said Ryerson is about 52% transactional, 48% contract, Rick said Olympic is roughly 30% transactional, 70% contractual, and they expect to tilt to higher transactional percentage going forward.

Q: Kasia Janczyk then asked about early challenges with integration.

A: Rich Manson said collaboration among organizations exceeded expectations with good cooperation among commercial and operational teams and savings achievable as per laid out numbers.

Q: Alan Weber with Rabadi and Company asked about third and fourth quarter thinking.

A: Eddie said May activity positive, second half likely better than first half, Rick added internal improvements, synergy ramp up, and opportunity for contract business growth if demand recovers in big OEMs, Alan noted synergies expected to take place in second half also.