Ryerson's Shipments Fall in Third Quarter
11/21/2014 - Ryerson Holding Corporation, a leading distributor and processor of metals, reported results for the third quarter of 2014.
Revenues for the third quarter of 2014 were US$948 million, an increase of 10.2% year-over-year and 1.8% sequentially. The quarter benefited from higher average selling prices, which were up 3.9% from the second quarter of 2014 and 10.4% from the third quarter of 2013 primarily as a result of a favorable shift in the company's product mix.
Adjusted EBITDA, excluding LIFO of US$62.2 million in the third quarter of 2014, was essentially unchanged, sequentially, and up 48% year-over-year. A reconciliation of net income attributable to Ryerson Holding Corporation to Adjusted EBITDA, excluding LIFO, is included in this news release.
Gross margin was 15.8% for the third quarter of 2014, compared to 18.0% in the third quarter of 2013, and 16.6% in the second quarter of 2014. Excluding LIFO, gross margin was 17.8%, compared to 16.9% in the year-ago quarter and 18.0% in the prior quarter. LIFO expense of US$19.1 million was included in cost of materials sold for the third quarter of 2014, compared with a US$13.7 million expense in the second quarter of 2014 and LIFO income of US$9.5 million in the third quarter of 2013. A reconciliation of gross margin, excluding LIFO to gross margin, is included below in this news release.
Warehousing, delivery, selling, general and administrative expense was up US$33.9 million, or 28%, sequentially and year-over-year, due to expenses associated with the Initial Public Offering (IPO) completed in the third quarter. Excluding a US$25.0 million charge to terminate the advisory services agreement with Platinum Equity and US$7.7 million of compensation expense associated with the IPO, expenses were up 1% sequentially and year-over-year.
Ryerson reported a net loss attributable to Ryerson Holding Corporation of US$34.7 million, or a loss of US$1.26 per share, in the third quarter of 2014, compared to net income attributable to Ryerson Holding Corporation of US$2.6 million, or US$0.13 per share, in the second quarter of 2014 and US$3.0 million, or US$0.14 per share, in the third quarter of 2013. In addition to the US$32.7 million of IPO-related expenses noted above, the third quarter of 2014 included aUS$11.2 million expense related to the premium paid to redeem a portion of the 11.25% Senior Notes due 2018, and a US$1.2 million non-cash charge to write-off unamortized debt issuance costs related to the Note redemption. Excluding the IPO-related and debt redemption expenses, net of income taxes, net income attributable to Ryerson Holding Corporation was US$2.6 million, or US$0.09 per share, in the third quarter of 2014. A reconciliation of expenses, net income, and earnings per share, excluding IPO-related and debt redemption expenses to their comparable GAAP financial measure is included in this earnings release.
"We are pleased with the 48% year-over-year gain in Adjusted EBITDA, excluding LIFO – our fifth consecutive quarter of year-over-year improvement in this important metric," said Mike Arnold, Ryerson's president and chief executive officer. "And, we held Adjusted EBITDA, excluding LIFO, essentially unchanged on a sequential basis, despite the typical seasonal slowdown relative to the second quarter, mid-quarter slowing in pricing momentum, and margin pressure driven by increasing import levels and wide spreads between domestic and imported metal prices."
Nine Month Performance
For the first nine months of 2014, revenues of US$2.8 billion increased 3.6% from the first nine months of 2013. Ryerson reported a net loss attributable to Ryerson Holding Corporation of US$30.5 million, or a loss of US$1.31per share, compared to net income attributable to Ryerson Holding Corporation of US$9.1 million, or US$0.43 per share, in the year-ago period. Excluding the IPO-related and debt redemption expenses, net of taxes, net income attributable to Ryerson Holding Corporation was US$6.8 million, or US$0.29 per share, for the first nine months of 2014. Adjusted EBITDA, excluding LIFO increased to US$177 million in the first nine months of 2014, up 38% year-over-year.
Pension Contributions
Ryerson expects to contribute US$55 million to the company's pension plans in 2014. This is a reduction of US$11 million from the company's previous estimate due to funding relief provided under the Highway and Transportation Funding Act of 2014. Ryerson's 2015 pension contributions are expected to be approximately US$43 million.
Initial Public Offering
On August 8, 2014, Ryerson's initial public offering raised US$121 million, pricing 11 million shares at US$11.00 per share. Use of the IPO proceeds included the redemption of US$99.5 million principal amount of its 11.25% Senior Notes due 2018.
Third Quarter 2014 Business Metrics
Third Quarter 2014 Major Product Metrics
Nine Months Ended 30 September 2014 Business Metrics
Nine Months Ended 30 September 2014 Major Product Metrics
Nine Months Ended 30 September 2014
Ryerson is a processor and distributor of metals with operations in the United States, Mexico, Canada, China and Brazil. The company serves several industries including oil and gas, industrial equipment, transportation equipment, heavy equipment and electrical machinery. Founded in 1842, Ryerson is headquartered in the United States and employs approximately 4,000 employees in more than 100 locations.
Adjusted EBITDA, excluding LIFO of US$62.2 million in the third quarter of 2014, was essentially unchanged, sequentially, and up 48% year-over-year. A reconciliation of net income attributable to Ryerson Holding Corporation to Adjusted EBITDA, excluding LIFO, is included in this news release.
Gross margin was 15.8% for the third quarter of 2014, compared to 18.0% in the third quarter of 2013, and 16.6% in the second quarter of 2014. Excluding LIFO, gross margin was 17.8%, compared to 16.9% in the year-ago quarter and 18.0% in the prior quarter. LIFO expense of US$19.1 million was included in cost of materials sold for the third quarter of 2014, compared with a US$13.7 million expense in the second quarter of 2014 and LIFO income of US$9.5 million in the third quarter of 2013. A reconciliation of gross margin, excluding LIFO to gross margin, is included below in this news release.
Warehousing, delivery, selling, general and administrative expense was up US$33.9 million, or 28%, sequentially and year-over-year, due to expenses associated with the Initial Public Offering (IPO) completed in the third quarter. Excluding a US$25.0 million charge to terminate the advisory services agreement with Platinum Equity and US$7.7 million of compensation expense associated with the IPO, expenses were up 1% sequentially and year-over-year.
Ryerson reported a net loss attributable to Ryerson Holding Corporation of US$34.7 million, or a loss of US$1.26 per share, in the third quarter of 2014, compared to net income attributable to Ryerson Holding Corporation of US$2.6 million, or US$0.13 per share, in the second quarter of 2014 and US$3.0 million, or US$0.14 per share, in the third quarter of 2013. In addition to the US$32.7 million of IPO-related expenses noted above, the third quarter of 2014 included aUS$11.2 million expense related to the premium paid to redeem a portion of the 11.25% Senior Notes due 2018, and a US$1.2 million non-cash charge to write-off unamortized debt issuance costs related to the Note redemption. Excluding the IPO-related and debt redemption expenses, net of income taxes, net income attributable to Ryerson Holding Corporation was US$2.6 million, or US$0.09 per share, in the third quarter of 2014. A reconciliation of expenses, net income, and earnings per share, excluding IPO-related and debt redemption expenses to their comparable GAAP financial measure is included in this earnings release.
"We are pleased with the 48% year-over-year gain in Adjusted EBITDA, excluding LIFO – our fifth consecutive quarter of year-over-year improvement in this important metric," said Mike Arnold, Ryerson's president and chief executive officer. "And, we held Adjusted EBITDA, excluding LIFO, essentially unchanged on a sequential basis, despite the typical seasonal slowdown relative to the second quarter, mid-quarter slowing in pricing momentum, and margin pressure driven by increasing import levels and wide spreads between domestic and imported metal prices."
Nine Month Performance
For the first nine months of 2014, revenues of US$2.8 billion increased 3.6% from the first nine months of 2013. Ryerson reported a net loss attributable to Ryerson Holding Corporation of US$30.5 million, or a loss of US$1.31per share, compared to net income attributable to Ryerson Holding Corporation of US$9.1 million, or US$0.43 per share, in the year-ago period. Excluding the IPO-related and debt redemption expenses, net of taxes, net income attributable to Ryerson Holding Corporation was US$6.8 million, or US$0.29 per share, for the first nine months of 2014. Adjusted EBITDA, excluding LIFO increased to US$177 million in the first nine months of 2014, up 38% year-over-year.
Pension Contributions
Ryerson expects to contribute US$55 million to the company's pension plans in 2014. This is a reduction of US$11 million from the company's previous estimate due to funding relief provided under the Highway and Transportation Funding Act of 2014. Ryerson's 2015 pension contributions are expected to be approximately US$43 million.
Initial Public Offering
On August 8, 2014, Ryerson's initial public offering raised US$121 million, pricing 11 million shares at US$11.00 per share. Use of the IPO proceeds included the redemption of US$99.5 million principal amount of its 11.25% Senior Notes due 2018.
Third Quarter 2014 Business Metrics
|
Third Quarter 2014 |
Second Quarter 2014 |
Third Quarter 2013 |
Sequential Quarter Change | Year-Over-Year Change | |
| Tons shipped (in thousands) | 518 | 529 | 519 | -2.1% | -0.2% |
| Average selling price/ton | US$1,830 | US$1,761 | US$1,657 | 3.9% | 10.4% |
| Average cost/ton | 1,541 | 1,469 | 1,358 | 4.9% | 13.5% |
| Average cost/ton, excluding LIFO | 1,504 | 1,443 | 1,376 | 4.2% | 9.3% |
Third Quarter 2014 Major Product Metrics
| Tons Shipped (tons in thousands) | Average Selling Price per Ton Shipped | ||||||
| Third Quarter 2014 Tons Shipped | Second Quarter 2014 Tons Shipped | Third Quarter 2013 Tons Shipped | Sequential Quarter Change | Year-Over-Year Change | Sequential Quarter Change | Year-Over-Year Change | |
| Carbon steel | 403 | 413 | 411 | -2.4% | -1.9% | 1.4% | 9.1% |
| Aluminum | 51 | 49 | 46 | 4.1% | 10.9% | 2.5% | -0.7% |
| Stainless Steel | 61 | 64 | 57 | -4.7% | 7.0% | 8.2% | 11.2% |
| Net Sales (dollars in millions) | |||||
| Third Quarter 2014 Net Sales | Second Quarter 2014 Net Sales | Third Quarter Net 2013 Sales | Sequential Quarter Change | Year-Over-Year Change | |
| Carbon steel | US$488 | US$493 | US$456 | -1.0% | 7.0% |
| Aluminum | 208 | 195 | 189 | 6.7% | 10.1% |
| Stainless Steel | 232 | 225 | 195 | 3.1% | 19.0% |
Nine Months Ended 30 September 2014 Business Metrics
| 2014 | 2013 | Year-Over-Year Change | |
| Tons Shipped (in thousands) | 1,553 | 1,559 | -0.4% |
| Average selling price/ton | US$1,773 | US$1,705 | 4.0% |
| Average cost/ton | 1,482 | 1,404 | 5.6% |
| Average cost/ton, excluding LIFO | 1,455 | 1,421 | 2.4% |
Nine Months Ended 30 September 2014 Major Product Metrics
| Tons Shipped (tons in thousands) | Average Selling Price per Ton Shipped | |||
| 2014 Tons Shipped | 2013 Tons Shipped | Year-Over-Year Change | Year-Over-Year Change | |
| Carbon steel | 1,214 | 1,231 | -1.4% | 5.3% |
| Aluminum | 146 | 140 | 4.3% | -2.1% |
| Stainless steel | 185 | 178 | 3.9% | 2.0% |
| Net Sales (dollars in millions) | |||
| 2014 Net Sales | 2013 Net Sales | Year-Over-Year Change | |
| Carbon steel | US$1,457 | US$1,403 | 3.8% |
| Aluminum | 582 | 570 | 2.1% |
| Stainless steel | 655 | 618 | 6.0% |
Nine Months Ended 30 September 2014
| Tons shipped year-over-year change | |
| U.S. | 2.5% |
| Non-U.S. | -14.5 |
Ryerson is a processor and distributor of metals with operations in the United States, Mexico, Canada, China and Brazil. The company serves several industries including oil and gas, industrial equipment, transportation equipment, heavy equipment and electrical machinery. Founded in 1842, Ryerson is headquartered in the United States and employs approximately 4,000 employees in more than 100 locations.
