Ryerson Holding Corp

Management Commentary

Eddie Lehner, Ryerson’s President, Chief Executive Officer and Director, said, “I want to thank all of my Ryerson teammates for their dedicated efforts in the service of operating safely and productively during the quarter, and I want to thank our customers for the opportunity to create and deliver great customer experiences which we never take for granted. As we embark on the third year of our growth and modernization investment cycle, we are pleased to mark two important milestones: the start of operations at our University Park, IL service center and the completion of the final stage of our ERP system unification program across 31 service centers from 2022 through the first quarter of 2024. These investments are notable keystones in creating Ryerson’s next generation operating model that enables the building of additional operating and earnings leverage as we move from counter-cyclical business conditions that we have experienced since the second half of 2022 to the next industry upturn whose exact timing, while unknown, will eventually arrive.

During the first quarter of 2024, we met our guidance range for revenue and shipments but missed on earnings per share and Adjusted EBITDA, excluding LIFO. The variance from guidance was partially due to lower than expected gross margins as commodity price moving averages for our carbon and stainless product franchises declined through the quarter before inflecting positively toward the end of the quarter. Additionally, our results differing from guidance expectations was also partially attributable to transitory operating expenses as a by-product of a record investment cycle in fixed assets, digitalization and acquisitions, which is migrating to more normative and targeted levels. As we move through the third year of our operating model investment program, it is time to begin the integration and optimization phase of our operating model renovation. As such, we are targeting $40 million in annual cost take-outs that reflect investment inertia and require well–placed paring and pruning. These cost saving measures are expected to result in $25 million in savings during the balance of 2024. As we move through the second quarter of the year, I am encouraged by stabilization in the carbon sheet market, improvements in bright metal commodity price indices, and incrementally better quoting and order activity across our network of industrial metal service centers.”