Ryerson Reports First Quarter 2017 Results

First Quarter 2017 Business Metrics

First
Quarter
2017

Fourth
Quarter
2016

First
Quarter
2016

Sequential
Quarter Change

Year-Over-Year
Change

Tons shipped (In thousands)

497

440

478

13.0%

4.0%

Average selling price/ton

$1,639

$1,550

$1,470

5.7%

11.5%

Average cost/ton

1,316

1,290

1,161

2.0%

13.4%

Average cost/ton, excluding LIFO

1,317

1,259

1,192

4.6%

10.5%

First Quarter 2017 Major Product Metrics

Tons Shipped (Tons in thousands)

Average Selling Price per Ton Shipped

First
Quarter
2017

Fourth
Quarter
2016

First
Quarter
2016

Sequential
Quarter
Change

Year-Over-Year
Change

Sequential
Quarter
Change

Year-Over-Year
Change

Carbon steel

374

332

367

12.7%

1.9%

4.4%

12.8%

Aluminum

50

43

46

16.3%

8.7%

1.9%

-3.1%

Stainless steel

71

64

62

10.9%

14.5%

12.0%

13.1%

Net Sales (Dollars in millions)

First

Quarter

2017

Fourth

Quarter

2016

First

Quarter
2016

Sequential
Quarter
Change

Year-Over-Year
Change

Carbon steel

$407

$346

$354

17.6%

15.0%

Aluminum

179

151

170

18.5%

5.3%

Stainless steel

215

173

166

24.3%

29.5%

RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES

Selected Income and Cash Flow Data - Unaudited

(Dollars and Shares in Millions, except Per Share and Per Ton Data)

Fourth

First Quarter

Quarter

2017

2016

2016

NET SALES

$      814.5

$          702.6

$      682.2

Cost of materials sold

653.9

555.0

567.6

Gross profit

160.6

147.6

114.6

Warehousing, delivery, selling, general and administrative

117.3

109.3

104.9

Restructuring and other charges

-

-

(1.5)

OPERATING PROFIT

43.3

38.3

11.2

Other income and (expense), net (1)

0.3

5.3

(4.0)

Interest and other expense on debt

(21.8)

(22.0)

(22.4)

INCOME (LOSS) BEFORE INCOME TAXES

21.8

21.6

(15.2)

Provision (benefit) for income taxes

6.8

8.1

(6.8)

NET INCOME (LOSS)

15.0

13.5

(8.4)

Less: Net income attributable to noncontrolling interest

0.2

-

0.2

NET INCOME (LOSS) ATTRIBUTABLE TO RYERSON HOLDING CORPORATION

$        14.8

$            13.5

$         (8.6)

EARNINGS (LOSS) PER SHARE

Basic and diluted

$        0.40

$            0.42

$       (0.23)

Shares outstanding - basic

37.1

32.1

37.1

Shares outstanding - diluted

37.3

32.1

37.1

Supplemental Data :

Tons shipped  (000)

497

478

440

Shipping days

64

64

60

Average selling price/ton

$      1,639

$          1,470

$      1,550

Gross profit/ton 

323

309

260

Operating profit/ton

87

80

25

LIFO expense (income), net per ton

(1)

(31)

31

LIFO expense (income), net

$         (0.7)

$           (14.8)

$        13.8

Depreciation and amortization expense

10.7

10.9

10.7

Cash flow from operating activities

(32.5)

47.0

48.3

Capital expenditures

(4.0)

(5.4)

(3.3)

The first quarter 2016 includes a gain of $8.2 million on the repurchase of debt. The fourth quarter 2016 includes an other-than-temporary impairment charge of $1.9 million related to our investment in an available-for-sale security and a loss of $1.5 million on the repurchase of debt.

See Schedule 1 for Condensed Consolidated Balance Sheets

See Schedule 2 for EBITDA and Adjusted EBITDA reconciliation.

See Schedule 3 for EPS reconciliation.

Schedule 1

RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES

Condensed Consolidated Balance Sheets

(In millions, except shares)

March 31,

December 31,

2017

2016

Assets

(unaudited)

Current assets:

Cash and cash equivalents

$        72.1

$            80.7

Restricted cash

1.2

1.0

Receivable, less provision for allowances, claims and doubtful accounts of $5.9 in 2017 and $4.6 in 2016

413.7

326.0

Inventories

624.1

563.4

Prepaid expenses and other current assets

26.4

26.7

Total current assets

1,137.5

997.8

Property, plant and equipment, at cost

708.0

668.7

Less: accumulated depreciation

289.9

280.5

Property, plant and equipment, net

418.1

388.2

Deferred income taxes

12.6

24.4

Other intangible assets

50.8

40.8

Goodwill

115.7

103.2

Deferred charges and other assets

4.2

4.3

Total assets

$   1,738.9

$       1,558.7

Liabilities

Current liabilities:

Accounts payable

$      337.0

$          230.4

Salaries, wages and commissions

32.6

36.8

Other accrued liabilities

59.6

37.7

Short-term debt

23.8

19.2

Current portion of deferred employee benefits

8.3

8.3

Total current liabilities

461.3

332.4

Long-term debt

968.7

944.3

Deferred employee benefits

291.5

298.8

Taxes and other credits

50.1

32.5

Total liabilities

1,771.6

1,608.0

Commitments and contingencies

Equity

Ryerson Holding Corporation stockholders' equity (deficit):

Preferred stock, $0.01 par value; 7,000,000 shares authorized and no shares issued at 2017 and 2016

-

-

Common stock, $0.01 par value; 100,000,000 shares authorized; 37,345,117 shares issued at 2017 and 2016

0.4

0.4

Capital in excess of par value

375.7

375.4

Accumulated deficit

(97.4)

(112.2)

Treasury stock, at cost - Common stock of 212,500 shares in 2017 and 2016

(6.6)

(6.6)

Accumulated other comprehensive loss

(306.8)

(307.8)

Total Ryerson Holding Corporation Stockholders' Equity (Deficit)

(34.7)

(50.8)

Noncontrolling interest

2.0

1.5

Total Equity (Deficit)

(32.7)

(49.3)

Total Liabilities and Stockholders' Equity

$   1,738.9

$       1,558.7

Schedule 2

RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES

Reconciliations of Net Income (Loss) Attributable to Ryerson Holding Corporation to EBITDA and Gross margin to Gross margin excluding LIFO 

(Dollars in millions)

Fourth

First Quarter

Quarter

2017

2016

2016

Net income (loss) attributable to Ryerson Holding Corporation

$        14.8

$            13.5

$         (8.6)

Interest and other expense on debt

21.8

22.0

22.4

Provision (benefit) for income taxes

6.8

8.1

(6.8)

Depreciation and amortization expense

10.7

10.9

10.7

EBITDA

$        54.1

$            54.5

$        17.7

Reorganization

0.5

1.3

0.5

Foreign currency transaction (gains) losses

(0.3)

2.9

0.7

(Gain) loss on retirement of debt

-

(8.2)

1.5

Impairment charges on assets

-

-

2.4

Purchase consideration and other transaction costs

0.7

1.5

(0.5)

Other adjustments

-

-

(0.1)

Adjusted EBITDA

$        55.0

$            52.0

Adjusted EBITDA

$        55.0

$            52.0

$        22.2

LIFO expense (income), net

(0.7)

(14.8)

13.8

Adjusted EBITDA, excluding LIFO expense (income), net

$        54.3

$            37.2

$        36.0

Net sales

$      814.5

$          702.6

$      682.2

Adjusted EBITDA, excluding LIFO expense (income), net, as a percentage of net sales

6.7%

5.3%

5.3%

Gross profit

$      160.6

$          147.6

$      114.6

Gross margin

19.7%

21.0%

16.8%

Gross profit

$      160.6

$          147.6

$      114.6

LIFO expense (income), net

(0.7)

(14.8)

13.8

Gross profit, excluding LIFO expense (income), net

$      159.9

$          132.8

$      128.4

Gross margin, excluding LIFO expense (income), net

19.6%

18.9%

18.8%

Note:

EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on assets, reorganization expenses and foreign currency transaction gains and losses. We believe that the presentation of EBITDA, Adjusted EBITDA and Adjusted EBITDA, excluding LIFO expense (income), net, provides useful information to investors regarding our operational performance because they enhance an investor's overall understanding of our core financial performance and provide a basis of comparison of results between current, past and future periods. We also disclose the metric Adjusted EBITDA, excluding LIFO expense (income), net, to provide a means of comparison among our competitors who may not use the same basis of accounting for inventories. EBITDA, Adjusted EBITDA and Adjusted EBITDA, excluding LIFO expense (income), net, are three of the primary metrics management uses for planning and forecasting in future periods, including trending and analyzing the core operating performance of our business without the effect of U.S. generally accepted accounting principles, or GAAP, expenses, revenues and gains (losses) that are unrelated to the day to day performance of our business. We also establish compensation programs for our executive management and regional employees that are based upon the achievement of pre-established EBITDA, Adjusted EBITDA and Adjusted EBITDA, excluding LIFO expense (income), net, targets. We also use EBITDA, Adjusted EBITDA and Adjusted EBITDA, excluding LIFO expense (income), net, to benchmark our operating performance to that of our competitors. EBITDA, Adjusted EBITDA and Adjusted EBITDA, excluding LIFO expense (income), net do not represent, and should not be used as a substitute for, net income or cash flows from operations as determined in accordance with generally accepted accounting principles, and neither EBITDA, Adjusted EBITDA and Adjusted EBITDA, excluding LIFO expense (income), net, is necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. This release also presents gross margin, excluding LIFO expense (income), net, which is calculated as gross profit plus LIFO expense (or minus LIFO income), net, divided by net sales. We have excluded LIFO expense (income), net from the gross margin and Adjusted EBITDA as a percentage of net sales metrics in order to provide a means of comparison among our competitors who may not use the same basis of accounting for inventories as we do. Our definitions of EBITDA, Adjusted EBITDA, Adjusted EBITDA, excluding LIFO expense (income), net, gross margin, excluding LIFO expense (income), net, and Adjusted EBITDA, excluding LIFO expense (income), net, as a percentage of sales may differ from that of other companies. 

Schedule 3

RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES

Reconciliation of Net Income (Loss) and Earnings (Loss) per Share Excluding Restructuring and Other Charges,

Impairment Charges on Assets and (Gain) Loss on Retirement of Debt

(Dollars and Shares in Millions, Except Per Share Data)

Fourth

First Quarter

Quarter

2017

2016

2016

Net income (loss) attributable to Ryerson Holding Corporation

$        14.8

$            13.5

$         (8.6)

Restructuring and other charges

-

-

(1.5)

Impairment charges on assets

-

-

2.4

(Gain) loss on debt retirement

-

(8.2)

1.5

Provision (benefit) for income taxes

-

2.9

(0.9)

Net income (loss) attributable to Ryerson Holding Corporation, excluding restructuring and other charges, impairment charges on assets and (gain) loss on retirement of debt

$        14.8

$              8.2

$         (7.1)

Earnings (loss) per share, excluding restructuring and other charges, impairment charges on assets and (gain) loss on debt retirement - basic and diluted

$        0.40

$            0.26

$       (0.19)

Shares outstanding - basic

37.1

32.1

37.1

Shares outstanding - diluted

37.3

32.1

37.1

Note:

Net income (loss) and Earnings (loss) per share excluding restructuring and other charges, impairment charges on assets and (gain) loss on debt retirement is presented to provide a means of comparison with periods that do not include restructuring and other charges, impairment charges on assets and (gain) loss on debt retirement.