Ryerson Inc. (RYI) Guides Q4 Revenue Ahead of Views

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January 24, 2018 4:36 PM EST

Ryerson Holding Corporation (NYSE: RYI), a leading value-added processor and distributor of industrial metals, today provided guidance for its fourth quarter ending December 31, 2017. The Company anticipates revenue of approximately $810 million for the fourth quarter of 2017 compared to $864 million in the third quarter of 2017 and $682 million in the fourth quarter of 2016. Average selling prices in the fourth quarter of 2017 are expected to be approximately three percent higher than the third quarter of 2017. Fourth quarter shipments are expected to be approximately nine percent lower sequentially due to fewer shipping days and normal seasonal demand. Average selling prices are expected to be approximately 11 percent higher and tons sold are expected to be approximately seven percent higher compared to the fourth quarter of 2016. The Company expects fourth quarter 2017 net loss attributable to Ryerson Holding Corporation in the range of $2 million to $4 million, which includes LIFO expense of $7 million to $10 million. Estimated fourth quarter 2017 earnings guidance does not include the impact from any recent federal tax legislation changes in the United States. Adjusted EBITDA, excluding LIFO is expected to be in the range of $40 million to $42 million for the fourth quarter of 2017. Ryerson reported fourth quarter 2016 net loss attributable to Ryerson Holding Corporation of $9 million and third quarter of 2017 net income attributable to Ryerson Holding Corporation of $2 million. Adjusted EBITDA, excluding LIFO was $36 million in the fourth quarter of 2016 and $38 million in the third quarter of 2017. A reconciliation of Adjusted EBITDA, excluding LIFO to net income attributable to Ryerson Holding Corporation is included below in this news release.

(Street sees Q4 EPS of 9c on revenue of $802.58 million)

Ryerson experienced quarterly year-over-year growth in nearly all end markets, most notably in commercial ground transportation, HVAC, and oil & gas, while consumer durables experienced quarterly year-over-year demand declines. Ryerson's end markets as measured in shipments per day showed sequential quarterly declines in nearly all sectors due to normal seasonal demand experienced in the fourth quarter.

Ryerson continues to see improved demand and pricing conditions heading into 2018. According to the Metal Service Center Institute, U.S. service center volumes increased by four percent in 2017 compared to the prior year period. Industrial production, as measured by the Federal Reserve, increased to a three-year high of 3.6 percent in December 2017. Ryerson anticipates domestic service centers to benefit from the increased demand in early 2018 compared to 2017, as the elevated import levels experienced in the first half of 2017 appear to have moderated, with November 2017 U.S. imports of carbon and stainless products down over 30 percent compared to peak levels in June 2017. Further, carbon and aluminum prices remained relatively stable in the fourth quarter compared to the third quarter of 2017. Nickel prices, a key component of stainless pricing, remain highly volatile but are up over 10 percent in mid-January from mid-December, which could positively impact stainless steel prices in the first half of 2018.

Ryerson Holding Corporation's Fourth Quarter 2017 Conference Call Details

Ryerson will host a conference call to discuss fourth quarter 2017 results on Tuesday, March 6, at 10 a.m. Eastern Time. The live online broadcast will be available on the Company's investor relations website, ir.ryerson.com. Ryerson will report earnings after the market closes on Monday, March 5.

DATE:

Tuesday, March 6, 2018

TIME:

10:00 a.m. ET / 9:00 a.m. CT

DIAL-IN:

833-241-7253 (Domestic) / 647-689-4217 (International)

CONFERENCE ID:

5372519

An online replay of the call will be posted on the investor relations website, ir.ryerson.com, and remain available for 90 days.

Set forth below is a reconciliation of our anticipated net loss attributable to Ryerson Holding Corporation to our Adjusted EBITDA and our Adjusted EBITDA, excluding LIFO expense.

Range of Estimates

(unaudited)

(in millions)

Low

High

Net loss attributable to Ryerson Holding Corporation (Note 1)

$ (4)

$ (2)

Interest and other expense on debt

23

23

Benefit from income taxes (Note 1)

(4)

(2)

Depreciation and amortization expense

13

13

EBITDA

$ 28

$ 32

Adjustments

2

3

Adjusted EBITDA

$ 30

$ 35

LIFO expense

10

7

Adjusted EBITDA, excluding LIFO expense

$ 40

$ 42

EBITDA represents net loss before interest and other expense on debt, benefit from 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, 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, 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, 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, targets. We also use EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense, to benchmark our operating performance to that of our competitors. EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense, 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, is necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. Our definitions of EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense, may differ from that of other companies.

Note 1: Estimated fourth quarter 2017 earnings guidance does not include the impact from any recent federal tax legislation changes in the United States.


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