Ryerson Inc. (NYSE: RYI) reported Q1 EPS of $0.41, $0.07 better than the analyst estimate of $0.34. Revenue for the quarter came in at $1.01 billion versus the consensus estimate of $1.03 billion.

Management Commentary

Eddie Lehner, President and Chief Executive Officer of Ryerson said, "I want to begin by first thanking all of the COVID-19 pandemic frontline workers who are tirelessly responding to the pandemic with tremendous grace and courage as they treat, care for and comfort the afflicted. I next want to thank, in these unparalleled and trying times, my Ryerson colleagues who understand the shared sacrifice required during this crisis and who have risen to the challenges imposed by the virus with grit, determination and solidarity. During the era of COVID-19, we are working in common cause and with great appreciation for our customers and suppliers as we strengthen these vital relationships and work through the complications of an economic shutdown without precedent. As an \"essential business," we are privileged and honored to be an integral part of supply chains that are providing life-saving and essential products and services that are supporting the critical and ongoing needs of society and the economy. As we work through the acute shocks caused by the pandemic, there are three distinct periods to address: BCV (Before the Coronavirus), DCV (During the Coronavirus) and ACV (After the Coronavirus). Turning to our first quarter performance, which began BCV, we delivered commendable results during a quarter that felt like three different years compressed into three months. January started slowly given demand weakness within key original equipment manufacturer, or OEM, verticals. Then, the pandemic tidal wave which gripped China in January and February exponentially spread and paralyzed North America in March. Distilling the first quarter reflective of BCV and DCV, we prepared our organization and implemented plans, policies and practices to safeguard the health and safety of our workforce. Safety performance was excellent throughout Ryerson in the quarter, as was COVID-19 adaptiveness and responsiveness. Our operations team delivered great customer experiences safely as Ryerson operated as an essential business and our operators shone brilliantly given the challenges posed by the global and national health emergency. Ryerson executed upon organizational priorities during the quarter by repurchasing $55 million of our Senior Secured Notes at an average price below par, decreasing net debt and cash interest expense, generating significant cash flow from operating activities, and continuing to build net book value of equity. At the same time, the turnaround progress at Central Steel & Wire, or CS&W, was demonstrated in the company's first quarter results, as carbon margins recovered to mid-cycle levels and additional post-acquisition synergies were realized. For Ryerson overall, transactional business was better than OEM program business and carbon gross margins were stronger than aluminum and stainless margins. Also affecting gross margins and Adjusted EBITDA, excluding LIFO was a mark-to-market customer hedging loss of $4.9 million, which negatively impacted gross margins, excluding LIFO by 50 basis points in the first quarter. However, this hedging loss is expected to be recovered as the physical metal ships in succeeding periods. All in all, our ability to adapt quickly to pandemic induced events and to execute DCV plans effectively is a tribute to our organization, our customers and suppliers in recognizing with clarity the gravity of circumstances created by COVID-19. Please know that our work continues indefatigably as we manage through the crisis and take the actions necessary to serve our dual mandate of safeguarding the health and safety of our employees while preserving liquidity and recovery capacity through the crisis interval and aftermath knowing that the duration of the virus and its impacts remain unknown. With respect to ACV, we remain hopeful and determined that as we collectively accelerate learnings about the virus and continue building virus response infrastructure to combat and eventually eradicate the virus, we will see societal and economic conditions normalize to the better side of current projections. We look forward to seeing all of you safe and well as we all work in common cause toward better and easier times."

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