Ryerson Holding Corporation, a Chicago-based value-added processor and distributor of industrial metals, today reported results for the third quarter ended September 30, 2019.
Ryerson achieved revenues of $1.10 billion, a decrease of 11.6 percent compared to $1.25 billion in the third quarter of 2018, with average selling prices down 8.1 percent and with tons shipped down 3.9 percent. In a press release, the company said it continued to gain market share on a same-store basis during the third quarter of 2019 compared to the third quarter of 2018, as North American industry volume contracted 6.6 percent according to the MSCI while Ryerson North American tons shipped, excluding Central Steel & Wire (CS&W), increased by 0.5 percent.
Net income attributable to Ryerson Holding Corporation was $10.1 million in the third quarter of 2019 compared to $77.5 million in the prior year period.
The company said Central Steel & Wire “continues to progress toward post-acquisition goals, exceeding customer account retention expectations, achieving approximately $32 million in annualized expense take-outs, and realizing $12 million in cumulative proceeds from real estate sales for operations that were consolidated into existing facilities.”
“CS&W was acquired with significant working capital of nearly 140 days of inventory supply and management continues to target levels more in-line with Ryerson's same-store service center metrics. However, days of supply increased slightly at the end of the third quarter to 92 days compared to 91 days for the prior quarter, due in part to shipment declines reflective of industry demand weakness. At the same time, the continued deflationary cycle, including CRU hot-rolled coil price deflation, resulted in inventory holding losses. As a result, CS&W generated Adjusted EBITDA, excluding LIFO loss of $4.5 million in the third quarter, compared to our expectation of Adjusted EBITDA, excluding LIFO income of $3.0 million for the period and compared to a loss of $2.0 million in the second quarter of 2019.”
As for an outlook, the company said, “For the fourth quarter of 2019, Ryerson anticipates revenues of $960 million to $1.0 billion with tons shipped down 6 to 9 percent compared to the third quarter of 2019, due to normal seasonality patterns compounded by slowing industrial growth and trade uncertainty. Carbon prices are expected to bottom in the fourth quarter and aluminum prices are expected to be neutral to modestly lower, while stainless prices, despite a recent pull-back in nickel prices, are expected to remain supported by low warehouse and stock inventories as reported by the London Metal Exchange, secular demand expectations in the electric-vehicle battery market and export restraints on Indonesian nickel ore. Collectively, Ryerson expects average selling prices in the fourth quarter to be down 3 to 5 percent. LIFO income in the fourth quarter is expected to be in the range of $6 to $10 million as declines in carbon and aluminum inventory values are partially offset by gains in stainless steel inventory values.”