CHICAGO, Sept. 28, 2017
/PRNewswire/ -- Ryerson Holding Corporation (NYSE: RYI), a
leading value-added processor and distributor of industrial metals,
today provided guidance for its third quarter ending September 30, 2017. The Company anticipates
revenue in the range of $840 million to $860
million for the third quarter of 2017 compared to
$875 million in the second quarter of
2017 and $735 million in the third
quarter of 2016. Average selling prices in the third quarter of
2017 are expected to be consistent with the second quarter of 2017.
Third quarter shipments are expected to be one to two percent lower
sequentially due in part to hurricane-related impacts and SAP
conversions in Canada. Both
average selling prices and tons sold are expected to be higher
compared to the third quarter of 2016. The Company expects third
quarter 2017 net income attributable to Ryerson Holding Corporation
in the range of $0 million to $2
million, which includes a range of $1
million of LIFO expense to $3
million in LIFO income. Adjusted EBITDA, excluding LIFO is
expected to be in the range of $37 million
to $40 million for the third quarter of 2017 when including
hurricane and SAP conversion related impacts of approximately
$5 million. Ryerson reported third
quarter 2016 net income attributable to Ryerson Holding Corporation
of $8 million and second quarter of
2017 net income attributable to Ryerson Holding Corporation of
$1 million. Adjusted EBITDA,
excluding LIFO was $49 million in the
third quarter of 2016 and $52 million
in the second 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.
Ryerson's end markets as measured in shipments per day showed
sequential quarterly growth in the construction equipment and food
processing and agricultural equipment industries, and declines in
the oil & gas and HVAC sectors. Ryerson experienced quarterly
year-over-year growth in nearly all end markets, most notably in
commercial ground transportation, oil & gas, and construction
equipment sectors, while consumer durables experienced quarterly
year-over-year demand declines.
Ryerson continues to see improved demand when viewed against the
year ago period. According to the Metal Service Center Institute,
U.S. service center volumes have increased by more than three
percent through August 2017
year-to-date compared to the prior year period. However, elevated
import levels, well supplied metals markets, and Section 232 driven
panic buying throughout 2017 have muted pricing. The muted pricing
together with higher procured metal costs resulted in margin
compression through the quarter. Consequently, Ryerson anticipates
gross margins, excluding LIFO expense to be lower in the third
quarter than the second quarter of 2017.
Overall, third quarter industrial economic demand conditions
appeared consistent with the prior quarter. Moreover, a weaker U.S.
dollar and improved global pricing conditions have narrowed spreads
between foreign and domestic steel pricing. Commodity prices have
trended higher sequentially from the second quarter through the
third quarter on balance despite continuing volatility in
industrial base metal markets. Consequently, we anticipate a
better gross margin climate in the fourth quarter of 2017.
Ryerson Holding Corporation's Third Quarter 2017 Conference
Call Details
Ryerson will host a conference call to discuss third quarter
2017 results on Wednesday, November
8, 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 Tuesday,
November 7.
DATE:
|
Wednesday, November
8, 2017
|
TIME:
|
10:00 a.m. ET / 9:00
a.m. CT
|
DIAL-IN:
|
833-241-7253
(Domestic) / 647-689-4217 (International)
|
CONFERENCE ID:
|
88577582
|
An online replay of the call will be posted on the investor
relations website, ir.ryerson.com, and remain available for 90
days.
Ryerson is a leading value-added processor and distributor of
industrial metals, with operations in the
United States, Canada,
Mexico, and China. Founded in 1842, Ryerson employs around
3,600 employees in approximately 100 locations. Visit Ryerson at
www.ryerson.com.
Safe Harbor Provision
Certain statements made in this press release and other written
or oral statements made by or on behalf of the Company constitute
"forward-looking statements" within the meaning of the federal
securities laws, including statements regarding our future
performance, as well as management's expectations, beliefs,
intentions, plans, estimates, or projections relating to the
future. Such statements can be identified by the use of
forward-looking terminology such as "believes," "expects," "may,"
"estimates," "will," "should," "plans" or "anticipates" or the
negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy. The Company cautions
that any such forward-looking statements are not guarantees of
future performance and may involve significant risks and
uncertainties, and that actual results may vary materially from
those in the forward-looking statements as a result of various
factors. Among the factors that significantly impact the metals
distribution industry and our business are: the cyclicality of our
business; the highly competitive, volatile, and fragmented market
in which we operate; fluctuating metal prices; our substantial
indebtedness and the covenants in instruments governing such
indebtedness; the integration of acquired operations; regulatory
and other operational risks associated with our operations located
inside and outside of the United
States; work stoppages; obligations under certain employee
retirement benefit plans; the ownership of a majority of our equity
securities by a single investor group; currency fluctuations; and
consolidation in the metals producer industry. Forward-looking
statements should, therefore, be considered in light of various
factors, including those set forth above and those set forth under
"Risk Factors" in our annual report on Form 10-K for the year
ended December 31, 2016, and in our other filings with
the Securities and Exchange Commission. Moreover, we caution
against placing undue reliance on these statements, which speak
only as of the date they were made. The Company does not
undertake any obligation to publicly update or revise any
forward-looking statements to reflect future events or
circumstances, new information or otherwise.
Set forth below is a reconciliation of our anticipated net
income attributable to Ryerson Holding Corporation to our Adjusted
EBITDA and our Adjusted EBITDA, excluding LIFO expense
(income).
|
|
|
|
|
|
Range of
Estimates
|
|
|
(unaudited)
|
|
|
(in
millions)
|
|
|
Low
|
High
|
Net income
attributable to Ryerson Holding Corporation
|
|
$
-
|
$ 2
|
Interest and other
expense on debt
|
|
23
|
23
|
Provision for income
taxes
|
|
2
|
2
|
Depreciation and
amortization expense
|
|
12
|
12
|
EBITDA
|
|
$ 37
|
$ 39
|
Adjustments
|
|
3
|
-
|
Adjusted
EBITDA
|
|
$ 40
|
$ 39
|
LIFO expense
(income)
|
|
(3)
|
1
|
Adjusted EBITDA,
excluding LIFO expense (income)
|
|
$ 37
|
$ 40
|
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), 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), 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), 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), targets. We also
use EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO
expense (income), to benchmark our operating performance to that of
our competitors. EBITDA, Adjusted EBITDA, and Adjusted EBITDA,
excluding LIFO expense (income), 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), 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 (income), may differ from
that of other companies
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SOURCE Ryerson Holding Corporation