Executive Summary

Q3 2024 was a bottoming quarter: revenue of $1.13B met the low end of guidance, but diluted EPS missed, printing a $(0.20) loss; margins compressed as ASP declines outpaced inventory cost deflation, especially in carbon steel .
Free cash flow was strong at $103.4M on $134.6M operating cash flow driven by $129M working capital release; net debt fell to $487.1M; net leverage rose to 3.8x given lower LTM EBITDA while the investment cycle winds down .
Q4 2024 outlook: shipments down 8–10% q/q; revenue $1.00–$1.04B; ASP −1% to +1%; LIFO income ~$10M; adj. EBITDA ex-LIFO $10–$12M; diluted EPS loss $(0.53)–$(0.47) as seasonal and cyclical bottoming persists .
Cost actions ahead of plan: annualized cost savings tracking toward ~$60M (from $40M previously) as start-up and reorg costs tail off into early 2025; management reiterated 2025 capex of ~$50M on the call .
Potential stock catalysts: evidence of cycle turn (contango across metals, improving indicators), commissioning of Shelbyville, sustained FCF/deleveraging, and execution on $60M cost program versus a still soft OEM contract backdrop and weather disruptions that weighed on Q3 volumes .

What Went Well and What Went Wrong

What Went Well
- Strong cash generation: $134.6M operating cash flow and $103.4M FCF, aided by working capital release; inventory reduced by $80.8M FIFO basis .
- Cost reduction momentum: opex down $2.1M q/q; management now “progressing well toward” ~$60M annualized cost savings target as investment-related expenses fade .
- Capital returns sustained: $42M returned (repurchasing ~1.85M shares for $36M plus $6M dividends); $38.4M remains on authorization; Q4 dividend declared at $0.1875 per share .
- Management tone on cycle: “Two things can be true…”—a cyclical bottom with compressed margins while record investments position RYI for the next upturn .
What Went Wrong
- Volumes missed guidance: 485k tons, below the company’s range due to soft demand and Hurricane Helene; ASP down 3.7% q/q and carbon prices fell sharply, compressing margins .
- EPS miss vs company expectations: adjusted EBITDA ex-LIFO hit low end ($21M), but net loss $(6.6)M and diluted EPS $(0.20) were below expectations on volume shortfall and acute margin pressure .
- Leverage elevated: net leverage at 3.8x (above 0.5x–2.0x target) as EBITDA troughs while the investment cycle draws on the ABL; global liquidity declined to $491M .

Financial Results

Metric	Q3 2023	Q2 2024	Q3 2024
Revenue ($USD Millions)	$1,246.7	$1,225.5	$1,126.6
Diluted EPS ($)	$1.00	$0.29	$(0.20)
Gross Margin (%)	20.0%	18.2%	17.9%
Gross Margin, ex-LIFO (%)	17.3%	17.4%	16.3%
Adj. EBITDA, ex-LIFO ($M)	$45.0	$42.6	$21.0
Tons Shipped (000s)	478	508	485
ASP ($/ton)	$2,608	$2,412	$2,323

Segment/product mix – Net Sales by Product ($M)

Product	Q3 2023	Q2 2024	Q3 2024
Carbon Steel	$642	$644	$585
Aluminum	$276	$277	$250
Stainless Steel	$308	$286	$276

Segment/product mix – Tons Shipped (000s)

Product	Q3 2023	Q2 2024	Q3 2024
Carbon Steel	371	397	382
Aluminum	48	49	44
Stainless Steel	57	59	58

Segment/product mix – ASP ($/ton)

Product	Q3 2023	Q2 2024	Q3 2024
Carbon Steel	$1,730	$1,622	$1,531
Aluminum	$5,750	$5,653	$5,682
Stainless Steel	$5,404	$4,847	$4,759

KPIs and Balance Sheet

KPI	Q2 2024	Q3 2024
Operating Cash Flow ($M)	$25.9	$134.6
Free Cash Flow ($M)	$3.3	$103.4
Net Debt ($M)	$497.4	$487.1
Net Leverage (Net Debt/LTM Adj. EBITDA ex-LIFO)	3.2x	3.8x
Global Liquidity ($M)	$585	$491
Capital Expenditures ($M)	$22.7	$31.6
Dividends per Share ($)	$0.1875	$0.1875 (Q4 declared)
Share Repurchases ($M)	$14.0	$36.0

Notes: LIFO income was $18.1M in Q3 vs $10.0M in Q2, contributing to reported GM; ex-LIFO, GM fell 110 bps q/q to 16.3% .

Guidance Changes

Q4 2024 Company Guidance (current)

Metric	Period	Previous Guidance	Current Guidance	Change
Shipments (q/q)	Q4 2024	N/A	Down 8%–10%	N/A
Revenue ($B)	Q4 2024	N/A	$1.00–$1.04	N/A
ASP (q/q)	Q4 2024	N/A	−1% to +1%	N/A
LIFO Income ($M)	Q4 2024	N/A	~$10	N/A
Adj. EBITDA ex-LIFO ($M)	Q4 2024	N/A	$10–$12	N/A
Diluted EPS ($)	Q4 2024	N/A	$(0.53)–$(0.47)	N/A
Dividend ($/sh)	Q4 2024	$0.1875 (Q3)	$0.1875 declared	Maintained

Q3 2024 Guidance vs Actual

Metric	Period	Previous Guidance	Actual	Outcome
Revenue ($B)	Q3 2024	$1.12–$1.16	$1.1266	Met low end
Adj. EBITDA ex-LIFO ($M)	Q3 2024	$21–$25	$21.0	Met low end
Diluted EPS ($)	Q3 2024	$0.01–$0.10	$(0.20)	Missed
ASP (q/q)	Q3 2024	−3% to −5%	−3.7%	In line
LIFO ($M)	Q3 2024	+$12	+$18.1	Above guide

Structural/Other Guidance

Metric	Period	Previous	Current	Change
Annualized Cost Savings	2024 run-rate	$40M (Q1)	~ $60M (Q2/Q3)	Raised
Capex	2025	~$50M (Q1)	“Yes” reaffirmed (Q3 Q&A)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1, Q2 2024)	Current Period (Q3 2024)	Trend
Cycle/Macro	Counter-cycle since H2’22; signs of stabilization late Q1; pricing/margins compressed; targeting cost-outs	“Long downturn” ~25 months; contango into 2025; bottoming into Q4; FX/China/PMI <50	Stabilizing/bottoming bias
Pricing/Margins	Q2: ASP down across products; carbon HRC −14% q/q; margin compression	ASP −3.7% q/q; carbon −6% ASP; margin compression mostly carbon; gross margin ex-LIFO 16.3%	Pressure persists but narrowing
Volumes/Weather	Q2 volumes met guide; macro soft	Q3 volumes below guide; Hurricane Helene impacted	Temporary disruption
Cost Savings	Announced $40M (Q1); raised to ~$60M (Q2)	“Progressing well toward” $60M annualized	Improving
ERP/Optimization	Q1 ERP conversions completed across 31 sites; optimization begins	ERP costs tailing off; optimization to drive logistics savings	Transition to benefits
Capex/Projects	2024E capex $110M; Shelbyville commissioning Q1’25	Q3 capex $32M; Shelbyville commissioning on schedule for Q1’25	On track
Working Capital/FCF	Q2 OCF $25.9M; inventory down $107M FIFO	OCF $134.6M; FCF $103.4M; more WC release possible in Q4	Strong cash release
Leverage/Liquidity	Q2 net leverage 3.2x; liquidity $585M	Net leverage 3.8x; liquidity $491M	Elevated leverage; lower liquidity
End-Markets	Q2: Stainless/Aluminum weak; carbon relatively stronger	Transactional spot outperformed OEM contracts; HVAC resilient	Mixed

Management Commentary

CEO framing the cycle and investments: “Two things can be true… the industry is experiencing a cyclical bottoming… and Ryerson’s record investments… are positioning the company well for the next cyclical upturn.”
Demand/pricing dynamics: OEM contracts lag and “compressed margins, most notably in carbon steels” as commodity pricing declined .
Cash/returns: “$103 million of free cash flow… $42 million returned to shareholders… ongoing cost reductions ahead of target.”
Supply backdrop: “Operating rates of 73%–74% are historically low… today’s market is a price market, not an availability market.”
Shelbyville differentiation: State-of-the-art CTL line with automated storage/packaging; commissioning underway, fully operational Q1’25 .

Q&A Highlights

Working capital/cash: Management sees “more opportunity” for working capital release in Q4 as seasonal/cyclical bottom plays through .
Capex outlook: When asked if 2025 capex should drop to ~$50M, CEO: “Yes.” .
Reorg/start-up costs: Expect reorg/pre-op costs to trend down to ~$8–$12M in Q4; ERP conversion and major project costs tailing off by Q1’25 .
Inventory positioning: DOS can come down 4–5 days while preserving service levels; aluminum/carbon improving; stainless slower to recover .
Production Metals acquisition: Entry into aerospace/defense/semiconductor; plan to leverage capability across 110-center network .

Estimates Context

Wall Street consensus (S&P Global) for Q3 2024 EPS, revenue, and EBITDA was unavailable at the time of analysis due to data access limits; consequently, we benchmarked performance versus company guidance and prior periods [GetEstimates error].
Company met the low end of its revenue and adj. EBITDA ex-LIFO guidance but missed on EPS due to lower volumes and sharper-than-anticipated margin compression; LIFO income exceeded guidance .

Key Takeaways for Investors

Near-term: Expect seasonally softer Q4 with guided losses and low EBITDA amid cyclical bottoming; monitor ASP trajectory (especially carbon), OEM contract resets, and any weather-related or macro disruptions .
Cash is a key offset: Strong Q3 FCF and an expected further working capital release in Q4 support deleveraging and shareholder returns despite trough margins .
Execution watchpoints: Timely commissioning of Shelbyville (Q1’25), ERP optimization benefits in logistics, and delivery of ~$60M run-rate cost savings are central to earnings recovery .
Mix risk and margin sensitivity: Transactional spot outperformed OEM contracts; sustained carbon price stability (or improvement) is needed to relieve margin pressure .
Capital allocation: Dividend maintained ($0.1875) and buybacks executed below book; leverage remains above target (3.8x) but should improve with cycle turn and FCF .
Strategic vector: Production Metals broadens exposure to aerospace/defense/semiconductor; potential to scale value-added capabilities across the network into an upcycle .

Appendix: Additional Data Points and Sources

Selected P&L and cash flow details including LIFO, opex, and balance sheet line items are disclosed in the press release tables and 8-K exhibits .
Q4 2024 guidance reconciliation and metrics provided in press release Schedule 5 .
Prior-quarter (Q2, Q1) reported results and guidance baselines referenced for trend and guidance tracking .

Citations:

Q3 2024 press release and detailed schedules .
Q3 2024 8-K exhibits (press release and presentation) .
Q3 2024 earnings call transcript (prepared remarks and Q&A) .
Q2 2024 press release and 8-K (including Q3 guidance) .
Q1 2024 press release and 8-K (cost savings initiation; baseline) .
Production Metals acquisition (Aug 2, 2024) .

S&P Global consensus estimates were not available at time of analysis due to access limitations.

Ryerson Holding Corp (RYI)·Q3 2024 Earnings Summary