CHICAGO, April 6, 2017 /PRNewswire/ -- Ryerson
Holding Corporation (NYSE: RYI), a leading distributor and
value-added processor of industrial metals, today provided guidance
for its first quarter ending March 31,
2017. The Company anticipates higher revenue for the first
quarter of 2017 compared to the fourth quarter of 2016 and the
first quarter of 2016 with higher average selling prices and higher
tons sold for the current quarter as compared to both periods. The
Company expects first quarter 2017 net income attributable to
Ryerson Holding Corporation in the range of $12 million to $15 million, which includes a
range of $2 million of LIFO expense,
net to $2 million of LIFO income,
net. Adjusted EBITDA, excluding LIFO is expected to be in the
range of $53 million to $55 million
for the first quarter of 2017. Ryerson reported first quarter 2016
net income attributable to Ryerson Holding Corporation of
$14 million, which included LIFO
income, net of $15 million. Adjusted
EBITDA, excluding LIFO was $37
million in the first quarter of 2016. 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 nearly all sectors. Ryerson
experienced quarterly year over year growth in oil & gas,
construction equipment, and food processing and agricultural
equipment, while HVAC and metal fabrication and machine shop
sectors experienced quarterly year over year demand declines.
Ryerson anticipates higher average selling prices in the first
quarter of 2017, which can be attributed to supply side
stabilization and global metal demand improvement. The rise in
prices for metallurgical coal, Chinese iron ore, and steel scrap,
combined with increased Chinese domestic steel consumption and
positive U.S. industrial sentiment indicators have supported higher
steel prices. Aluminum prices have steadily increased from
September 2016 through the first
quarter of 2017 on better than expected supply and demand
fundamentals. Recent increases in chrome prices, driven by supply
tightening, have positively impacted stainless steel prices in the
first quarter of 2017, although nickel fundamentals have been
volatile due to policy uncertainty in Indonesia and the
Philippines, leading to some retracement of LME nickel
prices in March 2017.
Current demand conditions appear favorable when viewed against
the year ago period. U.S. industrial production grew 0.4% in
February compared to the prior year, and has expanded for 3
straight months after 15 straight months of contraction.
Manufacturing sentiment indicators, as measured by PMI, continue to
show expansion for the U.S. and Chicago indices, with Chicago PMI reaching a 2
year high in March 2017. Further,
year-to-date U.S. service center shipments were up 3.8% year over
year in February 2017 according to
the Metals Service Center Institute. Ryerson remains cautiously
optimistic on demand for metal products in the first half of 2017
given these early performance indicators, as we see how positive
sentiment ultimately converts to real demand for industrial
metals.
Ryerson Holding Corporation's First Quarter 2017 Conference
Call Details
Ryerson also announced that it will host a conference call to
discuss first quarter 2017 results on Thursday, May 4 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 Wednesday, May 3.
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DATE:
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Thursday, May 4,
2017
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TIME:
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10:00 a.m. ET / 9:00
a.m. CT
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DIAL-IN:
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877-201-0168
(Domestic) / 647-788-4901 (International)
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CONFERENCE
ID:
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2102975
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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 distributor and value-added processor of
industrial metals, with operations in the
United States, Canada,
Mexico and China. Founded in 1842, Ryerson employs around
3,500 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.
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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), net.
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Range of
Estimates
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(unaudited)
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(in
millions)
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Low
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High
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Net income
attributable to Ryerson Holding Corporation
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$
12
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$
15
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Interest and other
expense on debt
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22
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22
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Provision for income
taxes
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6
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8
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Depreciation and
amortization expense
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11
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11
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EBITDA
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$
51
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$
56
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Adjustments
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-
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1
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Adjusted
EBITDA
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$
51
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$
57
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LIFO expense
(income), net
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2
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(2)
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Adjusted EBITDA,
excluding LIFO expense (income), net
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$
53
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$
55
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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), net, 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), net, to provide a means of comparison
amongst our competitors who may not use the same basis of
accounting for inventories. EBITDA, Adjusted EBITDA and Adjusted
EBITDA, excluding LIFO expense (income), net, 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), net, targets. We also use
EBITDA, Adjusted EBITDA and Adjusted EBITDA, excluding LIFO expense
(income), net, to benchmark our operating performance to that of
our competitors. EBITDA, Adjusted EBITDA and Adjusted EBITDA,
excluding LIFO expense (income), net 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), net, is
necessarily an indication of whether cash flow will be sufficient
to fund our cash requirements. Our definitions of EBITDA, Adjusted
EBITDA, Adjusted EBITDA, excluding LIFO expense (income), net, may
differ from that of other companies.
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SOURCE Ryerson Holding Corporation