Ryerson Holding Corporation Reports Significant Financial Challenges Amid Declining Market Conditions

Ryerson Holding Corporation reported significant financial challenges for the nine months ended September 30, 2024, compared to the same period in 2023. The company experienced a net loss of $3.1 million, a stark contrast to a net income of $120.4 million in the prior year. Total revenue for the nine-month period decreased by 10% to $3.6 billion, down from $3.996 billion, primarily due to lower average selling prices and a slight decrease in shipment volumes.

In terms of operational cash flow, net cash provided by operating activities fell to $112.7 million from $275.0 million in the previous year. The company also reported a net cash used in investing activities of $118.8 million, a decrease from $146.8 million in 2023. Ryerson's capital expenditures were $76.1 million, down from $96.5 million, reflecting a more cautious investment approach amid declining market conditions.

The company’s balance sheet showed a decrease in total assets to $2.533 billion from $2.570 billion at the end of 2023. Cash and cash equivalents also declined to $35.0 million from $54.3 million. Long-term debt increased significantly to $520.3 million, up from $428.3 million, primarily due to the acquisition of Production Metals for $44.1 million, which was completed on August 1, 2024. This acquisition is expected to enhance Ryerson's capabilities in the aerospace, defense, and semiconductor markets.

Market conditions have been challenging, with a reported 3.7% decrease in average selling prices and a 4.5% decrease in shipments in Q3 2024 compared to Q2 2024. The overall demand for Ryerson's products has been affected by a contraction in industrial activity, as indicated by the Institute for Supply Management’s Purchasing Managers’ Index (PMI) readings, which have remained below the growth threshold for most of the past year.

Despite these challenges, Ryerson has continued to manage its operational costs. Selling, general, and administrative expenses increased by $22.9 million for the nine-month period, largely due to expenses from recent acquisitions. However, excluding these acquisitions, expenses decreased, indicating some operational efficiencies.

The company’s share repurchase program was also active, with $51.0 million spent on repurchases in the first nine months of 2024, down from $107.6 million in the same period of 2023. Ryerson's Board of Directors declared a quarterly cash dividend of $0.1875 per share, reflecting ongoing commitment to returning value to shareholders despite the current financial challenges.