Ryerson Reports Third Quarter 2018 Results

CHICAGO, Nov. 1, 2018 /PRNewswire/ -- Ryerson Holding Corporation (NYSE: RYI), a leading value-added processor and distributor of industrial metals, today reported results for the third quarter ended September 30, 2018.

Eddie Lehner, Ryerson's President and Chief Executive Officer said, "Ryerson had an excellent quarter, generating significant shareholder returns of over $2 per share and Adjusted EBITDA, excluding LIFO of $88.7 million. We are delighted to expand our product offerings to our customers through our acquisition of Central Steel & Wire Company. The addition of Central's complimentary product offering, especially their enhanced long & tubular products portfolio, coupled with our strength in stainless, aluminum, and carbon sheet and plate products, provides even greater selection and value to our customers. Since we closed the Central Steel & Wire Company acquisition on July 2nd, I commend and recognize the outstanding efforts of both our Ryerson and Central Steel & Wire team members in getting off to an exceptional start together. We look forward to the realization of all we can accomplish as we offer great customer experiences across our intelligent and connected service center network. The Central Steel & Wire acquisition is another important step in our Company's strategic plan toward creating growing shareholder value. Looking closely at the larger picture, Ryerson is making notable strides in building an organization focused on the customer experience that consistently outperforms the industry cycle."

Third Quarter 2018 Financial Results

Revenues were $1,250.0 million for the third quarter of 2018, up 44.6 percent compared to the third quarter of 2017 driven by higher volume of 20.8 percent and an increase in average selling price per ton of 19.8 percent. On a same-store basis, revenues grew by 24.0 percent as average selling prices increased 21.0 percent and tons sold increased by 2.5 percent. Compared to the second quarter of 2018, revenues increased 18.2 percent due to 14.5 percent higher volume and 3.2 percent higher average selling prices. On a same-store basis, revenues grew by 1.4 percent as average selling prices increased 4.3 percent, partially offset by a decline in tons sold of 2.8 percent driven by one fewer shipping day, normal third quarter seasonality, and storm impacts from tornado damage to long-time customers in the Midwestern U.S.

Gross margin of 16.7 percent for the third quarter of 2018 was 10 basis points lower than the year-ago period and fell by 80 basis points compared to the second quarter of 2018. Included in cost of materials sold was LIFO expense of $32.1 million and purchase accounting adjustments of $4.7 million for the third quarter of 2018, LIFO expense of $43.9 million for the second quarter of 2018, and LIFO income of $1.7 million for the year-ago period. Gross margin, excluding LIFO and purchase accounting adjustments was 19.6 percent for the third quarter of 2018, compared to 21.7 percent in the second quarter of 2018, and 16.6 percent in the third quarter of 2017. Compared to the second quarter of 2018, gross margin, excluding LIFO and purchase accounting adjustments was down 210 basis points due to the cost of materials increasing by more than average selling prices. A reconciliation of gross margin to gross margin, excluding LIFO and purchase accounting adjustments is included below in this news release.

Warehousing, delivery, selling, general, and administrative expense increased by $35.1 million, or 25.3 percent, for the third quarter of 2018. Ryerson demonstrated expense leverage on a same-store basis as warehousing, delivery, selling, general, and administrative expenses was 13.1 percent of sales in the third quarter of 2018, down from 14.1 percent in the third quarter of 2017 and flat with the second quarter of 2018. Erich Schnaufer, Ryerson's Chief Financial Officer, noted, "Ryerson maintained strong same-store expense metrics, capitalizing on the operating leverage in our business, as volumes increased through the first three quarters of 2018."

Net income attributable to Ryerson Holding Corporation was $77.5 million, or $2.06 per diluted share, for the third quarter of 2018 compared to net income of $1.7 million, or $0.05 per diluted share in the year-ago quarter and $17.5 million, or $0.46 per diluted share, in the second quarter of 2018. Net income attributable to Ryerson Holding Corporation, excluding the gain on bargain purchase of $73.2 million from the acquisition of Central Steel & Wire Company and restructuring and other charges, was $6.3 million in the third quarter of 2018, or $0.17 per diluted share.

Adjusted EBITDA, excluding LIFO, was $88.7 million in the third quarter of 2018 or $79.8 million on a same-store basis, more than double the $37.7 million of earnings in the year-ago period. A reconciliation of Adjusted EBITDA, excluding LIFO and net income attributable to Ryerson Holding Corporation is included below in this news release.

Nine Months Ended September 30, 2018, Financial Results

Revenues in the first nine months of 2018 were $3,248.4 million, an increase of 27.2 percent compared to the first nine months of 2017, as average selling prices increased 15.1 percent and tons shipped increased 10.5 percent. On a same-store basis, revenues were $3,070.2 million in the first nine months of 2018, with volumes up 4.4 percent and prices up 15.2 percent.

Net income attributable to Ryerson Holding Corporation was $105.4 million, or $2.80 per diluted share, in the first nine months of 2018 compared to $17.1 million, or $0.46 per diluted share, for the same period of 2017. Net income attributable to Ryerson Holding Corporation, excluding the gain on bargain purchase, restructuring and other charges, and impairment charges on assets was $34.2 million for the year-to-date period of 2018, or $0.91 per diluted share compared to $17.2 million, or $0.46 per share in the year-ago period. Adjusted EBITDA, excluding LIFO increased almost 80 percent to $257.5 million in the first nine months of 2018 compared to $143.5 million in the first nine months of 2017. A reconciliation of Adjusted EBITDA, excluding LIFO and net income attributable to Ryerson Holding Corporation is included below in this news release.

Third Quarter 2018 Balance Sheet, Cash Flow, and Liquidity

Ryerson's third quarter inventory days of supply was 80 days, or 74 days on a same-store basis, compared to 74 days in the third quarter of 2017. Additionally, Ryerson maintained ample liquidity in the third quarter of 2018. As of September 30, 2018, borrowings were $589 million on our primary revolving credit facility with additional availability of $396 million. Including cash, marketable securities, and availability from foreign sources, Ryerson's total liquidity was $446 million as of September 30, 2018 compared to $414 million as of June 30, 2018.

Cash used in operating activities was $62.4 million for the first nine months of 2018, primarily due to higher valued inventory and receivables compared to year-end. In the first nine months of 2017, cash used in operating activities was $93.3 million.

Ryerson's strong income generation through the first nine months of 2018 has increased our equity to $102.1 million as of September 30, 2018 compared to an equity deficit of $7.4 million as of December 31, 2017.

Central Steel & Wire Company

In July 2018, Ryerson completed the acquisition of Central Steel & Wire Company. The addition of Central Steel & Wire Company has enhanced Ryerson's combined commercial, processing, and operational strengths to provide a greater breadth of products and services for our customers. Eddie Lehner noted, "In its first quarter as a part of Ryerson, Central's performance has exceeded our expectations with highly complementary product offerings that have contributed to strong customer retention. The acquisition increased our market share to approximately 5 percent from just over 4 percent, and enhanced our position in long products, which pairs well with our growth investments and strategic acquisitions in long product value-added processing equipment."

Ryerson is implementing post-close optimization actions to generate expense leverage and free cash flow from the acquisition of Central Steel & Wire Company, while focused foremost on customer relationships. In the third quarter of 2018, Ryerson realized expense savings of approximately $10 million on an annualized basis through operating expense reductions and improved working capital management to increase free cash flows by approximately $20 million, while noting the excellent work done retaining Central Steel & Wire Company's valued customer base. Further, Ryerson continues to evaluate its assets in the Midwest region, and expects to receive approximately $10.5 million in aggregate proceeds from the sale of two facilities whose operations are being consolidated into existing Ryerson locations.

Overall, Central Steel & Wire Company generated Adjusted EBITDA, excluding LIFO of $8.9 million in the third quarter of 2018 compared to the $12.3 million earned in the first six months of 2018 prior to the acquisition by Ryerson. The long-term, mid-cycle, objective is for Central Steel & Wire brand to generate $600 million in revenue and $50 million in Adjusted EBITDA, excluding LIFO for Ryerson Holding Corporation on an annual basis following our post-closing optimization work.

Fourth Quarter 2018 Commentary

Ryerson management anticipates continued good demand conditions in the U.S. for the fourth quarter of 2018, as economic indicators on balance remain favorable in the manufacturing economy. The U.S. industrial production index, as measured by the Federal Reserve, has remained elevated through September registering year-over-year monthly growth of 5.1 percent, the highest growth attained since December 2010. Overall, Ryerson expects tons shipped in the fourth quarter of 2018 to decline less than the 7 percent average decline from the third quarter to the fourth quarter experienced during the past 5 years, as measured by the MSCI.


       
              Same-store Key Financial Metrics Reconciliation




                                              
            Central           
       Central Steel        
      Ryerson          
           Ryerson
                                                Steel & Wire                & Wire               
      Same Store            Holding
                                                   Company                  Company                                     Corporation

                                                                                                                                        ---

        (Dollars in
         millions,
         tons in thousands)                  
            Six Months       
       Third Quarter 2018
                                                 Ended June
                                                              30, 2018

    ---                                                                                     ---

        Tons Shipped                                               218                        94                  528                      622

    ---


       Net Sales                                               $362.2                    $178.2             $1,071.8                 $1,250.0

    ---

        Gross margin,
         excluding LIFO
         expense and
         purchase accounting
         adjustments                                             21.9%                    22.7%               19.1%                   19.6%

    ---

        Warehousing,
         delivery, selling,
         general, and
         administrative
         expenses                                                $68.9                     $34.0               $140.0                   $174.0

    ---

        Expense % of sales                                       19.0%                    19.1%               13.1%                   13.9%

    ---

        Adjusted EBITDA,
         excluding LIFO                                          $12.3                      $8.9                $79.8                    $88.7

    ---

        Adjusted EBITDA,
         excluding LIFO % of
         sales                                                    3.4%                     5.0%                7.4%                    7.1%

    ---


       
                Third Quarter 2018 Business Metrics




                                   
              Third      
           Second     
     Third       
             Sequential       
      Year-Over-Year
                                        Quarter            Quarter                          Quarter Change             Change
                                                   2018                     
     Quarter
                                                                       2018
                                                                                    2017

                                                                                                                                       ---

        Tons shipped
         (In thousands)                             622                 543           515                      14.5%                    20.8%

    ---



        Average selling
         price/ton                               $2,010              $1,947        $1,678                       3.2%                    19.8%

    ---

        Average cost/
         ton                                      1,675               1,606         1,396                       4.3%                    20.0%

    ---

        Average cost/
         ton, excluding
         LIFO                                     1,623               1,525         1,399                       6.4%                    16.0%

    ---


       
                Third Quarter 2018 Major Product Metrics




                                                    Tons Shipped (Tons in thousands)                Average Selling Price per
                                                                                       Ton Shipped

                                                                                            ---

                               
              Third         
              Second            
             Third                       
            Sequential       
             Year-       
           Sequential       
             Year-Over-
                                                                                       Quarter                                Quarter                  Over-                 Quarter                  Year Change
                              
              Quarter       
              Quarter                                       2017             Change                    Year                 Change
                                              2018                      2018                                                                               Change

                                                                                                                                                                                                                         ---

        Carbon steel                           465                       410                                       387                         13.4%                 20.2%                    10.3%                       26.3%

    ---

        Aluminum                                66                        54                                        53                         22.2%                 24.5%                   (9.3%)                        9.5%

    ---

        Stainless
         steel                                  85                        76                                        73                         11.8%                 16.4%                   (2.0%)                       17.1%

    ---

                                     Net Sales (Dollars in millions)



                         
      Third        
              Second        
       Third      
         Sequential        
      Year-Over-
                                                                                   Quarter
                        
      Quarter      
              Quarter       
       Quarter       Change               
      Year Change

                                2018                     2018               2017



        Carbon steel            $666                     $532               $439                  25.2%                51.7%

    ---


       Aluminum                 266                      240                195                  10.8%                36.4%

    ---

        Stainless steel          296                      270                217                   9.6%                36.4%

    ---


       
                Nine Months Ended September 30, 2018 Business Metrics




                                                                           
            Nine Months          
            Nine Months           
      Year-Over-Year
                                                                             Ended September               Ended September                Change
                                                                                                30, 2018                      30, 2017

                                                                                                                                                          ---


       Tons shipped (In thousands)                                                                1,691                          1,530                   10.5%

    ---


       Average selling price/ton                                                                 $1,921                         $1,669                   15.1%

    ---


       Average cost/ton                                                                           1,591                          1,377                   15.5%

    ---


       Average cost/ton, excluding LIFO                                                           1,538                          1,369                   12.3%

    ---


       
                Nine Months Ended September 30, 2018 Major Product Metrics




                                                             Tons Shipped (Tons in thousands) 
     
                Average Selling Price
                                                                                                  per Ton Shipped

                                                                                                                               ---

                                                      
              Nine Months                    
              Nine Months              
      Year-Over-Year       
       Year-Over-Year
                                                          Ended September                           Ended September                   Change                  Change
                                                                                     30, 2018                             30, 2017

                                                                                                                                                                               ---

        Carbon steel                                                                    1,269                                 1,151                   10.3%                    17.0%

    ---


       Aluminum                                                                          176                                   155                   13.5%                    13.3%

    ---

        Stainless steel                                                                   235                                   218                    7.8%                    12.9%

    ---

                              Net Sales (Dollars in millions)



                        
             Nine Months                 
             Nine Months           
      Year-Over-Year
                          Ended September                       Ended September                 Change
                                                     30, 2018                       30, 2017



        Carbon steel                                   $1,663                          $1,289                   29.0%

    ---


       Aluminum                                          728                             566                   28.6%

    ---

        Stainless steel                                   806                             662                   21.8%

    ---

Earnings Call Information

Ryerson will host a conference call to discuss its third quarter 2018 results Friday, November 2, 2018 at 10 a.m. Eastern Time. Participants may access the conference call by dialing 833-241-7253 (Domestic) or 647-689-4217 (International) and using conference ID 2888628. The live online broadcast will be available on the Company's investor relations website, ir.ryerson.com. A replay will be available at the same website for 90 days.

About Ryerson

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, combined with Central Steel & Wire Company, has around 4,600 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, objectives or projections relating to the future. Such statements can be identified by the use of forward-looking terminology such as "objectives," "goals," "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, 2017, 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.

                                                                  
             RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES




                                                                    
              Selected Income and Cash Flow Data - Unaudited


                                                           
             (Dollars and Shares in Millions, except Per Share and Per Ton Data)






                                                              2018                                          2017                         First Nine Months Ended



                                                 
      Third                             
              Second                              
              Third            
     September 30,



                                                
      Quarter                            
              Quarter                            
              Quarter                       2018       2017






     NET SALES                                         $1,250.0                                      $1,057.1                                          $864.2            $3,248.4   $2,554.1




                              Cost of materials
                               sold                        1,041.8                                         871.8                                           719.2             2,690.0    2,108.1





                              Gross profit                   208.2                                         185.3                                           145.0               558.4      446.0




                             Warehousing,
                               delivery,
                               selling,
                               general, and
                               administrative
                               (1)                           174.0                                         138.9                                           121.7               443.4      359.7


                              Restructuring and
                               other charges                   2.7                                                                                                             2.7          -






     OPERATING PROFIT                                      31.5                                          46.4                                            23.3               112.3       86.3




                              Other income and
                               (expense), net
                               (1) (2)                        74.2                                           1.1                                             1.1                78.9        4.5


                              Interest and
                               other expense on
                               debt                         (26.0)                                       (23.9)                                         (23.2)             (73.2)    (67.8)





      INCOME BEFORE INCOME TAXES                            79.7                                          23.6                                             1.2               118.0       23.0




                              Provision
                               (benefit) for
                               income taxes                    2.0                                           6.2                                           (0.7)               12.3        5.3






     NET INCOME                                            77.7                                          17.4                                             1.9               105.7       17.7




      Less: Net income (loss) attributable
       to noncontrolling interest                            0.2                                         (0.1)                                            0.2                 0.3        0.6





      NET INCOME ATTRIBUTABLE TO RYERSON
       HOLDING CORPORATION                                 $77.5                                         $17.5                                            $1.7              $105.4      $17.1

                                                                                                                                                                                      ===




     EARNINGS PER SHARE




                   
              Basic                          $2.08                                         $0.47                                           $0.05               $2.83      $0.46



                   
              Diluted                        $2.06                                         $0.46                                           $0.05               $2.80      $0.46





      Shares outstanding -basic                             37.4                                          37.3                                            37.2                37.3       37.2


      Shares outstanding -diluted                           37.7                                          37.6                                            37.3                37.6       37.3





     Supplemental Data :




                              Tons shipped
                               (000)                           622                                           543                                             515               1,691      1,530


                              Shipping days                     63                                            64                                              63                 191        191




                              Average selling
                               price/ton                    $2,010                                        $1,947                                          $1,678              $1,921     $1,669


                              Gross profit/ton                 335                                           341                                             282                 330        292


                              Operating profit/
                               ton                              51                                            85                                              45                  66         56




                              LIFO expense
                               (income), net
                               per ton                          52                                            81                                             (3)                 53          8




                              LIFO expense
                               (income), net                 $32.1                                         $43.9                                          $(1.7)              $89.3      $11.8




                              Depreciation and
                               amortization
                               expense                        14.1                                          11.6                                            11.9                37.2       34.1




                              Cash flow from
                               operating
                               activities                   (44.5)                                       (49.6)                                         (11.8)             (62.4)    (93.3)


                              Capital
                               expenditures                  (8.3)                                       (13.8)                                          (5.6)             (29.7)    (15.8)




              (1)              As a result of
                                  adopting
                                  Accounting
                                  Standards
                                  Update
                                  2017-07,
                                  "Compensation
                                  -Retirement
                                  Benefits:
                                  Improving the
                                  Presentation
                                  of Net
                                  Periodic
                                  Pension Cost
                                  and Net
                                  Periodic Post
                                  Retirement
                                  Benefit Cost,"
                                  we have
                                  reclassified a
                                  $2.5 million
                                  benefit in the
                                  third quarter
                                  of 2017 and a
                                  $6.5 million
                                  benefit in the
                                  first nine
                                  months ended
                                  September 30,
                                  2017 from
                                  Warehousing,
                                  delivery,
                                  selling,
                                  general, and
                                  administrative
                                  expense to
                                  Other income
                                  and (expense),
                                  net.





              (2)              The third
                                  quarter and
                                  first nine
                                  months of 2018
                                  include a
                                  $73.2 million
                                  gain on
                                  bargain
                                  purchase
                                  related to our
                                  Central Steel
                                  & Wire
                                  acquisition.




                                 See Schedule 1
                                  for Condensed
                                  Consolidated
                                  Balance Sheets


                                 See Schedule 2
                                  for EBITDA,
                                  Adjusted
                                  EBITDA and
                                  gross profit
                                  reconciliations


                                 See Schedule 3
                                  for EPS
                                  reconciliation.

                                                                                                                                 
            
       Schedule 1




                                                    
        RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES




                                                      
             Condensed Consolidated Balance Sheets


                                                          
              (In millions, except shares)




                                                                                                  
              September 30,                  
        December 31,


                                                                                                                            2018                                2017




     Assets                                                                                    
              (unaudited)


                             Current assets:


                             Cash and cash
                              equivalents                                           $30.6                                           $77.4


                             Restricted cash                                          1.1                                             1.1


                            Receivable, less
                              provision for
                              allowances,
                              claims and
                              doubtful
                              accounts of $2.2
                              in 2018 and $4.9
                              in 2017                                               610.9                                           376.3


                             Inventories                                            910.2                                           616.5


                             Prepaid expenses
                              and other
                              current assets                                         55.4                                            32.6





                                                   
        Total current assets                                             1,608.2                             1,103.9




                             Property, plant and
                              equipment, at cost                                    843.4                                           742.7


                             Less: accumulated
                              depreciation                                          341.8                                           319.8



                             Property, plant
                              and equipment,
                              net                                                   501.6                                           422.9




                             Deferred income taxes                                                                                  17.9


                             Other intangible
                              assets                                                 60.1                                            46.9


                  
              Goodwill                                               120.3                                           115.3


                             Deferred charges and
                              other assets                                            6.6                                             5.0





                                                   
        Total assets                                                    $2,296.8                            $1,711.9








     Liabilities


                             Current liabilities:


                             Accounts payable                                      $460.2                                          $275.0


                             Salaries, wages
                              and commissions                                        60.8                                            40.3


                             Other accrued
                              liabilities                                            94.0                                            58.4


                             Short-term debt                                         33.2                                            21.3


                             Current portion
                              of deferred
                              employee
                              benefits                                                7.7                                             7.7





                                                        Total current liabilities                                          655.9                               402.7




                             Long-term debt                                       1,228.6                                         1,024.4


                             Deferred employee
                              benefits                                              238.5                                           243.5


                             Other noncurrent
                              liabilities                                            71.7                                            48.7





                                                   
        Total liabilities                                                2,194.7                             1,719.3





     Commitments and contingencies




      Equity


                             Ryerson Holding
                              Corporation
                              stockholders' equity
                              (deficit):


                            Preferred stock,
                              $0.01 par value;
                              7,000,000 shares
                              authorized and
                              no shares issued
                              at 2018 and 2017


                            Common stock,
                              $0.01 par value;
                              100,000,000
                              shares
                              authorized;
                              37,656,505 and
                              37,421,081
                              shares issued at
                              2018 and 2017,
                              respectively                                            0.4                                             0.4


                             Capital in excess
                              of par value                                          380.3                                           377.6


                             Retained earnings
                              (accumulated
                              deficit)                                               13.6                                          (95.1)


                            Treasury stock,
                              at cost -Common
                              stock of 212,500
                              shares in 2018
                              and 2017                                              (6.6)                                          (6.6)


                             Accumulated other
                              comprehensive
                              loss                                                (288.2)                                        (286.3)





                                                        Total Ryerson Holding Corporation
                                                         Stockholders' Equity (Deficit)                                     99.5                              (10.0)




                             Noncontrolling
                              interest                                                2.6                                             2.6





                                                   
        Total Equity (Deficit)                                             102.1                               (7.4)





                                                        Total Liabilities and
                                                         Stockholders' Equity                                           $2,296.8                            $1,711.9


                                                                                                                                                      
              
     Schedule 2


                                                          
              RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES


                   
             Reconciliations of Net Income Attributable to Ryerson Holding Corporation to EBITDA and Gross profit to Gross profit excluding LIFO


                                                                         
              (Dollars in millions)






                                                             2018                                          2017                            First Nine Months Ended



                                          
              Third                             
              Second                                
              Third             
              September 30,



                                         
              Quarter                            
              Quarter                              
              Quarter                   2018                2017

                                                                                                                                                                                                ---



      Net income
       attributable to
       Ryerson Holding
       Corporation                                          $77.5                                         $17.5                                               $1.7           $105.4               $17.1


      Interest and other
       expense on debt                                       26.0                                          23.9                                               23.2             73.2                67.8


      Provision (benefit)
       for income taxes                                       2.0                                           6.2                                              (0.7)            12.3                 5.3


      Depreciation and
       amortization expense                                  14.1                                          11.6                                               11.9             37.2                34.1




     EBITDA                                               $119.6                                         $59.2                                              $36.1           $228.1              $124.3


      Gain on bargain
       purchase                                            (73.2)                                                                                                         (73.2)                  -


      Reorganization                                          3.0                                           0.6                                                0.9              4.3                 2.8


      Foreign currency
       transaction (gains)
       losses                                                 0.5                                           0.6                                                1.4            (0.9)                1.8


      Impairment charges on
       assets                                                                                                                                                                                   0.2


      Purchase consideration
       and other transaction
       costs                                                  6.7                                           2.3                                                1.0             10.5                 2.6


      Other adjustments                                         -                                                                                                          (0.6)

                                                                                                                                                                                                ---

      Adjusted EBITDA                                       $56.6                                         $62.7                                              $39.4           $168.2              $131.7





      Adjusted EBITDA                                       $56.6                                         $62.7                                              $39.4           $168.2              $131.7


      LIFO expense (income),
       net                                                   32.1                                          43.9                                              (1.7)            89.3                11.8



      Adjusted EBITDA,
       excluding LIFO
       expense (income), net                                $88.7                                        $106.6                                              $37.7           $257.5              $143.5






     Net sales                                          $1,250.0                                      $1,057.1                                             $864.2         $3,248.4            $2,554.1




      Adjusted EBITDA,
       excluding LIFO
       expense (income),
       net, as a percentage
       of net sales                                          7.1%                                        10.1%                                              4.4%            7.9%               5.6%





      Gross profit                                         $208.2                                        $185.3                                             $145.0           $558.4              $446.0




      Gross margin                                          16.7%                                        17.5%                                             16.8%           17.2%              17.5%





      Gross profit                                         $208.2                                        $185.3                                             $145.0           $558.4              $446.0


      LIFO expense (income),
       net                                                   32.1                                          43.9                                              (1.7)            89.3                11.8



      Gross profit,
       excluding LIFO
       expense (income), net                               $240.3                                        $229.2                                             $143.3           $647.7              $457.8





      Gross margin,
       excluding LIFO
       expense (income), net                                19.2%                                        21.7%                                             16.6%           19.9%              17.9%





      Gross profit                                         $208.2                                        $185.3                                             $145.0           $558.4              $446.0


      LIFO expense (income),
       net                                                   32.1                                          43.9                                              (1.7)            89.3                11.8


      Purchase accounting
       adjustments                                            4.7                                                                                                             4.7                   -



      Gross profit,
       excluding LIFO
       expense (income), net
       and purchase
       accounting
       adjustments                                         $245.0                                        $229.2                                             $143.3           $652.4              $457.8





      Gross margin,
       excluding LIFO
       expense (income), net
       and purchase
       accounting
       adjustments                                          19.6%                                        21.7%                                             16.6%           20.1%              17.9%





              Note:                EBITDA
                                     represents
                                     net income
                                     before
                                     interest and
                                     other expense
                                     on debt,
                                     provision
                                     (benefit) for
                                     income taxes,
                                     depreciation
                                     and
                                     amortization.
                                     Adjusted
                                     EBITDA gives
                                     further
                                     effect to,
                                     among other
                                     things,
                                     impairment
                                     charges on
                                     assets,
                                     reorganization
                                     expenses,
                                     gain on
                                     bargain
                                     purchase, 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.
                                     This release
                                     also presents
                                     gross margin,
                                     excluding
                                     LIFO expense
                                     (income),
                                     net, which is
                                     calculated as
                                     gross profit
                                     plus LIFO
                                     expense (or
                                     minus LIFO
                                     income), net,
                                     divided by
                                     net sales,
                                     and gross
                                     margin,
                                     excluding
                                     LIFO expense
                                     (income), net
                                     and purchase
                                     accounting
                                     adjustments,
                                     which is
                                     calculated as
                                     gross profit
                                     plus LIFO
                                     expense (or
                                     minus LIFO
                                     income) and
                                     purchase
                                     accounting
                                     adjustments
                                     divided by
                                     net sales. We
                                     have excluded
                                     LIFO expense
                                     (income), net
                                     and purchase
                                     accounting
                                     adjustments
                                     from gross
                                     margin and
                                     Adjusted
                                     EBITDA as a
                                     percentage of
                                     net sales
                                     metrics in
                                     order to
                                     provide a
                                     means of
                                     comparison
                                     amongst our
                                     competitors
                                     who may not
                                     use the same
                                     basis of
                                     accounting
                                     for
                                     inventories
                                     as we do as
                                     well as
                                     remove the
                                     effect of
                                     non-cash
                                     purchase
                                     accounting
                                     adjustments.
                                     Our
                                     definitions
                                     of EBITDA,
                                     Adjusted
                                     EBITDA,
                                     Adjusted
                                     EBITDA,
                                     excluding
                                     LIFO expense
                                     (income),
                                     net, gross
                                     margin,
                                     excluding
                                     LIFO expense
                                     (income),
                                     net, gross
                                     margin
                                     excluding
                                     LIFO expense
                                     (income), net
                                     and purchase
                                     accounting
                                     adjustments,
                                     Adjusted
                                     EBITDA,
                                     excluding
                                     LIFO expense
                                     (income),
                                     net, as a
                                     percentage of
                                     sales, and
                                     Adjusted
                                     EBITDA,
                                     excluding
                                     LIFO expense
                                     (income),
                                     net, and
                                     purchase
                                     accounting
                                     adjustments
                                     as a
                                     percentage of
                                     sales may
                                     differ from
                                     that of other
                                     companies.

                                                                                                                                                          
              
            Schedule 3




                                                                     
              RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES


                                                    
             Reconciliation of Net Income and Earnings per Share Excluding Gain on Bargain Purchase,


                                                              
              Restructuring and Other Charges, and Impairment Charges on Assets


                                                                   
              (Dollars and Shares in Millions, Except Per Share Data)






                                                       2018                                     2017                          First Nine Months Ended



                                      
              Third                       
              Second                            
              Third              
     September 30,



                                     
              Quarter                      
              Quarter                          
              Quarter                         2018                   2017

                                                                                                                                                                                           ---



     Net income
      attributable to
      Ryerson Holding
      Corporation                                     $77.5                                    $17.5                                             $1.7                $105.4                  $17.1






     Gain on bargain
      purchase                                       (73.2)                                                                                                       (73.2)                     -


     Restructuring and
      other charges                                     2.7                                                                                                           2.7                      -


     Impairment charges
      on assets                                           -                                                                                                                                0.2


     Benefit for income
      taxes                                           (0.7)                                                                                                        (0.7)                 (0.1)



     Net income
      attributable to
      Ryerson Holding
      Corporation,
      excluding gain on
      bargain purchase,
      restructuring and
      other charges,
      impairment
      charges on
      assets, and loss                                 $6.3                                    $17.5                                             $1.7                 $34.2                  $17.2

                                                                                                                                                                                           ===



     Earnings per share, excluding gain on bargain
      purchase, restructuring and other charges,
      impairment charges on assets, and loss on
      retirement of debt




       
              Basic                                 $0.17                                    $0.47                                            $0.05                 $0.92                  $0.46





       
              Diluted                               $0.17                                    $0.46                                            $0.05                 $0.91                  $0.46





     Shares outstanding
      -basic                                           37.4                                     37.3                                             37.2                  37.3                   37.2





     Shares outstanding
      -diluted                                         37.7                                     37.6                                             37.3                  37.6                   37.3





              Note:                Net income and Earnings per
                                     share excluding gain on bargain
                                     purchase, restructuring and
                                     other charges, and impairment
                                     charges on assets is presented
                                     to provide a means of
                                     comparison with periods that do
                                     not include gain on bargain
                                     purchase, restructuring and
                                     other charges, and impairment
                                     charges on assets.

View original content to download multimedia:http://www.prnewswire.com/news-releases/ryerson-reports-third-quarter-2018-results-300742736.html

SOURCE Ryerson Holding Corporation