Ryerson Holding Corporation (RYI): history, ownership, mission, how it works & makes money

A Brief History of Ryerson Holding Corporation

Ryerson Holding Corporation, a leading distributor and processor of metals, has undergone significant transformations throughout its history, leading to its current position in 2024.

Company Overview

Founded in 1842, Ryerson has developed a strong market presence in the metals industry. As of September 30, 2024, the company reported net sales of $1.126 billion for the third quarter, down from $1.247 billion in the same quarter of 2023, marking a decrease of 9.6%. For the nine months ended September 30, 2024, net sales totaled $3.591 billion, a decline of 10.1% compared to $3.996 billion in the previous year.

Financial Performance

In terms of profitability, Ryerson's operating profit for the third quarter of 2024 was $5.3 million, representing just 0.5% of net sales, a sharp decline from $56.3 million (4.5% of net sales) in the third quarter of 2023. For the nine months ending September 30, 2024, operating profit was $28.9 million (0.8% of net sales), down from $184.6 million (4.6%) for the same period in 2023.

Cost Structure

Ryerson's cost of materials sold for the third quarter of 2024 was $924.6 million, accounting for 82.1% of net sales, compared to $997.4 million (80.0%) in the third quarter of 2023. Over the nine months, the cost of materials sold was $2.948 billion, representing 82.1% of net sales, down from $3.222 billion (80.6%) in the previous year.

Gross Profit Margins

The gross profit for the third quarter of 2024 was $202.0 million, constituting 17.9% of net sales, down from $249.3 million (20.0%) in the third quarter of 2023. For the first nine months of 2024, gross profit decreased to $643.1 million (17.9%) from $774.4 million (19.4%) in the corresponding period of 2023.

Debt and Liquidity

As of September 30, 2024, Ryerson's total debt stood at $522.1 million, an increase from $436.5 million at the end of 2023. The debt-to-capitalization ratio rose to 38% from 32%. The company's cash and cash equivalents decreased to $35.0 million from $54.3 million over the same period.

Market Position and Challenges

Ryerson faces challenges stemming from declining average selling prices due to lower commodity prices and reduced industrial manufacturing demand. The average selling price per ton sold in the third quarter of 2024 was $2,323, down 10.9% from $2,608 in the third quarter of 2023. This trend has necessitated strategic adjustments to maintain competitive positioning in the market.

Recent Developments

In 2024, Ryerson has focused on operational enhancements, including the launch of a redesigned e-commerce platform and the ongoing integration of a new ERP system. The company also completed key acquisitions, such as Production Metals, LLC, which expanded its exposure to the Aerospace and Defense sectors.

Ryerson's trajectory reflects both the challenges and opportunities inherent in the metals distribution sector, emphasizing the importance of strategic adaptation and operational efficiency in navigating the evolving market landscape.

A Who Owns Ryerson Holding Corporation (RYI)

Ownership Structure

As of 2024, Ryerson Holding Corporation (RYI) has a diverse ownership structure. The company has approximately 32.3 million shares outstanding. The major shareholders include:

• Platinum Equity, LLC: owns about 12.3% of the outstanding shares, totaling approximately 3.9 million shares.
• Institutional Investors: hold approximately 70% of the total shares owned by institutions.
• Individual Shareholders: make up around 17% of the total shareholding.

Shareholder Details

The following table provides a breakdown of the major shareholders of Ryerson Holding Corporation:

Recent Stock Transactions

In recent transactions, Ryerson has conducted share repurchases from Platinum Equity. On February 28, 2023, Ryerson repurchased 1,513,420 shares for $53 million. On May 8, 2023, a further repurchase of 1,369,300 shares was completed for $50 million. Additionally, on August 8, 2023, Ryerson did not repurchase shares during Platinum's offering of 4 million shares.

Market Performance

As of September 30, 2024, Ryerson's total equity stood at $842 million, down from $914.5 million at the end of 2023. The company's performance has been affected by market conditions, leading to a net loss attributable to Ryerson of $4.3 million for the first nine months of 2024 compared to net income of $119.9 million in the same period of 2023.

Share Price and Trading Volume

The stock price of Ryerson has fluctuated significantly in 2024, with an average trading volume of approximately 100,000 shares per day. The stock price as of September 30, 2024, was approximately $12.50 per share, reflecting a decrease from earlier in the year due to lower average selling prices and overall market volatility.

Future Outlook

With the ongoing adjustments in ownership and market strategies, Ryerson is expected to navigate the current economic climate while addressing shareholder interests and operational efficiencies. The focus will remain on improving profitability and shareholder value through strategic initiatives and market positioning.

Ryerson Holding Corporation (RYI) Mission Statement

As of 2024, Ryerson Holding Corporation's mission statement emphasizes its commitment to providing high-quality metals and industrial materials while delivering exceptional customer service. The company strives to be a leader in the metals service center industry by leveraging technology, operational excellence, and sustainability practices.

Company Overview

Ryerson Holding Corporation operates as a leading distributor and processor of metals in North America. The company focuses on various sectors, including construction, manufacturing, and energy. Ryerson's services include processing, inventory management, and logistics, which enhance customer satisfaction and operational efficiency.

Financial Performance

For the third quarter of 2024, Ryerson reported the following financial highlights:

Liquidity and Capital Structure

As of September 30, 2024, Ryerson's liquidity position is summarized as follows:

Market Trends and Challenges

In the third quarter of 2024, Ryerson faced significant challenges due to contracting industrial manufacturing demand, which led to a decrease in average selling prices across nearly all product lines. The average selling price per ton sold decreased by 10.9% year-over-year for the three-month period ended September 30, 2024.

Operational Highlights

Ryerson continues to invest in operational improvements and technology. Notable initiatives include:

• Start-up of a 900,000 square foot service center in University Park, Illinois.
• Ongoing assimilation of ERP systems across southern service centers.
• Launch of a redesigned e-commerce platform.
• Acquisition of Production Metals, enhancing exposure to the Aerospace & Defense sectors.

Conclusion

Ryerson Holding Corporation remains focused on its mission to deliver high-quality products and services while navigating a challenging market environment. The company's strategic initiatives and operational enhancements are aimed at driving long-term growth and improving customer experience.

How Ryerson Holding Corporation (RYI) Works

Overview of Operations

Ryerson Holding Corporation operates as a metals service center and distributor, specializing in the procurement, processing, and distribution of metals, including stainless steel, aluminum, and carbon steel. The company serves various industries, including aerospace, automotive, and construction, through its extensive network of service centers across North America.

Financial Performance

As of September 30, 2024, Ryerson reported the following financial metrics:

Revenue Breakdown

For the nine months ended September 30, 2024, Ryerson's net sales decreased by 10.1% from the previous year, totaling $3,591.3 million compared to $3,996.3 million in 2023. The decrease in revenue was primarily attributed to lower average selling prices driven by reduced commodity prices and contracting industrial manufacturing demand.

Cost Structure

The cost of materials sold for the three months ended September 30, 2024, was $924.6 million, which represented 82.1% of net sales. This was a decrease from $997.4 million (80.0% of net sales) in Q3 2023.

Liquidity and Debt Position

As of September 30, 2024, Ryerson reported cash and cash equivalents of $35.0 million, a decrease from $54.3 million at the end of 2023. The company’s total debt increased to $522.1 million from $436.5 million during the same period. The debt-to-capitalization ratio rose to 38% as of September 30, 2024, from 32% at the end of 2023.

Market Conditions and Strategic Initiatives

Ryerson's operational landscape is influenced by cyclical and volatile demand in the metals service center industry. In Q3 2024, Ryerson experienced declining demand, reflected in lower average selling prices and reduced shipment volumes. The company has initiated strategic acquisitions, including the acquisition of Production Metals for $44.1 million in August 2024, aimed at enhancing their service offerings in the aerospace and defense sectors.

In summary, Ryerson Holding Corporation continues to navigate a challenging market environment while implementing strategic initiatives to improve operational efficiency and market positioning.

How Ryerson Holding Corporation (RYI) Makes Money

Revenue Sources

Ryerson Holding Corporation primarily generates revenue through the distribution of metals, including carbon steel, stainless steel, and aluminum products. The company operates a single reportable segment, focusing on metals service centers.

Financial Performance

For the nine months ended September 30, 2024, Ryerson reported net sales of $3,591.3 million, a decrease of $405.0 million (10.1%) compared to $3,996.3 million in the same period of 2023. The decline in revenue was attributed to lower average selling prices, driven by reduced commodity prices in 2024.

Cost Structure

The cost of materials sold for the nine months ended September 30, 2024, was $2,948.2 million, which represented 82.1% of net sales. The average cost of materials sold per ton sold decreased to $1,978 from $2,158 in the prior year, a reduction of $180 (8.3%).

Operating Expenses

Operating expenses for the nine months ended September 30, 2024, amounted to $612.7 million, representing 17.1% of net sales, an increase from $589.8 million (14.8% of net sales) in the same period of 2023.

Liquidity and Debt Position

As of September 30, 2024, Ryerson had cash and cash equivalents of $35.0 million and total debt outstanding of $522.1 million. The debt-to-capitalization ratio increased to 38% from 32% at the end of 2023.

Market Trends and Challenges

In 2024, Ryerson faced challenges from contracting industrial manufacturing demand, which led to lower average selling prices across nearly all product lines. Regulatory measures, such as increased tariffs on steel and aluminum imports, could potentially support future pricing and volumes in the North American market.

Article updated on 8 Nov 2024

Resources:

• Ryerson Holding Corporation (RYI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Ryerson Holding Corporation (RYI)' financial performance, including balance sheets, income statements, and cash flow statements.
• SEC Filings – View Ryerson Holding Corporation (RYI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.