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Jun 30, 2020
Ryerson Q2 2020 Earnings Report
Ryerson's financial performance declined in Q2 2020 due to the impact of the COVID-19 pandemic, but the company outperformed industry peers and reduced net debt.
Key Takeaways
Ryerson reported a decrease in revenue and a net loss for Q2 2020 due to the COVID-19 pandemic. However, the company outperformed industry peers in terms of volume contraction, generated significant cash flow from operations, and reduced net debt to its lowest level in ten years. Ryerson also successfully refinanced its Senior Secured Notes, lowering expected annual cash interest expense.
Ryerson's net debt decreased by $100 million to $793 million, the lowest level in ten years.
The company refinanced Senior Secured Notes, which is expected to decrease annual cash interest expense by approximately $16 million.
Ryerson generated $103 million in cash flow from operations.
Adjusted EBITDA, excluding LIFO, was $21 million, outperforming the industry as measured by the Metals Service Center Institute (MSCI).
Revenue by Segment
Forward Guidance
The Company expects the third quarter to be impacted by continued COVID-19 pandemic-induced economic stresses. Due to the persisting macroeconomic uncertainty stemming from the COVID-19 pandemic and overall lack of visibility into future demand trends and market conditions in the end-markets in which Ryerson operates, the Company will not provide guidance for the third quarter ending September 30, 2020.
Positive Outlook
- Favorable trends in average selling prices.
- Increasing gross margins excluding LIFO.
- Shipments are trending upwards.
- Bookings are trending upwards.
- Demand conditions continue to see incremental improvement in the majority of Ryerson’s end-markets.
Challenges Ahead
- Continued COVID-19 pandemic-induced economic stresses.
- Persisting macroeconomic uncertainty stemming from the COVID-19 pandemic.
- Lack of visibility into future demand trends.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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