RUSSEL METALS ANNOUNCES 2025 THIRD QUARTER RESULTS

Executive Summary

• Russel Metals reported Q3 2025 revenue of C$1.2 billion, EBITDA of C$75 million and EPS of $0.63, marking a modest improvement over the prior year.
• The company announced a definitive agreement to acquire seven U.S. service‑center locations from Kloeckner Metals for approximately US$118.6 million (US$51.5 million cash plus working‑capital adjustments), expected to add roughly US$500 million of annual revenue and push U.S. sales contribution above 50%.
• Capital structure remains strong with $600 million of liquidity; S&P upgraded the credit rating to BBB‑, moving Russel Metals into investment‑grade status.

Key Details

• Financial Highlights (Q3 2025 vs Q3 2024)
• Revenue: C$1,166.9 M vs C$1,089.4 M (+7%).
• EBITDA: C$75.0 M vs C$67.4 M (+11%).
• Net earnings: C$35.0 M vs C$34.5 M (flat).
• EPS: $0.63 vs $0.59 (up 7%).
• Dividends & Share Repurchases
• Quarterly dividend declared: $0.43 per share (C$24 M total), payable Dec 15, 2025.
• Share repurchase Q3: 0.3 M shares at $41.43 average price – C$14 M; FY‑to‑date 1.5 M shares for C$61.4 M.
• Acquisition of Kloeckner Service Centers
• Purchase price: US$118.6 M (US$51.5 M cash + net working‑capital adjustments).
• Locations: Dubuque (IA), Charlotte (NC), Suwanee (GA), Houston (TX), Austin (TX), Jacksonville (FL), Pompano Beach (FL).
• Expected close: Q4 2025 or Q1 2026.
• Anticipated impact: +US$500 M annual revenue; U.S. sales >50% of total after closing.
• Western Canada Business Improvement
• Sale agreements signed for Delta (BC) and Saskatoon (SK) properties – cash proceeds >C$40 M, both recorded as assets held for sale.
• Restructuring charge: C$4 M related to Delta closure; non‑recurring tariff expense: C$2 M.
• Liquidity & Capital Structure
• Total available liquidity at Sep 30 2025: $600 M (pro forma after acquisition $435 M).
• S&P Global rating upgrade: BB+ → BBB‑ (investment grade).
• Operating Metrics
• Gross margin (first nine months 2025): 22.0% vs 21.0% in 2024.
• Annualized return on invested capital (ROIC) FY 2025: 16% (target >15%).
• Cash from operating activities Q3: $70 M (pre‑working‑capital) + $5 M (non‑cash WC).
• Capital expenditures Q3: $15 M; FY to date: $60 M.
• Market Conditions & Outlook
• Steel and aluminum prices stabilized after early‑2025 tariff‑driven spikes.
• Expected Q4 2025 margins similar to late‑Q3 levels (slightly lower than Q3 average).
• Seasonal shipment decline anticipated for Q4; normal holiday schedule impact.

Notable Quotes

• “Our continued focus on strategic acquisitions, disciplined capital allocation and operational efficiencies positions Russel Metals to capture growth opportunities across North America,” – Martin L. Juravsky, EVP & CFO.