Q4 2023 Ryerson Holding Corp Earnings Call
Operator: The Bulletproof Executive 2013 Please stand by; we are about to begin. Good day, and welcome to the Ryerson Holding Corporation's fourth quarter and full year 2023 conference call. Today's conference is being recorded. There will be a question and answer session later. If you would like to ask a question, please press star 1 on your telephone keypad at any time. Again, that is star 1 to ask a question. At this time, I would like to turn the conference over to Mr. Pratham Deer, Manager of Investor Relations. Please go ahead, sir.
Please standby we are about to begin.
Good day, and welcome to the Ryerson holding corporation's fourth quarter and full year 2023 conference call.
Today's conference is being recorded.
There will be a question and answer session. Later, if he would like to ask a question. Please press star one on your telephone keypad at any time.
Again that is star one task of question.
At this time I would like to turn the conference over to Mr. <unk> Dear manager of Investor Relations. Please go ahead Sir.
Pratham Deer: Good morning. Thank you for joining Ryerson Holding Corporation's fourth quarter and full year 2023 earnings call. On our call, we have Eddie Lehner, Ryerson's President and Chief Executive Officer, Mike Burbach, our Chief Operating Officer, Jim Claussen, our Chief Financial Officer, and Molly Cannon, our Chief Accounting Officer and Corporate Controller. John Orr, our Executive Vice President of Operations, Mike Hamilton, our Vice President of Corporate Supply Chain, and Jorge Beristain, our Vice President of Finance, will be joining us for Q&A. Certain comments on this call will contain forward-looking statements within the meaning of the federal securities laws. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. These risks include, but are not limited to, those set forth under risk factors in our annual report on Form 10-K for the year ended December 31st, 2023, and in other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made and are not guarantees of future performance.
Good morning, Thank you for joining Ryerson holding corporations fourth quarter and full year 2023 earnings call.
On our call, we have Eddie Lehner, <unk>, President and Chief Executive Officer, Mike Burbach, Our Chief operating Officer, Jim Claussen, Our Chief Financial Officer, and Molly Cannon, our Chief Accounting officer and corporate controller.
John <unk>, our executive Vice President of operations, Mike Hamilton, Our Vice President of corporate supply chain, and Jorge beer, saying, our vice President of finance will be joining us for Q&A.
Certain comments on this call will contain forward looking statements within the meaning of the federal Securities laws. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those implied by the forward looking statements.
These risks include but are not limited to those set forth under risk factors in our annual report on Form 10-K for the year ended December 31, 2023 and in other filings with the Securities and Exchange Commission you are cautioned not to place undue reliance on these forward looking statements which speak.
As of the date, they are made and not guarantees of future performance.
Pratham Deer: In addition, our remarks today refer to several non-GAAP financial measures that are intended to supplement, but not substitute for, the most directly comparable GAAP measures. A reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures is provided to you in our earnings release filed on Form 8K yesterday and also available on the Investor Relations section of our website. I'll now turn the call over to Eddie.
In addition, our remarks today refer to several non-GAAP financial measures that are intended to supplement but not substitute for the most directly comparable GAAP measures a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures is provided in our earnings release filed on form 8-K yesterday.
Today and also available on the Investor Relations section of our website.
Now turn the call over to Eddie.
Edward J. Lehner: Thank you, Pratham, and thank you all for joining us this morning. As we reflect on the fourth quarter and full year 2023 results, I want to start by recognizing our 4,600-strong Ryerson team for prioritizing a safe and productive operating environment for our over 110 facilities across North America and China. Through the fourth quarter and full year, our service center network became stronger, denser, and more robust as planned. Since 2021, Ryerson has embarked on its largest investment and shareholder return cycle in more than a generation, and this is an important marker in our 182-year history. As much as I wish we could microwave it, we are timing our investments to the next industry upturn while managing the business intelligently. 2023 and 2024 did not favor Ryerson's end markets as automotive aerospace and non-residential, but they outperformed consumer, general industrial, and machinery and equipment metal-consuming end markets. Commodity bellwether averages for carbon, aluminum, and stainless steel all declined year over year.
Thank you your PRASM and thank you all for joining us this morning.
As we reflect on the fourth quarter and full year.
2023 results.
I want to start by recognizing our 4600 strong ryerson team for prioritizing.
Safe and productive operating environment for our over 110 facilities across North America.
And China.
Through the fourth quarter and full year, Our service Center network became stronger denser and more robust as planned.
Since 2021, Ryerson has embarked on its largest investment and shareholder return cycle.
In more than a generation and is an important marker in our 182 year history.
As much as I wish we could micro weighted we are timing our investments to the next industry upturn.
While managing the business intelligently.
2023 in Q4 did not favor Ryerson and markets as automotive aerospace.
In nonresidential outperformed consumer general industrial machinery and equipment metal consuming end markets.
Commodity bellwether averages for carbon.
Aluminum and stainless all declined year over year.
Edward J. Lehner: And while Ryerson Group had market share in aluminum and stainless, the margin compression for stainless, in particular, was severe and unrelenting. We expect current counter-cyclical conditions for non-ferrous industrial metals consumption to be transient, as we're well into a non-ferrous bottoming. And we maintain a strong conviction around positive, longer-term secular demand trends for aluminum and stainless steel and Industrial Metals writ large. When looking at Ryerson through a year-over-year prism, I want to note that same-store expenses and headcount are both lower when comparing year-over-year benchmarks, and same-store headcount is still 8% below pre-pandemic levels. Additionally, we increased book value per share to its highest level since Ryerson's IPO in 2014, increased the dividend, continued prudent share buybacks, generated strong free cash flow and free cash flow yields, grew PP&E by 29%, expanded in Las Vegas, started up the Centralia Washington Service Center facility, and finished construction at University Park, Illinois, with construction and equipment installation expected to be completed in Shelbyville, Kentucky, by the end of 20 Now this is not the entire list, but a point of emphasis that there is no growth of any meaning or magnitude without some groin pain.
And while Ryerson grew market share in aluminum and stainless.
The margin compression for stainless in particular was severe and.
And unrelenting.
We expect current counter cyclical conditions for nonferrous industrial metals consumption to be transient.
As we're well into our nonferrous bottoming and.
And we maintain a strong conviction around positive longer term secular demand trends for aluminum and stainless.
In industrial metals writ large.
When looking at Ryerson through a year over year prison I want to note that same store expenses and head count are both lower when comparing year over year benchmarks and same store head count is still 8% below pre pandemic levels. Additionally.
Additionally, we increased book value per share to its highest level.
<unk> since the IPO in 2014 increased the dividend continued prudent share buybacks generated strong free cash flow and free cash flow yields grew P. P by 29% expanded in Las Vegas, starting up the Centralia, Washington Service Center facility.
And finish construction at University Park, Illinois, with construction and equipment installation expected to be completed in Shelbyville, Kentucky by the end of 2024, while converting 17 of our service centers to S. P for ERP consistency throughout our General line Service Center business.
Now this is not the entire list of appointed emphasis.
That there is no growth of <unk>.
Any meaning or magnitude without some growing pains.
Edward J. Lehner: We've been doing the hard but necessary things to create a better operating model centered on value add and Speed to Market to generate higher through-the-cycle earnings with less volatility when our investments fully phase in and begin generating operating cash flow. Despite the noted counter-cyclical conditions that pervaded Q4 and 2023 overall, I want to share several proofs. We welcomed three exceptional value-added businesses into our family of companies during the fourth quarter. Norlin Incorporated, which we introduced on our last call, is joined by TSA Processing and Hudson Toolsteel Corporation. TSA, headquartered in Houston, has been providing excellent toll processing capabilities for over 30 years, and it operates across the Midwest and Southern states.
We've been doing the hard but necessary things to create a better operating model centered on value add.
Speed to market to generate higher through the cycle earnings with less volatility when our investments fully phase in and begin generating operating cash flow. Despite the noted counter cyclical conditions that prevail in Q4 and 2023 overall.
I want to share several proof points.
We welcomed three exceptional value added businesses into our family of companies during the fourth quarter, Northern incorporated which we introduced on our last call is joined by TSA processing and Hudson tool Steel Corporation.
GSA headquartered in Houston has been providing excellent toll processing capabilities for over 30 years and.
<unk> operates across the Midwest and southern States.
Edward J. Lehner: Hudson Tool Steel, headquartered in Cerritos, California, has been supplying high-quality and specially-grade carbon and alloy tool steels for 20 years and has operations on the East Coast as well as the Midwest. The addition of Hudson allows Ryerson to create a tool steel center of excellence by combining the skill sets of Hudson, with Ford Tool Steel and Southern Tool Steel, throughout 2023, both organically and through acquisition. Ryerson increased its value-added percentage of sales from 14% to 18% year-over-year, helping mitigate the harsh margin compression noted in stainless in Q4 and for the whole of 2023. Counter cycles are never enjoyable, particularly when undertaking significant operating model investment over a multi-year investment period, keeping to the bigger picture with clarity and focus.
Hudson tool steel headquartered in Cerritos, California has been supplying high quality and specialty grade carbon and alloy tool steels for 20 years and has operations on the east coast as well as the Midwest.
The addition of Hudson It allows ryerson to create a total steel center of excellence by combining the skill sets of Hudson.
<unk> for tool steel.
And southern tool steel.
Throughout 2023, both organically and through acquisitions Ryerson increased its value added percentage of sales from 14% to 18% year over year, helping mitigate the harsh margin compression noted in stainless in Q4 and for the whole of <unk>.
Thousand twenty-three counter.
Countercyclical or never enjoyable, particularly when undertaking significant operating model investments.
Over a multi year investment period, keeping to the bigger picture with clarity and focus.
Edward J. Lehner: We're skating to where the puck is going, and then we plan on parking it in the net as we transition back to an industrial metals upturn whose precise timing we don't know, but when it comes, we'll be ready to make the most of it, to the benefit of Ryerson stakeholders. With that, I'll now turn the call over to our Chief Operating Officer, Mike Burbach, to further discuss the pricing and demand environment. Thank you, Eddie, and good morning, everyone.
Skating to where the puck is going and then we plan on parking it in the net as we transitioned back to an industrial metals upturn, whose precise timing, we don't know, but when it comes we'll be ready to make the most of it.
The benefit of Ryerson stakeholders with that I'll now turn the call over to our Chief operating officer, Mike Burbach to further discuss the pricing and demand environment.
Thank you Eddie and good morning, everyone.
Mike Burbach: Overall, Ryerson's fourth-quarter revenue of $1.1 billion came in line with our guidance expectations, with an average sale price of $2,472 per ton and a sales volume of 450,000 tons. Average sell price per ton was down 5.2% quarter over quarter at $2,472 per ton, which was slightly below the lower range of our guidance expectations, primarily due to weaker than expected conditions in stainless consuming. The index for domestic hot-rolled coil prices increased approximately 40% over the quarter in response to mills increasing prices five times from late September to late November. While we realized increases in spot prices as the quarter progressed, our average sale price was lower quarter over quarter due to the lagged pricing impact from our contractual customers. Our bright metals franchise was affected by continued declining LME nickel and LME aluminum prices during the fourth quarter due to continued global oversupply. Turning to the demand environment, broadly speaking, seasonal demand slowdowns impacted activity overall in the fourth quarter, as reflected by weak PMIs and a deceleration in industrial production. Ryerson sales volumes of 450,000 tons were 5.9% lower quarter-over-quarter and within our guidance expectations. Volume decreases were led by a slowdown in end markets related to consumer goods and industrial manufacturing.
Overall, Ryerson fourth quarter revenue of $1 1 billion came in line with our guidance expectations.
With an average sell price of 2000 and $472 per ton and sales volume of 450000 tons.
Average sell price per ton was down five 2% quarter over quarter at 2000 and $472 per ton.
Which was slightly below the lower range of our guidance expectations, primarily due to weaker than expected conditions in stainless consuming end markets.
The index for domestic hot rolled coil prices increased approximately 40% over the quarter in response to mills, increasing prices five times from late September to late November.
While we realized increases in spot pricing as the quarter progressed.
So price was lower quarter over quarter due to delayed pricing impact from our contractual customers.
Our bright metals franchise was affected by continued declining LMA nickel and the only aluminum prices during the fourth quarter due to continued global oversupply.
Turning to the demand environment broadly speaking seasonal demand slowdowns impacted activity overall in the fourth quarter.
As reflected by a weak PMI is that.
Deceleration in industrial production.
Ryerson sales volumes of 450000 tons were five 9% lower quarter over quarter and within our guidance expectations.
Volume decreases were led by a slowdown from end markets related to consumer goods and industrial manufacturing.
Mike Burbach: For the full year 2023, MSCI shipments increased 1.5%, while Ryerson shipments decreased by 4.8%. The difference in Ryerson's year-over-year volumes compared to the overall industry can partially be attributed to our end markets and end products, as we don't sell heavily into the automotive, aerospace, or non-residential construction industries, which were industries with strong growth in 2023. Our bright metals franchise outperformed the MSI, MSCI, but was eclipsed by underperformance in heavier-weighted carbon flat-rolled products primarily weighted toward the consumer.
For the full year 2023, MSCI shipments increased one 5%.
Ryerson shipments decreased by four 8%.
The difference in Ryerson is year over year volumes compared to the overall industry can partially be attributed by our end markets and product mix as.
As we don't sell heavily into the automotive aerospace or non residential construction end markets, which were industries with strong growth over 2023.
Our bright metals franchise outperformed the MSCI MSCI, but was eclipsed by underperformance in the heavier weighted carbon flat rolled products, primarily weighted towards the consumer.
Mike Burbach: Despite the decrease in overall tons, we saw full-year shipment increases in our commercial ground, transportation, and oil and gas end markets, following the strength of Class 8 truck orders and RIDCO. Finally, I would like to note that we're continuously working to provide our customers with ever better experiences through our products, network, and services. While investing to meet customers' increasing needs from emerging trends through our modernized facilities and increased capability. In that regard, Norlin, TSA, and Hudson are great additions to our service office.
The decrease in overall tons.
We saw full year shipment increases in our commercial ground transportation and oil and gas end markets.
Following the strength of class eight truck orders in rig counts.
Finally, I would like to note that we're continuously working to provide our customers with ever better experiences through our products network and services, while investing to meet customers increasingly needs from emerging trends.
A modernized facilities and increased capabilities.
In that regard norland, TSA and Hudson are great additions to our service offerings.
Mike Burbach: As we close out the year, our value-add percent of sales has increased to 18%, growing from approximately 14% a year ago. And with that, I'll turn the call over to Jim for fourth quarter financial highlights, as well as our first quarter 2024 outlook. Thank you, Mike, and good morning, everyone.
As we close out the year, our value add percentage of sales.
It has increased to 18% growing from approximately 14% a year ago.
And we reiterate our target of at least 20%.
And with that I'll turn the call over to Jim for fourth quarter financial highlights as well as our first quarter 2024 outlook.
Thank you, Mike and good morning, everyone.
James Claussen: During the fourth quarter, we exceeded our guidance on earnings per share, generated positive cash flow, maintained our net leverage ratio within range, and returned cash to shareholders through dividends and share repurchases while continuing to execute our organic and acquisition growth investments. Before discussing guidance for the first quarter, I would like to highlight the drivers for our fourth quarter performance compared to our guidance expectations. In the quarter, we generated $26 million of adjusted EBITDA excluding LIFO.
During the fourth quarter, we exceeded our guidance on earnings per share generated positive cash flow maintained our net leverage ratio within range and return cash to shareholders through dividends and share repurchases, while continuing to execute our organic and acquisition growth investments.
Before discussing guidance for the first quarter I would like to highlight the drivers for our fourth quarter performance compared to our guidance expectations.
In the quarter, we generated $26 million of adjusted EBITDA. Excluding LIFO. This came in just below the low end of our guidance range of $28 million to $32 million and was driven by pricing and margin pressure most acutely in our stainless steel franchise, which represents approximately <unk> <unk>.
James Claussen: This came in just below the low end of our guidance range of $28 to $32 million and was driven by pricing and margin pressure, most acutely in our stainless steel franchise, which represents approximately 25% of our revenue. Meanwhile, our earnings per share of $0.74 was notably higher than our guidance range of $0.18 to $0.22 per share. The beat on earnings per share was driven largely by the LIFO income recognized over the quarter, which was driven by continued falling costs through the quarter and was representative of the continued market price declines realized in our Bright Metals franchise. Looking to the first quarter of 2024, we expect volumes to be up sequentially compared to the fourth quarter in line with normal seasonality and up 8 to 10 percent.
95% of our revenue.
Meanwhile, our earnings per share of <unk>, 74 was notably higher than our guidance range of 18 to 22 per share.
The beat on earnings per share was driven largely by the LIFO income recognized over the quarter, which was driven by continued falling costs through the quarter and was representative of the continued market price declines realized in our bright metal franchise.
Looking to the first quarter of 2024, we expect volumes to be up sequentially compared to the fourth quarter in line with normal seasonality and up 8% to 10%.
James Claussen: As such, we expect first quarter revenues to be in the range of $1.21 to $1.25 billion, with average selling prices up 1 to 3 percent. Based on these expectations, we forecast adjusted EBITDA for the first quarter of 2024, excluding LIFO, in the range of $58 to $62 million, and earnings in the range of $0.24 to $0.34 per diluted share. We expect the impact of LIFO to be relatively neutral in the first quarter. In the fourth quarter, we generated $90 million of cash flow from our operations, which included $15 million released from lower working capital requirements. We ended the period with $436 million of total debt and $382 million of net debt.
As such we expect first quarter revenues to be in the range of one point to one to 1.25 billion.
With average selling price up 1% to 3%.
Based on these expectations, we forecast adjusted EBITDA for the first quarter of 2024, excluding LIFO in the range of $58 million to $62 million in earnings in the range of 24 to 34 cents per diluted share.
We expect the impact of LIFO to be relatively neutral in the first quarter.
In the fourth quarter, we generated $90 million of cash flow from our operations, which included $15 million released from lower working capital requirements. We ended the period with $436 million of total debt and $382 million of net debt.
James Claussen: Ryerson's net leverage ratio ended the year at 1.7 times and remains within our leverage target range of 0.5 times to 2.0 times. Furthermore, the company's available global liquidity remains healthy at $656 million. For the full year, we generated $365 million of operating cash.
Ryerson net leverage ratio ended the year at one seven times and remains within our leverage target range of 0.5 times to 2.0 times well the company's available global liquidity remains healthy at $656 million.
For the full year, we generated $365 million of operating cash.
James Claussen: In the fourth quarter, we invested $25 million in capital expenditures, which included new equipment at our service center at University Park, Illinois, as well as automation and expansion at our Shelbyville, Kentucky facility. Our full-year capital expenditures of $122 million also included an expansion of our Atlanta facility, investment in a new facility in Las Vegas, Nevada, Automation at our Portage, Indiana, Laser and Fabrication Center, a state-of-the-art cut-to-length line in Dallas, and the rollout of SAP in our south region for ERP uniformity across our general line service center. As we look forward to internal growth strategic initiatives in 2024, we anticipate This figure comprises base, maintenance, and growth CapEx and includes the completion of our state-of-the-art facility in University Park, Illinois, and the expansion of our facility in Shelbyville, Kentucky.
In the fourth quarter, we invested $25 million on capital expenditures, which included new equipment at our service Center at University Park, Illinois, as well as automation and expansion at our Shelbyville, Kentucky facility.
Our full year capital expenditures of $122 million also included an expansion of our Atlanta facility investment in a new facility in Las Vegas, Nevada.
Automation at our Portage, Indiana laser fabrication center.
State of the art cut to length line in Dallas, and the rollout of SAP in our South region for ERP uniformity across our General line Service Center business.
As we look forward to internal growth strategic initiatives in 2024, we anticipate full year capital expenditures to be around $110 million.
This figure comprises base maintenance and growth Capex.
Include completion of our state of the art facility in University Park, Illinois, and the expansion of our facility in Shelbyville, Kentucky.
The investments we are making are expected to drive better customer experiences enhanced long term potential of our equipment improve asset utilization increased productivity and provide a safer operating environment for our employees we.
James Claussen: The investments we are making are expected to drive better customer experiences, enhance the long-term potential of our equipment, improve asset utilization, increase productivity, and provide a safer operating environment for our employees. We are very excited about the modernization efforts taking place across our network and the better customer experiences they will provide for our customer base. Returning to shareholder returns, Ryerson returned $12.6 million in the quarter, which was comprised of $6.3 million in dividends and $6.3 million in share repurchase. We paid a quarterly dividend of $0.185 per share and have announced a first quarter cash dividend of $0.1875 per share, our 10th consecutive rate.
We are very excited about the modernization efforts, taking place across our network and the better customer experiences they will provide to our customer base.
Turning to shareholder returns Ryerson returned $12 $6 million in the quarter, which was comprised of $6 $3 million in dividends and $6 $3 million in share repurchases we.
We paid a quarterly dividend of <unk> 18, and one half cents per share and have announced our first quarter cash dividend of <unk> 18, and three quarter cents per share our 10th consecutive raise.
As for share repurchases after repurchasing just under 220000 shares for approximately $6 million in the open market. During the quarter. We currently have approximately $39 million remaining on our $100 million authorization, which expires in April of 2025.
James Claussen: As for share repurchases, after repurchasing just under 220,000 shares for approximately $6 million in the open market during the quarter, we currently have approximately $39 million remaining on our $100 million authorization, which expires in April of 2025. On a full-year basis, Ryerson returned approximately $139 million to shareholders, which comprised $114 million for 3.3 million shares repurchased and $0.72 of dividends declared per share. During the year, due to secondary share sales by Platinum Equity, our free-floating shares increased from 57% to 88.5%.
On a full year basis, Ryerson returned approximately $139 million to shareholders, which comprises of $114 million for $3 3 million shares repurchased and 72 cents of dividends declared per share.
During the year due to the secondary share sales by platinum equity are free floating shares increased from 57 to 88, 5%.
As we look forward to 2024 and beyond we will continue to prudently evaluate our shareholder return opportunities as well as our overall capital allocation strategy to maximize long term shareholder value.
With that I'll turn the call over to Molly to provide further detail on our fourth quarter and full year financial results.
Thank you Jim and good morning, everyone.
In the fourth quarter of 2023, Ryerson reported net sales of $1 1 billion, which was 11% lower sequentially driven by roughly an equal split of lower volumes and lower average selling price.
Molly Cannon: As we look forward to 2024 and beyond, we will continue to prudently evaluate our shareholder return opportunities as well as our overall capital allocation strategy to maximize long-term shareholder value. With that, I'll turn the call over to Molly to provide further detail on our fourth quarter and full year financial results. Thank you, Jim, and good morning, everyone. In the fourth quarter of 2023, Ryerson reported net sales of $1.1 billion, which was 11 percent lower sequentially, driven by roughly an equal split of lower volumes and lower average selling price. In the same period, gross margin of 22.2% was an expansion of 220 basis points versus the previous quarter. However, excluding LIFO, gross margin fell 40 basis points from the third quarter to 16.9 percent as average selling price for our sales mix decreased faster than cost of goods sold.
In the same period gross margin of 22, 2% was an expansion of 220 basis points versus the previous quarter.
Excluding LIFO gross margin fell 40 basis points from the third quarter to 16, 9% as average selling price for our sales mix decreased faster than cost of goods sold.
On the expense side warehousing delivery selling general and administrative expenses increased 6% sequentially to 204 million driven primarily by higher depreciation expense.
Expenses related to recent acquisitions and higher reorganization expenses related to ERP systems conversions and start up costs associated with the University Park Service Center.
These increased expenses were partially offset by lower personnel expenses lower delivery expenses and lower fixed and variable operating expenses.
For the fourth quarter of 2023 net income attributable to Ryerson was $25 8 million or.
Molly Cannon: On the expense side, warehousing delivery, selling, general, and administrative expenses increased 6% sequentially to $204 million, driven primarily by higher depreciation expense, higher expenses related to recent acquisitions, and higher reorganization expenses related to ERP system conversions and startup costs associated with the University Park Service Center. These increased expenses were partially offset by lower personnel expenses, lower delivery expenses, and lower fixed and variable operating expenses.
74 cents per diluted share compared to net income attributable to Ryerson F 35 million and diluted earnings per share of a dollar in the prior quarter.
For the full year net income attributable to Ryerson was $145 7 million or $4.10 per diluted share.
Finally, ryerson achieved adjusted EBITDA, excluding LIFO of $25 9 million in the fourth quarter of 2023, which compares to $45 million in the prior quarter.
Free cash flow generation was $65 1 billion in the fourth quarter and compares to $56 9 million in the prior quarter periods.
Molly Cannon: For the fourth quarter of 2023, net income attributable to Ryerson was $25.8 million, or $0.74 per diluted share compared to net income attributable to Ryerson of $35 million and diluted earnings per share of $1 in the prior quarter. For the full year, net income attributable to Ryerson was $145.7 million, or $4.10 per diluted share. Finally, Ryerson achieved adjusted EBITDA excluding LIFO of $25.9 million in the fourth quarter of 2023, which compares to $45 million in the prior quarter. Recash flow generation was $65.1 million in the fourth quarter, which compares to $56.9 million in the prior quarter.
For the full year of 2023, Ryerson has generated $231 million and adjusted EBITDA, excluding LIFO and two.
$244 million in free cash flow.
With that I'll turn the call back to Eddie.
Thank you Mollie.
Overall in the fourth quarter of 2023, and when reflecting on all of 2023, Ryerson navigated through headwinds of mix pricing and slow demand which were characterized.
The continuation of decreasing bright metals commodities prices driven by global oversupply as well as a holiday related slowdown in industrial and consumer purchasing activity. Despite the challenges of navigating through a contractionary manufacturing environment, our business generated cash.
From our operating model as well as our balance sheet.
<unk> did in the growth of our network through new and enhanced service centers.
Edward J. Lehner: For the full year 2023, Ryerson generated $231 million in adjusted EBITDA excluding LIFO and $244 million in free cash flow. And with that, I'll turn the call back to Eddie. Overall, in the fourth quarter of 2023, and when reflecting on all of 2023, Ryerson navigated through headwinds of mixed pricing and slow demand, which were characterized by a continuation of decreasing bright metals commodity prices driven by global oversupply, as well as a holiday-related slowdown in industrial and consumer purchasing activity. Despite the challenges of navigating to a contractionary manufacturing environment, our business generated cash from our operating model, as well as from our balance sheet, invested in the growth of our network through new and enhanced service centers, acquisitions, and technological integrations to build out our next generation operating model and prudently delivered returns to shareholders.
Acquisitions, and technological integrations to build out our next generation operating model and prudently delivered returns to shareholders.
As we look at the full year 2023, it's evident that we faced a terrain change in the market landscape from 2022 with both consumer and industrial manufacturing related end markets experiencing demand slowdowns combined with corresponding challenges and metals commodities.
Pricing related to global and domestic supply and demand imbalances, while reierson navigated the headwinds of this market cycle, we remain resolute in continuing to invest in the modernization expansion and integration of our service Center network, which serves.
As the engine of growth in our operating model 2023 marked the second year of our most significant investment cycle in more than a generation our investments and modernize facilities increased value added services and ERP network integration are aligned with our long term vision for Ryerson with the goal of adding value to.
Edward J. Lehner: As we look at the full year 2023, it's evident that we faced a terrain change in the market landscape from 2022, with both consumer and industrial manufacturing-related end markets experiencing demand slowdowns combined with corresponding challenges in metals commodity pricing related to global and domestic supply and demand imbalances. While Ryerson navigates the headwinds of this market cycle, we've remained resolute in continuing to invest in the modernization, expansion, and integration of our service center network, which serves as the engine of growth in our operating model. 2023 marked the second year of our most significant investment cycle in more than a generation.
Our customers through greater levels of service speed and efficiency and providing the industry's best customer experience as we look ahead to the first quarter and the rest of 2024 and over the Rainbow we firmly believe that our services as a trusted partner to our customers provides a greater good as.
Global industrial metals are the gifts that keep giving and which support and enable emerging trends of near shoring technological advancement and sustainability, even more importantly investment in industrial metals and manufacturing continues to show its undisputed magic and generating higher.
Quality of life, and well being for humankind, when we're smart enough to invest what is required.
Edward J. Lehner: Our investments in modernized facilities, increased value-added services, and ERP network integration are aligned with our long-term vision for Ryerson, with the goal of adding value to our customers through greater levels of service, speed, and efficiency and providing the industry's best customer experience. As we look ahead to the first quarter and the rest of 2024 and beyond, we firmly believe that our services, as a trusted partner to our customers, provide the greater good as recyclable industrial metals are the gifts they keep giving and which support and enable emerging trends of nearshoring technological advancement and sustainability. Even more importantly, investment in industrial metals and manufacturing continues to show its undisputed magic in generating higher quality of life and well-being for humankind when we're smart enough to invest what is required.
The investments Ryerson is making throughout our network of intelligently connected industrial metals service centers is.
To deliver those great customer experiences with joy speed scale value added consistency to position Ryerson and its stakeholders well for an enduring and valuable future with that we look forward to your questions operator.
Thank you, ladies and gentlemen, if you would like to ask a question. Please signal by pressing star one on your telephone keypad.
If you're using a speaker phone. Please make sure mute function is turned off to allow your signal to reach our equipment.
Again press Star one to ask a question.
Well pause for just a moment to allow everyone an opportunity to signal.
Okay.
And as a reminder, it was star one if you had a question at this time.
Okay.
Hello.
Yes, we will take our first question from <unk> <unk> with Keybanc capital markets. Your line is open. Please go ahead.
Operator: The investments Ryerson is making throughout our network of intelligently connected industrial metal service centers are to deliver those great customer experiences with joy, speed, scale, and value-added consistency to position Ryerson and its stakeholders well for an enduring and valuable future. With that, we look forward to your questions.
And Sir your line is open you may want to check your mute button.
Okay.
Yeah.
And I'm not hearing a response from that line again, if you had a question it was star one.
Okay.
And at this time I don't have any questions holding Mr. Wayne I will turn the conference back to you for any additional remarks.
Thank you. We appreciate your continued support of and interest in Ryerson stay safe be well and I look forward to being with you in may for our first quarter 2024 earnings release and conference call I'll wait wait we've got late arrival.
Operator: Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.
And we do have a question <unk> with Keybanc capital markets. Your line is open Sir. Please go ahead.
Operator: Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to ask theirs, and as a reminder, it was star one if you had a question at this time. Hello. Yes, we'll take our first question from Srinath Kastavan with KeyBank Capital Markets.
Yes, I am I audible now.
Yes, Sir you are.
Yes.
Sorry about that.
I just wanted to.
Basketball.
20 million of adjustments that you have for <unk> 'twenty <unk> guidance.
Operator: Your line is open. Please go ahead. Once your line is open, you may want to check your mute button.
Could you elaborate on that.
Operator: The Bulletproof Executive 2013, And I'm not hearing a response from that line. Again, if you had a question, it was star 1. And at this time, I don't have any questions held. Mr. Lehner, I'll turn the conference back to you for any additional remarks. Thank you. We appreciate your continued support of an interest in Ryerson. Stay safe, be well, and I look forward to being with you in May for our first quarter 2024 earnings release and conference call. Oh, wait, wait; we've got a late arrival. And we do have a question. Srinath Kesavan with KeyBank Capital Markets.
Okay.
On the adjustments.
Yes.
Do you have any noncash items.
Yes.
Yes, we we expect to continue to have pre operating and startup costs as we bring up the University Park and as we continue the construction and modernization of Shelbyville, Kentucky.
And also as we continue to.
<unk>.
Really come back from the ERP conversions in the fourth quarter of 2023, particularly across our largest business unit. So so we will have some some adjustments in the first quarter, but all in all in good cause and for good effect.
Operator: Your line is open, sir. Please go ahead. Yeah, am I audible now? Yes, sir. Hello. Yes. Sorry about that. I just wanted to ask about the 20 million adjustments that you have for 1Q24 guidance. Could you elaborate on that? Transcription by CastingWords. On the adjustments? Yep. Do you have any non-cash items?
And do you expect this to continue for the next few quarters.
Okay.
Well I think.
As University Park starts up in the second quarter, and operationalize and really comes into its full operational curve that we expect those adjustments to come down at University Park, they'll probably peak in Shelbyville, Kentucky in the second and third quarter of this year and we expect to be able to move through any of the remaining residual.
Edward J. Lehner: Yeah, we expect to continue to have pre-operated and startup costs as we bring up University Park and as we continue the construction and modernization of Shelbyville, Kentucky, and also as we continue to really come back from the ERP conversions in the fourth quarter of 2023, particularly across our largest business units. So we'll have some adjustments in the first quarter, but all for good cause and for good effect. And do you expect this to continue for the next few quarters? Well, I think as University Park starts up in the second quarter and operationalizes and really comes into its full operational curve, you know we expect those adjustments to come down at University Park. They'll probably peak in Shelbyville, Kentucky, in the second and third quarters of this year, and we expect to be able to move through any of the remaining residuals or remnants of the SAP ERP conversion in the second half of 2023 that will start to tail out in 20
It was a remnant of the S&P ERP conversion.
In the second half of 2023 that will start to tail out in 2024.
Got it thanks.
Thank you.
Alright, and there are no other questions holding at this time.
Alright, thank you.
And Mr. Later did you have any additional remarks.
I do not.
Alright, ladies and gentlemen that will conclude today's program. We thank you for your participation you may disconnect. Your phone line at this time.
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Edward J. Lehner: You got it. Thanks. Thank you. All right, and there are no other questions at this time. All right, thank you. And, Mr. Lehner, did you have any additional remarks? I do not. All right, ladies and gentlemen, that will conclude today's program. We thank you for your participation. You may disconnect your phone line at this time.
Yeah.
Okay.
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Sure.
Yes.
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