Russel Metals Announces 2024 Third Quarter Results
Russel Metals reported Q3 2024 financial results with revenues of $1.1 billion, EBITDA of $67 million, and earnings per share of $0.59. The company generated $163 million in cash from operating activities and maintained liquidity of $762 million. Notable developments include closing the Samuel acquisition with reduced invested capital of $167 million, entering a new $600 million credit agreement, investing $21 million in capital expenditures, and repurchasing $46 million of shares. Gross margins were 19.7%, compared to 21.0% in Q2 2024 and 20.2% in Q3 2023.
Russel Metals ha riportato i risultati finanziari del terzo trimestre 2024 con ricavi di 1,1 miliardi di dollari, un EBITDA di 67 milioni di dollari e utili per azione di 0,59 dollari. L'azienda ha generato 163 milioni di dollari di cash flow dalle attività operative e ha mantenuto una liquidità di 762 milioni di dollari. Tra gli sviluppi significativi c'è stata la chiusura dell'acquisizione di Samuel con un capitale investito ridotto a 167 milioni di dollari, l'entrata in un nuovo accordo di credito da 600 milioni di dollari, investimenti di 21 milioni di dollari in spese in conto capitale e un riacquisto di azioni per 46 milioni di dollari. I margini lordi sono stati del 19,7%, rispetto al 21,0% nel secondo trimestre 2024 e al 20,2% nel terzo trimestre 2023.
Russel Metals reportó resultados financieros del tercer trimestre de 2024 con ingresos de 1.1 mil millones de dólares, EBITDA de 67 millones de dólares y ganancias por acción de 0.59 dólares. La compañía generó 163 millones de dólares en flujo de efectivo de actividades operativas y mantuvo una liquidez de 762 millones de dólares. Los desarrollos notables incluyen el cierre de la adquisición de Samuel con un capital invertido reducido a 167 millones de dólares, la entrada en un nuevo acuerdo de crédito de 600 millones de dólares, la inversión de 21 millones de dólares en gastos de capital y la recompra de acciones por 46 millones de dólares. Los márgenes brutos fueron del 19.7%, en comparación con el 21.0% en el segundo trimestre de 2024 y el 20.2% en el tercer trimestre de 2023.
Russel Metals는 2024년 3분기 재무 실적을 발표하며 매출 11억 달러, EBITDA 6천7백만 달러, 주당순이익 0.59달러를 기록했습니다. 이 회사는 운영 활동에서 1억 6천3백만 달러의 현금을 창출했으며, 7억 6천2백만 달러의 유동성을 유지했습니다. 주목할 만한 발전으로는 1억 6천7백만 달러의 투자 비용으로 Samuel 인수 완료, 6억 달러의 새로운 신용 계약 체결, 2천1백만 달러의 자본 지출 투자, 4천6백만 달러의 자사주 매입이 포함됩니다. 총 마진은 19.7%로, 2024년 2분기의 21.0%와 2023년 3분기의 20.2%에 비해 감소했습니다.
Russel Metals a annoncé les résultats financiers du troisième trimestre 2024 avec des revenus de 1,1 milliard de dollars, un EBITDA de 67 millions de dollars et des bénéfices par action de 0,59 dollar. L'entreprise a généré 163 millions de dollars de liquidités provenant des activités opérationnelles et a maintenu une liquidité de 762 millions de dollars. Parmi les développements notables, on trouve la conclusion de l'acquisition de Samuel avec un capital investi réduit à 167 millions de dollars, la conclusion d'un nouvel accord de crédit de 600 millions de dollars, un investissement de 21 millions de dollars en dépenses d'investissement et le rachat d'actions pour 46 millions de dollars. Les marges brutes étaient de 19,7%, contre 21,0% au deuxième trimestre 2024 et 20,2% au troisième trimestre 2023.
Russel Metals hat die finanziellen Ergebnisse für das dritte Quartal 2024 mit Umsätzen von 1,1 Milliarden Dollar, EBITDA von 67 Millionen Dollar und Gewinn pro Aktie von 0,59 Dollar gemeldet. Das Unternehmen erzielte 163 Millionen Dollar an Cashflow aus operativen Aktivitäten und hielt eine Liquidität von 762 Millionen Dollar. Zu den bemerkenswerten Entwicklungen gehört der Abschluss der Übernahme von Samuel mit einem reduzierten investierten Kapital von 167 Millionen Dollar, der Abschluss eines neuen Kreditvertrags über 600 Millionen Dollar, die Investition von 21 Millionen Dollar in Investitionsausgaben und der Rückkauf von Aktien im Wert von 46 Millionen Dollar. Die Bruttomargen lagen bei 19,7%, verglichen mit 21,0% im zweiten Quartal 2024 und 20,2% im dritten Quartal 2023.
- Generated strong operating cash flow of $163 million
- Maintained robust liquidity position of $762 million
- Reduced Samuel acquisition invested capital from $225M to $167M
- Secured new $600M credit facility with improved terms
- Steady performance in energy field stores segment
- EPS declined to $0.59 from $0.99 year-over-year
- EBITDA decreased to $67M from $96M year-over-year
- Gross margins declined to 19.7% from 21.0% quarter-over-quarter
- Same store volumes decreased 5% from Q2 2024
- Steel prices decreased 12% for plate products in Q3
Revenues of
Generated
Closed the Samuel Acquisition and Reduced its Related Invested Capital
Entered into New
Invested
Repurchased
Liquidity1 of
Three Months Ended | Nine Months Ended | ||||
Sep 30 2024 | Jun 30 2024 | Sep 30 2023 | Sep 30 2024 | Sep 30 2023 | |
Revenues | $ 1,089 | $ 1,072 | $ 1,110 | $ 3,222 | $ 3,486 |
EBITDA1 | 67 | 86 | 96 | 237 | 343 |
Net income | 35 | 50 | 61 | 134 | 220 |
Earnings per share | 0.59 | 0.84 | 0.99 | 2.26 | 3.55 |
All amounts are reported in millions of Canadian dollars except per share figures, which are in Canadian dollars. |
Non-GAAP Measures and Ratios
We use a number of measures that are not prescribed by IFRS Accounting Standards ("IFRS" or "GAAP") and as such may not be comparable to similar measures presented by other companies. We believe these measures are commonly employed to measure performance in our industry and are used by analysts, investors, lenders and other interested parties to evaluate financial performance and our ability to incur and service debt to support our business activities. These non-GAAP measures include EBITDA and Liquidity and are defined below. Refer to Non-GAAP Measures and Ratios on page 2 of our Management Discussion and Analysis.
EBIT - represents net earnings before interest and income taxes.
EBITDA - represents net earnings before interest, income taxes, depreciation and amortization.
Liquidity - represents cash on hand less bank indebtedness plus excess availability under our bank credit facility.
Cash (for) from working capital - represents the change in non-cash working capital.
The following table shows the reconciliation of net earnings in accordance with GAAP to EBITDA for 2024 and 2023:
Three Months Ended | Nine Months Ended | ||||
($ millions, except per share data) | Sep 30 2024 | Jun 30 2024 | Sep 30 2023 | Sep 30 2024 | Sep 30 2023 |
Net earnings | $ 34.5 | $ 49.9 | $ 60.6 | $ 134.1 | $ 219.5 |
Provision for income taxes | 10.7 | 16.9 | 17.1 | 44.3 | 66.3 |
Interest (income) expense, net | 2.4 | 1.4 | 1.6 | 3.7 | 8.2 |
EBIT 1 | 47.6 | 68.2 | 79.3 | 182.1 | 294.0 |
Depreciation and amortization | 19.8 | 17.6 | 16.3 | 55.1 | 49.4 |
EBITDA 1 | $ 67.4 | $ 85.8 | $ 95.6 | $ 237.2 | $ 343.4 |
Basic earnings per share | $ 0.59 | $ 0.84 | $ 0.99 | $ 2.26 | $ 3.55 |
1 Defined in Non-GAAP Measures and Ratios |
Our third quarter 2024 results demonstrated the benefits to our growing and diversified business. In particular, the steel price environment that negatively impacted revenues and margins in our metal service centers segment was somewhat offset by higher revenues and steady margins in our energy field stores segment. Also, the closing of the Samuel, Son & Co., Limited ("Samuel") acquisition in the middle of the third quarter provided the starting point for additional growth, that should contribute to our profitability once we benefit from a full quarter of activity and the tapering back of the non-recurring costs associated with the acquisition. The countercyclical nature of our cash flow was also illustrated, as we generated
Our earnings per share was
Our EBITDA for the quarter was
Market Conditions
Steel prices continued to be volatile, as the average price of plate decreased by
Our energy field stores continued to experience steady business activity in both
Acquisitions
On August 12, 2024, we closed our acquisition of seven service center locations from Samuel. With the close of the transaction, we added five service center locations in
At the time that the agreement with Samuel was announced in December 2023, the expected transaction value was
Capital Investment Growth Initiatives
In the 2024 third quarter, we made capital investments of
Returning Capital to Shareholders
We have adopted a flexible approach to returning capital to shareholders through: (i) our ongoing dividend; and (ii) share buy backs.
In the 2024 third quarter, we paid dividends of
In August 2024, we renewed our normal course issuer bid to purchase up to approximately 5.8 million of our common shares representing
Liquidity and Capital Structure
During the 2024 third quarter, we generated
On July 15, 2024, we entered into a new credit facility. The new credit facility's total availability increased by
On October 1, 2024, we announced the redemption of our
The new bank structure, in combination with the May 2024 redemption of the
Outlook
Steel prices were volatile in the third quarter of 2024, and they remain volatile into the early part of the fourth quarter. We expect that producers will proactively manage supply through both regular maintenance downtime and other curtailments in the fourth quarter in order to rebalance supply. As such, we expect steel prices to demonstrate ongoing uncertainty in the fourth quarter of 2024 but set the stage for a more favourable dynamic in 2025.
Our end market activity remains steady and is expected to continue into the fourth quarter, other than the impact from reduced shipping days from various seasonal holidays in North America. In the fourth quarter, we expect to benefit from higher shipment activity from a full quarter of the Samuel acquisition. Over the medium-term, we expect growth in North American steel consumption as a result of onshoring activities and infrastructure spending initiatives in both
Our energy field stores are expected to continue to benefit from solid energy activity in the fourth quarter and into 2025. Our energy field store segment is also expected to continue to gain market share while maintaining a solid margin profile.
Investor Conference Call
The Company will be holding an Investor Conference Call on Thursday, November 7, 2024, at 9:00 a.m. ET to review its 2024 third quarter results. The dial-in telephone numbers for the call are 437-900-0527 (
A replay of the call will be available at 289-819-1450 (
Additional supplemental financial information is available in our investor conference call package located on our website at www.russelmetals.com.
Russel Metals is one of the largest metals distribution companies in
Certain statements contained in this press release constitute forward-looking statements or information within the meaning of applicable securities laws, including statements as to our future capital expenditures, our outlook, the availability of future financing and our ability to pay dividends. Forward-looking statements relate to future events or our future performance. All statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. Forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by us, inherently involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including the factors described below.
We are subject to a number of risks and uncertainties which could have a material adverse effect on our future profitability and financial position, including the risks and uncertainties listed below, which are important factors in our business and the metals distribution industry. Such risks and uncertainties include, but are not limited to: volatility in metal prices; cyclicality of the metals industry; future acquisitions; facilities modernization; volatility in the energy industry; product claims; significant competition; sources of supply and supply chain disruptions; manufacturers selling directly; material substitution; failure of our key computer-based systems; cybersecurity; credit risk; currency exchange risk; restrictive debt covenants; goodwill or long-term asset impairments; the unexpected loss of key individuals; decentralized operating structure; labour interruptions; laws and governmental regulations; litigious environment; environmental liabilities; climate change; carbon emissions; health and safety laws and regulations; geopolitical risk and common share risk.
While we believe that the expectations reflected in our forward-looking statements are reasonable, no assurance can be given that these expectations will prove to be correct, and our forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release and, except as required by law, we do not assume any obligation to update our forward-looking statements. Our actual results could differ materially from those anticipated in our forward-looking statements including as a result of the risk factors described above and under the heading "Risk" in our MD&A and under the heading "Risk Management and Risks Affecting Our Business" in our most recent Annual Information Form and as otherwise disclosed in our filings with securities regulatory authorities which are available on SEDAR+ at www.sedarplus.ca.
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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three Months Ended | Nine Months Ended | |||
(in millions of Canadian dollars, except per share data) | 2024 | 2023 | 2024 | 2023 |
Revenues | $ 1,089.4 | $ 1,109.5 | $ 3,222.0 | $ 3,485.8 |
Cost of materials | 874.5 | 885.1 | 2,543.9 | 2,725.7 |
Employee expenses | 105.7 | 96.7 | 294.6 | 303.0 |
Other operating expenses | 61.6 | 60.1 | 201.4 | 190.2 |
Gain on sale of investment in joint venture | - | (9.8) | - | (9.8) |
Earnings from joint venture | - | (1.9) | - | (17.3) |
Earnings before interest and | ||||
provision for income taxes | 47.6 | 79.3 | 182.1 | 294.0 |
Interest expense, net | 2.4 | 1.6 | 3.7 | 8.2 |
Earnings before provision for income taxes | 45.2 | 77.7 | 178.4 | 285.8 |
Provision for income taxes | 10.7 | 17.1 | 44.3 | 66.3 |
Net earnings for the period | $ 34.5 | $ 60.6 | $ 134.1 | $ 219.5 |
Basic and diluted earnings per common share | $ 0.59 | $ 0.99 | $ 2.26 | $ 3.55 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended | Nine Months Ended | |||
(in millions of Canadian dollars) | 2024 | 2023 | 2024 | 2023 |
Net earnings for the period | $ 34.5 | $ 60.6 | $ 134.1 | $ 219.5 |
Other comprehensive (loss) income | ||||
Items that may be reclassified to earnings | ||||
Unrealized foreign exchange (losses) gains on | ||||
translation of foreign operations | (13.5) | 18.5 | 18.2 | (1.2) |
Items that may not be reclassified to earnings | ||||
Actuarial (losses) gains on pension and similar | ||||
obligations, net of taxes | (0.6) | 6.7 | 3.3 | 8.0 |
Other comprehensive (loss) income | (14.1) | 25.2 | 21.5 | 6.8 |
Total comprehensive income | $ 20.4 | $ 85.8 | $ 155.6 | $ 226.3 |
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
(in millions of Canadian dollars) | September 30 | December 31 |
ASSETS | ||
Current | ||
Cash and cash equivalents | $ 222.3 | $ 629.2 |
Accounts receivable | 566.4 | 457.4 |
Inventories | 924.2 | 840.3 |
Prepaids and other | 24.2 | 26.2 |
Income taxes receivable | 11.6 | 8.2 |
1,748.7 | 1,961.3 | |
Property, Plant and Equipment | 408.8 | 339.9 |
Right-of-Use Assets | 149.5 | 100.0 |
Deferred Income Tax Assets | 0.9 | 1.2 |
Pension and Benefits | 45.9 | 43.6 |
Financial and Other Assets | 5.4 | 3.9 |
Goodwill and Intangibles | 124.8 | 120.2 |
Total Assets | $ 2,484.0 | $ 2,570.1 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current | ||
Accounts payable and accrued liabilities | $ 499.0 | $ 454.2 |
Short-term lease obligations | 20.4 | 15.7 |
Income taxes payable | 0.2 | 3.6 |
519.6 | 473.5 | |
Long-Term Debt | 149.1 | 297.2 |
Pensions and Benefits | 1.9 | 2.0 |
Deferred Income Tax Liabilities | 19.7 | 17.5 |
Long-term Lease Obligations | 155.9 | 109.6 |
Provisions and Other Non-Current Liabilities | 33.3 | 30.4 |
Total Liabilities | 879.5 | 930.2 |
Shareholders' Equity | ||
Common shares | 530.7 | 556.3 |
Retained earnings | 926.9 | 954.6 |
Contributed surplus | 10.0 | 10.3 |
Accumulated other comprehensive income | 136.9 | 118.7 |
Total Shareholders' Equity | 1,604.5 | 1,639.9 |
Total Liabilities and Shareholders' Equity | $ 2,484.0 | $ 2,570.1 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Three Months Ended | Nine Months Ended | |||
(in millions of Canadian dollars) | 2024 | 2023 | 2024 | 2023 |
Operating Activities | ||||
Net earnings for the period | $ 34.5 | $ 60.6 | $ 134.1 | $ 219.5 |
Depreciation and amortization | 19.8 | 16.3 | 55.1 | 49.4 |
Provision for income taxes | 10.7 | 17.1 | 44.3 | 66.3 |
Interest expense, net | 2.4 | 1.6 | 3.7 | 8.2 |
Gain on sale of property, plant and equipment | (0.2) | (0.1) | (0.6) | (0.6) |
Gain on sale of investment in joint venture | - | (9.8) | - | (9.8) |
Earnings from joint venture | - | (1.9) | - | (17.3) |
Difference between pension expense and amount funded | 0.8 | 0.5 | 2.1 | 1.3 |
Debt accretion, amortization and other | 0.2 | 0.3 | 1.9 | 0.9 |
Interest received (paid) net, | ||||
including interest on lease obligations | (1.6) | (1.3) | (3.7) | (7.3) |
Cash from operating activities before | ||||
non-cash working capital | 66.6 | 83.3 | 236.9 | 310.6 |
Changes in Non-Cash Working Capital Items | ||||
Accounts receivable | (0.3) | 29.1 | (37.4) | (58.8) |
Inventories | 48.1 | 71.5 | 36.9 | 72.5 |
Accounts payable and accrued liabilities | 56.6 | (51.8) | 44.3 | 32.1 |
Other | 2.5 | 9.5 | 2.7 | 18.5 |
Change in non-cash working capital | 106.9 | 58.3 | 46.5 | 64.3 |
Income tax paid, net | (10.8) | (27.1) | (49.6) | (62.4) |
Cash from operating activities | 162.7 | 114.5 | 233.8 | 312.5 |
Financing Activities | ||||
Issue of common shares | - | - | 1.6 | 11.8 |
Repurchase of common shares | (47.1) | (20.4) | (119.0) | (64.6) |
Dividends on common shares | (24.5) | (24.5) | (73.6) | (72.9) |
Repayment of long-term debt | - | - | (150.0) | - |
Deferred financing costs | (1.8) | - | (1.8) | - |
Lease obligations | (5.2) | (4.1) | (14.5) | (12.4) |
Cash used in financing activities | (78.6) | (49.0) | (357.3) | (138.1) |
Investing Activities | ||||
Purchase of property, plant and equipment | (21.0) | (15.1) | (69.0) | (44.7) |
Proceeds on sale of property, plant and equipment | 0.5 | 0.4 | 1.0 | 1.0 |
Proceeds on sale of joint venture | - | 60.0 | - | 60.0 |
Dividends received from joint venture | - | - | - | 13.7 |
Purchase of business | (222.9) | - | (222.9) | - |
Cash used in investing activities | (243.4) | 45.3 | (290.9) | 30.0 |
Effect of exchange rates on cash and cash equivalents | (4.6) | 8.1 | 7.5 | 1.6 |
(Decrease) Increase in cash and cash equivalents | (163.9) | 118.9 | (406.9) | 206.0 |
Cash and cash equivalents, beginning of the period | 386.2 | 450.1 | 629.2 | 363.0 |
Cash and cash equivalents, end of the period | $ 222.3 | $ 569.0 | $ 222.3 | $ 569.0 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
(in millions of Canadian dollars) | Common | Retained | Contributed | Accumulated | Total |
Balance, January 1, 2024 | $ 556.3 | $ 954.6 | $ 10.3 | $ 118.7 | |
Payment of dividends | - | (73.6) | - | - | (73.6) |
Net earnings for the period | - | 134.1 | - | - | 134.1 |
Other comprehensive income for the period | - | - | - | 21.5 | 21.5 |
Share options exercised | 1.9 | - | (0.3) | - | 1.6 |
Shares repurchased | (27.5) | (91.5) | - | - | (119.0) |
Transfer of net actuarial gains on defined benefit plans | - | 3.3 | - | (3.3) | - |
Balance, September 30, 2024 | $ 530.7 | $ 926.9 | $ 10.0 | $ 136.9 |
(in millions of Canadian dollars) | Common | Retained | Contributed | Accumulated | Total |
Balance, January 1, 2023 | $ 562.4 | $ 844.6 | $ 12.2 | $ 140.1 | |
Payment of dividends | - | (72.9) | - | - | (72.9) |
Net earnings for the period | - | 219.5 | - | - | 219.5 |
Other comprehensive loss for the period | - | - | - | 6.8 | 6.8 |
Share options exercised | 13.7 | - | (1.9) | - | 11.8 |
Shares repurchased | (16.2) | (48.4) | - | - | (64.6) |
Transfer of net actuarial gains on defined benefit plans | - | 8.0 | - | (8.0) | - |
Balance, September 30, 2023 | $ 559.9 | $ 950.8 | $ 10.3 | $ 138.9 |
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SOURCE Russel Metals Inc.
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