Ryerson Holding Corp (RYZ)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context indicates otherwise, Ryerson Holding Corporation ("Ryerson Holding") and its subsidiary companies are collectively referred to as “Ryerson,” “we,” “us,” “our,” or the “Company.”

This Quarterly Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements can be identified by the use of forward-looking terminology such as “objectives,” “goals,” “preliminary,” “range,” “believes,” “expects,” “may,” “estimates,” “will,” “should,” “plans,” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those anticipated or implied in the forward-looking statements as a result of various factors. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth under “Special Note Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed on February 23, 2026 and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Industry and Operating Trends” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we caution you not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events.

The contents herein are provided for general information purposes only and do not constitute an offer to sell or purchase, or a solicitation of an offer to purchase, any security (“Security”) of Ryerson Holding or its affiliates in any jurisdiction. Ryerson does not intend to solicit and is not soliciting, any action with respect to any Security or any other contractual relationship with Ryerson. Nothing in this Form 10-Q, individually or taken in the aggregate, constitutes an offer of securities for sale or purchase, or a solicitation of an offer to purchase, any Security in the United States, or to US persons, or in any other jurisdiction in which such an offer or solicitation is unlawful.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand our results of operations and financial condition as viewed by management. The MD&A should be read in conjunction with our Condensed Consolidated Financial Statements and related Notes thereto in Item 1, “Financial Statements” in this Quarterly Report on Form 10-Q and our Consolidated Financial Statements and related Notes thereto for the year ended December 31, 2025, in our Annual Report on Form 10-K filed on February 23, 2026.

Olympic Steel Acquisition

On February 13, 2026 (the “Closing Date”),the Company completed the transactions contemplated by the Agreement and Plan of Merger, (the “Merger Agreement”), dated as of October 28, 2025, by and among Ryerson Holding, Crimson MS Corp., an Ohio corporation and a direct wholly owned subsidiary of Ryerson Holding (“Merger Sub”), and Olympic Steel, Inc. ("Olympic Steel"). On the Closing Date, pursuant to the Merger Agreement, Merger Sub merged with and into Olympic Steel in accordance with Ohio law (the “Olympic Steel Merger”). At the effective time of the Olympic Steel Merger, each issued and outstanding share of common stock of Olympic Steel, without par per share (the “Olympic Common Stock”) (other than certain excluded shares), was converted into the right to receive 1.7105 shares of Ryerson Holding’s common stock, rounded down to the nearest whole share, and cash in lieu of fractional shares. Upon the completion of the Olympic Steel Merger, Olympic Steel, as the surviving corporation, became a wholly owned subsidiary of Ryerson Holding. As a result of the Olympic Steel Merger, Ryerson Holding issued approximately 19.5 million shares of its common stock to former holders of Olympic Common Stock.

Olympic Steel is a metals service center focused on the direct sale and value-added processing of carbon and coated sheet, plate, and coil products; stainless steel sheet, plate, bar, and coil; aluminum sheet, plate, and coil; pipe, tube, bar, valves and fittings, tin plate, and metal-intensive end-use products. The combination of the two companies enhances Ryerson's presence as one of North America's largest metals service centers, bringing Olympic Steel's complementary footprint, capabilities, and product offering into Ryerson's intelligently interconnected network of value-added service centers. Together, functioning as Ryerson Holding Corporation, the combined entity is expected to generate approximately $120 million in annual synergies by the beginning of 2028 through procurement scale, efficiency gains, commercial enhancement, and network optimization. Please refer to Note 6: Acquisitions in Part I, Item I - Notes to Condensed Consolidated Financial Statements, for further information on the Olympic Steel Merger.

Ryerson Holding is the acquirer of Olympic Steel under U.S. generally accepted accounting principles (“GAAP”), and as a result, our Condensed Consolidated Financial Statements for periods prior to the Closing Date do not include the results of operations, financial position, or cash flows of Olympic Steel. The results of operations of Olympic Steel are included in our Condensed Consolidated Financial Statements only from the Closing Date forward. Accordingly, our results of operations, financial condition, and cash flows after the Closing Date are not comparable to prior periods due to the inclusion of Olympic Steels’s results from the Closing Date. Throughout this document, where relevant, we identify the impact of Olympic Steel and separately provide "same store" information, which excludes Olympic Steel, to provide investors with additional insight into the operating performance of the legacy Ryerson business. Readers should consider both reported results and same-store results when evaluating period-over-period trends.

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Olympic Steel contributed significantly to our reported results during the periods presented following the Closing Date. For further information, including purchase accounting impacts, please refer to Note 6: Acquisitions and Note 10: Segment Information in Part I, Item I - Notes to Condensed Consolidated Financial Statements.

Industry and Operating Trends

We are a metals service center providing value-added processing and distribution of industrial metals with operations in the United States, Canada, Mexico, and China. We purchase large quantities of metal products from primary producers and sell these materials in smaller quantities to a wide variety of metals-consuming industries. We carry a full line of approximately 75,000 products in stainless steel, aluminum, carbon steel, and alloy steels and a limited line of nickel and red metals in various shapes and forms. In addition to our metals products, we offer numerous value-added processing and fabrication services, and in 2025 nearly 80% of the metals products we sold were processed by us by bending, beveling, blanking, blasting, burning, cutting-to-length, drilling, flattening, forming, grinding, laser cutting, machining, notching, painting, polishing, punching, rolling, sawing, shearing, slitting, stamping, tapping, threading, welding, or other techniques to process materials to a specified thickness, length, width, shape, and surface quality pursuant to specific customer orders. We also offer metal-intensive end-use products.

Similar to other metals service centers, we maintain substantial inventories of metals to accommodate the short lead times and just-in-time delivery requirements of our customers. Accordingly, we purchase metals to maintain our inventory at levels that we believe to be appropriate to satisfy the anticipated needs of our customers based upon customer forecasts, historic buying practices, supply agreements with customers, mill lead times, and market conditions. Our commitments to purchase metals are generally at prevailing market prices in effect at the time we place our orders. At the request of our customers, we may enter into swaps in order to mitigate our customers’ risk of volatility in the price of metals, as well as metal hedges to mitigate our own risk of volatility in the price of metals. We have no long-term, fixed-price metals purchase contracts. When metals prices decline, customer demands for lower prices and our competitors’ responses to those demands could result in lower sale prices and, consequently, lower gross profits and earnings as we sell existing metals inventory. When metals prices increase, competitive conditions will influence how much of the price increase we may pass on to our customers. Changes in average selling prices are primarily driven by commodity metals prices, which impact Ryerson’s selling prices over the subsequent three to six-month period.

The metals service center industry is cyclical, volatile in demand and pricing, and difficult to predict. In the second quarter of 2026, Ryerson’s average selling prices increased by 4.5% while shipments increased by 22.6%, or 4.0% excluding Olympic Steel ("same-store"), compared to the first quarter of 2026. Average selling price increases were supported by U.S. industrial metals prices reaching multi-year highs during the quarter as carbon pricing was driven by tight domestic supply, extended lead times, cyclical momentum, and restocking activity. Aluminum prices and Midwest Premiums also rose meaningfully during the quarter, largely due to supply disruptions in the Middle East, while nickel prices remained volatile in response to Indonesian quotas.

Increases in second quarter year-over-year North American same-store shipments were supported by relative strength in nearly all of our end-markets, led by strongest growth in our fabrication and welding sector, followed by growth in our machinery and equipment, machine shop, climate, and heavy equipment sectors. The only end-market that offset this year-over-year growth was our commercial transportation sector, however, we did experience improved shipment volume from commercial transportation on a sequential quarter-over quarter-basis.

Improved demand conditions in the first six months of 2026 were supported by data points from the Institute for Supply Management’s Purchasing Managers’ Index (“PMI”), a key steel industry economic indicator. Monthly readings during the second quarter continued to be over the growth threshold of 50, establishing a six-month streak of expansionary activity. This growth trend contrasts the contractionary trend of the previous three years, during which readings were below 50 for nearly each of those 36 months.

According to the Metal Service Center Institute ("MSCI"), North American service center volumes increased by 2.9% in the first half of 2026 compared to the first half of 2025, supported by improved manufacturing demand. Ryerson's North American same-store volumes, by comparison, increased by 5.8% in the same periods, implying market share gains with particular relative strength in carbon products.

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First Six Months 2026 vs. First Six Months 2025 Performance, Total Company

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with the audited Consolidated Financial Statements of Ryerson Holding Corporation and Subsidiaries and the Notes thereto in Item 8. “Financial Statements and Supplementary Data.” This discussion contains forward-looking statements that involve risks and uncertainties. See the section entitled “Special Note Regarding Forward-Looking Statements.” Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of certain factors, including those discussed in Item 1A. “Risk Factors” and elsewhere in this Form 10-K.

This section of this Form 10-K generally discusses 2025 and 2024 items and year-over-year comparisons between 2025 and 2024. Discussions of 2023 items and year-over-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Overview

Business

Ryerson Holding Corporation (“Ryerson Holding”), a Delaware corporation, is the parent company of Joseph T. Ryerson & Son, Inc. (“JT Ryerson”), a Delaware corporation. As of December 31, 2025 affiliates of Platinum Equity, LLC (“Platinum”) own approximately 3,924,478 shares of our common stock, which is approximately 12.2% of our issued and outstanding common stock.

We are a leading value-added processor and distributor of industrial metals with operations in the United States ("U.S.") through JT Ryerson and other U.S. subsidiaries, in Canada through our indirect wholly-owned subsidiary Ryerson Canada, Inc., a Canadian corporation (“Ryerson Canada”), and in Mexico through our indirect wholly-owned subsidiary Ryerson Metals de Mexico, S. de R.L. de C.V., a Mexican corporation (“Ryerson Mexico”). In addition to our North American operations, we conduct metal processing and distribution operations in China through an indirect wholly-owned subsidiary, Ryerson China Limited, a Chinese limited liability company (“Ryerson China”). Unless the context indicates otherwise, Ryerson Holding, JT Ryerson, Ryerson Canada, Ryerson Mexico, and Ryerson China together with their subsidiaries, are collectively referred to herein as “Ryerson,” “we,” “us,” “our,” or the “Company.”

Industry and Operating Trends

We are a metals service center providing value-added processing and distribution of industrial metals with operations in the U.S., Canada, Mexico, and China. We purchase large quantities of metal products from primary producers and sell these materials in smaller quantities to a wide variety of metals-consuming industries. We carry a full line of approximately 75,000 products in stainless steel, aluminum, carbon steel, and alloy steels and a limited line of nickel and red metals in various shapes and forms. In addition to our metals products, we offer numerous value-added processing and fabrication services, and nearly 80% of the metals products we sell are processed by us by bending, beveling, blanking, blasting, burning, cutting-to-length, drilling, flattening, forming, grinding, laser cutting, machining, notching, painting, polishing, punching, rolling, sawing, shearing, slitting, stamping, tapping, threading, welding, or other techniques to process materials to a specified thickness, length, width, shape, and surface quality pursuant to specific customer orders.

Similar to other metals service centers, we maintain substantial inventories of metals to accommodate the short lead times and just-in-time delivery requirements of our customers. Accordingly, we purchase metals to maintain our inventory at levels that we believe to be appropriate to satisfy the anticipated needs of our customers based upon customer forecasts, historic buying practices, supply agreements with customers, mill lead times, and market conditions. Our commitments to purchase metals are generally at prevailing market prices in effect at the time we place our orders. At the request of our customers, we have some fixed price sales contracts. We have entered into swaps in order to mitigate our risk of volatility in the price of metals related to these contracts and we have entered into metals hedges to mitigate our own risk of volatility in the price of metals. We have no long-term, fixed-price metals purchase contracts. When metals prices decline, customer demands for lower prices and our competitors’ responses to those demands could result in lower sale prices and, consequently, lower gross profits and earnings as we sell existing metals inventory. When metals prices increase, competitive conditions will influence how much of the price increase we may pass on to our customers.

The metals service center industry is cyclical and volatile in both demand and pricing, and difficult to predict. In 2025, Ryerson experienced marginal volume growth of 0.5% and an average selling price decrease of 1.1% compared to 2024 as the period was characterized by subdued downstream demand and volatile pricing, impacted by tariff trade policy. Changes in average selling prices are primarily driven by commodity metals prices, which impact Ryerson’s selling prices over the subsequent three to six-month period.

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In 2025, indicators for key steel industry end markets reported contraction in industrial activity momentum but output improvement relative to the previous year. This is evidenced by the Institute for Supply Management’s Purchasing Managers’ Index (“PMI”), which indicated that the majority of surveyed purchasing managers reported a decline in activity in nearly every month of 2025 with the exception of January and February, as marked by readings below the growth threshold of 50. January 2026 reversed the trend with a reading above the growth threshold of 52.6. On the other hand, U.S. Industrial Production, which reports year-over-year industrial sector business output, reported growth for each month of 2025, indicating that while PMI would suggest that 2025 was a year of widespread contractionary momentum, there was resiliency in the overall output relative to the previous year.

According to the Metal Service Center Institute, North American service center volumes decreased by 1.5% in 2025 compared to 2024. Also on a North American basis, Ryerson's volumes declined by 0.4% over the same period, implying that the Company gained market share during the year. Reflecting on volume performance by end-market, Ryerson experienced year-over-year declines in Commercial Transportation, Climate, Heavy Equipment, and Power sectors. These declines were partially offset by demand growth in Fabrication & Welding, Machine Shop, and Machinery & Equipment sectors.

Olympic Steel Acquisition

On February 13, 2026 (the “Closing Date”), the Company completed the transactions contemplated by the Agreement and Plan of Merger, (the “Merger Agreement”), dated as of October 28, 2025, by and among Ryerson Holding, Crimson MS Corp., an Ohio corporation and a direct wholly owned subsidiary of Ryerson Holding (“Merger Sub”), and Olympic Steel, Inc. ("Olympic Steel"). On the Closing Date, pursuant to the Merger Agreement, Merger Sub merged with and into Olympic Steel in accordance with Ohio law. At the effective time of the Olympic Steel Merger, each issued and outstanding share of common stock of Olympic Steel, without par per share (the “Olympic Common Stock”) (other than certain excluded shares), was converted into the right to receive 1.7105 shares the Ryerson Holding’s common stock, rounded down to the nearest whole share, and cash in lieu of fractional shares. Upon the completion of the Olympic Steel Merger, Olympic Steel, as the surviving corporation, became a wholly owned subsidiary of Ryerson Holding. As a result of the Olympic Steel Merger, Ryerson Holding issued approximately 19.5 million shares of its common stock to former holders of Olympic Common Stock

Olympic Steel is a metals service center focused on the direct sale and value-added processing of carbon and coated sheet, plate, and coil products; stainless steel sheet, plate, bar, and coil; aluminum sheet, plate, and coil; pipe, tube, bar, valves and fittings, tin plate, and metal-intensive end-use products. The combination of the two companies enhances Ryerson's presence as North America's second largest metals service center, bringing Olympic Steel's complementary footprint, capabilities, and product offering into Ryerson's intelligently interconnected network of value-added service centers. Together, functioning as Ryerson Holding Corporation, the combined entity is expected to generate approximately $120 million in annual synergies by the beginning of 2028 through procurement scale, efficiency gains, commercial enhancement, and network optimization. Please refer to Note 19 — “Subsequent Events” of Part II, Item 8 "Financial Statements and Supplementary Data" for further information on the Olympic Steel merger.

Ryerson’s 2025 Strategy Achievements

Ryerson’s market strategy focuses on providing excellent customer experiences consistently with speed at scale. Our culture is based on our trademarked “say yes, figure it out” mantra. We strive to grow our volume and sustainably expand margins by increasing our fabrication business, transactional sales, and improving our speed through tools and analytics. Ryerson’s financial strategy includes a focus on generating cash from operating activities and continuously improving a “through the cycle” operating model to maintain a strong balance sheet, re-invest in the growth of the business, and generate returns to stockholders.

In 2025, coming off of a historically high three-year investment cycle, the Company focused on operationalizing and optimizing major capital investment projects at its service centers in Shelbyville, KY, Norcross, GA, Dallas, TX, and Los Angeles, CA. The primary objective of these investments was to improve Ryerson's operating model and the customer experience. The expansion of our Shelbyville service center, for example, was an investment in our bright metals flat roll processing capabilities to support transactional market share growth at a lower cost to service with improved service levels. Likewise, the investments made in Norcross, Dallas, and Los Angeles included processing equipment, which we expect will improve our ability to provide our customers with higher value-added products and thereby improve our gross margins.

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2025 Performance

Demand conditions in 2025 continued to be subdued while pricing was volatile, impacted by tariff trade policy. Nonetheless, we believe that the investments that we have made in our service capabilities and operating model will enable us to provide better experiences for our customers and, in turn, enable greater value generation for our stockholders.

These key metrics illustrate Ryerson’s financial performance for the full year 2025 compared to 2024:

A reconciliation of diluted earnings (loss) per share ("EPS") to adjusted diluted EPS is provided below.

Commodity price volatility and subdued downstream demand in 2025 contributed to lower average selling prices and modestly higher volumes year-over-year. Compared to 2024, average selling prices decreased by 1.1% and tons shipped increased by 0.5%, resul

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