Ryerson's Synergy Run-Rate Beats First-Year Target Early

The Tip Desk · November 9, 2026 · 4 min read

Adjusted EBITDA excluding LIFO was $115.0 million, above the $88 million to $92 million range, as Olympic Steel added $30.2 million of that measure.

Ryerson Holding Corporation (RYZ), a value-added processor and distributor of industrial metals, reported third-quarter revenue of $2.18 billion, above its prior guidance range, and net income of $32.0 million, or $0.61 a share, after a $15.5 million profit, or $0.30 a share, in the second quarter.

Adjusted EBITDA excluding LIFO was $115.0 million, or 5.3% of sales, versus $101.0 million, or 5.0%, in the second quarter. Olympic Steel contributed $602.1 million of revenue and $30.2 million of Adjusted EBITDA excluding LIFO, above the company’s $21 million to $23 million expectation for that measure. Same-store Adjusted EBITDA excluding LIFO was $84.8 million.

The sequential revenue gain of 8.6% followed a 28.1% sequential increase in the second quarter, the first full period after the February 13, 2026 merger. Total tons shipped were 814 thousand, up 1.2% sequentially. Average selling price was $2,675 a ton, up 7.2%. Excluding Olympic Steel, same-store revenue was $1.58 billion, up 9.3% sequentially, with tons up 1.8% to a highest quarterly level in more than five years and average selling prices up 7.3%.

Chief Executive Officer Eddie Lehner said daily shipment volumes and invoice counts defied normal industry seasonality, with AI infrastructure and power-generation investment elevating demand. President and Chief Operating Officer Rick Marabito said industry inventories were low and mill lead times extended.

Carbon steel net sales were $1.22 billion, up 11.5% sequentially, with average selling prices of $1,840 a ton. Aluminum net sales were $453 million and stainless steel net sales were $453 million. The company said carbon prices continued to rally at multi-year highs supported by trade policy, tight domestic supply, extended lead times, and low service-center inventories, while stainless and aluminum prices faced downward pressure.

Gross margin contracted 50 basis points to 17.2% from 17.7%, as higher material costs flowed through ahead of price adjustments for program customers. An inventory purchase-accounting charge to cost of materials sold was $4.0 million, down from $15.7 million in the second quarter. LIFO expense was $30.0 million. Excluding both LIFO and purchase-accounting adjustments, gross margin contracted 60 basis points to 18.7% from 19.3%.

Warehousing, delivery, selling, general and administrative expenses were $326.1 million, or 15.0% of sales, versus 16.0% in the second quarter. The company attributed the dollar increase to variable compensation and producer inflationary cost pressures.

Ryerson realized about $13 million of synergy benefits in the quarter, or about $52 million on an annualized run-rate basis, substantially exceeding its $40 million first-year target ahead of the February 2027 merger anniversary. One-time costs to achieve those synergies totaled $2.6 million through the third quarter. Management expects $14 million to $15 million of fourth-quarter synergy benefits, which would bring 2026 cumulative realization to about $33 million to $34 million. The company said it remains confident in a $120 million two-year annualized run-rate synergy target.

Cash used in operating activities was $18.2 million, versus a $5.6 million use in the second quarter, as net income was offset by higher working capital. Net debt rose to $965.6 million from $913.3 million. Global liquidity, cash plus revolving availability, increased to $865 million from $757 million at June 30. The company returned $13.6 million to stockholders, including $9.8 million in dividends and $3.8 million of share repurchases at an average $23.85 a share.

For the fourth quarter, Ryerson expects shipments to decline 6% to 8% sequentially, average selling prices to be flat to up 2%, and net sales of $1.96 billion to $2.04 billion. Net income is expected at $16 million to $20 million, or $0.30 to $0.38 a share, with LIFO expense of $28 million to $32 million. Adjusted EBITDA excluding LIFO is expected at $100 million to $104 million, including Olympic Steel’s expected $28 million to $30 million.