Metallus Inc. Q1 FY2025 earnings call

• Mike noted growing demand for domestic steel and Metallus is well-positioned, with order backlog up ~50% from prior year. Supports steel tariffs aligning with fair trade. • Safety: $5M investment planned in 2025, safety metrics improved in 2025, Iron Shield Competition with over 100 projects, Faircrest team awarded for safety innovation. • Business results: Shipments up 17% QoQ; melt utilization improved 9 pts QoQ. Industrial shipments up 33% QoQ, energy up 24%, automotive up 9%, aerospace/defense down due to start-up challenges. • Government funding: Received $71.5M as of end-April, with ~$32M remaining to be received in 2025-2026 for munitions production assets. • Share repurchases: Repurchased 395,000 shares in Q1, $96M remaining under authorization.

First quarter net sales totaled $280.5 million, a sequential increase of $40 million or 17%. Shipments increased by 17% compared with the fourth quarter, driven by higher industrial, automotive and energy shipments, partially offset by lower aerospace and defense shipments. Manufacturing costs declined by $12.5 million on a sequential basis. Adjusted EBITDA was $17.7 million in the first quarter, a sequential increase of $9.4 million. Net income in the first quarter was $1.3 million, or $0.03 per diluted share, while adjusted net income was $3.2 million, or $0.07 per diluted share.

• Anticipates second quarter adjusted EBITDA higher than first quarter. • Second quarter shipments expected to modestly increase, primarily due to higher aerospace/defense shipments. • Lead times extend to July for bar and tube products. • Spot price increases: SBQ up $60-$120/ton effective 4/28, seamless mechanical tubing up $100/ton effective 7/7. • Melt utilization expected to increase in Q2 for better manufacturing cost absorption.

• Macroeconomic uncertainty poses potential challenges. • Aerospace and defense customer start-up delays initially impacted shipments, though progress is being made. • Trade environment dynamics could introduce uncertainties, though tariffs are supported as aligning with fair trade.

Q: 1Q '25 shipments up about 17% sequentially, frame how much due to pull forward demand to get ahead of tariffs?

A: Very little, as most orders placed in Q4 and tariffs didn't take effect until April; mainly market share gains and distributors restocking.

Q: Within A&D, details on customer manufacturing start-up challenges?

A: New facility commissioning had difficulties, but progress being made; new inquiries and military applications ramping up, Vacuum Arc Remelt products have significant orders.

Q: Current production capacity given strengthening order book?

A: We have plenty of capacity.