Company Overview - Metallus (NYSE: MTUS) is a leader in high-quality specialty metals, manufactured components, and supply chain solutions, with a focus on recycled scrap metal [3] - The company has been in the business of producing high-quality steel for over 100 years and serves various demanding applications in industrial, automotive, aerospace & defense, and energy end-markets [3] - Metallus employs approximately 1,850 people and reported sales of $1.1 billion in 2024 [3] Upcoming Financial Results - Metallus will release its fourth-quarter and full-year 2025 results on February 19, 2026, after the market closes on the New York Stock Exchange [1] - A conference call with the financial community is scheduled for February 20, 2026, at 9:00 a.m. ET, which will be accessible via live Internet broadcast [2] - A replay of the conference call will also be available on the company's investor website [2]

Core Insights - The focus is on identifying companies in the consumer products sector that exhibit strong brand recognition, solid financials, and growth potential [1] Group 1: Investment Focus - The investment strategy emphasizes a keen understanding of consumer trends and the ability to identify profitable opportunities within the sector [1]

Core Points - Metallus has reached a new tentative agreement for a four-year contract with the United Steelworkers Local 1123 after previous agreements were rejected [1][2] - The new contract aims to balance employee needs and company priorities, ensuring job stability and supporting future success [2] - The current labor contract has been extended for an additional 14 days until February 12, 2026, allowing time for the union to communicate with its members [2] Company Overview - Metallus (NYSE: MTUS) specializes in high-performance specialty metals, manufactured components, and supply chain solutions, primarily serving industrial, automotive, aerospace & defense, and energy markets [4] - The company employs approximately 1,850 people and reported sales of $1.1 billion in 2024 [4] - Metallus has over 100 years of experience in producing high-quality steel, including alloy steel bars and seamless mechanical tubing [4] Labor Relations - The contract covers around 1,200 bargaining employees at Metallus' Canton, Ohio operations [3] - The CEO of Metallus emphasized the importance of constructive cooperation among all parties to reach a beneficial solution for employees and the company [2]

Core Viewpoint - Metallus (NYSE: MTUS) announced that members of the United Steelworkers (USW) Local 1123 voted against ratifying a second tentative labor agreement reached on December 4, 2025, which was intended to provide competitive compensation and benefits while ensuring the company's long-term health [1][2]. Company Overview - Metallus is a leader in high-quality specialty metals, manufactured components, and supply chain solutions, with a focus on serving industrial, automotive, aerospace & defense, and energy markets [4]. - The company has been in the business of producing high-quality steel for over 100 years and employs approximately 1,850 people, reporting sales of $1.1 billion in 2024 [4]. Labor Agreement Details - The proposed labor agreement included historic wage increases, comprehensive healthcare coverage with minimal employee costs, and enhanced work-life benefits such as paid parental leave and improved retirement contributions [6]. - The current labor agreement has been extended until January 29, 2026, covering around 1,200 bargaining employees at the Canton, Ohio operations [3]. Management Response - The CEO of Metallus expressed disappointment over the vote outcome, emphasizing the company's commitment to negotiate in good faith and work towards a resolution that benefits both employees and the company's future [2].

Core Insights - Metallus has reached a new tentative agreement for a four-year contract with the United Steelworkers Local 1123 after the initial agreement was not ratified [1][2] - The new agreement aims to ensure competitive wages, solid benefits, and a safe working environment for approximately 1,200 bargaining employees at the Canton, Ohio operations [2] Company Overview - Metallus (NYSE: MTUS) specializes in high-performance specialty metals, manufactured components, and supply chain solutions, primarily serving industrial, automotive, aerospace & defense, and energy markets [3] - The company has been in the business of producing high-quality steel for over 100 years and employs around 1,850 people [3] - In 2024, Metallus reported sales of $1.1 billion, indicating a strong market presence [3]

Financial Data and Key Metrics Changes - In Q3 2025, net sales totaled $305.9 million, a sequential increase of $1.3 million, primarily driven by higher shipments in aerospace and defense and steady volume across automotive and industrial end markets [12] - Net income was $8.1 million, or $0.19 per diluted share, while adjusted net income was $12 million, or $0.28 per diluted share [12] - Adjusted EBITDA rose to $29 million, a sequential increase of 9%, driven by improved product mix and better fixed cost leverage [12][16] - Operating cash flow was $22 million, with a cash and cash equivalents balance of $191.5 million at the end of Q3 [13] Business Line Data and Key Metrics Changes - Aerospace and defense backlog increased approximately 80% year-over-year, contributing to a favorable product mix [6] - Industrial shipments decreased slightly on a sequential basis, while automotive shipments increased slightly [8][9] - Energy shipments remained at reduced volumes, but there is potential for increased customer share due to declining import levels and tightened tariff enforcement [9] Market Data and Key Metrics Changes - Customer feedback indicated that over 97% of respondents would recommend Metallus products, highlighting strong service and quality [5] - The company successfully sold to over two dozen new customers in 2025, indicating a shift towards domestic supply chain solutions [6] - The current lead times for SBQ bars extend to late January and February for seamless mechanical tubing products [7] Company Strategy and Development Direction - The company aims to secure approximately 70% of its long products business through annual agreements during commercial contract negotiations [6] - Metallus is focused on growing its participation in the vacuum arc remelt (VAR) steel product line and has executed a long-term supply agreement to strengthen its strategic position [10] - The company is committed to delivering value to shareholders by driving profitable growth and executing its capital allocation strategy [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future in the growing aerospace and defense market, with expectations to achieve a run rate of $250 million in annual A&D sales by mid-2026 [10] - The company anticipates lower shipments and slightly weaker product mix in Q4 due to normal year-end seasonality and potential global supply chain challenges [16] - Management remains committed to securing a fair labor agreement, with the current contract extended by 90 days to January 29, 2026 [11] Other Important Information - The company plans to spend $5 million to enhance safety management systems and critical equipment, with zero serious injuries reported in 2025 [4] - Capital expenditures for 2025 are approximately $120 million, slightly lower than previous guidance due to timing of cash payments [14] - The company repurchased 178,000 shares of common stock for $3 million in Q3, reflecting confidence in cash flow generation [15] Q&A Session Summary Question: Automotive business performance and domestic share - Management noted that automotive demand remained solid, with no disruptions from global supply chain challenges yet [20][22] Question: Labor negotiation costs incurred in Q3 - Management indicated that costs incurred were minimal, primarily related to negotiation activities [23] Question: Impact of tariffs on customers - Management stated that the tariff environment has been favorable, with increased inquiries from new customers seeking domestic supply chains [26] Question: Global supply chain challenges - Management highlighted concerns over chip supply and aluminum supply affecting automotive production, particularly with Ford [29] Question: Energy market volume rebound potential - Management indicated that oil prices and global demand will drive potential increases in energy market volumes [40] Question: Order book tracking relative to last year - Management expressed confidence in reaching the goal of being 70% booked for the upcoming year, with positive customer forecasts [43] Question: CapEx spend for next year - Management is in the planning phases for 2026 CapEx, with adjustments made due to timing issues [49] Question: New A&D awards and revenue recognition timing - Management expects significant growth in VAR VIM sales and munitions demand, with material revenue recognition anticipated in 2026 [52]

Financial Performance - Net sales reached $306 million in Q3 2025[13] - Net income was $8 million in Q3 2025[13] - Adjusted EBITDA improved to $29 million in Q3 2025, marking the fourth consecutive quarterly improvement[10, 13] - Adjusted EPS was $028 in Q3 2025[13] - Liquidity stood at $437 million[13] Operational Highlights - Aerospace & Defense backlog increased by approximately 80% compared to the previous year[10] - Melt utilization improved sequentially to 72%[10] - Capital expenditures totaled $284 million in Q3 2025, including $22 million for U S government-funded projects[10] - The company repurchased 02 million common shares for $3 million[10] End Market Performance - Base sales per ton in Aerospace & Defense reached $2,546 in Q3 2025[16] - Base sales per ton in Energy reached $1,644 in Q3 2025[16] Q4 2025 Outlook - Capital expenditures for Q4 2025 are projected to be approximately $45 million, primarily related to U S government-funded projects[21]

Core Insights - Metallus (NYSE: MTUS) is a leader in high-quality specialty metals and has released its third-quarter 2025 results on November 6, 2025 [1][3] - The company will host a conference call for the financial community on November 7, 2025, at 9:00 a.m. ET, which will be accessible via live Internet streaming [1] Company Overview - Metallus manufactures high-performance specialty metals from recycled scrap metal in Canton, OH, serving various end-markets including industrial, automotive, aerospace & defense, and energy [2] - The company is recognized as a premier U.S. producer of alloy steel bars (up to 16 inches in diameter), seamless mechanical tubing, and manufactured components [2] - Metallus has over 100 years of experience in producing high-quality steel and employs approximately 1,850 people, with sales reaching $1.1 billion in 2024 [2]

Company Performance - Metallus (MTUS) reported quarterly earnings of $0.28 per share, exceeding the Zacks Consensus Estimate of $0.17 per share, and showing a significant improvement from a loss of $0.09 per share a year ago, resulting in an earnings surprise of +64.71% [1] - The company achieved revenues of $305.9 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 6.14% and increasing from $227.2 million year-over-year [2] - Over the last four quarters, Metallus has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Metallus shares have increased approximately 27.3% since the beginning of the year, outperforming the S&P 500's gain of 15.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.16 on revenues of $270.5 million, while for the current fiscal year, it is $0.59 on revenues of $1.14 billion [7] Industry Outlook - The Steel - Specialty industry, to which Metallus belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Metallus may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance - Net sales for Q3 2025 were $305.9 million, an increase of $78.7 million, or 34.6% compared to Q3 2024, driven by higher shipments and favorable surcharges [84]. - For the nine months ended September 30, 2025, net sales were $891.0 million, an increase of $47.5 million, or 5.6% compared to the same period in 2024, primarily due to higher shipments and surcharges [87]. - Gross profit for Q3 2025 increased by $22.9 million, or 189.3% compared to Q3 2024, attributed to higher volume and favorable raw material spread [90]. - Base sales for the three months ended September 30, 2025, were $241.9 million, up from $182.0 million in the same period of 2024, reflecting a growth of approximately 32.8% [106]. - The company reported a total of 163.1 thousand ship tons for the three months ended September 30, 2025, compared to 119.9 thousand ship tons for the same period in 2024, indicating a 36.0% increase in shipment volume [106]. Expenses and Investments - SG&A expenses for Q3 2025 rose by $2.0 million, or 8.9%, compared to Q3 2024, mainly due to higher variable compensation and salary [97]. - Capital investments for Q3 2025 were $28.4 million, with a total of $73.7 million for the nine months ended September 30, 2025, focusing on safety and equipment automation [79]. - Capital expenditures for 2025 are projected to be approximately $120 million, including about $90 million funded by the U.S. government [114]. - Net cash used by investing activities for the nine months ended September 30, 2025, was $44.0 million, compared to $3.6 million in the same period of 2024, due to higher capital expenditures [122]. Liquidity and Cash Flow - Total liquidity as of September 30, 2025, was $436.9 million, including cash and cash equivalents of $191.5 million [81]. - The company’s net cash provided by operating activities for the nine months ended September 30, 2025, was $17.9 million, down from $26.4 million in the same period of 2024, primarily due to increased working capital needs [121]. - Total liquidity as of September 30, 2025, was $436.9 million, slightly down from $458.6 million as of December 31, 2024 [112]. - The company expects to meet its working capital needs and other liquidity requirements for at least the next twelve months based on current cash balances and projected cash flows [113]. Share Repurchase and Taxation - The company repurchased 0.2 million and 0.9 million common shares for $3.0 million and $11.9 million in Q3 and the nine months ended September 30, 2025, respectively [81]. - The company repurchased approximately 0.9 million common shares at an aggregate cost of $11.9 million during the nine months ended September 30, 2025, with an average repurchase price of $14.31 per share [118]. - The effective tax rate for Q3 2025 was 25.7%, up from 16.9% in Q3 2024, primarily due to being in a taxable income position [100]. Government Funding and Support - The company received $10.0 million and $28.0 million from the U.S. government in Q3 and the nine months ended September 30, 2025, respectively, as part of a $99.75 million funding agreement [79]. Market and Economic Conditions - The company is closely monitoring trade developments, including tariffs on steel imports, which are expected to positively impact demand for domestic products [81]. - The company is monitoring the impacts of global economic conditions, including potential slowdowns and political risks in regions where it operates [129]. - The company emphasizes the uncertainty of future results due to various factors, including customer demand fluctuations and economic conditions [126]. - The company is cautious about the potential impacts of pandemics and health issues on its operations [129]. Strategic Focus and Goals - The company is focused on achieving its 2030 environmental goals, which may be impacted by changes in regulations and technology adoption [129]. - The company is focused on improving profitability through strategic actions and initiatives [126]. - The company is investing in equipment to support the U.S. Army's munitions production, contingent on timely funding and successful installation [129]. - The company is assessing the availability of financing and interest rates, which could affect its capital-raising capabilities [129]. - The company faces competitive pressures from both domestic and foreign competitors, including price competition and new product introductions [129]. - The company is committed to maintaining appropriate relations with unions to avoid business disruptions [126].