Metallus(MTUS) - 2024 Q4 - Annual Report

Financial Performance - Net sales for the year ended December 31, 2024 were $1,084.0 million, a decrease of$ 278.4 million, or 20.4%, compared to 2023, driven by lower shipments and surcharges [164]. - Gross profit for the year ended December 31, 2024 decreased by $88.8 million, or 47.6%, due to lower shipments and higher manufacturing costs [167]. - Net income for 2024 was$ 1.3 million, a significant drop from $69.4 million in 2023, reflecting a decline of approximately 98.1% [275]. - Basic earnings per share decreased to$ 0.03 in 2024 from $1.58 in 2023, a decline of about 98.1% [275]. - Total assets decreased to$ 1,116.7 million in 2024 from $1,175.3 million in 2023, a reduction of approximately 5.0% [280]. - Total liabilities decreased to$ 426.2 million in 2024 from $443.7 million in 2023, a decline of about 4.0% [280]. - Shareholders' equity decreased to$ 690.5 million in 2024 from $731.6 million in 2023, reflecting a decrease of approximately 5.6% [280]. - Cash and cash equivalents decreased to$ 240.7 million in 2024 from $280.6 million in 2023, a decline of about 14.2% [280]. - The company reported a loss on extinguishment of debt of$ 9.4 million in 2024, compared to $11.4 million in 2023 [275]. - Other comprehensive loss for 2024 was$ 4.7 million, compared to a loss of $2.3 million in 2023, indicating an increase in losses [278]. Sales and Revenue - Total net sales for 2024 were$ 1,084.0 million, with base sales of $864.4 million after excluding surcharges [188]. - The company reported a total of 555.5 ship tons sold in 2024, down from 683.8 ship tons in 2023 [188]. - The net sales per ton for 2024 was$ 1,951, compared to $1,992 in 2023, indicating a decrease in pricing power [188]. - The Company's revenue from the industrial sector for the year ended December 31, 2024, was$ 390.5 million, down from $533.3 million in 2023 [328]. - The aerospace and defense sector generated$ 134.9 million in revenue for the year ended December 31, 2024, compared to $115.0 million in 2023 [328]. - Bar product sales decreased to$ 641.8 million in 2024 from $917.1 million in 2023, representing a decline of 30.0% [330]. Expenses and Costs - SG&A expenses for the year ended December 31, 2024 increased by$ 3.1 million, or 3.7%, primarily due to higher salary and benefits [170]. - The company reported stock-based compensation expense of $14.0 million in 2024, up from$ 11.5 million in 2023, reflecting increased employee compensation costs [286]. - Net cash provided by operating activities for 2024 was $40.3 million, a decrease from$ 125.3 million in 2023, primarily due to lower profitability and higher pension contributions [217]. - Net cash used by financing activities in 2024 was $68.9 million, compared to$ 51.9 million in 2023, mainly due to higher share repurchases and shares surrendered for taxes [219]. Capital and Investments - The Company invested $64.3 million in capital investments for improved safety and equipment automation [162]. - The company expects capital expenditures to be approximately$ 125 million in 2025, including about $90 million funded by the U.S. government [205]. - Capital expenditures for 2024 were$ 64.3 million, an increase from $51.6 million in 2023, indicating ongoing investment in production capabilities [286]. Liquidity and Debt - Total liquidity as of December 31, 2024 was$ 458.6 million, including cash and cash equivalents of $240.7 million [162]. - As of December 31, 2024, total liquidity available was$ 458.6 million, down from $539.4 million in 2023 [202]. - The company has a credit facility capacity of$ 400.0 million, which remains undrawn as of December 31, 2024 [191]. - The principal balance of Convertible Senior Notes due 2025 was $5.5 million as of December 31, 2024, after repurchases throughout the year [200]. - The company believes its cash balance and projected cash generated from operations will be sufficient to meet liquidity needs for at least the next twelve months [203]. - The company repurchased approximately 2.0 million common shares at a cost of$ 37.6 million, reducing diluted shares outstanding by 3.0 million shares [162]. Taxation - The provision for income taxes for the year ended December 31, 2024, was $3.3 million, a decrease of$ 23.7 million from $27.0 million in 2023, primarily due to lower pre-tax net income [183]. - The effective tax rate for 2024 was 72.2%, an increase of 44.2% compared to 28.0% in 2023 [183]. - As of December 31, 2024, the company had a net deferred tax liability of$ 14.3 million, down from $15.0 million in 2023 [346]. Pension and Benefits - A net loss of$ 10.3 million from the remeasurement of all pension and postretirement benefit plans was recognized for the year ended December 31, 2024 [178]. - Total pension contributions for 2025 are expected to be approximately $65 million, following contributions of$ 42.8 million in the twelve months ended December 31, 2024 [206]. - The Company's aggregate defined benefit pension and other postretirement benefit obligation was $617.2 million as of December 31, 2024, exceeding the fair value of plan assets of$ 446.0 million, resulting in an unfunded obligation of $171.2 million [260]. - For the year ended December 31, 2024, net periodic pension expense was$ 18.4 million, while postretirement benefit income was $4.0 million [240]. Company Changes and Governance - The Company changed its name to Metallus Inc. on February 26, 2024, reflecting its expertise in high-performance specialty metals [162]. - The Company has been audited by Ernst & Young LLP since 2012, with an unqualified opinion on its financial statements for the year ended December 31, 2024 [256]. - The Company adopted ASU 2023-07 for segment reporting, enhancing reportable segment disclosure requirements effective January 1, 2024 [323].