Olympic Steel (ZEUS) Q3 2025 earnings summary

Executive summary

• Entered a definitive all-stock merger agreement with Ryerson, expected to close in Q1 2026, creating the second-largest metal service center in North America with legacy shareholders to own about 37% of the combined company.

• Third quarter 2025 marked by continued industry recession, falling shipments, margin compression, and manufacturing activity well below mid-cycle levels, but Specialty Metals and manufactured products segments showed resilience and led profitability.

• Combined company targets $6.5 billion in revenue and $120 million in synergies over two years, with one-third realized in year one.

• Combined company aims for enhanced customer solutions, operational efficiencies, and improved financial profile.

• Board to expand to 11 members, with leadership from both companies.

Financial highlights

• Q3 2025 net sales: $1.16 billion (Ryerson, down less than 1% sequentially) and $491 million (Olympic Steel, up 4.5% YoY); average selling prices rose 2.6% for Ryerson, but tons shipped fell 3.2%.

• Ryerson Q3 2025 net loss of $14.8 million ($0.46 per diluted share); Olympic Steel Q3 2025 net income of $2.2 million ($0.18 per share), down from $2.7 million in Q3 2024.

• Ryerson Q3 gross margin contracted by 70 basis points to 17.2%; Olympic Steel Q3 gross margin improved to 24.0% from 22.7% YoY.

• Ryerson adjusted EBITDA excluding LIFO was $40.3 million, down from $45 million in Q2; Olympic Steel adjusted EBITDA was $15.4 million, up from $13.0 million YoY.

• Ryerson ended Q3 with $500 million in total debt, $470 million in net debt, and $521 million in liquidity; Olympic Steel had $240.9 million in debt and $7.5 million in cash.

Outlook and guidance

• Q4 2025 volumes expected to soften by 5%-7% due to seasonality and persistent demand challenges; revenue guidance of $1.07-$1.11 billion.

• Gross margins to remain under pressure; forecasted adjusted EBITDA excluding LIFO of $33-$37 million and net loss per share of $0.28-$0.22.

• LIFO expense expected between $10-$14 million; net CapEx to finish the year within $50 million target.

• Management expects sufficient liquidity for working capital, capital expenditures, dividends, and acquisitions for at least the next 12 months.

• Optimism for future performance based on diversified business model and operational discipline, with merger expected to enhance competitiveness and growth.