Russel Metals (RUS) Q4 2023 earnings summary

Executive summary

• Q4 revenue fell 8% QoQ to $1.019B amid seasonal volume softness and lower selling prices; gross margin rose to 21%, while EBITDA was $82M and EPS was $0.78.

• FY2023 revenue was $4,505.1M, EBITDA $425.6M and net earnings $266.7M, all below 2022; year-end net cash was $332M and liquidity was $1.029B.

Financial highlights

• Q4 revenue was $1,019M; gross margin was $217M (21%), EBITDA $82M, net income $47M and EPS $0.78.

• FY2023 revenue was $4,505.1M vs. $5,070.6M in 2022; EBITDA was $425.6M vs. $578.9M, net earnings $266.7M vs. $371.9M and EPS $4.33 vs. $5.91.

• FY2023 free cash flow was $320.6M; operating cash flow was $462M, including $146M from working capital for the year and $82M in Q4.

Outlook and guidance

• 2024 capital expenditures are expected to exceed $100M, versus $72.7M in 2023; the project pipeline exceeded $200M.

• Q1 2024 shipments were expected to improve from Q4 with seasonal increases in operating days and demand; weather may affect some regions.

• Near-term steel prices were expected to remain relatively stable; medium-term North American consumption was expected to grow with onshoring and infrastructure spending.

• Energy field stores were expected to benefit from solid 2024 activity, with investment initiatives supporting potential market-share gains.