Company Announcements

(1)

Please see discussion of non-GAAP financial measures in this news release.

(2)

The company defines total liquidity as available borrowing capacity plus cash and cash equivalents.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended
June 30,

Six Months Ended
June 30,

(in millions, except per share data) (Unaudited)

2025

2024

2025

2024

Net sales

$

304.6

$

294.7

$

585.1

$

616.3

Cost of products sold

272.4

270.6

531.0

541.6

Gross Profit

32.2

24.1

54.1

74.7

Selling, general & administrative expenses (SG&A)

22.9

20.7

47.2

44.8

Loss (gain) on sale or disposal of assets, net

—

0.2

(1.5)

0.3

Loss on extinguishment of debt

3.6

—

3.6

—

Other (income) expense, net

(1.6)

(0.5)

(3.9)

(1.3)

Interest (income) expense, net

(1.3)

(2.4)

(2.8)

(5.2)

Income (Loss) Before Income Taxes

8.6

6.1

11.5

36.1

Provision (benefit) for income taxes

4.9

1.5

6.5

7.5

Net Income (Loss)

$

3.7

$

4.6

$

5.0

$

28.6

Net Income (Loss) per Common Share:

Basic earnings (loss) per share

$

0.09

$

0.10

$

0.12

$

0.65

Diluted earnings (loss) per share^{(1, 2)}

$

0.09

$

0.10

$

0.11

$

0.62

Weighted average shares outstanding - basic

42.0

43.8

42.1

43.7

Weighted average shares outstanding - diluted^{(1, 2)}

43.3

46.6

43.5

46.6

⁽¹⁾ For the three and six months ended June 30, 2025, common share equivalents for shares issuable upon the conversion of outstanding convertible notes (0.6 million shares and 0.6 million shares, respectively) and common share equivalents for shares issuable for equity-based awards (0.7 million shares and 0.8 million shares, respectively) were included in the computation of diluted earnings (loss) per share, as they were considered dilutive. For the convertible notes, the company utilizes the if-converted method to calculate diluted earnings (loss) per share. Based on the timing of the convertible note settlement during the three and six months ended June 30, 2025, there were no adjustments to net income for the add back of convertible notes interest expense (including amortization of convertible notes issuance costs).

⁽²⁾ For the three and six months ended June 30, 2024, common share equivalents for shares issuable upon the conversion of outstanding convertible notes (1.7 million shares and 1.7 million shares, respectively) and common share equivalents for shares issuable for equity-based awards (1.1 million shares and 1.2 million shares, respectively) were included in the computation of diluted earnings (loss) per share, as they were considered dilutive. For the convertible notes, the company utilizes the if-converted method to calculate diluted earnings (loss) per share. As such, net income was adjusted to add back $0.2 million and $0.4 million for the three and six months ended June 30, 2024, respectively, of convertible notes interest expense (including amortization of convertible notes issuance costs).

CONSOLIDATED BALANCE SHEETS

(Dollars in millions) (Unaudited)

June 30,
2025

December 31,
2024

ASSETS

Cash and cash equivalents

$

190.8

$

240.7

Accounts receivable, net of allowances

129.6

90.8

Inventories, net

223.4

219.8

Deferred charges and prepaid expenses

14.9

29.9

Other current assets

1.8

6.1

Total Current Assets

560.5

587.3

Property, plant and equipment, net

523.1

507.3

Operating lease right-of-use assets

16.0

11.7

Pension assets

7.8

5.5

Intangible assets, net

3.2

3.4

Other non-current assets

1.4

1.5

Total Assets

$

1,112.0

$

1,116.7

LIABILITIES

Accounts payable

$

143.7

$

119.2

Salaries, wages and benefits

25.0

16.8

Accrued pension and postretirement costs

14.9

66.5

Current operating lease liabilities

5.1

4.8

Current convertible notes, net

—

5.4

Government funding liabilities

73.1

53.5

Other current liabilities

14.4

15.3

Total Current Liabilities

276.2

281.5

Credit agreement

—

—

Non-current operating lease liabilities

10.9

6.9

Accrued pension and postretirement costs

108.0

110.2

Deferred income taxes

12.6

14.3

Other non-current liabilities

14.3

13.3

Total Liabilities

422.0

426.2

SHAREHOLDERS' EQUITY

Additional paid-in capital

842.7

843.9

Retained deficit

(47.4)

(52.4)

Treasury shares

(111.9)

(108.7)

Accumulated other comprehensive income (loss)

6.6

7.7

Total Shareholders' Equity

690.0

690.5

Total Liabilities and Shareholders' Equity

$

1,112.0

$

1,116.7

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions) (Unaudited)

Three Months Ended
June 30,

Six Months Ended
June 30,

2025

2024

2025

2024

CASH PROVIDED (USED)

Operating Activities

Net income (loss)

$

3.7

$

4.6

$

5.0

$

28.6

Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:

Depreciation and amortization

14.1

13.4

27.8

26.8

Amortization of deferred financing fees

0.1

0.1

0.2

0.2

Loss on extinguishment of debt

3.6

—

3.6

—

Loss (gain) on sale or disposal of assets, net

—

0.2

(1.5)

0.3

Stock-based compensation expense

3.7

3.5

7.1

7.0

Pension and postretirement expense (benefit), net

1.0

2.1

1.8

4.1

Changes in operating assets and liabilities:

Accounts receivable, net

(3.7)

12.6

(38.5)

5.9

Inventories, net

7.6

33.0

(3.2)

23.7

Accounts payable

(8.1)

(30.7)

25.9

(14.2)

Other accrued expenses

5.3

(17.3)

8.2

(21.5)

Deferred charges and prepaid expenses

12.5

(5.9)

15.0

(4.6)

Pension and postretirement contributions and payments

(6.6)

(6.2)

(59.6)

(34.6)

Other, net

1.6

(1.1)

4.1

20.0

Net Cash Provided (Used) by Operating Activities

34.8

8.3

(4.1)

41.7

Investing Activities

Capital expenditures

(17.8)

(14.1)

(45.3)

(31.5)

Proceeds from government funding

5.1

10.0

18.0

10.0

Proceeds from disposals of property, plant and equipment

—

—

1.7

—

Net Cash Provided (Used) by Investing Activities

(12.7)

(4.1)

(25.6)

(21.5)

Financing Activities

Purchase of treasury shares

(3.3)

(9.6)

(8.9)

(14.0)

Proceeds from exercise of stock options

—

0.2

—

1.3

Shares surrendered for employee taxes on stock compensation

—

—

(2.6)

(15.4)

Repayments on convertible notes

(9.1)

—

(9.1)

—

Net Cash Provided (Used) by Financing Activities

(12.4)

(9.4)

(20.6)

(28.1)

Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

9.7

(5.2)

(50.3)

(7.9)

Cash, cash equivalents, and restricted cash at beginning of period

181.9

278.6

241.9

281.3

Cash, Cash Equivalents, and Restricted Cash at End of Period

$

191.6

$

273.4

$

191.6

$

273.4

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows:

Cash and cash equivalents

$

190.8

$

272.8

$

190.8

$

272.8

Restricted cash reported in other current assets

0.8

0.6

0.8

0.6

Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows

$

191.6

$

273.4

$

191.6

$

273.4

Three Months Ended
June 30,

Six Months Ended
June 30,

(Dollars in millions) (Unaudited)

2025

2024

2025

2024

Net Cash Provided (Used) by Operating Activities

$

34.8

$

8.3

$

(4.1)

$

41.7

Less: Capital expenditures⁽¹⁾

(2.5)

(14.1)

(16.1)

(31.5)

Free Cash Flow⁽²⁾

$

32.3

$

(5.8)

$

(20.2)

$

10.2

⁽¹⁾ On February 27, 2024, the Company entered into an agreement for up to $99.75 million in funding from the United States Army. In the three and six months ended June 30, 2025, funding proceeds of $5.1 million and $18.0 million were received and the related capital spending for the project of $15.3 million and $29.2 million is excluded from Free Cash Flow.

⁽²⁾ Free Cash Flow is defined as net cash provided (used) by operating activities less capital expenditures.

Three months ended
June 30, 2025

Three months ended
June 30, 2024

Three months ended
March 31, 2025

(Dollars in millions) (Unaudited)

Net
income
(loss)

Diluted
earnings
(loss) per
share⁽¹⁾

Net
income
(loss)

Diluted
earnings
(loss) per
share⁽¹⁰⁾

Net
income
(loss)

Diluted
earnings
(loss) per
share⁽¹¹⁾

As reported

$

3.7

$

0.09

$

4.6

$

0.10

$

1.3

$

0.03

Adjustments:⁽²⁾

Loss (gain) on sale or disposal of assets, net

—

—

0.2

—

(1.5)

(0.03)

Loss on extinguishment of debt

3.6

0.08

—

—

—

—

Loss (gain) from remeasurement of benefit plans, net

—

—

1.0

0.02

—

—

Sales and use tax refund

—

—

—

—

(0.8)

(0.02)

Business transformation costs⁽³⁾

—

—

0.3

0.01

—

—

IT transformation costs⁽⁴⁾

1.0

0.02

1.2

0.03

0.9

0.02

Manufacturing optimization costs⁽⁵⁾

0.2

—

—

—

—

—

Rebranding costs⁽⁶⁾

—

—

0.1

—

0.1

—

Amortization of cloud-computing costs⁽⁷⁾

0.3

0.01

—

—

0.3

—

Salaried pension plan surplus asset distribution⁽⁸⁾

—

—

—

—

3.6

0.08

Tax effect on above adjustments⁽⁹⁾

(0.4)

(0.01)

(0.7)

(0.01)

(0.7)

(0.01)

As adjusted

$

8.4

$

0.20

$

6.7

$

0.15

$

3.2

$

0.07

⁽¹⁾ For the three months ended June 30, 2025 convertible notes (0.6 million shares) and common share equivalents for shares issuable for equity-based awards (0.7 million shares) were included in the computation of as reported and as adjusted diluted earnings (loss) per share, as they were considered dilutive. The total diluted weighted average shares outstanding for the three months ended June 30, 2025 was 43.3 million shares. For the convertible notes, the company utilizes the if-converted method to calculate diluted earnings (loss) per share. Based on the timing of the convertible note settlement during the three months ended June 30, 2025, there were no adjustments to net income for the add back of convertible notes interest expense (including amortization of convertible notes issuance costs).

⁽²⁾ Adjusted net income (loss) and adjusted diluted earnings (loss) per share are defined as net income (loss) and diluted earnings (loss) per share, respectively, excluding, as applicable, adjustments listed in the foregoing table.

⁽³⁾ Business transformation costs consist of professional service fees associated with the evaluation of certain strategic opportunities, with a focus on targeted growth to diversify the company's end market and product portfolio through acquisitions.

⁽⁴⁾ The company is undergoing a multi-year IT transformation initiative intended to streamline and modernize legacy IT systems while also reducing operating costs, increasing information security and positioning us to take advantage of market opportunities. IT transformation costs were primarily related to professional service fees not eligible for capitalization and are primarily related to project planning and third-party implementation services.

⁽⁵⁾ Third party professional fees related to process optimization efforts and improving manufacturing efficiency within targeted facilities.

⁽⁶⁾  Rebranding costs consist primarily of professional service fees associated with the company's name change to Metallus Inc., announced during the first quarter of 2024.

⁽⁷⁾ Amortization of cloud computing software costs consists of expense recognized in Selling, General, and Administrative expense resulting from amortization of capitalized implementation costs for cloud computing IT systems. This expense is not included in depreciation and amortization.

⁽⁸⁾ Following the completion of the salaried pension plan annuitization in May 2024, there were surplus assets which were used to make a one-time 401(k) contribution to eligible employees. As a result, the Company recognized a loss of $3.6 million when the remaining assets were distributed.

⁽⁹⁾ Tax effect on above adjustments includes the tax impact related to the adjustments shown above.

⁽¹⁰⁾ For the three months ended June 30, 2024 convertible notes (1.7 million shares) and common share equivalents for shares issuable for equity-based awards (1.1 million shares) were included in the computation of as reported and as adjusted diluted earnings (loss) per share, as they were considered dilutive. The total diluted weighted average shares outstanding for the three and six months ended June 30, 2024 was 46.6 million shares. For the convertible notes, the company utilizes the if-converted method to calculate diluted earnings (loss) per share. As such, net income was adjusted to add back $0.2 million of convertible notes interest expense (including amortization of convertible notes issuance costs).

⁽¹¹⁾ For the three months ended March 31, 2025, common share equivalents for shares issuable for equity-based awards (0.9 million shares) were included in the computation of diluted earnings (loss) per share, as they were considered dilutive. Common share equivalents for shares issuable upon the conversion of outstanding convertible notes were excluded in the computation of diluted earnings (loss) per share for the three months ended March 31, 2025 as these shares would be anti-dilutive.

Six Months Ended June 30, 2025

Six Months Ended June 30, 2024

(Dollars in millions) (Unaudited)

Net
income
(loss)

Diluted
earnings
(loss) per
share⁽¹⁾

Net
income
(loss)

Diluted
earnings
(loss) per
share⁽¹⁰⁾

As reported

$

5.0

$

0.11

$

28.6

$

0.62

Adjustments:⁽²⁾

Loss (gain) on sale or disposal of assets, net

(1.5)

(0.03)

0.3

—

Loss on extinguishment of debt

3.6

0.08

—

—

Loss (gain) from remeasurement of benefit plans, net

—

—

1.8

0.04

Sales and use tax refund

(0.8)

(0.02)

—

—

Business transformation costs⁽³⁾

—

—

0.6

0.01

IT transformation costs⁽⁴⁾

1.9

0.06

2.5

0.06

Manufacturing optimization costs⁽⁵⁾

0.2

—

—

—

Rebranding costs⁽⁶⁾

0.1

—

0.4

—

Amortization of cloud-computing costs⁽⁷⁾

0.6

0.02

—

—

Salaried pension plan surplus asset distribution⁽⁸⁾

3.6

0.08

—

—

Tax effect on above adjustments⁽⁹⁾

(1.1)

(0.03)

(1.4)

(0.02)

As adjusted

$

11.6

$

0.27

$

32.8

$

0.71

⁽¹⁾ For the six months ended June 30, 2025, common share equivalents for shares issuable upon the conversion of outstanding convertible notes (0.6 million shares) and common share equivalents for shares issuable for equity-based awards (0.8 million shares) were included in the computation of as reported and as adjusted diluted earnings (loss) per share, as they were considered dilutive. The total diluted weighted average shares outstanding for the six months ended June 30, 2025 was 43.5 million shares. For the convertible notes, the company utilizes the if-converted method to calculate diluted earnings (loss) per share. Based on the timing of the convertible note settlement during the six months ended June 30, 2025, there were no adjustments to net income for the add back of convertible notes interest expense (including amortization of convertible notes issuance costs).

⁽²⁾ Adjusted net income (loss) and adjusted diluted earnings (loss) per share are defined as net income (loss) and diluted earnings (loss) per share, respectively, excluding, as applicable, adjustments listed in the foregoing table.

⁽³⁾ Business transformation costs consist of professional service fees associated with the evaluation of certain strategic opportunities, with a focus on targeted growth to diversify the company's end market and product portfolio through acquisitions.

⁽⁴⁾ The company is undergoing a multi-year IT transformation initiative intended to streamline and modernize legacy IT systems while also reducing operating costs, increasing information security and positioning us to take advantage of market opportunities. IT transformation costs were primarily related to professional service fees not eligible for capitalization and are primarily related to project planning and third-party implementation services.

⁽⁵⁾ Third party professional fees related to process optimization efforts and improving manufacturing efficiency within targeted facilities.

⁽⁶⁾ Rebranding costs consist primarily of professional service fees associated with the company's name change to Metallus Inc., announced during the first quarter of 2024.

⁽⁷⁾ Amortization of cloud computing software costs consists of expense recognized in Selling, General, and Administrative expense resulting from amortization of capitalized implementation costs for cloud computing IT systems. This expense is not included in depreciation and amortization.

⁽⁸⁾ Following the completion of the salaried pension plan annuitization in May 2024, there were surplus assets which were used to make a one-time 401(k) contribution to eligible employees. As a result, the Company recognized a loss of $3.6 million when the remaining assets were distributed.

⁽⁹⁾ Tax effect on above adjustments includes the tax impact related to the adjustments shown above.

⁽¹⁰⁾ For the six months ended June 30, 2024, common share equivalents for shares issuable upon the conversion of outstanding convertible notes (1.7 million shares) and common share equivalents for shares issuable for equity-based awards (1.2 million shares) were included in the computation of as reported and as adjusted diluted earnings (loss) per share, as they were considered dilutive. The total diluted weighted average shares outstanding for the six months ended June 30, 2024 was 46.6 million shares. For the convertible notes, the company utilizes the if-converted method to calculate diluted earnings (loss) per share. As such, net income was adjusted to add back $0.4 million of convertible notes interest expense (including amortization of convertible notes issuance costs).

Three Months Ended
June 30,

Six Months Ended
June 30,

Three Months Ended
March 31,

(Dollars in millions) (Unaudited)

2025

2024

2025

2024

2025

Net income (loss)

$

3.7

$

4.6

$

5.0

$

28.6

$

1.3

Net Income Margin ⁽¹⁾

1.2

%

1.6

%

0.9

%

4.6

%

0.5

%

Provision (benefit) for income taxes

4.9

1.5

6.5

7.5

1.6

Interest (income) expense, net

(1.3)

(2.4)

(2.8)

(5.2)

(1.5)

Depreciation and amortization

14.1

13.4

27.8

26.8

13.7

Amortization of cloud-computing costs ⁽²⁾

0.3

—

0.6

—

0.3

Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) ⁽³⁾

$

21.7

$

17.1

$

37.1

$

57.7

$

15.4

EBITDA Margin ⁽³⁾

7.1

%

5.8

%

6.3

%

9.4

%

5.5

%

Adjustments:

(Gain) loss from remeasurement of benefit plans

—

1.0

—

1.8

—

Loss on extinguishment of debt

3.6

—

3.6

—

—

Sales and use tax refund

—

—

(0.8)

—

(0.8)

Business transformation costs ⁽⁴⁾

—

0.3

—

0.6

—

IT transformation costs ⁽⁵⁾

1.0

1.2

1.9

2.5

0.9

Manufacturing optimization costs⁽⁶⁾

0.2

—

0.2

—

—

Rebranding costs ⁽⁷⁾

—

0.1

0.1

0.4

0.1

Salaried pension plan surplus asset distribution ⁽⁸⁾

—

—

3.6

—

3.6

(Gain) loss on sale or disposal of assets, net

—

0.2

(1.5)

0.3

(1.5)

$

26.5

$

19.9

$

44.2

$

63.3

$

17.7

Adjusted EBITDA Margin ⁽⁹⁾

8.7

%

6.8

%

7.6

%

10.3

%

6.3

%

⁽¹⁾ Net Income Margin is defined as net income (loss) as a percentage of net sales.

⁽²⁾ Amortization of cloud computing software costs consists of expense recognized in Selling, General, and Administrative expense resulting from amortization of capitalized implementation costs for cloud computing IT systems. This expense is not included in depreciation and amortization.

⁽³⁾ EBITDA is defined as net income (loss) before interest (income) expense, net, income taxes, depreciation and amortization, including cloud-computing costs. EBITDA Margin is EBITDA as a percentage of net sales.

⁽⁴⁾ Business transformation costs consist of professional service fees associated with the evaluation of certain strategic opportunities, with a focus on targeted growth to diversify the company's end market and product portfolio through acquisitions.

⁽⁵⁾  The company is undergoing a multi-year IT transformation initiative intended to streamline and modernize legacy IT systems while also reducing operating costs, increasing information security and positioning us to take advantage of market opportunities. IT transformation costs were primarily related to professional service fees not eligible for capitalization and are primarily related to project planning and third-party implementation services.

⁽⁶⁾  Third party professional fees related to process optimization efforts and improving manufacturing efficiency within targeted facilities.

⁽⁷⁾  Rebranding costs consist primarily of professional service fees associated with the company's name change to Metallus Inc., announced during the first quarter of 2024.

⁽⁸⁾  Following the completion of the salaried pension plan annuitization in May 2024, there were surplus assets which were used to make a one-time 401(k) contribution to eligible employees. As a result, the Company recognized a loss of $3.6 million when the remaining assets were distributed.

⁽⁹⁾ Adjusted EBITDA is defined as EBITDA excluding, as applicable, adjustments listed in the table above. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of net sales.

(Dollars in millions, ship tons in thousands)

Three Months Ended June 30, 2025

Industrial

Automotive

Aerospace
& Defense

Energy

Other

Total

Ship Tons

66.5

69.6

15.4

16.2

—

167.7

Net Sales

$

104.4

$

122.8

$

42.1

$

30.8

$

4.5

$

304.6

Less: Surcharges

28.6

24.8

5.7

7.8

—

66.9

Base Sales

$

75.8

$

98.0

$

36.4

$

23.0

$

4.5

$

237.7

Net Sales / Ton

$

1,570

$

1,764

$

2,734

$

1,901

$

—

$

1,816

Surcharges / Ton

$

430

$

356

$

370

$

481

$

—

$

399

Base Sales / Ton

$

1,140

$

1,408

$

2,364

$

1,420

$

—

$

1,417

Three Months Ended June 30, 2024

Industrial

Automotive

Aerospace
& Defense

Energy

Other

Total

Ship Tons

56.4