RYZ

Good day. Welcome to the Ryerson Holding Corporation Second Quarter 2026 conference call. Today's conference is being recorded. There will be a question and answer session later. If you'd like to ask a question, please press star one on your telephone keypad at any time. Again, that is star one to ask a question. At this time, I'd like to turn the conference over to Justine Carlson. Please go ahead.

Good morning. Thank you all for joining Ryerson Holding Corporation Second Quarter 2026 earnings call. On our call, we have Eddie Lehner, Ryerson's Chief Executive Officer, Rick Marabito, our President and Chief Operating Officer, Jim Claussen, our Chief Financial Officer, and Molly Kannan, our Chief Accounting Officer and Corporate Controller. Rich Manson, Ryerson's Senior Vice President of Finance and Chief Financial Officer of Olympic Steel, Andrew Greiff, Executive Vice President of Ryerson and President of Olympic Steel, and Trent McFarland, our Senior Vice President of Supply Chain at Ryerson Process Metals, will be joining us for Q&A. A recording of this call will be posted on our investor relations website at ir.ryerson.com. Please read the forward-looking statement disclosures included in our earnings release issued yesterday, and note that it applies to all statements made during this call. In addition, our remarks today refer to several non-GAAP measures.

Reconciliations of these adjusted numbers are also included in our earnings release. I will now turn the call over to Eddie.

Thank you, Justine. Good morning, everyone, and thank you all for joining us. In the second quarter of 2026, I am pleased to say that we made the most of our opportunities and continued to position RYZ for higher quality earnings generation through the cycle as we further realized merger-related synergies while building an ever-better customer experience engine. We delivered greater than expected shipments on a same store and total company basis, achieved revenue and adjusted EBITDA, excluding LIFO, well above our guidance ranges, and generated higher net income sequentially and year-over-year. In our first full quarter together as RYZ, we continued advancing our shared vision of the Ryerson and Olympic Steel merger potential as we attained second quarter synergy realizations in line with our guidance.

More importantly, we are finding additional opportunities for growth commercially, which we expect will continue to drive top-line performance and market share gains. Our results in the quarter were impacted by a unique amalgamation of puts and takes. On the positive side of the ledger, business investment-driven demand, quote activity, transactional order win rates, and spot transactional margins were outsized drivers for EBITDA generation while program customer business volumes, program pricing, and margins continued to lag with inflationary delivery cost pressures building through the quarter as fuel prices rose and truck capacity tightened. In a supply-side tension market, where extended mill lead times, low distributor inventories, domestic capacity constraints in carbon steel plate and tube mill production, and heightened geopolitical turmoil are complicating customer backlog turnover and efficient resource allocation.

We don't dwell on the imperfect, and we get on with the business of creating consistently great customer experiences, which is a forever part of our strategy. On the demand side, the improved, though asymmetrical manufacturing demand conditions as illustrated more broadly by a now six-month streak of expanding ISM Manufacturing Purchasing Managers' Index readings, but more narrowly by end market strength that is skewing heavily to artificial intelligence, aerospace, defense, semiconductor, and electrification. We note that we should be well-positioned through our network to take advantage of this demand upside, while other verticals such as agriculture, consumer discretionary, and residential construction move further toward eventual recovery. On the price side of the ledger, average selling prices have been increasing. However, pricing and margin spreads widened in the quarter between transactional pricing and program pricing to their highest deltas in three years.

With respect to commodity price drivers, carbon was the best performer in the quarter, followed by stainless and then aluminum, whereas non-ferrous commodity bellwethers saw an approximately 15% price reversion at the end of Q2 and into early Q3, before recently stabilizing within a lower trading range. Moving beyond the industry macro environment, what has been especially inspiring is the energy and shared purpose we are seeing across the unified enterprise as our teams combine strengths, share best practices, and scale customer solutions. We have achieved a great deal together in these first months, but we are just in the early stages of getting to escape velocity. The work is taking hold, the commercial and financial impacts are beginning to show, and we are progressing toward realizing the full potential and value this merger can create for our customers, teammates, shareholders, and one another.

With that, I will turn the call over to Rick to discuss market conditions, industry trends, and how we are executing operationally across the business.

Thanks, Eddie, and good morning everyone. On a year-to-date basis, Ryerson's North American ton shipped increased by 49% compared to the first half of 2025 or by 5.8% on a same-store basis, implying market share gains when compared to the industry's growth of 2.9% in the year-to-date period, and that's according to the Metals Service Center Institute. Ryerson's year-to-date volume growth was led by solid double-digit growth in its transactional business, we also saw encouraging early third quarter indicators around improvement in our contractual business on a year-over-year basis for the first time since 2022. On a total company basis, Ryerson generated net sales of over $2 billion and ton shipped of over 800,000 in the second quarter. Our shipments increased 22.6% compared to the prior quarter or 4% on a same-store basis, exceeding our guidance expectations.

The improvement reflected broad sequential volume growth across the business, supported by better market conditions, stronger customer activity, commercial collaboration, and continued execution by our teams. Second quarter results also continued to benefit from secular demand tied to data center and power generation projects, which we estimate represented approximately 7% of our second quarter revenues. Sales tied to these applications continued to accelerate during the quarter, increasing approximately 30% sequentially, and we expect opportunities in these markets to continue building in future periods. Ryerson is participating in this demand through customers' power, IT hardware, cooling, fabrication, and related project activity. With that demand showing up across a number of our traditional end market categories. Given our scale, processing capabilities, product breadth, and customer relationships, we believe Ryerson is well-positioned to support continued growth in these areas and expand our participation.

Within our Ryerson North American same-store end markets, commercial transportation and climate were notable areas of strength. In commercial transportation, we saw solid single-digit North American same-store volume growth quarter-over-quarter, led by our truck cab sub-sector. We continue to view 2026 as a transition year for the Class 8 industry and remain cautiously optimistic about improving demand conditions as we move further into 2026 and into 2027. In climate, we delivered double-digit North American same-store volume growth quarter-over-quarter, supported by stronger activity from larger HVAC customers serving both data center-related demand and traditional product lines. At the same time, recovery across more cyclical end markets remains selective. Ryerson North American same-store agriculture shipments improved modestly during the period, suggesting that some larger customers may have slightly increased production after an extended period of inventory destocking.

However, the agriculture market remains recessed given current farming economics, and we expect demand to remain largely subdued in the near term. Same-store North American fabrication and welding also improved modestly, supported by data center-related projects and broader improvement in manufacturing activity. In consumer products, Ryerson same-store North American volumes were flat quarter-over-quarter, although we saw solid single-digit growth among top appliance customers. Overall, consumer demand remains disciplined as higher-for-longer interest rates and inflation continue to influence purchasing behavior. Across all of our end markets, customers have increasingly valued product availability, reliability, processing capabilities, and speed of response. All areas where our expanded scale and combined footprint are enhancing our ability to service our customers. One example of our enhanced ability to serve our customers is through the sharing of assets. Our Integrity Stainless business previously rented external storage due to space constraints at this location.

Through coordination with our nearby Singer Steel facility, we moved Integrity Stainless product into available space within our own network, reducing external storage costs, lowering logistics costs, and improving turnaround times for our customers. We're also winning business through collaboration across geographies. For example, a customer in our Northeast market reached out to their Olympic representative in need of support for their new West Coast facility. Our Olympic representative connected with Ryerson L.A., which fulfilled the customer's needs and delivered a successful customer experience. This is a good example of how the merger has opened doors for additional business opportunities for the combined enterprise. We're also beginning to coordinate order flow more strategically across the combined network. In certain cases, that means aligning contract business within Olympic facilities that are well-positioned to support it while creating additional capacity at Ryerson facilities for quicker turning, higher margin transaction work.

This is a synergistic example of how our combined footprint can improve customer service, facility utilization, and earnings quality. Across the business, we are seeing collaboration among commercial, procurement, operations, logistics, and leadership teams translate into practical execution. Our teams are identifying new ways to serve customers through the combined footprint, broader product access, shared inventory, increased in-house processing, and faster response in a market where availability and reliability matter. We continue to be encouraged by how naturally the organizations are integrating. The shared customer-first mindset is showing up in our everyday decisions, how we move material, connecting customers to new capabilities, and solving problems across our expanded network. From an operating standpoint, our focus remains straightforward: serve our customers well, execute on our synergies, and build a more cohesive, interconnected metal service center platform. The second quarter began to show the power of that model.

We still have much work ahead, but we're already creating real value for our customers, our teammates, and our stakeholders. Now I'll turn the call over to Jim Claussen to review our performance relative to second quarter guidance. He'll also discuss our expectations for the third quarter and provide an update on synergy attainment and capital allocation. Jim?

Thank you, Rick, and good morning, everyone. As Rick mentioned, Ryerson generated a record $2 billion in revenue for the quarter on just over 800,000 tons shipped, exceeding guidance expectations on both a revenue and shipment basis. Our top-line performance reflects both stronger same-store and total company shipment performance, improved pricing, and effective execution across the organization. On the bottom line, our net income and earnings per share generation came in at $15.5 million and $0.30 per diluted share. Net income for the quarter was impacted by a $15.7 million purchase accounting adjustment to cost of material sold, which reduced our gross margin and net income generation. Excluding the impact of purchase accounting and other one-time items, adjusted net income generation for the second quarter was $27.6 million or $0.52 per diluted share.

Adjusted EBITDA excluding LIFO was $101 million in the second quarter, which exceeded our guidance range of $88 million-$92 million. Olympic Steel generated $23.5 million in adjusted EBITDA excluding LIFO, also exceeding our expectations. In the second quarter, we recorded LIFO expense of $17 million. Turning to our outlook for the third quarter. We expect that market demand will follow normal seasonal industry demand patterns, leading to volumes 3%-5% lower compared to the second quarter. At the same time, we expect that average selling prices will be flat to up by 2% as we anticipate that carbon pricing will remain supported and offset recent corrections in stainless and aluminum prices. We therefore expect that our third quarter revenues will be in the range of $1.87 billion-$1.95 billion.

We anticipate that rising material costs, ongoing program customer pricing lags, and continued inflationary pressures across labor and delivery will pressure margins, causing some compression in the third quarter. We also expect to recognize approximately $5 million-$7 million of additional inventory purchase accounting adjustments through the end of the year as we sell through the remaining acquired inventory and get further distance from one-time merger closing events. Excluding these inventory purchase accounting adjustments, we anticipate net income generation in the range of $19 million-$21 million or $0.37-$0.40 per diluted share in the third quarter. We expect to record LIFO expense in the range of $16 million-$18 million in the third quarter, leading to adjusted EBITDA excluding LIFO in the range of $88 million-$92 million, with $21 million-$23 million of that generation contributed by Olympic Steel.

At the same time, given that stainless and aluminum prices are reverting from recent highs, we expect working capital requirements to moderate in the third quarter, reporting free cash flow generation and net debt reduction. This working capital requirement moderation, coupled with higher trailing 12-month EBITDA generation, is expected to move us closer to a net leverage ratio of three times by the end of the year. Turning to our progress on synergies, our second quarter results included the realization of approximately $5 million of synergy attainment across our four synergy pillars. Based on the actions already implemented and those currently underway, we expect to realize approximately $13 million-$14 million in synergies in the third quarter. This third-quarter expectation would result in an annual run rate synergy amount of $52 million-$56 million and exceed our first-year target of $40 million in annual run rate synergies ahead of schedule.

Through the second quarter, we have spent approximately $1.2 million in one-time costs to achieve these synergies. Of our third-quarter forecasted attainment, we expect that our procurement synergies will generate approximately $6.5 million as we continue to align purchasing programs and leverage the increased scale of the combined company. Efficiency and public company cost savings are progressing as expected, and we anticipate that this category will create approximately $3 million in savings in the third quarter through the elimination of duplicative public company costs, attrition, and related efficiency actions. Our commercial enhancement strategy is off to an even stronger start than anticipated, and Rick gave great examples of the wins we are seeing across our markets. As a reminder, we projected $20 million in annual run rate opportunities from this category.

Our third-quarter expectation includes approximately $2 million of synergy benefits generated by commercial strategies, approximately $8 million of annualized incremental EBITDA from new business opportunities enabled by the scale of our combined facilities, equipment, customer relationships, and geographic reach. Finally, our third-quarter synergy outlook includes approximately $2 million of expected benefits from network optimization actions, or approximately $8 million on an annualized basis. This work includes practical actions such as bringing more processing in-house, reducing third-party costs, sharing inventory across the combined network, and consolidating facilities where we believe in improved service and cost structure. Together, these actions are expected to support EBITDA performance while enhancing our ability to serve customers during a period of extended lead times and constrained availability.

Within this network optimization strategy, we have already completed a consolidation project in Mexico that is generating approximately $1.3 million of annual run rate synergies, and we are advancing a Connecticut project that will consolidate Olympic Steel and Ryerson Specialty Alloys. The Connecticut project is expected to be completed in the first quarter of 2027 and create a stronger operating platform with improved workflow, expanded processing capabilities, better product availability, lower fixed costs, and enhanced logistics. In all, we are very pleased with how our synergy strategies are progressing. That progress is the direct reflection of our teams in the field, from those serving on dedicated synergy councils to those in local markets reaching across offices, warehouses, and geographies to create solutions for customers.

Looking ahead with our first-year target in sight, we remain confident in our ability to achieve our total two-year target of $120 million of annual run rate synergies. Turning to investments in the business, capital expenditures totaled $16 million in the quarter and included investments in the maintenance of our facilities, as well as projects supporting our transactional and value-add growth. Year-to-date, we have invested $29 million in CapEx. We still expect to invest approximately $75 million for the full year with $50 million in same-store capital expenditures anticipated. During the second quarter, we returned approximately $800,000 to shareholders through the opportunistic repurchase of approximately 39,000 shares. These repurchases were completed prior to the effectiveness of the new authorization announced in May. As a result, the full $100 million authorization remains available to us through April 2028.

Our board has declared a quarterly dividend of 18 and three quarter cents per share, which is consistent with our prior quarter and will be paid on September 17th to shareholders of record as of September 3rd. Overall, our capital allocation strategy remains focused on enabling free cash flow generation and reducing debt. That means maintaining a disciplined approach to capital expenditures, being highly selective on M&A, continuing to support our dividend, and preserving the flexibility to prudently exercise our share repurchase authorization as conditions warrant. I'll now turn the call over to Molly Kannan to discuss our financial performance highlights for the second quarter.

Thanks, Jim. Good morning, everyone. In the second quarter of 2026, Ryerson generated net sales of $2.01 billion, an increase of 28.1% compared to the prior quarter, with tons shipped 22.6% higher and average selling prices 4.5% higher. On a same-store basis, revenue was $1.44 billion, an increase of 11.5% sequentially, with average selling prices 7.2% higher and tons shipped 4% higher. Impacted by the one-time purchase accounting adjustment that Jim mentioned, gross margin contracted during the second quarter by 70 basis points to 17.7%, compared to 18.4% in the prior period. Excluding our second quarter LIFO expense of $17 million and the impact to purchase accounting, adjusted gross margin excluding LIFO expanded by 20 basis points to 19.3%, compared to gross margin excluding LIFO of 19.1% in the first quarter of 2026.

Warehousing, delivery, selling, general and administrative expenses for WDSG&A totaled $320.3 million in the second quarter, an increase of 20.8% compared to the first quarter. On a same-store basis, WDSG&A was relatively flat compared to the first quarter, up by just $1.1 million-$218.7 million and down as a percentage of sales from 16.8%-15.2%. On a per ton basis, total company WDSG&A decreased to $398 per ton in the second quarter from $404 per ton in the first quarter, and decreased on a same-store basis to $402 per ton from $416 per ton in the first quarter, reflecting improved operating leverage across the expanded platform as volumes increase. In all, we generated net income of $15.5 million, or $0.30 per diluted share in the second quarter, compared to net income of $4.5 million or $0.10 per share in the first quarter.

After removing the impact of purchase accounting adjustments and insurance settlement gains, advisory service fees, and impairment charges on assets, as well as the related income tax benefits of these items, Ryerson's second quarter adjusted net income was $27.6 million, or $0.52 per diluted share. Our total company adjusted EBITDA excluding LIFO generation for the second quarter was $101 million, $23.5 million of which was contributed by Olympic Steel. This compares to $67.4 million generated in the first quarter, $12.5 million of which was contributed by Olympic Steel on the six-week sub-period. Turning to cash flow, Ryerson used $5.6 million in cash from operations in the second quarter as net income generation was offset by a higher than anticipated working capital build supporting higher revenues. We anticipate the working capital build to mitigate in Q3 as both stainless steel and aluminum products have come off their 2026 highs in June.

Our inventory remained well managed in the second quarter as our days of supply decreased by one day to 73 days, which is within our target range of 70 to 75 days. Our cash conversion cycle increased to 71 days for the second quarter compared to 67 days in the first quarter as we took advantage of early payment discounts during the quarter, decreasing our payable cycle while our receivable cycle increased slightly. We ended the quarter with total debt of $955 million and net debt of $913 million, which represents sequential increases of $47 million and $30 million, respectively, due to higher working capital requirements. Our leverage ratio decreased from 5.1 times in the first quarter to four times in the second, driven by higher trailing 12-month adjusted EBITDA excluding LIFO as we recorded higher same-store achievement and a full quarter of Olympic Steel results.

We expect our leverage ratio to continue its downward trend as we anticipate that our trailing 12-month adjusted EBITDA excluding LIFO will increase with the addition of Olympic Steel, our expectations for higher year-over-year same-store generation, and our forecasted synergy attainment. Finally, total global liquidity increased from $618 million at the end of the first quarter to $757 million at the end of the second, as our borrowing base continued to expand with our working capital. Overall, the second quarter reflected strong revenue, adjusted net income, and adjusted EBITDA generation, improved operating leverage, and incremental progress on deleveraging with ample liquidity to support our growth strategies. With that, I will turn the call back to Eddie to conclude our prepared comments.

Thank you, Molly. Taking it all together, Ryerson succeeded in delivering revenue and adjusted EBITDA excluding LIFO results that exceeded expectations. We continue making meaningful synergy and operating model progress while navigating an improved but complex market. This quarter's achievements are a credit to our people and to the daily decisions they are making and actions they are taking to connect capabilities, solve problems, reduce friction, and create excellent customer experiences.

We believed from the beginning that merging Ryerson and Olympic Steel together would act as a growth and enterprise value accelerant, giving us the scale, capabilities, and momentum to support the transformation of one of North America's largest metal service center platforms into a higher-performing, technologically enabled industrial metal solutions network with speed, joy, and operational excellence. After our first full quarter together, we are beginning to see tangible proof of what this was all about. Great experiences all around for our customers, our employees, and our shareholders as RYZ continues to rise. With that, we look forward to your questions. Operator?

If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We can pause for just a moment to allow everyone the opportunity to signal. Our first question comes from Samuel McKinney with KeyBanc Capital Markets.

Hey, good morning, guys.

Hey, good morning, Sam.

The transactional business outperforming contract has been the trend at Ryerson for a while. You also mentioned some transactional market share gains in the release. Just maybe an outline of where you're seeing those wins right now.

Yeah, Sam, it's really broad-based, and it really depends on what we term service center fundamentals that we've referenced, where when we have service levels that are standard, which we peg at 95% for A1A items, when that inventory's in the network positioned locally in the right place at the right time, in addition to some of the technologies that we've developed to improve quoting bandwidth, quoting speed, when that inventory is available, we do better. It's really that simple. I think over the last two to three years, as we've talked about investments that we've made in the company that maybe weren't quite ready for prime time two, three, four years ago.

As those investments now have really come to fruition, in a market environment that is better on the whole, we're seeing that transactional growth because we do have a name and brand in the industry that gets us the quoting opportunity, but then we need to perform when we get that opportunity, increase win rates, and get that product positioned where it can do the most good.

Okay. If you could just level set us on the split between the transactional and the contract business today.

Yeah. Where we are now as a combined enterprise is, I'd say 40/60, when you look at the two enterprises. We're looking to improve both sides of the ledger. I think where we can improve the program portfolio of business, we're doing that, and we call it sweat the P and grow the T. What you do is you look to lower the cost to serve on your program assets by moving that business to the work centers that can accommodate those higher volumes, and so you can increase the spread of the margin that way. That frees up more space to go ahead and grow the transactional side of the ledger. As we go from 40/60, we're looking to get to that next benchmark of 45/55.

Because right now, as we referenced in the script, you've got a margin differential between transactional and program between 700 and 800 basis points, and so there's ample opportunity to improve both parts of that commercial portfolio.

All right. Thank you.

Once again, if you'd like to ask a question, please signal by pressing star one on your telephone keypad. We'll take our next question from Katja Jancic with BMO Capital Markets.

Hi. Thank you for taking my questions. Maybe staying on the contractual and transactional business. Eddie, you just mentioned that the GAAP, I think currently is, margin GAAP is between 700-800 basis points. How does that compare to typical historical GAAP?

Katja, that's a great question. In my time over the last, call it 14 years with Ryerson, I've seen the GAAP be. You really dial it in to about 600-700 basis points difference between that transactional order, that spot bill of material order, and the program order.

On the program, what are the main factors that are driving the margin to lag so much? Are there steps that are in your control that you can take to maybe reduce that?

Yeah, absolutely. I'm going to actually ask Rick and Andy to add color to this. I would only say that the answer is yes. There's a unique set of circumstances, I think, around the program book coming out of Q4 of 2025 and into 2026. Some of it has to do with some supply-side constraints that I know you're well aware of, around carbon sheet, carbon plate, and tube, for example, and maybe catching a little bit of a downdraft in aluminum and stainless. I'd ask Rick and Andrew to append to that.

Yeah, Katja, this is Andrew. What I would tell you is so many of the contract businesses, especially on the carbon side, are index based. As you came out of 2025, going into 2026, the numbers were relatively fixed, going up or down based on either monthly or quarterly contracts. Where we certainly have the opportunities, as both Eddie and Rick have talked about, is the opportunity to get better asset utilization. The more we're running contract business on the Olympic assets and running full shifts and getting into a third full shift, we'll see greater opportunities for profitability. I think that will allow, as Eddie talked about on the number of the Ryerson assets, to be able to free up to put more transactional items on the floor, getting up to those A1A items and getting closer to a 95% rate of inventory on the floor.

Katja, I think, as you know, there's always a normal lag on the contract business, as Andrew just described, because you're typically, the preponderance of those contracts are pricing a quarter in arrears based on the prior quarter's index. The good news is we continue, especially in carbon, to be in a rising price environment. That lag that we talk about, we still haven't caught equilibrium yet on the contracts, where as you see pricing starting to level off, those subsequent one or two quarters, you start to really catch up on that lag. It's timing. It's the things Andrew talked about. You know there's long lead times also. That also creates some other dynamics in terms of the lag in terms of servicing the customers, but having the perfect matching of what you'd like with the supply side really being extended.

If I can just squeeze one more. You talked about cost pressures, including freight or transportation costs. I always understood or thought that those type of costs are passed through to customers. Are you not able to do that now?

Katja, I'll start, again, I'll ask the team to contribute. I would say this, there's always a lag. I think when you look at the speed and rate at which fuel price increases and flatbed trucking capacity is tightened, there's just an adjustment, especially on the program side, where those contracts have terms in them that tell you pretty much when you can introduce those price increases. On the spot side of the ledger, on the transactional side, we have a lot more flexibility to price that alongside of competitors that we're bidding against for that next order. Those price pass-throughs are coming. I think that I would take everybody back to the operating leverage that we generated, even though some of those variable cost components are surging higher than maybe the average selling price increase.

The synergy side has been a really good story for us, we dealt ourselves some really good cards in this merger. We've got winning hands to play. We just need to catch up to that lag. I would ask Jim and Rich to talk a little bit about that.

Thanks, Eddie. Good morning, Katja. I think Eddie really covered it. There can be a bit of a lag, especially on fuel prices as you have fuel surcharges that may index up over time and things like that. Really, the spot market is also driven by market dynamics with supply and demand. There are pressures on that cost, we've seen them across both platforms and continue to work together to try to moderate logistics cost, leverage our synergies, leverage that network to reduce those miles and trips.

Okay, thank you.

I would just Yeah. All right.

We have a question from online. Thanks for sending that in.

Sure.

This one's regarding our FIFO gross margin outlook for the third quarter, given the noted price cost dynamics on contracts, stainless pricing declines.

Yeah, I think following up on what we talked about in the script, and even so far in the Q&A, I would say this, I think we all agree that the biggest opportunity that we have is within our commercial portfolio to drive margin accretion over time. I think some of the headwinds that have shown themselves in the transition from Q2 to Q3, they're really lags, and they're transitional lags. Whereas aluminum and stainless on a three-month average both step down between 10% and 15%, you're going to see that wind through Q3, along with some of the supply chain disruptions, where you have to cover buy, or you have to take on some additional network costs because you want to make sure that you create those great customer experiences.

Those are all transitory costs, and I think over time, we'll continue to grow our margin profile and expand margins as we go forward. It really is something that we just need to cycle through about one inventory turn as we go from Q2 to Q3. We've been looking forward to this Q&A for a long time. Come on. Come on. Let's bring the questions.

As a reminder, if you'd like to ask a question, please signal by pressing star one on your telephone keypad. It appears there are no further questions in the queue at this time. I'll turn it back to the speakers for any closing remarks.

We really appreciate your support of Ryerson, and we look forward to being with you to discuss Q3 results sometime in early November. Thank you.

Ladies and gentlemen, this concludes today's call. We thank you for your participation. You may now disconnect and have a great day.

Good day, and welcome to the Ryerson Holding Corporation's 1st quarter 2026 conference call. Today's conference is being recorded. There will be a question and answer session later. If you would like to ask a question, please press star one on your telephone keypad at any time. Again, that is star one to ask a question. At this time, I'd like to turn the conference over to Justine Carlson. Please go ahead.

Good morning. Thank you for joining Ryerson Holding Corporation's 1st quarter 2026 earnings call. On our call, we have Edward Lehner, Ryerson's Chief Executive Officer, Rick Marabito, our President and Chief Operating Officer, James Claussen, our Chief Financial Officer, and Molly Kannan, our Chief Accounting Officer and Corporate Controller. A recording of this call will be posted on our investor relations website at ir.ryerson.com. Please read the forward-looking statement disclosures included in our earnings release issued yesterday, and note that it applies to all statements made during this call. In addition, our remarks today refer to several non-GAAP measures. Reconciliations of these adjusted numbers are also included in our earnings release. I will now turn the call over to Eddie.

Thank you, Justine. Good morning, and thank you all for tuning in to WRYZ, The Riz. I just had to say that. To discuss our first quarter performance, I am compelled to say again how delighted we are to be working together in common cause with our Olympic teammates. If one half of a quarter is any indication, I can hardly wait to see what we will do together with full quarters. We entered 2026 with order activity at stronger levels than we have seen in quite some time, going back to 2022. We achieved double-digit sequential volume growth, market share gains, solid margin expansion, excellent working capital management, and higher adjusted EBITDA, excluding LIFO, above our targeted range, while already hard at work in getting at and to those synergies.

The demand in order activity we referenced is corroborated by recent ISM Manufacturing Purchasing Managers Index readings, which reported expanding manufacturing activity for the past four consecutive months, the longest consecutive growth period since late 2022. As I have been known to say, PMI don't lie. Beneath the surface, we note that these early signs of recovery have been unevenly distributed across our customer base as our transactional customers showed particular strength while many of our large OEMs exhibited ongoing demand stagnation following what had been a prolonged manufacturing contraction with high interest rates and prevailing tariff and geopolitical uncertainty. We would be remiss if we didn't mention the omnipresent AI infrastructure and compute build-out and its outsized impact to PMI and GDP growth, as well as our increasing participation in this secular super cycle as an AI infrastructure partner to our customers.

This has and continues to be a significant contributor to the improving demand environment noted both year over year and sequentially. The most important question continues to be around the duration of demand conditions amidst supply-side disruptions and inflationary wild cards, particularly considering heightened global unrest and whether economic expansion circuit breakers can absorb potential hyper shocks to the system. While industrial metal commodity price bellwethers continue moving higher, most notably aluminum, the real puzzle is how much and at what pace can higher input costs move through the value chain to end customers without triggering the dreaded boomerang effect, whereby we invert from current pro-cyclical conditions to countercyclical conditions earlier than any of us would like.

Further evidence of this ongoing dynamic is the onset of higher diesel fuel prices coupled with ongoing tightness in the trucking market, resulting in further inflation of delivery costs industry-wide and the resultant lag effect in these cost increases propagating through the value chain. Looking inside RYZ, in the last six weeks of the quarter, we began the vital work of integrating with Olympic Steel. I could not be more encouraged by how the early stages are progressing. From an organizational standpoint, we moved quickly to establish a unified leadership structure, bringing together talent from both legacy companies to drive alignment, accountability, and execution against our synergy targets. In a few moments, I will hand the call over to our President and Chief Operating Officer, Rick Marabito.

Before I do, I would like to take the opportunity to express that it has been a true pleasure to participate in and witness the cross-collaboration of our teams and see the expanded product and service offerings begin to benefit our customers across our larger, more capable enterprise and footprint. We are stacking wins and building synergy momentum, and I am exceedingly confident about the opportunities we have to create value together in creating the industry's best customer experience. I would like to thank my Ryerson and Olympic teammates for their adaptability, energy, and passion during this process and their continued focus on the customer. Their efforts are transforming us into a fully integrated platform of combined strengths, enabling us to capture the full value of our synergies, foster growth, and further elevate our offering to customers while further building enterprise value for our shareholders.

With that, I will ask Rick to join us to discuss market conditions and industry trends.

Thanks, Eddie, and it's great to be with you all. Good morning to everyone. Turning to the market, the North American Service Center Industry shipping volumes, as measured by the MSCI or the Metals Service Center Institute, experienced a seasonally aligned and momentum-driven start to 2026, with improved demand relative to the end of 2025. Ryerson's North American volumes, by comparison, grew significantly, even on a same-store basis, outpacing the industry in realizing market share gains during the quarter, with particular strength in carbon products. Our first quarter total company ton ships increased sequentially by 42.3% or 13.4% on a same-store basis, in line with guidance expectations. Year-over-year, total company shipments were up 31.2% in the first quarter of 2026. That's 4.6% up on a same-store basis.

As Eddie mentioned, transactional business led the way in growth and coupled with historically low service center industry inventory levels for plate and sheet products relative to shipments, we anticipate healthy transactional activity moving forward. On the other side of the business, activity among our contract customers was steady during the quarter. Thematically, we're seeing data centers and power generation projects continue to drive strong backlogs. We're also seeing optimism for the future in Class 8 truck trailer as that industry now views 2026 as a supply-driven transition year.

I would also like to take a moment before I turn the call over to Jim to echo Eddie's comments and say that it's been a true pleasure joining our organizations together and being part of the collaboration and execution of what is truly a unique opportunity for us to create value for all of our stakeholders. From an operating standpoint, we've been very deliberate about how we're building the combined organization because for us, culture isn't an abstract concept. It's actually the secret sauce, how we align our teams to make decisions, how we serve our customers, and how we execute day in and day out. For our customers, we've been focusing on expanding capabilities, enhancing our product offerings, and leveraging our larger footprint to serve their needs, help solve their problems, and enhance the value that they receive from us.

We're also very disciplined about synergy attainment. I echo what Eddie said. I think we're, as we're six weeks into it in the first quarter, we're more confident than ever in terms of the attainment of those synergies. We're approaching synergies as a structured, ongoing effort embedded in our operating model with mechanisms in place to build on those gains over time. By strengthening the foundation of our business through culture and shared values, synergy execution, and a customer-centric focus, we are positioning the company to generate higher, more consistent earnings and drive long-term value for shareholders. Now I'll turn the call over to James Claussen to review our performance relative to first quarter guidance, discuss our expectations for second quarter, and provide an overview of our synergy attainment progress and capital allocation activities.

Thank you, Rick, and good morning, everyone. In the first quarter, we achieved revenue at the top end of our guidance range, with same-store volumes increasing as expected and same-store average selling prices exceeding our expectations as aluminum pricing was influenced by geopolitical events. Gross margin expanded as anticipated during the quarter as our contracts began to reset at current market pricing and improved demand conditions supported transactional pricing. Net income for the quarter came in at $4.5 million or $0.10 per diluted share, our adjusted net income for the first quarter, which removes transaction-related expenses and a one-time impairment charge, was $13.1 million or $0.30 per diluted share.

Our same-store first quarter adjusted EBITDA excluding LIFO generation of $54.9 million exceeded our expectations, while Olympic Steel contributed an additional $12.5 million, which was in range for the business' post-merger six-week stub period. Altogether, our adjusted EBITDA excluding LIFO in the first quarter was $67.4 million. Turning to current expectations, bookings have remained at healthy levels in recent weeks, and we expect the second quarter to fall in line with typical seasonal demand patterns, producing shipments 1%-3% higher relative to the first quarter on a same-store basis. We therefore anticipate that total company ton shipped will be 18%-20% higher compared to the first quarter of 2026, with Olympic Steel included in the entire period, compared to only six weeks at the end of the prior period.

Total company revenues are expected to be in the range of $1.86 billion-$1.93 billion, with same-store average selling prices expected to be up 2%-4% sequentially, and overall average selling prices to be up 1%-3% quarter-over-quarter as our product mix shifts higher in carbon products with the full quarter inclusion of Olympic Steel and average selling prices for carbon products lower than those for aluminum and stainless. In all, we anticipate generating net income for the second quarter in the range of $20 million-$22 million or $0.38-$0.42 per diluted share.

We expect our LIFO expense to be between $14 million and $16 million in the second quarter, leading to adjusted EBITDA excluding LIFO generation in the range of $88 million-$92 million, with $21 million-$23 million of that attributed to Olympic Steel. Second quarter synergy realization is expected to be in the range of $4 million-$6 million. Turning to our integration with Olympic Steel and our progress on attaining our announced $120 million of annual run rate synergies. In our first six weeks together, before the end of the first quarter, we were able to hit the ground running on many of our strategies and are seeing early, encouraging progress across our synergy categories.

One of our earliest priorities post-close was to begin the alignment of our supply chain networks and realize initial harmonization of purchasing programs, which we are confident will lead to meaningful savings and further projected buildup in the future quarters as contracts cycle through and we continue to align our purchasing efforts. We expect that in total, the procurement synergies that we executed during the first quarter will generate annual savings of approximately $15 million, and we are on track to meet our anticipated $40 million two-year procurement target. We realized efficiency savings during the first quarter through the elimination of overlapping corporate subscriptions and fees, and we have more lined up for the second quarter. We anticipate that in total, the merger will realize approximately $5 million in annualized savings from reduced public company costs alone.

We exited two leased facilities during the quarter, one in Hanceville, Alabama, and the other in Waterbury, Connecticut. Those operations moved into other facilities in Alabama and Connecticut, and we expect to realize annual savings of $1.5 million as a result. We are seeing great progress in supply chain mapping and commercial synergies, with several actions implemented to leverage our enhanced footprint. For example, our Hickman, Arkansas facility, where we recently had upgraded our temper mill. Our capabilities are already being leveraged to service current and prospective Olympic customers. We are also exercising Ryerson strength in bright metals to service Olympic accounts through our TSA Processing facilities, which would have been brought into the Ryerson family of companies in 2023. In total, we realized about $1 million in savings within the first six weeks of integration.

As previously mentioned, we expect realization of approximately $4 million-$6 million in Q2, and we are well on our way to achieving our estimated first-year attainment of $40 million in annual run rate synergies. As both Eddie and Rick expressed, we are exceedingly pleased with the collaborative efforts of both teams and are looking forward to providing further updates as we drive towards our two-year target of $120 million in annual run rate synergies. Turning to our investments in the business. In the first quarter, our capital expenditures totaled $12 million and primarily included investments in repair and maintenance projects at our facilities, as well as small capability enhancement projects. As a reminder, we anticipated investing approximately $50 million in same-store capital expenditures in 2026, with an additional $25 million allocated to Olympic Steel, for a total this year of $75 million.

Turning to shareholder returns. During the first quarter, Ryerson distributed $9.7 million in the form of dividends, or $0.1875 per share distributed to our expanded shareholder base. For the second quarter, we have announced a dividend of the same amount. Additionally, we returned $1.6 million to our shareholders during the first quarter by opportunistically repurchasing approximately 74,000 shares from the open market under our share repurchase authorization. We are also pleased to announce that following the expiration of our previous program on April 30th, our board of directors has approved a new share repurchase program, which provides us with the authorization to repurchase up to $100 million worth of our shares over the next two years. We expect to prudently exercise this authority as opportunities in the market are presented.

I will now turn the call over to Molly Kannan to discuss our financial performance highlights for the first quarter.

Thanks, Jim, and good morning, everyone. In the first quarter of 2026, Ryerson generated net sales of $1.57 billion, an increase of 37.9% compared to the same quarter of 2025, with tons shipped 31.2% higher and average selling prices 5.2% higher. On a same-store basis, we generated net sales of $1.29 billion, with tons shipped 4.6% higher and average selling prices 8.9% higher compared to the same period last year. Compared to the previous quarter, same-store revenues were up 17.1%, with shipments 13.4% higher and average selling prices 3.2% higher.

Commodity prices rose slightly more than anticipated during the quarter and resulted in a LIFO expense of $10 million compared to our expected expense of $6 million-$8 million. Same-store gross margin expanded in the second quarter by 270 basis points to 18%, and same-store gross margin, excluding LIFO, expanded by 150 basis points to 18.8%. Warehousing, delivery, selling, general, and administrative expenses totaled $265.2 million for the first quarter, or $217.6 million on a same-store basis, which represents an increase of $15.5 million compared to the first quarter of 2025.

On a per ton basis, total company warehousing, selling, general, and administrative expenses were $404 per ton in the first quarter, or $416 per ton on a same-store basis, compared to $404 per ton in the year ago period, or $445 in the previous period. First quarter same-store year-over-year expense increases were driven by higher compensation and benefits expenses, advisory service fees related to the Olympic Steel merger, and higher delivery fees driven by increased diesel prices. Our first quarter income taxes came in at $8.2 million, significantly higher than our normal effective tax rate due to $2 million in tax impacts from the merger, which included non-deductible transaction costs and changes to our state rate.

We do not expect these impacts to be recurring, and our effective rate should therefore return to approximately 25%-26% in future quarters. In all, we generated total company net income of $4.5 million, or $0.10 per diluted share in the first quarter of 2026, compared to net loss of $5.6 million in the first quarter of 2025. After removing the impacts of both the advisory service fees and the income tax revision related to the merger, as well as an asset impairment charge, our adjusted net income generation for the quarter was $13.1 million, or $0.30 per diluted share. Our total company adjusted EBITDA, excluding LIFO generation for the first quarter of 2026, was $67.4 million, which more than doubles the $32.8 million generated in the first quarter of 2025.

On a same-store basis, our adjusted EBITDA, excluding LIFO, increased by $22.1 million year-over-year. We used $179 million in cash from operating activities in the first quarter of 2026, primarily to satisfy the higher working capital requirements of the combined company within the seasonally stronger period. Inventory days of supply decreased by five days quarter-over-quarter to 74, which is back within our target range of 70 to 75 days. Our overall cash conversion cycle also remained well managed, coming in at 67 days for the first quarter, which is a day less than the prior quarter and in line with the same quarter of last year.

Our total debt increased to $908 million, and net debt to $883 million during the first quarter, an increase of $445 million and $447 million respectively as we paid off Olympic Steel's debt of approximately $300 million, paid merger-related costs, and funded our working capital requirements. As a result of the combined debt base, Ryerson's leverage ratio for the first quarter rose to 5.1 times compared to 3.1 times for the previous quarter. We expect our leverage ratio to move lower throughout the year as we anticipate that our trailing-twelve-month adjusted EBITDA excluding LIFO should increase with the addition of Olympic Steel's contributions as well as with our forecasted first-year synergy attainments.

Finally, our global liquidity increased from $502 million at the end of the fourth quarter to $618 million at the end of the first as our borrowing base expanded with our working capital. With that, I will turn the call back to Eddie to conclude our prepared comments.

Thank you, Molly. Throughout our call this morning, as we recounted our accomplishments in the quarter, we pointed to the dedication and commitment of our teammates. I would like to close our prepared comments on that high note because after all is said and done, we were well-positioned for the first quarter's demand improvement because of the optimizing and refining work we have done internally, incorporating new capabilities from our record investment cycle, honing and bettering our practice of service-centered fundamentals, and modernizing our operating model. This quarter, the team, our collective RYZ team, executed in an exemplary fashion of which we can all be proud.

By the way, have we mentioned synergies lately? Rest assured, there's much more work to do in bringing these home over the next couple of years while building our internal artificial intelligence capabilities, as well as serving as a trusted partner to our customers in the AI-related build-out that is still in its early stages. Until next time, let's keep rising and rising toward realizing our maximum potential to the benefit of all our RYZ stakeholders. With that, we look forward to your questions. Operator.

Thank you. If you would like to signal with questions, please press star one on your touch-tone telephone. If you're joining us today using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star one if you would like to signal with questions. The first question today comes from Samuel McKinney with KeyBanc Capital Markets.

Hey, good morning.

Hey, good morning, Sam. Congratulations.

Thanks. Congrats to you guys, too. You called out particular strength in the transaction business developing over the course of the first quarter, which continues the trend from last year. Could you just talk about the extent to which the divergence between spot and contract tons is continuing? What do you need to see to really get that contract business moving again?

Yeah, Sam, it's a really good question. I'll say this, I mean, I was very pleasantly surprised by the increase in transactional business across our entire footprint. I mean, relative to the MSCI, we really put out a really nice print when it came to market share growth. I think that's a function of the CapEx investments we've made finally coming online, having inventory at the right place, really practicing service center fundamentals in an exceedingly good way. Then on the contract side, you know, I'll have Andrew Greiff speak to this. On the contract side, we're still lagging by about 4%-5%. It's pretty uneven on that program side.

As you know, when you look at residential construction, ag, heavy truck and trailer, and consumer durables, they're still lagging some of the other growth areas that you're seeing in the economy. Let me have Andrew give you more color on that.

Yeah, Eddie, I think you said it well. We had seen the first quarter not the improvement that we had thought we'd see from Q4 the second half of 2025. I will tell you, Sam, that as we came out of the first quarter coming into the second quarter, and certainly the expectations that we're hearing from the industrial OEMs, the expectation is second quarter will improve upon first. The belief is that the second half is going to be certainly better than the first half. We've seen it in the construction side, certainly with the industrials, a little bit more life in ag. Clearly, on the data center side, that has continued to stay very strong, impacting, you know, our flat roll and pipe and tube.

I think that, second half business, we'll see a nice pickup on the contract side.

Okay. Thanks. That's helpful. The next one, if you could just discuss the capital allocation priorities within the context of instituting that new share repurchase program while the net debt level is approaching $900 million. I mean, I understand the increased same-store earnings and incremental contribution from Olympic will help the ratio, just trying to better understand the plans for bringing that debt load down.

Yeah, sure. Sure, Sam. Let me just give you some preamble of that and say that, just given our experience in the industry, 255 plus years, and the experience of the people in this room, looking at where we are, having turned procyclical and getting past the stub period to full quarters and being able to project out over four quarters as opposed to, you know, some of the math that happens when you're only accounting for half a quarter. We see our debt trends improving meaningfully as we go through the balance of the year and even forward in terms of what we know is our free cash flow generating ability. Also, we're past that big part of the CapEx cycle. CapEx is really normalizing.

We did find an opportunity through the quarter. When the stock was trading under $20, you know, $21-$20, it's so far below its intrinsic value, and given the liquidity position we have, which is still very, very strong, it made sense to go in and buy back some shares. Let me have Jim Claussen give you a little more color on that.

Morning, morning, Sam. You know, I think Eddie really answered the question. As we go forward, certainly gonna be prioritization on the leverage ratio. As we look, you know, opportunistically and we understand, you know, how the shares can perform, we wanted to make sure that we had the ability to repurchase, in certainly a sub-book value period, which we saw in the first quarter, as we go forward. You know, we'll be prudent with it. You know, priority around the leverage ratio continues. As Eddie mentioned, we're through the CapEx cycle. Obviously, we had some merger-related transaction costs in the first quarter that were another drain on cash, we're past that. Really, I feel really good.

We've got the ABL redone, liquidity is strong, and we're really just full steam ahead on synergies and, you know, on growing as RYZ.

All right. Thanks, guys, and good luck.

Okay. Thanks, Sam.

Thanks, Sam.

As a reminder, if you would like to signal with questions, please press star one on your touch tone telephone. Again, that is star one, and we'll pause for just a moment. Our next question comes from Katja Jancic with BMO Capital Markets.

Hi. Thank you for taking my questions. I might have missed this, but what is currently the split between contract and transactional business on a pro forma basis?

Hi, Katja. This is Eddie. Ryerson is running at about, and I'm happy to say we're running at about 52% transactional, 48% contract on the Ryerson side. On the Olympic side, and I'll have Rick speak to this. I believe on the Olympic side, it's, say 30% transactional and 40% program, but maybe Rick you can give a little more color on-

Yeah

Olympic's mix.

Yeah. That's right. 30%, roughly 30% transactional, 70% contractual. I think getting back to the earlier question about the transactional business, one of the things I do wanna stress is a strategic initiative of the combined company, and actually one of the benefits of the merger is to really build out that transactional business. With a much bigger footprint, we're able to do that. I think you know the transactional, the contractual and transactional, it's a tongue twister, business is a lot more difficult to do inside of the same facility versus when you have separate assets and separate facilities doing that.

One of the initiatives going forward, and we're already seeing benefits of this, is to move business so we can optimize that transactional business in those locations that are really set up to do same day, next day delivery. I think what you'll see is that mix that we just talked about. Over time, I think you'll even see us as Ryerson tilt to a higher transactional percentage going forward. That's where we are to start. You know, we're excited about the opportunities.

Katja, from a, just a computational perspective, you know, as we get Olympic hubbed on to our data warehouse, we'll be able to come up with a much more precise calculation. If I just put my thumb to the sun, I would tell you it's probably about 52% or 42% transactional, 58% contract, and you look at the combined companies and would expect that to move higher in the course and years ahead.

Is there an optimal level? Given that it works on a foot. Depends on the footprint and so on. Is there an optimal level of how much, in theory, transactional sales you could get to?

I mean, I believe with transactional and value add, especially given the synergy plans that we have that Rick spoke to, where do you run business? If you're running program business and you're running transactional business on the same cut to length line, you have to do different setups. You have to keep different size coils and inventory. We've become adept at being amphibious in that way, but it's certainly not the way we'd like to do it to scale to that 60/40 target. Make no mistake about it, man, we love the program business. It's just a different business.

The greater growth opportunity still in the economy, when it comes to industrial metals, is to really get at that transactional spot filler material business that really depends on having the inventory on hand and the equipment to run it with a same day, one day, or two day turnaround time. I would say our goal is to still get to 60/40, but also to optimize the profitability of that program business and continue to grow that as well. Because in a lot of cases, that same contract customer is also a transactional customer.

I know you're still in early stages of integration in a way, but so far it seems like everything is going well. Have you experienced any issues, any early challenges with the integration?

Yeah. I mean, Rich Manson is heading up our synergy effort for the overall company, so I'll have Rich speak to that. We couldn't be more delighted with how the organizations are really collaborating really not just at the top, but as we go deeper into the organization. I think the way that the teams are working together has really even exceeded my expectations, and my expectations were high going in. I'll let Rich speak in more detail to the synergy efforts to date.

Sure. Thanks, Eddie. I would echo your comments that I think as we were working on the due diligence, I think collectively management was very comfortable around the $40 million savings in year one and $120 million after year two. I think the best part of this has been is we've engaged lower levels of the organization. You know, we're seeing ideas that we didn't even think of, right? I think there's been great cooperation amongst the commercial organizations, amongst the operators, and do believe that the savings are very achievable and will hit the numbers that we've laid out.

Okay. Thank you.

Thanks, Katja.

The next question will come from Alan Weber with Robotti & Company.

Hey. Good morning. How are you?

Hi, Alan. How are you doing?

Good. When you look at the presentation, can you talk about the third and fourth quarter, not specific estimates, but how you're thinking about them. I ask that because your first quarter EBITDA is basically what last year's third and fourth was combined. Your second quarter EBITDA, your projection of $90 million is, you know, $25 million or so higher than the third and fourth combined. Just curious how you really think about the third and fourth quarter in terms of EBITDA.

Yeah. I mean, not wanting to get too far over our skis, I'll say this. Some of the good news we see that's really been building, especially given our book of business around contract pricing lags, and really even looking at April activity and May activity so far, I would tell you that May activity, even though it's early in the month, is over year-to-date activity when we look at quote activity and order activity. That's really positive. April trended really nicely, which is really positive. You know, we've learned, Alan, not to get too far ahead of ourselves just because there still is a reasonable amount of uncertainty just, you know, in the global economy, as you well know.

I think the second half of the year, I'd be very surprised if the second half of this year wasn't better than the second half of last year. You know, I'll have Rick append to that.

Good morning, Alan. Thanks for joining us. I think the second half, what I can comment on is the things that we can control. Obviously, there's a lot of variables out there in the marketplace, and those are the things I think Eddie is really referring to that make it difficult. What I do know is inside of Ryerson, we're absolutely confident that we'll keep making internal improvements. You're going to see the ramp-up of those synergies. We talked about next quarter, having around a $5 million synergy benefit. Obviously, we're very comfortable to get to the 40. I think one thing is sort of our own internal efforts, you're going to see improved results. We're excited about that.

I think second of all, you know, you look at the business, and one of the benefits of merging, talking about that mix now where we're, you know, over 50% transactional, boy, that really buoyed first quarter. As I look to the second half, the opportunity is really if we start to see some demand recovery in the big OEMs in the U.S. and our contract business. While it was fine in, you know, the quarter, I think there's a lot of room for growth. Some of the industries that we talked about, and some construction business, I think if we see an improvement there, yeah, we're, we'd be pretty excited and pretty optimistic about the second half.

I think that's the real opportunity is the demand side of the equation and specifically, from the big OEMs on the contract side.

Pricing trends are positive. Yeah, Alan, I would just say pricing can be a real tempest, but pricing trends are really favorable right now, both, I mean, across the board in carbon, aluminum, and nickel picked up in the last 30 days. Looking as you try to see through pricing going through Q2 into Q3, there would have to be a significant reversion or inversion, you know, to really stop that momentum that seems to be building on the price side.

Okay. Actually even the numbers that I mentioned obviously don't really include the synergies for this year from the merger, which you're expecting most of those to take place in the second half also.

Yeah, thats right. So, being as transparent as we can be, you know, $1 million having found its way into the financial statements in Q1, a $5 million midpoint of synergies getting into the financials in Q2, yeah, we'd expect to build momentum through the balance of the year in Q3 and Q4.

Okay, great. Thank you very much.

Hey, thanks, Alan.

At this time, there are no further questions. I'll now turn the conference back over to you for any additional remarks.

Well, we all want to thank.

There is a question on the web. Thanks for sending that in. It's our expectations in the second half for synergy attainment compares to $40 million expected for year.

Yeah, I mean, I think Rich spoke very well to that, and we feel that we're tracking on pace to hit our annual run rate synergies and expect those to continue to propagate and get into the financial statements as we move through the balance of the year, as we've discussed on our call so far this morning. Well, we wanna thank everybody for tuning in to WRYZ, and I'll eventually outgrow that, by the way. Wanna thank everybody for tuning in to the earnings call. We look forward to being with you on our Q2 earnings call later later this summer. Thanks.

Thank you. That does conclude today's conference. We do thank you for your participation. Have an excellent day.