10q10k10q10k.net

What changed in Ryerson Holding Corp's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Ryerson Holding Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+278 added−314 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-22)

Top changes in Ryerson Holding Corp's 2023 10-K

278 paragraphs added · 314 removed · 217 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

48 edited+10 added−30 removed53 unchanged
Biggest changeAdditional training is also available at any time on the Company’s learning platform, where employees can select from a growing catalog of DEI courses. Employee Health, Wellness, and Safety. Health, safety, and wellness are fundamental expectations of our Board, executives, employees, and our customers.
Biggest changeEach of the three ERGs established is purposefully aligned with Ryerson’s DEI mission and strategic goals. Further, Ryerson is invested in DEI training by providing employees with training on being inclusive, avoiding bias, and workplace intervention. Training is available at any time on the Company’s learning platform, where employees can select from a growing catalog of DEI courses.
We believe few of our customers have the capability to process the metal into the desired sizes, forms, or finishes or they are unwilling to incur the significant capital expenditures to acquire the necessary equipment. We are growing and diversifying our product mix mainly as a result of our targeted growth strategy to provide increased levels of value-added processing services.
We believe few of our customers have the capability to process metal into the desired sizes, forms, or finishes or they are unwilling to incur the significant capital expenditures to acquire the necessary equipment. We are growing and diversifying our product mix mainly as a result of our targeted growth strategy to provide increased levels of value-added processing services.
Due to this, many customers have reduced their in-house processing capabilities, opting to source processed metal from service centers like us. This saves our customers time, labor, and expense, reducing their overall manufacturing costs, while permitting us to increasingly focus on value-added services and expanding our mix of fabrication products, which typically sell at higher margins.
Due to this, many customers have reduced their in-house processing capabilities, opting to source processed metal from service centers like us. This 4 saves our customers time, labor, and expense, reducing their overall manufacturing costs, while permitting us to increasingly focus on value-added services and expanding our mix of fabrication products, which typically sell at higher margins.
We carry a full line of nearly 75,000 products in stainless steel, aluminum, carbon steel, and alloy steels and a limited line of nickel and red metals in various shapes and forms. In addition to our metals products, we offer numerous value-added processing and fabrication services, and nearly 80% of the products we sell are processed to meet customer requirements.
We carry a full line of approximately 75,000 products in stainless steel, aluminum, carbon steel, and alloy steels and a limited line of nickel and red metals in various shapes and forms. In addition to our metals products, we offer numerous value-added processing and fabrication services, and nearly 80% of the products we sell are processed to meet customer requirements.
By aggregating end-users’ demand and purchasing metal in bulk to take advantage of economies of scale, metals service centers may purchase, process, and deliver metal to end‑users in a more efficient and cost‑effective manner than the end‑user may achieve by 4 dealing directly with the primary producer.
By aggregating end-users’ demand and purchasing metal in bulk to take advantage of economies of scale, metals service centers may purchase, process, and deliver metal to end‑users in a more efficient and cost‑effective manner than the end‑user may achieve by dealing directly with the primary producer.
We do not currently anticipate any new programs disproportionately impacting us compared to our competitors. Some of the properties currently or previously owned or leased by us are located in industrial areas or have a long history of heavy industrial use.
We do not currently anticipate any new programs disproportionately impacting us compared to our competitors. 9 Some of the properties currently or previously owned or leased by us are located in industrial areas or have a long history of heavy industrial use.
We are generally able to meet our materials requirements because we use many suppliers, there is a substantial overlap of product offerings from these suppliers, and there are several other suppliers able to provide identical or similar products.
We are generally able to meet our materials requirements because we use many suppliers, there is a substantial overlap of product offerings from these suppliers, and there are several other suppliers able to provide identical or similar 8 products.
We believe that our various and diverse offerings, ways-to-markets, and end markets reduce the volatility of our business in the aggregate, thus somewhat reducing earnings volatility. A portion of our customers experience seasonal slowdowns.
We believe that our various and diverse offerings, ways-to-market, and end markets reduce the volatility of our business in the aggregate, thus somewhat reducing earnings volatility. A portion of our customers experience seasonal slowdowns.
See Note 14 — “Segment information” of Part II, Item 8 “Financial Statements and Supplementary Data” for further information on U.S. and foreign revenues and assets. Customer demand may change from time to time based on, among other things, general economic conditions and industry capacity. Many of the industries in which our customers compete are cyclical in nature.
See Note 13 — “Segment information” of Part II, Item 8 “Financial Statements and Supplementary Data” for further information on U.S. and foreign revenues and assets. Customer demand may change from time to time based on, among other things, general economic conditions and industry capacity. Many of the industries in which our customers compete are cyclical in nature.
Based on sales, we are one of the largest service center companies for carbon, stainless steel, and aluminum in the North American market where we have a broad geographic presence with 96 facilities. Our service centers are located near our customer locations, enabling us to timely deliver to customers across numerous geographic markets.
Based on sales, we are one of the largest service center companies for carbon, stainless steel, and aluminum in the North American market where we have a broad geographic presence with 110 facilities. Our service centers are located near our customer locations, enabling us to timely deliver to customers across numerous geographic markets.
We believe our broad product mix and marketing approach provides customers with a “one-stop shop” solution few other metals service center companies are able to offer. We provide a broad range of processing and fabrication services to meet the needs of our approximately 40,000 customers and typically fulfill more than 1,000,000 orders per year.
We believe our broad product mix and marketing approach provides customers with a “one-stop shop” solution few other metals service center companies are able to offer. We provide a broad range of processing and fabrication services to meet the needs of our approximately 40,000 customers and typically fulfill approximately 1,000,000 orders per year.
To facilitate talent attraction and retention, we strive to create a diverse, inclusive, and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits, and wellness programs, and by programs that build connections between our employees and their communities. 11 Talent and Future Workforce.
To facilitate talent attraction and retention, we strive to create a diverse, inclusive, and safe workplace, with opportunities for our 10 employees to grow and develop in their careers, supported by strong compensation, benefits, and wellness programs, and by programs that build connections between our employees and their communities. Talent and Future Workforce.
The amount of liability, if any, for those claims and actions as of December 31, 2022 is not determinable but, in the opinion of management, such liability, if any, will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
The amount of liability, if any, for those claims and actions as of December 31, 2023 is not determinable but, in the opinion of management, such liability, if any, will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
As part of retaining and developing talent, Ryerson offers employees competitive compensation, expanded benefits including a newly implemented parental leave policy, career growth through its learning platform, mentorship and tuition reimbursement programs, and engagement through all-employee surveys conducted periodically. Diversity and Inclusion.
As part of retaining and developing talent, Ryerson offers employees competitive compensation, expanded benefits including a parental leave policy, career growth through its learning platform, mentorship and tuition reimbursement programs, and engagement through all-employee surveys conducted periodically. Diversity and Inclusion.
Please refer to the Section titled “Acquisitions” of Item 7, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations,” and Note 2 — “Acquisitions” of Part II, Item 8 "Financial Statements and Supplementary Data" for further information regarding all acquisitions made in 2022.
Please refer to the Section titled “Acquisitions” of Item 7, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations,” and Note 2 — “Acquisitions” of Part II, Item 8 "Financial Statements and Supplementary Data" for further information regarding all acquisitions made in 2023.
Customers and Markets Our customer base is diverse, numbering approximately 40,000 in a variety of industries, including metal fabrication and machine shops, industrial machinery and equipment, commercial ground transportation, consumer durable, food processing and agricultural equipment, construction equipment, and HVAC.
Customers and Markets Our customer base is diverse, numbering approximately 40,000 in a variety of industries, including metal fabrication and machine shops, industrial machinery and equipment, commercial ground transportation, consumer durable, food processing and agricultural equipment, construction equipment, HVAC, and oil & gas.
See Item 1A, Risks Related to Operating our Business, sub-section "Any significant work stoppages can harm our business", as well as Note 13: Commitments and Contingencies within Part II, Item 8 "Financial Statements and Supplementary Data" for further information.
See Item 1A, Risks Related to Operating our Business, sub-section "Any significant work stoppages can harm our business", as well as Note 12: Commitments and Contingencies within Part II, Item 8 "Financial Statements and Supplementary Data" for further information.
As the EPA has not yet allocated responsibility for the contamination among the potentially responsible parties, including JT Ryerson, we do not currently have sufficient information available to us to determine whether the ROD will be executed as currently stated, whether and to what extent JT Ryerson may be held responsible for any of the identified contamination, and how much (if any) of the final plan’s costs might ultimately be allocated to JT Ryerson.
As the EPA has not yet allocated responsibility for the contamination among the potentially responsible parties, including JT Ryerson, we do not currently have sufficient information available to us to determine whether the Record of Decision will be executed as currently stated, whether and to what extent JT Ryerson may be held responsible for any of the identified contamination, and how much (if any) of the final plan’s costs might ultimately be allocated to JT Ryerson.
Our recruitment and talent management teams lead our mission to attract, retain and develop diverse talent. These teams are organized under our newly formed Talent Management Office ("TMO"), which includes our Chief Human Resources Officer, our Director of Talent Management, and other senior leaders.
Our recruitment and talent management teams lead our mission to attract, retain and develop diverse talent. These teams are organized under our Talent Management Office ("TMO"), which includes our Chief Human Resources Officer, our Director of Talent Management, and other senior leaders.
Substantially all of our sales are attributable to our U.S. operations and substantially all of our long-lived assets are located in the U.S. The following pie charts show the Company’s percentage of sales by metal consuming industry for 2022 and 2021: Our customers are primarily located throughout the U.S., but we also have international customers.
Substantially all of our sales are attributable to our U.S. operations and substantially all of our long-lived assets are located in the U.S. 7 The following pie charts show the Company’s percentage of sales by metal consuming industry for 2023 and 2022: Our customers are primarily located throughout the U.S., but we also have international customers.
While the costs of compliance could be significant, given the uncertain outcome and timing of future action by the U.S. federal government and states on this issue, we cannot accurately predict the financial impact of future greenhouse gas regulations on our operations or our customers at this time.
While the costs of compliance could be significant, given the uncertain outcome and timing of future action by the U.S. federal government on this issue, we cannot accurately predict the full financial impact of current and future greenhouse gas regulations on our operations or our customers at this time.
We have approximately 4,200 employees across 96 facilities in North America and four facilities in China. Through this network we serve approximately 40,000 customers across a wide range of manufacturing end-markets. Our customers range from local, independently owned fabricators and machine shops to large, international original equipment manufacturers.
We have approximately 4,600 employees across 110 facilities in North America and four facilities in China. Through this network we serve approximately 40,000 customers across a wide range of manufacturing end-markets. Our customers range from local, independently owned fabricators and machine shops to large, international original equipment manufacturers.
Edward Lehner, who joined the Company in August 2012 as Chief Financial Officer (“CFO”) and became CEO in June 2015, has 31 years of experience, predominantly in the metals industry. Mr. Mike Burbach, our Chief Operating Officer, has over 39 years of experience with the Company and previously served as the President, North-West Region of the Company. Mr.
Edward Lehner, who joined the Company in August 2012 as Chief Financial Officer (“CFO”) and became CEO in June 2015, has 32 years of experience, predominantly in the metals industry. Mr. Mike Burbach, our Chief Operating Officer, has over 40 years of experience with the Company and previously served as the President of the North-West Region of the Company. Mr.
We provide supply chain solutions, including just-in-time delivery and value-added processing, to many original equipment manufacturing customers. For the year ended December 31, 2022, no single customer, including their subcontractors, accounted for more than 6% of our sales, and our top 10 customers, including their subcontractors accounted for less than 16% of our sales. Strong Relationships with Suppliers.
We provide supply chain solutions, including just-in-time delivery and value-added processing, to many original equipment manufacturing customers. 5 For the year ended December 31, 2023, no single customer, including their subcontractors, accounted for more than 8% of our sales, and our top 10 customers, including their subcontractors accounted for less than 16% of our sales. Strong Relationships with Suppliers.
ITEM 1. B USINESS. Ryerson Holding Corporation (“Ryerson Holding”), a Delaware corporation, is the parent company of Joseph T. Ryerson & Son, Inc. (“JT Ryerson”), a Delaware corporation. Affiliates of Platinum Equity, LLC (“Platinum”) own approximately 15,924,478 shares of our common stock, which is approximately 43% of our issued and outstanding common stock.
ITEM 1. B USINESS. Ryerson Holding Corporation (“Ryerson Holding”), a Delaware corporation, is the parent company of Joseph T. Ryerson & Son, Inc. (“JT Ryerson”), a Delaware corporation. Affiliates of Platinum Equity, LLC (“Platinum”) own approximately 3,924,478 shares of our common stock, which is approximately 11.5% of our issued and outstanding common stock.
See Part III, Item 10 for more information regarding our Code of Ethics. 12 Our website address is included in this report for informational purposes only. Our website and the information contained therein or connected thereto are not incorporated into this annual report on Form 10-K.
The Company also posts its Code of Ethics on its website. See Part III, Item 10 for more information regarding our Code of Ethics. Our website address is included in this report for informational purposes only. Our website and the information contained therein or connected thereto are not incorporated into this annual report on Form 10-K.
We believe our enhanced processing capabilities will increase our ability to sell higher-margin metals processing services to a larger group of customers. We expect this, together with our focus on maintaining pricing discipline related to our processing services, will increase our gross profit margin. We had capital expenditures of $274.6 million in the five-year period ended December 31, 2022.
We believe our enhanced processing capabilities will increase our ability to sell higher-margin metals processing services to a larger group of customers. We expect this, together with our focus on maintaining pricing discipline related to our processing services, will increase our gross profit margin. We had capital expenditures of $358.1 million in the five-year period ended December 31, 2023.
As a result, additional costs and liabilities may be incurred to comply with future requirements or to address newly discovered conditions, and these costs and liabilities could have a material adverse effect on the results of operations, financial condition, or cash flows.
As a result, additional costs and liabilities may be incurred to comply with future requirements, including California and the proposed SEC climate disclosure requirements, or to address newly discovered conditions, and these costs and liabilities could have a material adverse effect on the results of operations, financial condition, or cash flows.
Such documents are available as soon as reasonably practicable after electronic filing of the material with the SEC. Copies of these reports (excluding exhibits) may also be obtained free of charge, upon written request to: Investor Relations, Ryerson Holding Corporation, 227 W. Monroe St., 27th Floor, Chicago, Illinois 60606. The Company also posts its Code of Ethics on its website.
Such documents are available as soon as reasonably practicable after electronic filing of the material with the SEC. Copies of these reports (excluding 11 exhibits) may also be obtained free of charge, upon written request to: Investor Relations, Ryerson Holding Corporation, 227 W. Monroe St., 27th Floor, Chicago, Illinois 60606.
Consequently, we are required to carry sufficient inventory to meet the short lead time and just-in-time delivery requirements of our customers. We also have international facilities located in Canada, Mexico, and China. Net sales of our international locations (based on where the shipments originated) accounted for 8.8% of our consolidated 2022 net sales, or $558.6 million.
Consequently, we are required to carry sufficient inventory to meet the short lead time and just-in-time delivery requirements of our customers. We have international facilities located in Canada, Mexico, and China. Net sales of our international locations (based on where the shipments originated) accounted for 9.1% of our consolidated 2023 net sales, or $466.4 million.
The following pie charts show our percentage of sales by major product lines for 2022 and 2021: We are not dependent on any particular customer group or industry because we process and distribute a variety of metals.
We currently perform processing services on nearly 80% of the materials sold by us. 6 The following pie charts show our percentage of sales by major product lines for 2023 and 2022: We are not dependent on any particular customer group or industry because we process and distribute a variety of metals.
Our ESG Report includes important content on our governance practices, including how we continuously monitor and analyze ourselves and our supply-chain relationships in order to operate with a high level of integrity.
Additionally, the Sustainability Report includes important content on governance practices, including how we continuously monitor and analyze ourselves and our supply-chain relationships in order to operate with a high level of integrity and how we protect Company and stakeholder information through strong cybersecurity practices.
When integrating acquired businesses into our operational model, we may draw on our large scale and geographic reach to improve operational and financial performance through greater purchasing power, improved expense and working capital management, increased access to additional end markets, and broadening product mix. 5 Lean Operating Structure Providing Operating Leverage.
When integrating acquired businesses into our operational model, we may draw on our large scale and geographic reach to improve operational and financial performance through greater purchasing power, improved expense and working capital management, increased access to additional end markets, and broadening product mix. Extensive Breadth of Products and Services for Diverse Customer Base.
While we consider all our intellectual property rights as a whole to be important, we do not consider any single right to be essential to our operations as a whole.
While we consider all our intellectual property rights as a whole to be important, we do not consider any single right to be essential to our operations as a whole. Sustainability In December 2023, Ryerson released its second Sustainability Report.
The net capital change during such period aggregated to an increase of $134.6 million. Additions Retirements or Sales Net (In millions) 2022 $ 105.1 $ 8.3 96.8 2021 59.3 68.5 (9.2 ) 2020 26.0 0.2 25.8 2019 45.8 57.5 (11.7 ) 2018 38.4 5.5 32.9 The net reductions in 2019 and 2021 are related to sale lease-back transactions.
Additions Retirements or Sales Net (In millions) 2023 $ 121.9 $ 0.4 $ 121.5 2022 105.1 8.3 96.8 2021 59.3 68.5 (9.2 ) 2020 26.0 0.2 25.8 2019 45.8 57.5 (11.7 ) The net reductions in 2019 and 2021 are related to sale lease-back transactions.
Although we sell directly to many large original equipment manufacturers, the majority of our sales are to smaller customers, including small machine shops and fabricators, in small quantities with frequent deliveries, helping them manage their working capital and credit needs more efficiently. 7 For the year ended December 31, 2022, no single customer, including their subcontractors, accounted for more than 6% of our sales, and our top 10 customers, including their subcontractors, accounted for approximately 16% of our sales.
Although we sell directly to many large original equipment manufacturers, the majority of our sales are to smaller customers, including small machine shops and fabricators, in small quantities with frequent deliveries, helping them manage their working capital and credit needs more efficiently.
We currently anticipate capital expenditures, excluding acquisitions, of up to approximately $95 million for 2023, much of which is related to purchases geared towards highly accretive projects focused on strategic initiatives, IT infrastructure investment, and growth, along with maintenance projects.
We currently anticipate capital expenditures, excluding acquisitions, of up to approximately $110 million for 2024, much of which is related to purchases geared towards highly accretive strategic initiatives, IT infrastructure investment, and growth, along with maintenance projects. We expect all of the 2024 capital expenditures to be funded using proceeds from the cash generated by operations.
PMI readings can be a good indicator of industrial activity and general economic growth. Additionally, the Department of Commerce announced that real GDP increased 2.1 percent in 2022 and the Federal Reserve projected that the median growth rate in real GDP would be 0.7%, 1.8%, and 2.2% for 2023, 2024, and 2025, respectively.
The Department of Commerce announced that real GDP increased 2.5 percent in 2023 and the Federal Reserve Bank of Philadelphia projected that the median growth rate in real GDP would be 1.7 percent, 1.8 percent, and 2.1 percent for 2024, 2025, and 2026, respectively.
We are increasing our investments in processing equipment to offer more value-added processing to our customers in an effort to increase our margins and profitability. We currently perform processing services on nearly 80% of the materials sold by us.
We are increasing our investments in processing equipment to offer more value-added processing to our customers in an effort to increase our margins and profitability.
Jim Claussen, Executive Vice President & CFO, has 28 years of industry experience. Industry Outlook The Institute for Supply Management’s Purchasing Managers’ Index (“PMI”) reported slowing growth for most of 2022 with readings decreasing, yet still above 50%, indicating expansion in factory activity.
Jim Claussen, Executive Vice President & CFO, has 29 years of industry experience. Industry Outlook The Institute for Supply Management’s Purchasing Managers’ Index (“PMI”) reported contracting factory activity throughout 2023 with readings consistently below the growth threshold of 50.
These materials are stocked in a number of shapes, including coils, sheets, rounds, hexagons, square and flat bars, plates, structurals, and tubing. We also provide a wide variety of processing services to meet our customers’ needs. Most of the products that we carry require expensive specialized equipment for material handling and processing.
We also provide a wide variety of processing services to meet our customers’ needs. Most of the products that we carry require expensive specialized equipment for material handling and processing.
Our end markets are supported by the strength of the manufacturing economy, and according to the latest Livingston Survey, published by the Federal Reserve Bank of Philadelphia, U.S. industrial production is expected to have expanded by 4.3% in 2022 and is further expected to grow by 0.5% in 2023 and 2.2% in 2024. 6 Products and Services We carry a full line of carbon steel, stainless steel, alloy steels, and aluminum, and a limited line of nickel and red metals.
Our end markets reflect the performance of the manufacturing economy, and according to the latest Livingston Survey, published by the Federal Reserve Bank of Philadelphia, U.S. industrial production is expected to have expanded by 0.3 percent in 2023 and is further expected to grow by 0.5 percent in 2024 and 1.4 percent in 2025.
Capital Expenditures In 2022, we continued to focus on organic growth by expanding existing facilities and adding processing equipment. Investments by us in property, plant, and equipment, together with asset retirements for the five years ended December 31, 2022, excluding the initial purchase price of acquisitions are set forth below.
Investments by us in property, plant, and equipment, together with asset retirements for the five years ended December 31, 2023, excluding the initial purchase price of acquisitions are set forth below. The net capital change during such period aggregated to an increase of $223.2 million.
Because of our total volume of purchases and our long‑term relationships with our suppliers, we believe that we are generally able to purchase inventory at the best prices offered by our suppliers. 8 For the year ended December 31, 2022, our top 25 suppliers, including their subcontractors, accounted for approximately 78% of our purchase dollars.
Suppliers We purchase the majority of our inventories from key domestic metals suppliers. Because of our total volume of purchases and our long‑term relationships with our suppliers, we believe that we are generally able to purchase inventory at the best prices offered by our suppliers.
Our 2022 performance at our facilities, measured as the number of OSHA recordable injuries per 200,000 labor hours, was 3.03, which was better than the industry average as reported by the Bureau of Labor Statistics.
Our commitment towards a zero-injury workplace is constant and driven by an Environmental, Health, and Safety policy that reinforces the goal. Our 2023 performance at our facilities, measured as the number of OSHA recordable injuries per 200,000 labor hours, was 2.26, which was better than the industry average as reported by the Bureau of Labor Statistics.
This downward trend continued with readings turning below 50% starting in November 2022 and continued into 2023 with a reading of 47.4% for January. The PMI measures the economic health of the manufacturing sector and is a composite index based on five indicators: new orders, inventory levels, production, supplier deliveries, and the employment environment.
The PMI measures the economic health of the manufacturing sector and is a composite index based on five indicators: new orders, inventory levels, production, supplier deliveries, and the employment environment. PMI readings can be a good indicator of industrial activity and general economic growth.
Our safety standards, which go beyond industry standards and the minimum legal requirements, have helped protect the well-being of our people and prevent workplace injuries. Our commitment towards a zero-injury workplace is constant and driven by an Environmental, Health, and Safety policy that reinforces the goal.
Employee Health, Wellness, and Safety. Health, safety, and wellness are fundamental expectations of our Board, executives, employees, and our customers. Our safety standards, which go beyond industry standards and the minimum legal requirements, have helped protect the well-being of our people and prevent workplace injuries.
In October 2011, the United States Environmental Protection Agency (the “EPA”) named JT Ryerson as one of more than 100 businesses that may be a potentially responsible party (“PRP”) for the Portland Harbor Superfund Site (the “PHS Site”). On January 6, 2017, the EPA issued an initial Record of Decision (“ROD”) regarding the site.
In October 2011, the United States Environmental Protection Agency (the “EPA”) named JT Ryerson as one of more than 100 businesses that may be a potentially responsible party for the Portland Harbor Superfund Site. See Note 12: Commitments and Contingencies in the notes to the consolidated financial statements included in Part II, Item 8 of this Report on Form 10-K.
Removed
Recently, Ryerson has focused on bolt-on acquisitions. In 2022, Ryerson's larger acquisitions included Excelsior, Inc. (“Excelsior”) and Howard Precision Metals, Inc. (“Howard”). Excelsior is a full-service fabrication and machining company based in Fresno, California with advanced processing capabilities including machining centers, laser and waterjet cutting, welding, and complex assemblies that are a value-add to Ryerson's processing capabilities.
Added
Recently, Ryerson has focused on bolt-on acquisitions. In 2023, Ryerson's acquisitions included BLP Holdings, LLC, Norlen Incorporated, TSA Processing, and Hudson Tool Steel Corporation.
Removed
Howard, based in Milwaukee, Wisconsin, is one of the largest aluminum distributors in the Midwest, specializing in value-added processing services including high-quality precision-cut aluminum plate and saw-cut extruded aluminum bar distribution.
Added
The contractionary trend indicated by PMI began with readings dropping below 50 starting in November 2022 and continuing through December of 2023, marking 14 consecutive months, with the most recent reading of 47.4 for December 2023.
Removed
We have demonstrated the ability to effectively manage expenses through tactical productivity and spending improvements. In a stronger demand environment for metals service centers characterized by increases in shipments and/or pricing, we believe that most additional expenses to service higher revenues and margin would come from leveraging economies of scale across our fixed expenses.
Added
Products and Services We carry a full line of carbon steel, stainless steel, alloy steels, and aluminum, and a limited line of nickel and red metals. These materials are stocked in a number of shapes, including coils, sheets, rounds, hexagons, square and flat bars, plates, structurals, and tubing.
Removed
In 2022, our warehousing, selling, general, and administrative expenses increased by $24.0 million compared to 2021, but decreased as a percentage of sales by 90 basis points, illustrating our ability to manage cost pressures and realize expense leverage. Extensive Breadth of Products and Services for Diverse Customer Base.
Added
For the year ended December 31, 2023, no single customer, including their subcontractors, accounted for more than 8% of our sales, and our top 10 customers, including their subcontractors, accounted for less than 16% of our sales.
Removed
Suppliers We purchase the majority of our inventories from key domestic metals suppliers.
Added
For the year ended December 31, 2023, our top 25 suppliers, including their subcontractors, accounted for approximately 78% of our purchase dollars.
Removed
We expect all of the 2023 capital expenditures to be funded using proceeds from the cash generated by operations and borrowings on our $1.3 billion revolving credit facility (“the Ryerson Credit Facility”).
Added
Capital Expenditures In 2023, we continued to focus on organic growth by expanding and modernizing existing facilities, adding new state-of -the-art facilities, and adding processing equipment to support value-added business.
Removed
For 9 example, there is increasing likelihood that additional regulation of greenhouse gas emissions will occur at the federal, state, local, and foreign level, which could affect us, our suppliers, and our customers.
Added
The report builds on the Company’s inaugural 2022 report and provides an update on ongoing sustainability efforts, the investments being made in its people and service center network, and how it is serving its communities.
Removed
The ROD includes a combination of dredging, capping, and enhanced natural recovery that would take approximately thirteen years to construct plus additional time for monitored natural recovery, at an estimated present value cost of $1.05 billion.
Added
Similar to the inaugural report, the 2023 edition illustrates the Company’s focus on energy and emissions reductions, sustainable products, data security, diversity, equity, and inclusion ("DEI"), and talent and future workforce while also providing updates on Ryerson’s advancement in these categories.
Removed
At a December 4, 2018 meeting with the Portland Harbor Participation and Common Interest Group (“PCI Group”), of which JT Ryerson is a member, the EPA indicated that it expected PRPs to submit a plan during 2019 to start remediation of the river and harbor per the ROD within the next two to three years.
Added
A few achievements include Ryerson’s recognition by Forbes as one of America’s best mid-sized companies to work for, its launch of the award-winning Ryerson Illuminator app, and its continued role in the circular metals economy.
Removed
As set forth more fully below, those dates have been extended until 2024 and 2025. The EPA met with various PRPs throughout 2019 and 2020 regarding remedial design. The EPA did not include JT Ryerson in those meetings.
Added
In 2023, Ryerson’s DEI Council announced the establishment of three employee resource groups ("ERGs") to be available to employees in 2024: Women in Search of Excellence (WISE), Next Generation of Leaders (NextGen), and Leveraging All Diversity (LEAD). These ERGs are voluntary, employee-led groups that work to foster a more inclusive workplace by uniting people with common interests, identities, or backgrounds.
Removed
It did include Schnitzer Steel, which is developing a remedial design plan for the river area which includes the area where the former JT Ryerson facilities were located. Schnitzer Steel’s 2020 disclosures filed with the EPA acknowledged that Schnitzer Steel is the legal successor to the prior operators (including JT Ryerson) in the designated area.
Removed
Schnitzer Steel has also indicated that JT Ryerson was not a significant contributor of any contaminants of concern. On February 12, 2021, the EPA announced that one hundred percent of the PHS Site is now in the active remedial design phase. In June 2021, the EPA issued a Fact Sheet setting forth the status of the entire site.
Removed
The primary area of relevance for JT Ryerson is River Mile 3.5 East, with Swan Island Basin being of secondary interest. For River Mile 3.5 East, remedial design work is ongoing; the Sufficiency Assessment and the Pre-Design Investigation work plans are finalized, and design investigation sampling is underway.
Removed
Schnitzer Steel and MMGL Corp. are the working parties for River Mile 3.5 East. For Swan Island, remedial design is just beginning, with Daimler Trucks, Shipyard Commerce, and various government entities as the working parties. JT Ryerson has not been asked to participate in the remedial design phase.
Removed
The PCI Group has engaged a third party to prepare cost estimates for each of the Sediment Management Areas at the site. That work is still in progress.
Removed
In the meantime, the voting parties of the PCI Group (which does not include JT Ryerson) have begun the “advocacy process,” during which the voting parties submit written arguments to the Allocation Team regarding how costs should be allocated among the various PRPs.
Removed
Once that advocacy process is completed, the Allocation Team will prepare a proposed Joint Preliminary Allocation Report (“JPAR”) of costs among the PRPs. The current timeline projects that the draft JPAR will be issued in June 2024, with a 90-day comment period to conclude in September 2024 and the final JPAR to be issued by the end of 2024.
Removed
Once the final JPAR is issued, a six-month mediation period will commence. All PRPs, including JT Ryerson, will participate in this mediation process, during which the PRPs will attempt to agree on a final cost allocation. These dates are subject to change.
Removed
The Advocacy Group, a subset representing the interests of the PCI Group, met with the EPA on November 8, 2022, at which time the EPA set forth its desire for a single overarching Consent Decree to include implementation of the various proposed remedial design plans.
Removed
That consent decree would set forth the plan for sequencing and costs of and payment for all work to be done at the site with all settling defendants to agree to site-wide covenants not to sue. The EPA would like this consent decree to be signed by the summer of 2025.
Removed
In the meantime, the EPA is preparing an updated Draft Sequencing Scenario for Current Project Areas to be issued in or around the first quarter of 2023.
Removed
The EPA indicated that it anticipates that Special Notice Letters (“SNL”), which give PRPs information as to why the EPA thinks they are liable as well as clean up plans, will be issued to PRPs between the end of 2023 and mid-2024. 10 The EPA has stated that it is willing to consider de minimis settlements, which JT Ryerson is trying to pursue; however, the EPA has not begun meeting with any of the smaller parties who have requested de minimis or de micromis status, stating that it does not have sufficient information to determine whether any parties meet such criteria and does not intend to begin those considerations until after the remedial design work is completed and the SNLs are issued.

… 8 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

58 edited+16 added−9 removed99 unchanged
Biggest changeThere can be no guarantee that our stock price will remain at current levels or that future sales of our common stock will not be at prices lower than those sold to investors. We paid cash dividends on our common stock in each quarter of 2022, but any future dividend payments are at the discretion of our Board of Directors.
Biggest changeWe paid cash dividends on our common stock in each quarter of 2023, but any future dividend payments are at the discretion of our Board of Directors. Since the third quarter of 2021 we have paid regular quarterly cash dividends on our common stock.
If the Chinese government decided to terminate our land use rights agreements, our assets could become impaired and our ability to meet customer orders could be impacted. RISKS RELATED TO CYBERSECURITY Damage to our information technology infrastructure could harm our business.
If the Chinese government decided to terminate our land use rights agreements, our assets could become impaired and our ability to meet customer orders could be impacted. RISKS RELATED TO CYBERSECURITY AND INFORMATION TECHNOLOGY Damage to our information technology infrastructure could harm our business.
RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK Our stock price has fluctuated in the past, has recently been volatile, and may be volatile in the future, and as a result, investors in our common stock could incur substantial losses. Our stock price has fluctuated in the past, has recently been volatile, and may be volatile in the future.
RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK Our stock price has fluctuated in the past, has recently been volatile, and may be volatile in the future, and as a result, investors in our common stock could incur substantial losses.
The market price for our common stock may be influenced by many factors, including the following: • investor reaction to our business strategy; • the success of competitive products or technologies; 19 • any developments with respect to our pursuit of strategic alternatives, including a potential sale or merger of the Company, sale of part of the Company, strategic minority investment, or licensing and other transactions • changes in regulatory or industry standards applicable to our products; • variations in our financial and operating results or those of companies that are perceived to be similar to us; • developments concerning our collaborations or partners; • developments or disputes with any third parties that supply, manufacture, sell, or market any of our products; • actual or perceived defects in any of our products, if commercialized, and any related product liability claims; • our ability or inability to raise additional capital and the terms on which we raise it; • declines in the market prices of stocks generally; • trading volume of our common stock; • sales of our common stock by us or our stockholders; • general economic, industry, and market conditions; and • other events or factors, including those resulting from such events, or the prospect of such events, including war, terrorism, and other international conflicts, public health issues including health epidemics or pandemics, and natural disasters such as fire, hurricanes, earthquakes, tornadoes, or other adverse weather and climate conditions, whether occurring in the U.S. or elsewhere, could disrupt our operations, disrupt the operations of our suppliers, or result in political or economic instability.
The market price for our common stock may be influenced by many factors, including the following: • investor reaction to our business strategy; • the success of competitive products or technologies; • any developments with respect to our pursuit of strategic alternatives, including a potential sale or merger of the Company, sale of part of the Company, strategic minority investment, or licensing and other transactions; • changes in regulatory or industry standards applicable to our products; • variations in our financial and operating results or those of companies that are perceived to be similar to us; • developments concerning our collaborations or partners; • developments or disputes with any third parties that supply, manufacture, sell, or market any of our products; • actual or perceived defects in any of our products, if commercialized, and any related product liability claims; • our ability or inability to raise additional capital and the terms on which we raise it; • declines in the market prices of stocks generally; • trading volume of our common stock; • sales of our common stock by us or our stockholders; • general economic, industry, and market conditions; and • other events or factors, including those resulting from such events, or the prospect of such events, including war, terrorism, and other international conflicts, public health issues including health epidemics or pandemics, and natural disasters such as fire, hurricanes, earthquakes, tornadoes, or other adverse weather and climate conditions, whether occurring in the U.S. or elsewhere, could disrupt our operations, disrupt the operations of our suppliers, or result in political or economic instability.
Our indebtedness may: • make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments on our indebtedness; • limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, or other general corporate purposes; • limit our ability to use our cash flow for future working capital, capital expenditures, acquisitions, or other general corporate purposes; • require us to use a substantial portion of our cash flow from operations to make debt service payments; • limit our flexibility to plan for, or react to, changes in our business and industry; • place us at a competitive disadvantage compared to our less leveraged competitors; and • increase our vulnerability to the impact of adverse economic and industry conditions.
Our indebtedness may: • make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments on our indebtedness; • limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, or other general corporate purposes; 20 • limit our ability to use our cash flow for future working capital, capital expenditures, acquisitions, or other general corporate purposes; • require us to use a substantial portion of our cash flow from operations to make debt service payments; • limit our flexibility to plan for, or react to, changes in our business and industry; • place us at a competitive disadvantage compared to our less leveraged competitors; and • increase our vulnerability to the impact of adverse economic and industry conditions.
As the EPA has not yet allocated responsibility for the contamination among the potentially responsible parties, including JT Ryerson, we do not currently have sufficient information available to us to determine whether the Record of Decision will be executed as currently 18 stated, whether and to what extent JT Ryerson may be held responsible for any of the identified contamination, and how much (if any) of the final plan’s costs might ultimately be allocated to JT Ryerson.
As the EPA has not yet allocated responsibility for the contamination among the potentially responsible parties, including JT Ryerson, we do not currently have sufficient information available to us to determine whether the Record of Decision will be executed as currently stated, whether and to what extent JT Ryerson may be held responsible for any of the identified contamination, and how much (if any) of the final plan’s costs might ultimately be allocated to JT Ryerson.
In particular, although the passage of the Tax Cut and Jobs Act of 2017 reduced the U.S. tax rate to 21%, our future earnings could be negatively impacted by changes in tax legislation including changing tax rates and tax base such as limiting, phasing-out, or eliminating deductions or tax credits, changing rules for earnings repatriations, and changing other tax laws in the U.S. or other countries.
In particular, although the passage of the Tax Cut and Jobs Act of 2017 reduced the U.S. tax rate to 21%, our future earnings could be negatively impacted by changes in tax legislation including changing tax rates and tax base such as 18 limiting, phasing-out, or eliminating deductions or tax credits, changing rules for earnings repatriations, and changing other tax laws in the U.S. or other countries.
We have grown through a combination of internal expansion, acquisitions, and joint ventures. We intend to continue to grow through selective acquisitions, but we may not be able to identify appropriate acquisition candidates, obtain financing on satisfactory terms, consummate acquisitions, or integrate acquired businesses effectively and profitably into our existing operations.
We have grown through a combination of internal expansion, acquisitions, and joint ventures. We intend to continue to grow through acquisitions, but we may not be able to identify appropriate acquisition candidates, obtain financing on satisfactory terms, consummate acquisitions, or integrate acquired businesses effectively and profitably into our existing operations.
We may be required to make substantial future contributions to improve the plan’s funded status. 17 Any prolonged disruption of our processing centers could harm our business. We have dedicated processing centers that permit us to produce standardized products in large volumes while maintaining low operating costs.
We may be required to make substantial future contributions to improve the plan’s funded status. Any prolonged disruption of our processing centers could harm our business. We have dedicated processing centers that permit us to produce standardized products in large volumes while maintaining low operating costs.
During periods of rising metal prices, we may be negatively impacted by delays between the time of increases in the cost of 13 metals to us and increases in the prices that we charge for our products if we are unable to pass these increased costs on to our customers.
During periods of rising metal prices, we may be negatively impacted by delays between the time of increases in the cost of metals to us and increases in the prices that we charge for our products if we are unable to pass these increased costs on to our customers.
Certain of our facilities are located in industrial areas, have a history of heavy industrial use, and have been in operation for many years and, over time, we and other predecessor operators of these facilities have generated, used, handled, and disposed of hazardous and other regulated wastes.
Certain of our facilities are located in industrial areas, have a history of heavy industrial use, and have been in operation for many years and, over time, we and other predecessor operators of these facilities have generated, used, handled, and disposed of 17 hazardous and other regulated wastes.
To remain competitive, we must be willing and able to respond to market pressures. These pressures, and the implementation, timing, and results of our strategic pricing and other responses, could have a material effect on our sales and profitability.
To remain competitive, we must be willing and able to respond to market pressures timely. These pressures, and the implementation, timing, and results of our strategic pricing and other responses, could have a material effect on our sales and profitability.
In October 2011, the United States Environmental Protection Agency (the “EPA”) named JT Ryerson as one of more than 100 businesses that may be a potentially responsible party for the Portland Harbor Superfund Site. See Note 13: Commitments and Contingencies in the notes to the consolidated financial statements included in Part II, Item 8 of this Report on Form 10-K.
In October 2011, the United States Environmental Protection Agency (the “EPA”) named JT Ryerson as one of more than 100 businesses that may be a potentially responsible party for the Portland Harbor Superfund Site. See Note 12: Commitments and Contingencies in the notes to the consolidated financial statements included in Part II, Item 8 of this Report on Form 10-K.
This volatility can significantly affect the availability and cost of materials for us. Our ability to pass on increases in costs in a timely manner depends on market conditions and may result in lower gross margins. In addition, higher prices could impact demand for these products, resulting in lower sales volumes.
This volatility can significantly 12 affect the availability and cost of materials for us. Our ability to pass on increases in costs in a timely manner depends on market conditions and may result in lower gross margins. In addition, higher prices could impact demand for our products, resulting in lower sales volumes.
In addition, Platinum may have an interest in pursuing acquisitions, divestitures, and other transactions that, in their judgment, could enhance their equity investment, even though such transactions might involve risks to holders of our common stock. ITEM 1B. UNRESOLVE D STAFF COMMENTS. Not applicable. 23
In addition, Platinum may have an interest in pursuing acquisitions, divestitures, and other transactions that, in their judgment, could enhance their equity investment, even though such transactions might involve risks to holders of our common stock. ITEM 1B. UNRESOLVE D STAFF COMMENTS. Not applicable. 22
The metals services industry as a whole is cyclical and, at times, pricing and availability of metal can be volatile due to numerous factors beyond our control, including general domestic and international economic conditions, labor costs, sales levels, competition, levels of inventory held by other metals service centers, consolidation of metals producers, higher raw material costs for the producers of metals, import duties and tariffs, and currency exchange rates.
The metals services industry as a whole is cyclical and, at times, pricing and availability of metal can be volatile due to numerous factors beyond our control, including, but not limited to, general domestic and international economic conditions, labor costs, sales levels, competition, levels of inventory held by other metals service centers, consolidation of metals producers, higher raw material costs for the producers of metals, import duties and tariffs, and currency exchange rates.
See discussion regarding the Ryerson Credit Facility in Note 10: 21 “Debt” of Part II, Item 8 “Financial Statements and Supplementary Data” as well as the discussion within the “Liquidity and Capital Resources” section of Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our future indebtedness may contain covenants more restrictive in certain respects than the restrictions contained in the Ryerson Credit Facility.
See discussion regarding the Ryerson Credit Facility in Note 9: “Debt” of Part II, Item 8 “Financial Statements and Supplementary Data” as well as the discussion within the “Liquidity and Capital Resources” section of Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our future indebtedness may contain covenants more restrictive in certain respects than the restrictions contained in the Ryerson Credit Facility.
Additionally, we have significant assets in China. We also conduct business in Mexico. We may from time to time experience losses when the value of the U.S. dollar strengthens against the Canadian dollar, the Chinese renminbi, the Hong Kong dollar, or the Mexican peso, which could have a material adverse effect on our results of operations.
Additionally, we have significant assets in China and conduct operations in Mexico. We may from time to time experience losses when the value of the U.S. dollar strengthens against the Canadian dollar, the Chinese renminbi, the Hong Kong dollar, or the Mexican peso, which could have a material adverse effect on our results of operations.
Total credit availability is limited by the amount of eligible accounts receivable, inventory, and qualified cash pledged as collateral under the agreement insofar as the Company is subject to a borrowing base comprised of the aggregate of these three amounts, less applicable reserves. As of December 31, 2022, total credit availability under the Ryerson Credit Facility was $826 million.
Total credit availability is limited by the amount of eligible accounts receivable, inventory, and qualified cash pledged as collateral under the agreement insofar as the Company is subject to a borrowing base comprised of the aggregate of these three amounts, less applicable reserves. As of December 31, 2023, total credit availability under the Ryerson Credit Facility was $560 million.
Certain of our operations are located outside of the United States, which subjects us to risks associated with international activities. Certain of our operations are located outside of the U.S., primarily in Canada, China, and Mexico.
Certain of our operations are located outside of the United States, which subjects us to risks associated with international activities. We have certain operations which are located outside of the U.S., in Canada, China, and Mexico.
We use management information systems to track inventory information at individual facilities, communicate customer information, and aggregate daily sales, margin, and promotional information. Difficulties associated with upgrades, installations of major software or hardware, and integration with new systems could have a material adverse effect on results of operations.
We use management information systems to track inventory information at individual facilities, provide pricing recommendations for sales quotes, communicate customer information, and aggregate daily sales, margin, and promotional information. Difficulties associated with upgrades, installations of major software or hardware, and integration with new systems could have a material adverse effect on results of operations.
Assuming a consistent level of debt through-out 2022 a 100 basis point increase in the interest rate on our floating rate debt effective from the beginning of the year would increase our interest expense under the Ryerson Credit Facility and the China credit facility by approximately $4.3 million, on an annual basis.
Assuming a consistent level of 21 debt through-out 2023 a 100 basis point increase in the interest rate on our floating rate debt effective from the beginning of the year would increase our interest expense under the Ryerson Credit Facility and the China credit facility by approximately $4.7 million, on an annual basis.
For more information, see “Dividend Policy.” Your only opportunity to achieve a return on your investment in us may be if the market price of our common stock appreciates and you sell your shares at a profit, but there is no guarantee that the market price for our common stock will ever exceed the price that you pay for our common stock.
Your only opportunity to achieve a return on your investment in us may be if the market price of our common stock appreciates and you sell your shares at a profit, but there is no guarantee that the market price for our common stock will ever exceed the price that you pay for our common stock.
The majority of our indebtedness, including the Ryerson Credit Facility, bears interest at rates that fluctuate with changes in certain short-term prevailing interest rates. As of December 31, 2022, we had $365.0 million of outstanding borrowings under the Ryerson Credit Facility, with an additional $826 million available for borrowing under such facility.
The majority of our indebtedness, including the Ryerson Credit Facility, bears interest at rates that fluctuate with changes in certain short-term prevailing interest rates. As of December 31, 2023, we had $433.0 million of outstanding borrowings under the Ryerson Credit Facility, with an additional $560 million available for borrowing under such facility.
RISKS RELATED TO OUR CAPITAL STRUCTURE We have indebtedness under our Ryerson Credit Facility, which could adversely affect our financial position and prevent us from fulfilling our financial obligations. As of December 31, 2022, our total indebtedness was $367 million and we had approximately $826 million of unused capacity under the Ryerson Credit Facility.
RISKS RELATED TO OUR CAPITAL STRUCTURE We have indebtedness under our Ryerson Credit Facility, which could adversely affect our financial position and prevent us from fulfilling our financial obligations. As of December 31, 2023, our total indebtedness under the Ryerson Credit Facility was $433 million and we had $560 million of unused capacity on the facility.
These provisions: • establish a classified Board of Directors so that not all members of our Board of Directors are elected at one time; • authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock; • provide that the Board of Directors is expressly authorized to make, alter, or repeal our amended and restated bylaws; • prohibit stockholders from acting by written consent if less than a majority of the voting power of our outstanding stock is controlled by Platinum; and • establish advance notice requirements for nominations for elections to our Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings. 20 These anti-takeover provisions and other provisions under Delaware law could discourage, delay, or prevent a transaction involving a change in control of our company, even if doing so would benefit our stockholders.
These provisions: • establish a classified Board of Directors so that not all members of our Board of Directors are elected at one time; • authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock; • provide that the Board of Directors is expressly authorized to make, alter, or repeal our amended and restated bylaws; • prohibit stockholders from acting by written consent if less than a majority of the voting power of our outstanding stock is controlled by Platinum; and • establish advance notice requirements for nominations for elections to our Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
For our sources of lower cost products from Asia and other areas of the world, the effect of disruptions is typically increased due to the additional lead time required and distances involved. Further, the risk of disruption is increased due to the current political climate seeking trade reform. In addition, we have strategic relationships with a number of vendors.
For our sources of lower cost products from Asia and other areas of the world, the effect of disruptions is typically increased due to the additional lead time required and distances involved. In addition, we have strategic relationships with a number of vendors.
Our credit ratings are based on a number of factors, including our financial strength and factors outside of our control, such as conditions affecting our industry generally or the introduction of new rating practices and methodologies.
Changes in our credit ratings and outlook may reduce access to capital and increase borrowing costs. Our credit ratings are based on a number of factors, including our financial strength and factors outside of our control, such as conditions affecting our industry generally or the introduction of new rating practices and methodologies.
We may not be able to retain all of our and an acquisition’s customers, which may adversely affect our business and sales. Integrating acquisitions, particularly large acquisitions, requires us to enhance our operational and financial systems and employ additional qualified personnel, management, and financial resources, and may adversely affect our business by diverting management away from day-to-day operations.
Integrating acquisitions, particularly large acquisitions, requires us to enhance our operational and financial systems and employ additional qualified personnel, management, and financial resources, and may adversely affect our business by diverting management away from day-to-day operations.
RISKS RELATED TO EXPANSION AND INTERNATIONAL OPERATIONS We may not be able to successfully consummate and complete the integration of future acquisitions, and if we are unable to do so, it could disrupt operations and cause unanticipated increases in costs and/or decreases in revenues and results of operations.
Significant unanticipated changes in any of these factors may have an adverse effect on our financial condition, results of operations, liquidity, and cash flows. 14 RISKS RELATED TO EXPANSION AND INTERNATIONAL OPERATIONS We may not be able to successfully consummate and complete the integration of future acquisitions, and if we are unable to do so, it could disrupt operations and cause unanticipated increases in costs and/or decreases in revenues and results of operations.
For example, a sale of a substantial number of shares of stock in the future by Platinum could cause our stock price to decline.
The interests of Platinum may not in all cases be aligned with the interests of the other holders of our common stock. For example, a sale of a substantial number of shares of stock in the future by Platinum could cause our stock price to decline.
Losing the services of one or more members of our management team such as our CEO, Edward J. Lehner, could adversely affect our business and possibly prevent us from improving our operational, financial, and information management systems and controls. We compete to hire employees and then must train them and develop their skills and competencies.
We believe that our success is due, in part, to our experienced management team. Losing the services of one or more members of our management team such as our CEO, Edward J. Lehner, could adversely affect our business and possibly prevent us from improving our operational, financial, and information management systems and controls.
The number of available suppliers could be reduced by factors such as industry consolidation and bankruptcies affecting steel and metal producers. For the year ended December 31, 2022, our top 25 suppliers represented approximately 78% of our purchases. We could be 14 significantly and adversely affected if delivery were disrupted from a major supplier.
For the year ended December 31, 2023, our top 25 suppliers represented approximately 78% of our purchases. We could be significantly and adversely affected if delivery were disrupted from a major supplier.
In order to compete and have continued growth, we must attract, retain, and motivate executives and other key employees, including those in managerial, technical, sales, marketing, and support positions. We believe that our success is due, in part, to our experienced management team.
If we are unable to retain, attract, and motivate management and key personnel, it may adversely affect our business. In order to compete and have continued growth, we must attract, retain, and motivate executives and other key employees, including those in managerial, technical, sales, marketing, and support positions.
RISKS RELATED TO OUR STOCKHOLDER BASE Platinum owns a significant percentage of our stock and has the right to nominate a majority of the members of the Corporation’s board and will be able to exert control over matters subject to stockholder approval.
RISKS RELATED TO OUR STOCKHOLDER BASE Platinum owns a substantial percentage of our stock and has the right to nominate two members of the Corporation’s board and will be able to exert influence over matters subject to stockholder approval. Platinum owns approximately 3,924,478 shares of our common stock, which is approximately 11.5% of our issued and outstanding common stock.
Lead time and the cost of our products could increase if we were to lose one of our primary suppliers. If, for any reason, our primary suppliers of aluminum, carbon steel, stainless steel, or other metals should curtail or discontinue their delivery of such metals in the quantities needed and at prices that are competitive, our business could suffer.
If, for any reason, our primary suppliers of aluminum, carbon steel, stainless steel, or other metals should curtail or discontinue their delivery of such metals in the quantities needed and at prices that are competitive, our business could suffer. The number of available suppliers could be reduced by factors such as industry consolidation and bankruptcies affecting steel and metal producers.
Fluctuations in the value of the U.S. dollar versus the Canadian dollar, Chinese renminbi, the Hong Kong dollar, or the Mexican peso could reduce the value of these assets as reported in our financial statements, which could, as a result, reduce our stockholders’ equity.
Fluctuations in the value of the U.S. dollar versus the Canadian dollar, Chinese renminbi, the Hong Kong dollar, or the Mexican peso could reduce the value of these assets as reported in our financial statements, which could, as a result, reduce our stockholders’ equity. 15 The Chinese government exerts substantial influence over the manner in which we must conduct our business activities, particularly with regards to the land our facilities are located on.
Such excess capacity sometimes results in metal manufacturers in certain countries exporting steel at prices that are lower than prevailing domestic prices and sometimes at or below their cost of production. Excessive imports of metal into the U.S. have exerted and may exert in the future, downward pressure on U.S. steel prices which may negatively affect our results of operations.
Such excess capacity sometimes results in metal manufacturers in certain countries exporting steel at prices that are lower than prevailing domestic prices and sometimes at or below their cost of production.
We may suffer prolonged disruption in the operations of any of these facilities, whether due to labor or technical difficulties, destruction, or damage to any of the facilities or otherwise, which could adversely affect our operating results. If we are unable to retain, attract, and motivate management and key personnel, it may adversely affect our business.
We may suffer prolonged disruption in the operations of any of these facilities, whether due to labor or technical difficulties, destruction, or damage sustained as a result of natural disasters or climate-related events to any of the facilities or otherwise, which could adversely affect our operating results.
Some of our existing supply agreements have required minimum purchase quantities. Under adverse economic conditions, those minimums may exceed our needs.
From time to time, we may use fixed-price and/or fixed-volume supplier contracts to offset contracts with customers. Some of our existing supply agreements have required minimum purchase quantities. Under adverse economic conditions, those minimums may exceed our needs.
Restrictions contained in the agreements governing the Ryerson Credit Facility, or our other existing or future debt may also inhibit our ability to make certain investments, including acquisitions, and participations in joint ventures. 15 Acquisitions, partnerships, joint ventures, and other business combination transactions, both foreign and domestic, involve various inherent risks, such as uncertainties in assessing value, strengths, weaknesses, liabilities, and potential profitability.
Restrictions contained in the agreements governing the Ryerson Credit Facility, or our other existing or future debt may also inhibit our ability to make certain investments, including acquisitions, and participations in joint ventures.
If interest rates increase dramatically, we could be unable to service our debt, which could have a material adverse effect on our business, financial condition, results of operations, or cash flows. 22 Changes in our credit ratings and outlook may reduce access to capital and increase borrowing costs.
The Federal Reserve has continued to increase interest rates in 2023, increasing our interest expense on the Ryerson Credit Facility. If interest rates continue to rise in the future, we could be unable to service our debt, which could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
Sixteen percent of our plant employees were members of various unions, including the United Steel Workers and The International Brotherhood of Teamsters. Four renewal contracts covering 98 employees were successfully negotiated in 2022. Six contracts covering 120 employees are currently scheduled to expire in 2023.
Our North American workforce was comprised of approximately 1,900 office employees and approximately 2,400 plant employees. Sixteen percent of our plant employees were members of various unions, including the United Steel Workers and The International Brotherhood of Teamsters. Eight renewal contracts covering 160 employees were successfully negotiated in 2023.
Therefore, management cannot predict the ultimate outcome of this matter or estimate a range of potential loss at this time. Regulations related to conflict-free minerals may force us to incur additional expenses and place us at a competitive disadvantage.
Therefore, management cannot predict the ultimate outcome of this matter or estimate a range of potential loss at this time.
There is also risk relating to our ability to achieve identified operating and financial synergies anticipated to result from the transactions. Additionally, problems could arise from the integration of acquired businesses, including unanticipated changes in the business or industry or general economic conditions that affect the assumptions underlying the acquisition.
Additionally, problems could arise from the integration of acquired businesses, including unanticipated changes in the business or industry or general economic conditions that affect the assumptions underlying the acquisition. Our future success will depend on our ability to complete the integration of these future acquisitions successfully into our operations.
Disruptions could occur due to factors beyond our control, including economic downturns, political unrest, port slowdowns, trade issues, including increased export or import duties or trade restrictions, health crises, climate related disruptions, and other factors, any of which could adversely affect a supplier’s ability to manufacture or deliver products to us.
Disruptions could occur due to factors beyond our control, including economic downturns, political unrest, port slowdowns, trade issues, including increased export or import duties or trade restrictions, health crises, climate related disruptions, and other factors. Recent unrest in the Red Sea has increased both shipping times and costs presenting new challenges to the metals industry.
As a result of Platinum’s ownership of a significant portion of the Company’s outstanding capital stock as well its board nomination rights pursuant to the Investor Rights Agreement, Platinum may significantly influence or effectively control our policies and operations, including the appointment of management, future issuances of our common stock or other securities, and the payment of dividends.
As a result, Platinum may influence our policies and operations, including the appointment of management, future issuances of our common stock or other securities, and the payment of dividends, as well as impact decisions to enter into any other corporate transaction.
However, the central or local governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. 16 Moreover, the Chinese court system does not provide the same property and contract right guarantees as do courts in the U.S. and, accordingly, disputes may be protracted and resolution of claims may result in significant economic loss.
Moreover, the Chinese court system does not provide the same property and contract right guarantees as do courts in the U.S. and, accordingly, disputes may be protracted and resolution of claims may result in significant economic loss.
For example, Platinum may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that our stockholders may believe are in their best interest as stockholders.
This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that our stockholders may believe are in their best interest as stockholders.
Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property, and other matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements.
The Chinese government has exercised and continues to exercise substantial control over the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property, and other matters.
Our results of operations could be adversely affected by increased costs due to increased competition for employees, higher employee turnover, or increased employee benefit costs. Our risk management strategies may result in losses. From time to time, we may use fixed-price and/or fixed-volume supplier contracts to offset contracts with customers.
Our ability to implement our business plan is dependent on our ability to retain, hire, and train a large number of qualified employees each year. Our results of operations could be adversely affected by increased costs due to increased competition for employees, higher employee turnover, or increased employee benefit costs. Our risk management strategies may result in losses.
Certain employee retirement benefit plans are underfunded and the actual cost of those benefits could exceed current estimates, which would require us to fund the shortfall. As of December 31, 2022, our pension plan had an unfunded liability of $73.0 million. Our actual costs for benefits required to be paid may exceed those projected and future actuarial assessments.
As of December 31, 2023, our pension plan had an unfunded liability of $63.9 million and our other postretirement benefits plan had an unfunded liability of $35.7 million. Our actual costs for benefits required to be paid may exceed those projected and future actuarial assessments.
In the future, we may need to retain and hire additional qualified sales, marketing, administrative, operating, and technical personnel, and to train and manage new personnel. Our ability to implement our business plan is dependent on our ability to retain, hire, and train a large number of qualified employees each year.
We compete to hire employees and then must train them and develop their skills and competencies. In the future, we may need to retain and hire additional qualified sales, marketing, administrative, operating, and technical personnel, and to train and manage new personnel.
RISKS RELATED TO OPERATING OUR BUSINESS Any significant work stoppages can harm our business. As of December 31, 2022, we employed approximately 3,900 persons in North America and 300 persons in China. Our North American workforce was comprised of approximately 1,800 office employees and approximately 2,100 plant employees.
Refer to Item 1C: "Cybersecurity" for further information on our Cybersecurity processes, policies, and programs. RISKS RELATED TO OPERATING OUR BUSINESS Any significant work stoppages can harm our business. As of December 31, 2023, we employed approximately 4,300 persons in North America and 300 persons in China.
Our future success will depend on our ability to complete the integration of these future acquisitions successfully into our operations. Specifically, after any acquisition, customers may choose to diversify their supply chains to reduce reliance on a single supplier for a portion of their metals needs.
Specifically, after any acquisition, customers may choose to diversify their supply chains to reduce reliance on a single supplier for a portion of their metals needs. We may not be able to retain all of our and an acquisition’s customers, which may adversely affect our business and sales.
These provisions could also discourage proxy contests and make it more difficult for our stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire.
These anti-takeover provisions and other provisions under Delaware law could discourage, delay, or prevent a transaction involving a change in control of our company, even if doing so would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for our stockholders to elect directors of their choosing.
In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management's attention and resources, which could materially and adversely affect our business, financial condition, results of operations, and growth prospects.
In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies.
Therefore, you should not rely on dividend income from shares of our common stock.
Therefore, you should not rely on dividend income from shares of our common stock. For more information, see "Dividend Policy" of Part II, Item 5 "Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities".
Removed
Public health problems may result in quarantines, business closures, transportation restrictions, import and export complications, and otherwise cause shortages in the supply of materials, higher costs for available supplies, or cause other disruptions within our operations and supply chain.
Added
Any of the aforementioned items could adversely affect a supplier’s ability to manufacture or deliver products to us.
Removed
Public health problems may cause increased costs of certain supplies and disruptions and delays within our supply chain, and may expose us to unanticipated liability or require us to change our business practices.
Added
Excessive imports of metal into the U.S. have exerted and may exert in the future, downward pressure on U.S. steel prices which may negatively affect our results of operations. 13 Lead time and the cost of our products could increase if we were to lose one of our primary suppliers.
Removed
Significant unanticipated changes in any of these factors may have an adverse effect on our financial condition, results of operations, liquidity, and cash flows.
Added
Acquisitions, partnerships, joint ventures, and other business combination transactions, both foreign and domestic, involve various inherent risks, such as uncertainties in assessing value, strengths, weaknesses, liabilities, and potential profitability. There is also risk relating to our ability to achieve identified operating and financial synergies anticipated to result from the transactions.
Removed
In addition, we may be subject to business disruptions created by health crises and outbreaks of communicable diseases.
Added
We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.
Removed
The Chinese government exerts substantial influence over the manner in which we must conduct our business activities, particularly with regards to the land our facilities are located on. The Chinese government has exercised and continues to exercise substantial control over the Chinese economy through regulation and state ownership.
Added
Eight contracts covering 152 employees are currently scheduled to expire in 2024. 16 Certain employee retirement benefit plans are underfunded and the actual cost of those benefits could exceed current estimates, which would require us to fund the shortfall.
Removed
We have recently paid regular quarterly cash dividends on our common stock.
Added
Environmental, social, and governance matters, and any related reporting obligation may impact our business Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social, and governance matters ("ESG"), that could expose us to numerous risks.
Removed
The Federal Reserve has increased interest rates throughout 2022 and early 2023, increasing our interest expense on the Ryerson Credit Facility. The expectation is that additional rate hikes will occur in 2023.
Added
These rules and regulations continue to evolve in scope and complexity, and many new requirements have been created in response to laws enacted by Congress, making compliance more difficult and uncertain. In addition, increasingly regulators, customers, investors, employees, and other stakeholders are focusing on ESG type matters and related disclosures.
Removed
Platinum owns approximately 15,924,478 shares of our common stock, which is approximately 43% of our issued and outstanding common stock. Therefore, Platinum may be able to determine all matters requiring stockholder approval.
Added
Our implementation of these evolving rules and regulations will require additional resources and implementation of new practices and reporting processes, all entailing additional compliance risk. Moreover, the progress and disclosure of our initiatives within the ESG scope could be criticized for accuracy, adequacy, and completeness, or may not advance at a sufficient pace.
Removed
In addition, Platinum has significant control over our decisions to enter into any other corporate transaction. The interests of Platinum may not in all cases be aligned with the interests of the other holders of our common stock.
Added
If our ESG-related data, processes, and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our sustainability goals, or at all, our reputation, business, financial performance, and growth could be adversely affected.
Added
Overall increased emphasis of ESG in itself and ESG reporting has increased stakeholder focus, including by U.S. and foreign governmental authorities, investors, and customers on environmental sustainability matters, such as climate change, the reduction of greenhouse gases, and water consumption.
Added
Legislative, regulatory, or other efforts to combat climate change or other environmental concerns could result in future increases in taxes, restrictions on or increases in the costs of supplies, transportation, and utilities, any of which could increase our operating costs, and necessitate future investments in facilities and equipment.
Added
Further, the customers we serve may impose emissions reduction or other environmental standards and requirements. As a result, we may experience increased compliance burdens and costs and the sourcing of our products may be adversely affected.
Added
These risks also include the increased pressure to make commitments, set targets, or establish additional goals and take actions to meet them, which could expose us to market, operational, execution, and reputation costs or risks. Regulations related to conflict-free minerals may force us to incur additional expenses and place us at a competitive disadvantage.

… 3 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

6 edited+0 added−0 removed4 unchanged
Biggest changeLouis, MO Owned Jackson, MS Owned Charlotte, NC** Owned Greensboro, NC (2) Owned Pikeville, NC Leased Winston-Salem, NC* Leased Youngsville, NC Leased Omaha, NE Owned Hampstead, NH* Leased 24 Lancaster, NY Leased Cincinnati, OH Owned Columbus, OH Leased Hamilton, OH* Leased Hilliard, OH Leased Stow, OH Leased Streetsboro, OH Leased Strongsville, OH Leased Oklahoma City, OK Leased Tulsa, OK Leased Ambridge, PA** Leased Charleston, SC** Owned Greenville, SC Owned Wellford, SC** Owned Chattanooga, TN Leased Knoxville, TN* Leased Memphis, TN Leased Dallas, TX Leased El Paso, TX Leased Houston, TX (2) Leased McAllen, TX Leased Odessa, TX Leased/Vacated Salt Lake City, UT Leased Pounding Mill, VA Leased Richmond, VA Leased Centralia, WA Leased Spokane, WA Leased Green Bay, WI Owned Green Bay, WI Leased Hammond, WI Leased Milwaukee, WI (2) Owned * Office space only ** Processing centers Operations in Canada Ryerson Canada, a wholly-owned indirect Canadian subsidiary of Ryerson Holding, has ten operational facilities in Canada.
Biggest changeLouis, MO Owned Jackson, MS Owned Charlotte, NC Owned Greensboro, NC (2) Owned 24 Pikeville, NC Leased Winston-Salem, NC* Leased Youngsville, NC Leased Omaha, NE Owned Dover, NH Leased Hampstead, NH* Leased Las Vegas, NV Leased Lancaster, NY Leased Cincinnati, OH Owned Columbus, OH Leased Hamilton, OH* Leased Hilliard, OH Leased Stow, OH*** Leased Streetsboro, OH Leased Strongsville, OH Leased Oklahoma City, OK Leased Tulsa, OK Leased Ambridge, PA** Leased Hyde Park, PA*** Leased North Huntingdon, PA Owned Charleston, SC** Owned Greenville, SC Owned Wellford, SC Owned Chattanooga, TN Leased Knoxville, TN* Leased Memphis, TN Leased Arlington, TX*** Leased Dallas, TX Leased El Paso, TX Leased Houston, TX*** Owned Houston, TX*** Leased Houston, TX (2) Leased McAllen, TX Leased Salt Lake City, UT Leased Pounding Mill, VA Leased Richmond, VA Leased Centralia, WA Leased Spokane, WA Leased Vancouver, WA* Leased Green Bay, WI Owned Green Bay, WI Leased Hammond, WI Leased Milwaukee, WI (2) Owned Schofield, WI Owned Wausau, WI Owned * Office space only ** Processing centers ***Toll Processing centers 25 Operations in Canada Ryerson Canada, a wholly-owned indirect Canadian subsidiary of Ryerson Holding, has ten operational facilities in Canada.
Ryerson 25 China’s headquarters office building is located in Kunshan. We own all of our China facilities and have purchased the related land use rights. All of the facilities are in good condition and are adequate for Ryerson China’s existing and anticipated operations. Operations in Mexico Ryerson Mexico, an indirect wholly-owned subsidiary of Ryerson Holding, has four facilities in Mexico.
Ryerson China’s headquarters office building is located in Kunshan. We own all of our China facilities and have purchased the related land use rights. All of the facilities are in good condition and are adequate for Ryerson China’s existing and anticipated operations. Operations in Mexico Ryerson Mexico, an indirect wholly-owned subsidiary of Ryerson Holding, has four facilities in Mexico.
For information concerning legal proceedings as of December 31, 2022, please refer to Note 13: Commitments and Contingencies in the notes to the consolidated financial statements included in Part II, Item 8 of this Report on Form 10-K, which is incorporated into this item by reference. ITEM 4. MINE SAF ETY DISCLOSURES. Not applicable. 26 PART II
For information concerning legal proceedings as of December 31, 2023, please refer to Note 12: Commitments and Contingencies in the notes to the consolidated financial statements included in Part II, Item 8 of this Report on Form 10-K, which is incorporated into this item by reference. ITEM 4. MINE SAF ETY DISCLOSURES. Not applicable. 26 PART II
ITEM 2. PR OPERTIES. As of December 31, 2022, the Company’s facilities are set forth below: Operations in the United States JT Ryerson and its U.S. affiliates maintain 82 operational facilities, including 8 locations that are dedicated to administration services. All of our metals service center facilities are in good condition and are adequate for JT Ryerson’s existing operations.
ITEM 2. PR OPERTIES. As of December 31, 2023, the Company’s facilities are set forth below: Operations in the United States JT Ryerson and its U.S. affiliates maintain 96 operational facilities, including 10 locations that are dedicated to administration services. All of our metals service center facilities are in good condition and are adequate for JT Ryerson’s existing operations.
Approximately 66% of these facilities are leased. The lease terms expire at various times through 2042. JT Ryerson’s properties and facilities are adequate to serve its present and anticipated needs.
Approximately 67% of these facilities are leased. The lease terms expire at various times through 2043. JT Ryerson’s properties and facilities are adequate to serve its present and anticipated needs.
Location Own/Lease Birmingham, AL Owned Mobile, AL Owned Fort Smith, AR Owned Hickman, AR** Leased Little Rock, AR** Leased Phoenix, AZ Leased Fresno, CA (2) Leased Livermore, CA Leased Santa Clara, CA Leased Vernon, CA Owned Commerce City, CO Owned Wilmington, DE Leased Jacksonville, FL Owned Tampa Bay, FL Leased Lavonia, GA Leased Norcross, GA Owned Des Moines, IA Owned Eldridge, IA** Leased Marshalltown, IA Owned Chicago, IL (Headquarters)* Leased Chicago, IL Leased Dekalb, IL Leased Downers Grove, IL* Leased Elgin, IL Leased Lisle, IL* Leased Burns Harbor, IN Owned Indianapolis, IN Owned Portage, IN** Owned Wichita, KS Leased Shelbyville, KY** Leased Shreveport, LA Owned St.
Location Own/Lease Birmingham, AL Owned Mobile, AL Owned Fort Smith, AR Owned Hickman, AR** Leased Little Rock, AR** Leased Phoenix, AZ Leased Cerritos, CA* Leased Fresno, CA (2) Leased Livermore, CA Leased Santa Clara, CA Leased Vernon, CA Owned Commerce City, CO Owned Wilmington, DE Leased Jacksonville, FL Owned Tampa Bay, FL Leased Buford, GA*** Leased Lavonia, GA Leased Norcross, GA Owned Des Moines, IA Owned Eldridge, IA** Leased Marshalltown, IA Owned Chicago, IL (Headquarters)* Leased Chicago, IL Leased Downers Grove, IL* Leased Elgin, IL Leased Lisle, IL* Leased Loves Park, IL Leased Montgomery, IL*** Leased University Park, IL Leased Burns Harbor, IN Owned Indianapolis, IN Owned Portage, IN** Owned Richmond, IN*** Leased Shelbyville, KY** Leased Shreveport, LA Owned St.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+1 added−1 removed3 unchanged
Biggest changeAs of December 31, 2022, we had remaining authorization to purchase an additional $73.2 million of shares. 28 Our share repurchase activity during the three months ended December 31, 2022 was as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet be Purchased under the Program (In millions, except shares and per share data) October 1, 2022 - October 31, 2022 8,646 $ 26.53 8,646 $ 73.9 November 1, 2022 - November 30, 2022 24,337 26.64 24,337 73.2 December 1, 2022 - December 31, 2022 — — — 73.2 32,983 32,983 Recent Sale of Unregistered Securities and Use of Proceeds None.
Biggest changeOur share repurchase activity during the three months ended December 31, 2023 was as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet be Purchased under the Program (In millions, except shares and per share data) October 1, 2023 - October 31, 2023 100,329 $ 27.96 100,329 $ 42.9 November 1, 2023 - November 30, 2023 81,736 28.89 81,736 40.5 December 1, 2023 - December 31, 2023 37,549 30.49 37,549 39.4 219,614 219,614 Recent Sale of Unregistered Securities and Use of Proceeds None.
While there is no nationally-recognized industry index consisting of metals service center companies, Ryerson considers its Peer Group to consist of Reliance Steel & Aluminum Co., Olympic Steel Inc., and Worthington Industries, Inc., each of which has securities listed for trading on the NASDAQ; Russel Metals Inc., which has securities listed for trading on the Toronto Stock Exchange; and Klöckner & Co SE., which has securities listed for trading on the XETRA Frankfurt Stock Exchange.
While there is no nationally-recognized industry index consisting of metals service center companies, Ryerson considers its Peer Group to consist of Reliance Steel & Aluminum Co., Olympic Steel Inc., and Worthington Steel, Inc., each of which has securities listed for trading on the NASDAQ; Russel Metals Inc., which has securities listed for trading on the Toronto Stock Exchange; and Klöckner & Co SE., which has securities listed for trading on the XETRA Frankfurt Stock Exchange.
Holders As of February 22, 2023, there were 7 stockholders of record of our common stock. Because many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders represented by these record holders.
Holders As of February 21, 2024, there were 7 stockholders of record of our common stock. Because many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders represented by these record holders.
The graph tracks the performance of a $100 investment in each of the indices (with reinvestment of dividends) from December 31, 2017 to December 31, 2022.
The graph tracks the performance of a $100 investment in each of the indices (with reinvestment of dividends) from December 31, 2018 to December 31, 2023.
Dividend Policy We paid cash dividends on our common stock in all four quarters of 2022; $0.100 per share in the first quarter, $0.125 per share in the second quarter, $0.150 per share in the third quarter, and $0.160 per share in the fourth quarter.
Dividend Policy We paid cash dividends on our common stock in all four quarters of 2023; $0.170 per share in the first quarter, $0.180 per share in the second quarter, $0.1825 per share in the third quarter, and $0.185 per share in the fourth quarter.
Under the share repurchase program, management is not obligated to repurchase, but has discretion in determining the conditions under which shares may be purchased from time to time.
On May 1, 2023, the Board of Directors authorized an increase to $100.0 million and extended the program to April 2025. Under the program, management is not obligated to repurchase shares, but has discretion in determining the conditions under which shares may be purchased from time to time.
Comparison of 5 Year Cumulative Total Return Assumes Initial Investment of $100 This graph is not deemed to be “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934 (“the Exchange Act”), and should not be deemed to be incorporated by reference into any of our prior or subsequent filings under the Securities Act of 1933 or the Exchange Act. 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 Ryerson Holding $ 100.00 $ 60.09 $ 112.13 $ 129.29 $ 248.48 $ 293.46 S&P 500 $ 100.00 $ 95.41 $ 124.56 $ 146.30 $ 186.19 $ 154.15 Peer Group $ 100.00 $ 80.11 $ 120.86 $ 132.26 $ 171.23 $ 204.41 Purchases of Equity Securities by the Issuer and Affiliated Purchasers On August 4, 2021, the Board of Directors authorized a share repurchase program that permitted the purchase of up to $50 million of the Company’s outstanding shares of common stock.
Comparison of 5 Year Cumulative Total Return Assumes Initial Investment of $100 This graph is not deemed to be “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934 (“the Exchange Act”), and should not be deemed to be incorporated by reference into any of our prior or subsequent filings under the Securities Act of 1933 or the Exchange Act. 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Ryerson Holding $ 100.00 $ 192.67 $ 222.15 $ 427.04 $ 504.40 $ 588.08 S&P 500 $ 100.00 $ 132.78 $ 156.34 $ 199.56 $ 164.85 $ 205.25 Peer Group $ 100.00 $ 152.67 $ 166.30 $ 217.74 $ 258.47 $ 359.06 28 Purchases of Equity Securities by the Issuer and Affiliated Purchasers On August 3, 2022, the Board of Directors authorized a new $75 million share repurchase program after the exhaustion of the previous share repurchase program.
During the year ended December 31, 2022, we repurchased 1,700,766 shares at an average cost of $29.39 per share, or $50.0 million in total.
During the year ended December 31, 2023, we repurchased 3,253,313 shares at an average cost of $35.00 per share, or $113.9 million in total. Following the increase in the share repurchase program to $100 million on May 1, 2023, we have repurchased $60.6 million in shares and $39.4 million remains outstanding as of December 31, 2023.
The returns of each member of the Peer Group are weighted according to that member’s stock market capitalization. The stock price performance included in this graph is not necessarily indicative of future stock price performance.
The returns of each member of the Peer Group are weighted according to that member’s stock market capitalization. On December 1, 2023 Worthington Industries spun off their steel division into Worthington Steel, Inc.
Removed
This program was exhausted during the second quarter of 2022. On August 3, 2022, the Board of Directors authorized a new $75 million share repurchase program after the exhaustion of the previous share repurchase program. The authorization is effective through August 4, 2024, unless terminated.
Added
The chart below includes Worthington Industries data for December 31, 2018 through November 30, 2023 and Worthington Steel, Inc. data thereafter, with returns and market capitalization weighted for each respective period. The stock price performance included in this graph is not necessarily indicative of future stock price performance.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

86 edited+34 added−52 removed65 unchanged
Biggest changeThe increase in expenses in 2022 was primarily due to changes in the following categories: • higher selling, general, and administrative expenses of $16.9 million resulting from higher consulting fees and higher travel and entertainment expenses; • higher delivery expenses of $14.2 million due to increased fuel and delivery costs; • higher operating expenses of $11.1 million primarily due to higher repair & maintenance costs, higher operating supplies, higher rent expense after the leaseback of facilities sold in 2021 and the new lease on the Centralia, Washington facility which began in the third quarter of 2022, and higher information technology costs; • higher reorganization costs of $3.4 million primarily due to increased system implementation activity; 37 • higher depreciation and amortization expense of $2.9 million from increased capital expenditures in 2022; and • partially offset by lower compensation expenses of $22.6 million, which comprises lower sales incentive expense of $35.4 million, partially offset by an increase of $12.8 million in salaries and wage expense due to compensation increases and increased headcount resulting from acquisitions.
Biggest changeExcluding the impact of acquisitions, expenses changed in the following categories: • higher reorganization costs of $28.7 million in 2023 primarily due to increased system conversion activity as well as start up costs associated with our new state of the art University Park location; • higher employee benefit costs of $8.3 million in 2023, primarily due to higher medical costs and stock compensation; • higher salaries and wage expense of $4.9 million in 2023 primarily due to compensation increases; • higher operating expenses of $4.3 million in 2023 primarily due to higher repair & maintenance costs, higher information technology expenses, and higher insurance expense; and • higher selling, general, and administrative expenses of $1.3 million in 2023 resulting from higher travel and entertainment expenses; 37 • partially offset by lower incentive compensation expense of $21.2 million.
Any related impairment loss is calculated based upon comparison of the fair value to the carrying value of the asset. Separate intangible assets that have finite useful lives are amortized over their useful lives. An impaired long-lived or intangible 43 asset would be written down to fair value, based on various available valuation techniques, including the discounted cash flow method.
Any related impairment loss is calculated based upon comparison of the fair value to the carrying value of the asset. Separate intangible assets that have finite useful lives are amortized over their useful lives. An impaired long-lived or intangible asset would be written down to fair value, based on various available valuation techniques, including the discounted cash flow method.
We cannot guarantee that the rate of future credit losses will be similar to past experience. Provisions for allowances and claims are based upon historical rates, expected trends, and estimates of potential returns, allowances, customer discounts, and incentives. We consider all available information when assessing the adequacy of the provision for allowances, claims, and doubtful accounts.
We cannot guarantee that the rate of future credit losses will be similar to past experience. Provisions for allowances and claims are based upon 42 historical rates, expected trends, and estimates of potential returns, allowances, customer discounts, and incentives. We consider all available information when assessing the adequacy of the provision for allowances, claims, and doubtful accounts.
We cannot determine at this time whether any potential liability related to this litigation would materially affect our financial position, results of operations, or cash flows. Recent Accounting Pronouncements Recent accounting pronouncements are discussed within Note 1: Summary of Accounting and Financial Policies in Part II, Item 8 Financial Statements and Supplementary Data.
We cannot determine at this time whether any potential liability related to this litigation would materially affect our financial position, results of operations, or cash flows. 44 Recent Accounting Pronouncements Recent accounting pronouncements are discussed within Note 1: Summary of Accounting and Financial Policies in Part II, Item 8 Financial Statements and Supplementary Data.
Critical Accounting Estimates Preparation of this Form 10-K requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of sales and 42 expenses during the reporting period.
Critical Accounting Estimates Preparation of this Form 10-K requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of sales and expenses during the reporting period.
Over-time revenues are recorded in proportion with the progress made toward completing the performance obligation. 34 Sales, cost of materials sold, gross profit, and operating expense control are the principal factors that impact our profitability: Net Sales.
Over-time revenues are recorded in proportion with the progress made toward completing the performance obligation. Sales, cost of materials sold, gross profit, and operating expense control are the principal factors that impact our profitability: Net Sales.
Discussions of 2021 items and year-over-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Discussions of 2021 items and year-over-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
We purchase large quantities of metal products from primary producers and sell these materials in smaller quantities to a wide variety of metals-consuming industries. We carry a full line of nearly 75,000 products in stainless steel, aluminum, carbon steel, and alloy steels and a limited line of nickel and red metals in various shapes and forms.
We purchase large quantities of metal products from primary producers and sell these materials in smaller quantities to a wide variety of metals-consuming industries. We carry a full line of approximately 75,000 products in stainless steel, aluminum, carbon steel, and alloy steels and a limited line of nickel and red metals in various shapes and forms.
Industry Developments After the Russian forces invaded Ukraine on February 24, 2022, the Biden administration issued executive orders prohibiting the importation of goods from covered regions related to Ukraine and Russia. Ryerson takes this very seriously and has reviewed our direct and indirect material purchases to ensure compliance.
After the Russian forces invaded Ukraine on February 24, 2022, the Biden administration issued executive orders prohibiting the importation of goods from covered regions related to Ukraine and Russia. Ryerson takes this very seriously and has reviewed our direct and indirect material purchases to ensure compliance.
Working capital requirements in 2022 decreased due to lower shipments and a decline in average selling prices in the fourth quarter of 2022 compared to the fourth quarter of 2021, which resulted in lower sales and the related accounts receivable. Inventory quantities on hand decreased to align with softer demand conditions. The lower inventory investment also decreased accounts payable balances.
Working capital requirements in 2022 decreased due to lower shipments and a decline in average selling prices in the fourth quarter of 2022, which resulted in lower sales and the related accounts receivable. Inventory quantities on hand decreased to align with softer demand conditions. The lower inventory investment also decreased accounts payable balances.
The discount rate was determined by matching, on an approximate basis, the coupons and maturities for a portfolio of corporate bonds (rated Aa or better by Moody’s Investor Services or AA or better by Standard and Poor’s) to the expected plan benefit payments defined by the projected benefit obligation.
The discount rate is determined by matching, on an approximate basis, the coupons and maturities for a portfolio of corporate bonds (rated Aa or better by Moody’s Investor Services or AA or better by Standard and Poor’s) to the expected plan benefit payments defined by the projected benefit obligation.
If these estimates or their related assumptions for commodity prices and demand change in the future, we may be required to record impairment charges for these assets. Based on the impairment test performed on October 1, 2022, the Company concluded that the fair value of the reporting units tested for impairment exceeded the carrying value.
If these estimates or their related assumptions for commodity prices and demand change in the future, we may be required to record impairment charges for these assets. 43 Based on the impairment test performed on October 1, 2023, the Company concluded that the fair value of the reporting units tested for impairment exceeded the carrying value.
Our net debt (defined as total debt less cash and cash equivalents) was $328 million and $588 million at December 31, 2022 and December 31, 2021, respectively. Total liquidity and net debt are not U.S. generally accepted accounting principles (“GAAP”) financial measures. We believe that total liquidity provides additional information for measuring our ability to fund our operations.
Our net debt (defined as total debt less cash and cash equivalents) was $382 million and $328 million at December 31, 2023 and December 31, 2022, respectively. Total liquidity and net debt are not U.S. generally accepted accounting principles (“GAAP”) financial measures. We believe that total liquidity provides additional information for measuring our ability to fund our operations.
Tons sold decreased in 2022 overall, with the largest decreases in our stainless flat, stainless plate, and stainless long product lines partially offset by an increase in our carbon plate shipments.
Tons sold decreased in 2023 overall, with the largest decreases in our stainless flat, aluminum long, and carbon long product lines partially offset by an increase in our stainless, aluminum, and carbon plate shipments.
This section of this Form 10-K generally discusses 2022 and 2021 items and year-over-year comparisons between 2022 and 2021.
This section of this Form 10-K generally discusses 2023 and 2022 items and year-over-year comparisons between 2023 and 2022.
Overview Business Ryerson Holding Corporation (“Ryerson Holding”), a Delaware corporation, is the parent company of Joseph T. Ryerson & Son, Inc. (“JT Ryerson”), a Delaware corporation. Affiliates of Platinum Equity, LLC (“Platinum”) own approximately 15,924,478 shares of our common stock, which is approximately 43% of our issued and outstanding common stock.
Overview Business Ryerson Holding Corporation (“Ryerson Holding”), a Delaware corporation, is the parent company of Joseph T. Ryerson & Son, Inc. (“JT Ryerson”), a Delaware corporation. Affiliates of Platinum Equity, LLC (“Platinum”) own approximately 3,924,478 shares of our common stock, which is approximately 11.5% of our issued and outstanding common stock.
Pension expense increases as the expected rate of return on plan assets decreases. Lowering the expected long-term rate of return on plan assets by 50 basis points would have increased 2022 pension expense by approximately $1 million. Future pension obligations for the U.S. plans were discounted using rates between of 5.28% and 5.45% at December 31, 2022.
Pension expense increases as the expected rate of return on plan assets decreases. Lowering the expected long-term rate of return on plan assets by 50 basis points would have increased 2023 pension expense by approximately $1 million. Future pension obligations for the U.S. plans were discounted using rates between of 5.05% and 5.24% at December 31, 2023.
Additionally, the report highlights Ryerson’s scope 1 and 2 emissions, relative emissions comparisons to metals and distribution peers, commitment to employee safety and continued outperformance of industry average OSHA rates, as well as initiatives by the Company’s talent management office to develop its workforce.
Additionally, the report highlights Ryerson’s scope 1 and 2 emissions, relative emissions comparisons to metals and distribution peers, commitment to employee safety and continued outperformance of industry average OSHA rates, as well as initiatives by the Company’s talent management office to develop its workforce. In 2023, the Company progressed in its financial strategy.
Our principal source of operating cash is from the sale of metals and other materials. Our principal uses of cash are for payments associated with the procurement and processing of metals and other materials inventories, costs incurred for the warehousing and delivery of inventories, the selling and administrative costs of the business, capital expenditures, and for interest payments on debt.
Our principal uses of cash are for payments associated with the procurement and processing of metals and other materials inventories, costs incurred for the warehousing and delivery of inventories, the selling and administrative costs of the business, capital expenditures, and for interest payments on debt.
The discount rate was estimated to be 16% at October 1, 2022. The Company determines a discount rate based on an estimate of a reasonable risk-adjusted return an investor would expect to realize on an investment in the reporting unit.
The discount rate was estimated to be 13.5% at October 1, 2023. The Company determines a discount rate based on an estimate of a reasonable risk-adjusted return an investor would expect to realize on an investment in the reporting unit.
Ryerson’s financial strategy includes a focus on generating cash from operating activities and continuously improving a “through the cycle” operating model in order to maintain a strong balance sheet, re-invest in the growth of the business, and generate returns to shareholders. In 2022, the Company achieved major milestones in its financial strategy.
Ryerson’s financial strategy includes a focus on generating cash from operating activities and continuously improving a “through the cycle” operating model in order to maintain a strong balance sheet, re-invest in the growth of the business, and generate returns to shareholders.
We had a debt-to-capitalization ratio of 29% and 54% at December 31, 2022 and at December 31, 2021, respectively. We had total liquidity (defined as cash and cash equivalents, and availability under the Ryerson Credit Facility and foreign debt facilities) of $909 million at December 31, 2022 versus $741 million at December 31, 2021.
We had a debt-to-capitalization ratio of 32% and 29% at December 31, 2023 and at December 31, 2022, respectively. We had total liquidity (defined as cash and cash equivalents, and availability under the Ryerson Credit Facility and foreign debt facilities) of $656 million at December 31, 2023 versus $909 million at December 31, 2022.
Item 8, Financial Statements and Supplementary Data, Note 10: Debt for further information. The Company expects to pay approximately $21 million of interest on the Ryerson Credit Facility, foreign debt, and other debt over the next 12 months and $73 million thereafter.
Item 8, Financial Statements and Supplementary Data, Note 9: Debt for further information. The Company expects to pay approximately $29 million of interest on the Ryerson Credit Facility, foreign debt, and other debt over the next 12 months and $72 million thereafter.
The Company anticipates that it will have a minimum required pension contribution of approximately $8.6 million in 2023 under the Employee Retirement Income Security Act of 1974 (“ERISA”), Pension Protection Act in the U.S., and the Ontario Pension Benefits Act in Canada.
The Company anticipates that it will have a minimum required pension contribution of approximately $11.0 million in 2024 under the Employee Retirement Income Security Act of 1974 (“ERISA”), Pension Protection Act in the U.S., and the Ontario Pension Benefits Act in Canada.
Availability under the Ryerson Credit Facility was $826 million and $670 million at December 31, 2022 and December 31, 2021, respectively. For further information, see Note 10: Debt in Part II, Item 8 – Financial Statements and Supplementary Data.
Availability under the Ryerson Credit Facility was $560 million and $826 million at December 31, 2023 and December 31, 2022, respectively. For further information, see Note 9: Debt in Part II, Item 8 – Financial Statements and Supplementary Data.
Moody’s upgraded Ryerson’s corporate rating to Ba3 from B1, Standard & Poor’s (“S&P”) upgraded it to BB- from B+, and Fitch issued an upgrade to BB from BB-. The following table summarizes the Company’s ratings by agency as of February 22, 2023.
Moody’s upgraded Ryerson’s corporate rating to Ba3 from B1, Standard & Poor’s (“S&P”) upgraded it to BB- from B+, and Fitch issued an upgrade to BB from BB-. The following table summarizes the Company’s current ratings by agency.
Total debt outstanding as of December 31, 2022 consisted of the following amounts: $365.0 million borrowings under the Ryerson Credit Facility, $4.0 million of foreign debt, and $4.0 million of other debt, less $6.0 million of unamortized debt issuance costs.
Total debt outstanding as of December 31, 2023 consisted of the following amounts: $433.0 million borrowings under the Ryerson Credit Facility, $6.0 million of foreign debt, and $2.2 million of other debt, less $4.7 million of unamortized debt issuance costs.
Pension Funding The Company made contributions of $6.8 million in 2022, $23.7 million in 2021, and $7.1 million in 2020 to improve the Company’s pension plans funded status. At December 31, 2022, as reflected in Part II. Item 8, Financial Statements and Supplementary Data, Note 11, pension liabilities exceeded plan assets by $73.0 million.
Pension Funding The Company made contributions of $8.8 million in 2023, $6.8 million in 2022, and $23.7 million in 2021 to improve the Company’s pension plans funded status. At December 31, 2023, as reflected in Part II. Item 8, Financial Statements and Supplementary Data, Note 10, pension liabilities exceeded plan assets by $63.9 million.
Changes in average selling prices are primarily driven by commodity metals prices, which impact Ryerson’s selling prices over the subsequent three to six-month period. 30 Throughout 2022, indicators in the key steel industry end markets reported slowing growth.
Changes in average selling prices are primarily driven by commodity metals prices, which impact Ryerson’s selling prices over the subsequent three to six-month period. 30 Throughout 2023, indicators in the key steel industry end markets reported contraction in industrial activity.
Noncontrolling Interest In both 2022 and 2021, Ryerson China’s results of operations was income and the portion attributable to the noncontrolling interest was $0.5 million and $1.1 million, respectively. Earnings Per Share Basic and diluted earnings per share was $10.41 and $10.21, respectively, in 2022. Basic and diluted earnings per share was $7.67 and $7.56, respectively, in 2021.
Noncontrolling Interest In both 2023 and 2022, Ryerson China’s results of operations was income and the portion attributable to the noncontrolling interest was $0.7 million and $0.5 million, respectively. Earnings Per Share Basic and diluted earnings per share was $4.17 and $4.10, respectively, in 2023. Basic and diluted earnings per share was $10.41 and $10.21, respectively, in 2022.
Interest payments related to the variable rate debt were estimated using the weighted average interest rate for the Ryerson Credit Facility. The Company leases various assets including real estate, trucks, trailers, cars, mobile equipment, processing equipment, and IT equipment. We have noncancelable operating leases expiring at various times through 2042, and finance leases expiring at various times through 2028.
Interest payments related to the variable rate debt were estimated using the weighted average interest rate for the respective debt instrument. 41 The Company leases various assets including real estate, trucks, trailers, cars, mobile equipment, processing equipment, and IT equipment. We have noncancelable operating leases expiring at various times through 2043, and finance leases expiring at various times through 2030.
Material Cash Requirements The Company expects to make approximately $373 million in principal payments to satisfy its debt obligations, consisting of $4 million in foreign debt coming due in 2023, $4 million of other debt coming due between 2023 and 2024, and $365 million for the Ryerson Credit Facility coming due in 2027. Please refer to Part II.
Material Cash Requirements The Company expects to make approximately $441 million in principal payments to satisfy its debt obligations, consisting of $6 million in foreign debt coming due in 2024, $2 million of other debt coming due in 2024, and $433 million for the Ryerson Credit Facility coming due in 2027. Please refer to Part II.
When calculating pension expense for 2022, we assumed the pension plans’ assets would generate a long-term rate of return of 4.85% for the JT Ryerson plan and 1.80% for the Central Steel and Wire Company plan, and between 2.25% and 4.25% for the Canadian plans.
When calculating pension expense for 2023, we assumed the pension plans’ assets would generate a long-term rate of return of 6.05% for the JT Ryerson plan and 3.80% for the Central Steel and Wire Company plan, and between 4.25% and 6.00% for the Canadian plans.
Below is a reconciliation of cash and cash equivalents to total liquidity: December 31, 2022 December 31, 2021 December 31, 2020 (In millions) Cash and cash equivalents $ 39 $ 51 $ 61 Availability under Ryerson Credit Facility and foreign debt facilities 870 690 312 Total liquidity $ 909 $ 741 $ 373 Below is a reconciliation of total debt to net debt: December 31, 2022 December 31, 2021 December 31, 2020 (In millions) Total debt $ 367 $ 639 $ 740 Less: cash and cash equivalents (39 ) (51 ) (61 ) Net debt $ 328 $ 588 $ 679 Of the total cash and cash equivalents, as of December 31, 2022, $8.1 million was held in subsidiaries outside the U.S. that is deemed to be permanently reinvested.
Below is a reconciliation of cash and cash equivalents to total liquidity: December 31, 2023 December 31, 2022 December 31, 2021 (In millions) Cash and cash equivalents $ 54 $ 39 $ 51 Availability under Ryerson Credit Facility and foreign debt facilities 602 870 690 Total liquidity $ 656 $ 909 $ 741 Below is a reconciliation of total debt to net debt: December 31, 2023 December 31, 2022 December 31, 2021 (In millions) Total debt $ 436 $ 367 $ 639 Less: cash and cash equivalents (54 ) (39 ) (51 ) Net debt $ 382 $ 328 $ 588 Of the total cash and cash equivalents, as of December 31, 2023, $34.2 million was held in subsidiaries outside the U.S. that is deemed to be permanently reinvested.
In June, Ryerson broke ground on a new 900,000 square foot service center facility for its wholly-owned subsidiary, Central Steel & Wire Company, located in University Park, IL, which will feature expanded bar and tube processing capabilities and is expected to be operational by the middle of 2023.
Over the year, Ryerson also progressed with construction on a 900,000 square foot service center facility for its wholly-owned subsidiary, Central Steel & Wire Company, located in University Park, IL, which will feature expanded bar and tube processing capabilities and is expected to be operational by the second quarter of 2024.
Deferred Tax Amounts At December 31, 2022, the Company had a net deferred tax liability of $114 million comprised primarily of a deferred tax asset of $20 million related to pension liabilities, a deferred tax asset related to postretirement benefits other than pensions of $10 million, deferred tax assets of $7 million related to state, local, and foreign tax loss carryforwards, and $24 million of other deferred taxes relating to accrued compensation and other items, offset by a valuation allowance of $5 million and deferred tax liabilities of $61 million related to fixed assets, $99 million related to inventory, and $10 million related to intangibles.
Deferred Tax Amounts At December 31, 2023, the Company had a net deferred tax liability of $136 million comprised primarily of a deferred tax asset of $17 million related to pension liabilities, a deferred tax asset related to postretirement benefits other than pensions of $9 million, deferred tax assets of $7 million related to state, local, and foreign tax loss carryforwards, $93 million related to operating lease liabilities, and $22 million of other deferred taxes relating to accrued compensation and other items, offset by a valuation allowance of $4 million and deferred tax liabilities of $86 million related to fixed assets, $99 million related to inventory, $88 million related to operating lease assets, and $7 million related to intangibles.
See Part II. Item 8, Financial Statements and Supplementary Data, Note 19: Income Taxes for further discussion.
Item 8, Financial Statements and Supplementary Data, Note 18: Income Taxes for further discussion.
In 2022, we recorded a gain on sale of assets of $3.8 million from the sale of a facility in Texas that Ryerson had an option to purchase.
In 2022, we recorded a gain on sale of assets of $3.8 million from the sale of a facility in Texas that Ryerson had an option to purchase. On a per ton basis, total operating expenses increased to $408 per ton in 2023 from $360 per ton in 2022.
(Dollars and shares in millions, except per share data) 2022 2021 Net income attributable to Ryerson Holding Corporation $ 391.0 $ 294.3 Gain on bargain purchase (0.6 ) — Gain on sale of assets (3.8 ) (109.6 ) Loss on retirement of debt 21.3 5.5 Pension settlement charge — 98.3 Provision (benefit) for income taxes (4.3 ) 1.5 Adjusted net income attributable to Ryerson Holding Corporation $ 403.6 $ 290.0 Diluted earnings per share $ 10.21 $ 7.56 Adjusted diluted earnings per share $ 10.54 $ 7.46 Shares outstanding - diluted 38.3 38.9 Ryerson generated cash from operating activities of $501.2 million in 2022, an increase compared to $35.0 million generated in 2021 driven by net income from operations.
(Dollars and shares in millions, except per share data) 2023 2022 Net income attributable to Ryerson Holding Corporation $ 145.7 $ 391.0 Gain on bargain purchase — (0.6 ) Gain on sale of assets — (3.8 ) Loss on retirement of debt — 21.3 Benefit plan curtailment gain (0.8 ) — Provision (benefit) for income taxes 0.2 (4.3 ) Adjusted net income attributable to Ryerson Holding Corporation $ 145.1 $ 403.6 Diluted earnings per share $ 4.10 $ 10.21 Adjusted diluted earnings per share $ 4.08 $ 10.54 Shares outstanding - diluted 35.6 38.3 Ryerson generated cash from operating activities of $365.1 million in 2023, a decrease compared to $501.2 million generated in 2022.
Specific plans for reinvestment include funding for future international acquisitions and funding of existing international operations. 39 The following table summarizes the Company’s cash flows: Year Ended December 31, 2022 2021 (In millions) Net income $ 391.5 $ 295.4 Depreciation and amortization 59.0 55.9 Pension settlement charge — 98.7 Loss on retirement of debt 21.3 5.5 Gain on sale of assets (3.8 ) (109.6 ) Change in operating assets and liabilities: Receivables 126.7 (252.5 ) Inventories 39.9 (227.9 ) Accounts payable (72.1 ) 123.6 Accrued liabilities (17.5 ) 32.0 Deferred employee benefit costs (7.7 ) (25.0 ) Other operating asset and liability balances (33.7 ) 1.9 All other operating cash flows (2.4 ) 37.0 Net cash provided by operating activities 501.2 35.0 Acquisitions (57.0 ) (14.5 ) Capital expenditures (105.1 ) (59.3 ) Proceeds from sale of property, plant, and equipment 8.0 166.3 Other investing activities (5.9 ) 1.9 Net cash provided by (used in) investing activities (160.0 ) 94.4 Repayment of debt (321.3 ) (157.3 ) Net proceeds from short-term borrowings 26.1 45.8 Net increase (decrease) in book overdrafts 29.6 (7.7 ) Dividends paid to shareholders (19.9 ) (6.4 ) Share repurchases (50.0 ) (1.8 ) All other financing cash flows (14.6 ) (10.5 ) Net cash used in financing activities (350.1 ) (137.9 ) Effect of exchange rates on cash and cash equivalents (3.0 ) (1.6 ) Net decrease in cash and cash equivalents $ (11.9 ) $ (10.1 ) Operating activities.
Specific plans for reinvestment include funding for future international acquisitions and funding of existing international operations. 39 The following table summarizes the Company’s cash flows: Year Ended December 31, 2023 2022 (In millions) Net income $ 146.4 $ 391.5 Depreciation and amortization 62.5 59.0 Loss on retirement of debt — 21.3 Change in operating assets and liabilities: Receivables 67.9 126.7 Inventories 28.8 39.9 Accounts payable 24.8 (72.1 ) Accrued taxes payable/receivable 23.3 (52.9 ) Tenant improvement allowance 15.9 — Other operating asset and liability balances (22.5 ) (6.0 ) All other operating cash flows 18.0 (6.2 ) Net cash provided by operating activities 365.1 501.2 Acquisitions (137.8 ) (57.0 ) Capital expenditures (121.9 ) (105.1 ) Proceeds from sale of property, plant, and equipment 0.5 8.0 Other investing activities (2.9 ) (5.9 ) Net cash used in investing activities (262.1 ) (160.0 ) Repayment of debt (1.7 ) (321.3 ) Net proceeds from short-term borrowings 69.8 26.1 Net increase (decrease) in book overdrafts (7.1 ) 29.6 Dividends paid to shareholders (24.8 ) (19.9 ) Share repurchases (113.9 ) (50.0 ) All other financing cash flows (10.6 ) (14.6 ) Net cash used in financing activities (88.3 ) (350.1 ) Effect of exchange rates on cash and cash equivalents 0.2 (3.0 ) Net increase (decrease) in cash and cash equivalents $ 14.9 $ (11.9 ) Operating activities.
Ryerson’s 2022 Strategy Achievements Ryerson’s market strategy focuses on providing excellent customer experiences consistently with speed at scale. Our culture is based on our trademarked “say yes, figure it out” mantra as we strive to grow volume and sustainably expand margins by increasing our fabrication business and improving our speed through our use of both tools and analytics.
Our culture is based on our trademarked “say yes, figure it out” mantra as we strive to grow volume and sustainably expand margins by increasing our fabrication business, transactional sales and improving our speed through our use of both tools and analytics.
Results of Operations The following table sets forth our Consolidated Statements of Operations data (certain percentages may not calculate due to rounding): Year Ended December 31, 2022 % of Net Sales Year Ended December 31, 2021 % of Net Sales Net sales $ 6,323.6 100.0 % $ 5,675.3 100.0 % Cost of materials sold 5,013.5 79.3 4,528.5 79.8 Gross profit 1,310.1 20.7 1,146.8 20.2 Warehousing, delivery, selling, general, and administrative expenses 735.2 11.6 711.2 12.5 Gain on sale of assets (3.8 ) (0.1 ) (109.6 ) (1.9 ) Operating profit 578.7 9.2 545.2 9.6 Other expenses (55.8 ) (0.9 ) (156.1 ) (2.7 ) Income before income taxes 522.9 8.3 389.1 6.9 Provision for income taxes 131.4 2.1 93.7 1.7 Net income 391.5 6.2 295.4 5.2 Less: Net income attributable to noncontrolling interest 0.5 — 1.1 — Net income attributable to Ryerson Holding Corporation $ 391.0 6.2 % $ 294.3 5.2 % Basic earnings per share $ 10.41 $ 7.67 Diluted earnings per share $ 10.21 $ 7.56 35 The following charts show the Company’s percentage of sales by major product lines for 2022 and 2021: Comparison of the year ended December 31, 2022 with the year ended December 31, 2021 Net Sales Year Ended December 31, Dollar Percentage 2022 2021 change change ($ in millions) Net sales $ 6,323.6 $ 5,675.3 $ 648.3 11.4 % Year Ended December 31, Tons Percentage 2022 2021 change change (in thousands) Tons sold 2,029 2,095 (66 ) (3.2 )% Year Ended December 31, Price Percentage 2022 2021 change change Average selling price per ton sold $ 3,117 $ 2,709 $ 408 15.1 % Revenue for the year ended December 31, 2022, increased from the same period a year ago due to higher average selling prices caused by higher commodity prices and supply constraints in the first half of 2022.
Operating expenses include costs related to warehousing and distributing our products as well as selling, general, and administrative expenses. 34 Results of Operations The following table sets forth our Consolidated Statements of Operations data (certain percentages may not calculate due to rounding): Year Ended December 31, 2023 % of Net Sales Year Ended December 31, 2022 % of Net Sales Net sales $ 5,108.7 100.0 % $ 6,323.6 100.0 % Cost of materials sold 4,087.1 80.0 5,013.5 79.3 Gross profit 1,021.6 20.0 1,310.1 20.7 Warehousing, delivery, selling, general, and administrative expenses 793.5 15.5 735.2 11.6 Gain on sale of assets — — (3.8 ) (0.1 ) Operating profit 228.1 4.5 578.7 9.2 Other expenses (34.4 ) (0.7 ) (55.8 ) (0.9 ) Income before income taxes 193.7 3.8 522.9 8.3 Provision for income taxes 47.3 0.9 131.4 2.1 Net income 146.4 2.9 391.5 6.2 Less: Net income attributable to noncontrolling interest 0.7 — 0.5 — Net income attributable to Ryerson Holding Corporation $ 145.7 2.9 % $ 391.0 6.2 % Basic earnings per share $ 4.17 $ 10.41 Diluted earnings per share $ 4.10 $ 10.21 35 The following charts show the Company’s percentage of sales by major product lines for 2023 and 2022: Comparison of the year ended December 31, 2023 with the year ended December 31, 2022 Net Sales Year Ended December 31, Dollar Percentage 2023 2022 change change ($ in millions) Net sales $ 5,108.7 $ 6,323.6 $ (1,214.9 ) (19.2 )% Year Ended December 31, Tons Percentage 2023 2022 change change (in thousands) Tons sold 1,943 2,029 (86 ) (4.2 )% Year Ended December 31, Price Percentage 2023 2022 change change Average selling price per ton sold $ 2,629 $ 3,117 $ (488 ) (15.7 )% Revenue for the year ended December 31, 2023, decreased from the same period a year ago due to lower average selling prices caused by lower commodity prices and to lower volume caused by slower economic conditions in metal markets in 2023.
The $93.7 million income tax provision in 2021 primarily represents taxes at federal and local statutory rates where the Company operates, but generally excludes any tax benefit for losses in jurisdictions with historical losses.
Provision for Income Taxes The $47.3 million income tax provision in 2023 and the $131.4 million tax provision in 2022 primarily represent taxes at federal and local statutory rates where the Company operates, but generally exclude any tax benefit for losses in jurisdictions with historical losses.
While most sectors experienced declines in volumes, Ryerson experienced demand growth in commercial ground transportation, oil & gas, HVAC, and construction equipment on a year-over-year basis. 2022 Performance Highlights These key metrics illustrate Ryerson’s financial performance for the full year 2022 compared to 2021: $6.3B 20.7% $391M Total Revenues Gross Margin Net Income Attributable to Ryerson Holding Corporation 11% increase 50bps increase $97M increase $10.21 $10.54 $501M Diluted EPS Adjusted Diluted EPS Cash from Operating Activities $2.65 increase $3.08 increase $466M increase A reconciliation of diluted EPS to adjusted diluted EPS is provided below.
While most sectors experienced declines in volumes, Ryerson experienced demand growth in commercial ground transportation and oil & gas on a year-over-year basis. 2023 Performance These key metrics illustrate Ryerson’s financial performance for the full year 2023 compared to 2022: $5.1B 20.0% $146M Total Revenues Gross Margin Net Income Attributable to Ryerson Holding Corporation 19% decrease 70bps decrease $245M decrease $4.10 $4.08 $365M Diluted EPS Adjusted Diluted EPS Cash from Operating Activities $6.11 decrease $6.46 decrease $136M decrease A reconciliation of diluted EPS to adjusted diluted EPS is provided below.
Our actuarial consultants also use subjective factors such as withdrawal and mortality rates when estimating expenses and liabilities. The discount rate used for U.S. plans reflects the market rate for high-quality fixed-income investments on our annual measurement date (December 31) and is subject to change each year.
The discount rate used for U.S. plans reflects the market rate for high-quality fixed-income investments on our annual measurement date (December 31) and is subject to change each year.
Revenues associated with products which we believe have no alternative use, and where the Company has an enforceable right to payment, are recognized on an over-time basis.
The timing of shipment is substantially the same as the timing of delivery to customers given the proximity of our distribution sites to our customers. Revenues associated with products which we believe have no alternative use, and where the Company has an enforceable right to payment, are recognized on an over-time basis.
Lowering the discount rate by 50 basis points would increase the pension liability at December 31, 2022 by approximately $16 million. 44 The calculation of other postretirement benefit obligations requires the use of a number of assumptions, including the assumed discount rate for measuring future payment obligations.
The calculation of other postretirement benefit obligations requires the use of a number of assumptions, including the assumed discount rate between 4.63% and 5.06% at December 31, 2023 for measuring future payment obligations. A decrease in the weighted average discount rate of 50 basis points would increase the postretirement benefit liability by approximately $2 million.
Operating Expenses Year Ended December 31, 2022 2021 $ % of Net Sales $ % of Net Sales Dollar change Percentage change ($ in millions) Warehousing, delivery, selling, general, and administrative expenses $ 735.2 11.6 % $ 711.2 12.5 % $ 24.0 3.4 % Gain on sale of assets $ (3.8 ) (0.1 )% $ (109.6 ) (1.9 )% $ 105.8 (96.5 )% Warehousing, delivery, selling, general, and administrative expenses increased $24.0 million in 2022 compared to 2021.
Operating Expenses Year Ended December 31, 2023 2022 $ % of Net Sales $ % of Net Sales Dollar change Percentage change ($ in millions) Warehousing, delivery, selling, general, and administrative expenses $ 793.5 15.5 % $ 735.2 11.6 % $ 58.3 7.9 % Gain on sale of assets $ — — $ (3.8 ) (0.1 )% $ 3.8 (100.0 )% Warehousing, delivery, selling, general, and administrative expenses increased $58.3 million in 2023 compared to 2022 with $28.4 million of the increase driven by including the expenses of companies acquired during 2022 and 2023.
Gross Profit Year Ended December 31, 2022 2021 $ % of Net Sales $ % of Net Sales Dollar change Percentage change ($ in millions) Gross profit $ 1,310.1 20.7 % $ 1,146.8 20.2 % $ 163.3 14.2 % Gross profit dollars increased in 2022 compared to 2021 as average selling price increased faster than the increase in the average cost of materials sold resulting in an increase in gross margin.
Gross Profit Year Ended December 31, 2023 2022 $ % of Net Sales $ % of Net Sales Dollar change Percentage change ($ in millions) Gross profit $ 1,021.6 20.0 % $ 1,310.1 20.7 % $ (288.5 ) (22.0 )% Gross profit dollars decreased in 2023 compared to 2022 as average selling price decreased faster than the decrease in the average cost of materials sold resulting in a decrease in gross margin.
In December, Ryerson published its inaugural Environmental, Social, and Governance ("ESG") report, which describes the Company’s ESG governance and commitment to making meaningful progress in five key focus areas: diversity, equity and inclusion, energy and emissions, talent and future workforce, circular economy, and data security.
In 2023, through share repurchases and dividends, Ryerson returned approximately $139 million to shareholders. 32 In December of 2023, Ryerson published its second Sustainability Report, which describes the Company’s commitment to making meaningful progress in five key focus areas: diversity, equity and inclusion, energy and emissions, talent and future workforce, circular economy, and data security.
Operating Profit Year Ended December 31, 2022 2021 $ % of Net Sales $ % of Net Sales Dollar change Percentage change ($ in millions) Operating profit $ 578.7 9.2 % $ 545.2 9.6 % $ 33.5 6.1 % Our operating profit increased in 2022 compared to 2021 primarily due to increases in average selling prices and higher gross margins.
Operating Profit Year Ended December 31, 2023 2022 $ % of Net Sales $ % of Net Sales Dollar change Percentage change ($ in millions) Operating profit $ 228.1 4.5 % $ 578.7 9.2 % $ (350.6 ) (60.6 )% Our operating profit decreased in 2023 compared to 2022 primarily due to the decrease in average selling prices and gross profit and the increase in operating expenses as discussed above.
This compares to net income attributable to Ryerson Holding Corporation of $294.3 million, or earnings of $7.56 per diluted share, for 2021. 31 To provide greater insight into the Company’s 2022 operating trends apart from the year’s one-time transactions, Ryerson provides adjusted net income and adjusted diluted earnings per share figures, which are not U.S. generally accepted accounting principles (“GAAP”) financial measures, to compliment the reported GAAP net income and diluted earnings per share figures.
The year over year decreases are a result of the decline in commodity prices and slower economic conditions, 31 To provide greater insight into the Company’s 2023 operating trends apart from the year’s one-time transactions, Ryerson provides adjusted net income and adjusted diluted earnings per share figures, which are not U.S. generally accepted accounting principles (“GAAP”) financial measures, to compliment the reported GAAP net income and diluted earnings per share figures.
In the normal course of business with customers, vendors, and others, we have entered into off-balance sheet arrangements, such as letters of credit, which totaled $20 million as of December 31, 2022. We do not have any other material off-balance sheet financing arrangements.
We repurchased $113.9 million of common stock during the 2023 compared to $50.0 of common stock repurchased in 2022. In the normal course of business with customers, vendors, and others, we have entered into off-balance sheet arrangements, such as letters of credit, which totaled $10.9 million as of December 31, 2023.
The average cost of materials sold increased across all of our product lines with the average cost of materials sold for our stainless plate, stainless flat, and stainless long product lines increasing more than our other product lines during 2022.
The average cost of materials sold decreased across all of our product lines with the average cost of materials sold for our carbon product lines decreasing more than our other product lines during 2023.
Tons sold per ship day were 8,084 in 2022 as compared to 8,313 in 2021. 36 Cost of Materials Sold Year Ended December 31, 2022 2021 $ % of Net Sales $ % of Net Sales Dollar change Percentage change ($ in millions) Cost of materials sold $ 5,013.5 79.3 % $ 4,528.5 79.8 % $ 485.0 10.7 % Year Ended December 31, Dollar Percentage 2022 2021 change change Average cost of materials per ton sold $ 2,471 $ 2,162 $ 309 14.3 % The increase in cost of materials sold in 2022 compared to the year ago period is primarily due to the increase in average cost of materials sold per ton driven by higher commodity prices due to supply constraints in the first half of 2022 partially offset by lower tons sold.
Tons sold per ship day were 7,741 in 2023 compared to 8,084 in 2022. 36 Cost of Materials Sold Year Ended December 31, 2023 2022 $ % of Net Sales $ % of Net Sales Dollar change Percentage change ($ in millions) Cost of materials sold $ 4,087.1 80.0 % $ 5,013.5 79.3 % $ (926.4 ) (18.5 )% Year Ended December 31, Dollar Percentage 2023 2022 change change Average cost of materials per ton sold $ 2,103 $ 2,471 $ (368 ) (14.9 )% The decrease in cost of materials sold in 2023 compared to the year ago period is primarily due to a decrease in average cost of materials sold per ton and to lower tons sold.
Illustrated in the below table, the 2022 net income attributable to Ryerson Holding Corporation of $391.0 million includes $21.3 million of expenses related to the redemption of $300.0 million of the 8.50% senior secured notes due 2028 (the “2028 Notes”), a $3.8 million gain on the sale of assets, and a $0.6 million bargain purchase gain related to the acquisition of Ford Tool Steels, Inc.
After adjusting for this non-core business transaction and the related income taxes, the adjusted net income attributable to Ryerson Holding Corporation for 2023 is $145.1 million, a decrease of $258.5 million compared to the prior year’s adjusted net income attributable to Ryerson Holding Corporation of $403.6 million which included $21.3 million of expenses related to the redemption of $300.0 million of the 8.50% senior secured notes due 2028 (the “2028 Notes”), a $3.8 million gain on the sale of assets, and a $0.6 million bargain purchase gain related to the acquisition of Ford Tool Steels, Inc., and related income taxes.
Statistical methods are used to anticipate future events when calculating expenses and liabilities related to the plans. The statistical methods include assumptions about, among other things, the discount rate, expected return on plan assets, rate of increase of health care costs, and the rate of future compensation increases.
The statistical methods include assumptions about, among other things, the discount rate, expected return on plan assets, rate of increase of health care costs, and the rate of future compensation increases. Our actuarial consultants also use subjective factors such as withdrawal and mortality rates when estimating expenses and liabilities.
A decrease in the weighted average discount rate of 50 basis points would increase the postretirement benefit liability by approximately $2 million. The assumptions used in the actuarial calculation of expenses and liabilities may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants.
The assumptions used in the actuarial calculation of expenses and liabilities may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants. These differences may result in a significant impact on the amount of pension or postretirement benefit expense we may record in the future.
Annual average selling prices were 15.1% higher in 2022 than in 2021 resulting in significantly higher operating profits and higher cash generated from operations of $501.2 million compared to $35.0 million 2021. Working capital fluctuates throughout the year based on business needs.
In 2023, average selling prices were 15.7% lower than in 2022 resulting in lower cash generated from operations. Working capital fluctuates throughout the year based on business needs.
Compared to the year ago period, average selling price increased for all of our product lines in 2022 with the largest increases in our stainless long, aluminum flat, aluminum long, and aluminum plate products.
Commodity prices were at cyclical highs in 2021 and 2022 before beginning to decline in the second half of 2022. Compared to the year ago period, average selling price decreased for all of our product lines in 2023 with the largest decreases in our carbon flat, stainless flat, and carbon plate products.
The year 2022 includes losses of $21.3 million on the redemption and repurchase of $300.0 million of the 2028 Notes. In addition, the other income and (expense), net in 2022 includes foreign currency translation losses of $1.3 million, and a $0.3 million charge from net periodic benefit cost other than service cost.
In addition, the year 2022 includes losses of $21.3 million on the redemption and repurchase of $300.0 million of the 2028 Notes.
The Company paid $57.0 million in 2022 to acquire Apogee Steel Fabrication Incorporated, Ford Tool Steels, Inc., Howard Precision Metals, Inc., and Excelsior, Inc. See Note 2: Acquisitions within Part II, Item 8 of this report, for further discussion of the acquisitions. 40 Financing activities.
The Company paid $57.0 million in 2022 to acquire Apogee Steel Fabrication Incorporated, Ford Tool Steels, Inc., Howard Precision Metals, Inc., and Excelsior, Inc. The Company sold property, plant, and equipment and assets held for sale generating cash proceeds of $0.5 and $8.0 million in 2023 and 2022, respectively. 40 Financing activities.
We determine whether an estimated loss from a loss contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. We analyze our legal matters based on available information to assess potential liability. We consult with outside counsel involved in our legal matters when analyzing potential outcomes.
We analyze our legal matters based on available information to assess potential liability. We consult with outside counsel involved in our legal matters when analyzing potential outcomes.
The total amount of future lease payments is estimated to be $317 million with $38 million for the next 12 41 months. Including leases signed but not yet commenced as of December 31, 2022, total lease payments are $445 million. Please refer to Part II, Item 8 – Financial Statements and Supplementary Data, Note 6: Leases for further information.
The total amount of future lease payments is estimated to be $485 million with $48 million for the next 12 months. Please refer to Part II, Item 8 – Financial Statements and Supplementary Data, Note 6: Leases for further information. Purchase obligations with suppliers are entered into when we receive firm sales commitments with certain of our customers.
Interest expense in 2022 included $2.6 million in charges to write-off unamortized bond issuance costs related to the $300.0 million of 2028 Notes redeemed in 2022. Interest expense in 2021 included a $2.8 million charge to write-off unamortized bond issuance costs related to the $150.0 million of 2028 Notes redeemed in July 2021.
Interest expense in 2022 included $2.6 million in charges to write-off unamortized bond issuance costs related to the $300.0 million of 2028 Notes redeemed in 2022. The other income and (expense), net in 2023 includes a $0.8 million gain on the curtailment of certain Central Steel & Wire ("CSW") pension and other post-employment benefit plans.
The Company's main source of liquidity to fund working capital requirements is borrowings on our credit facility. In 2022, we repurchased, redeemed, and retired $300.0 million principal of our 2028 Notes, which was partially offset by an increase of $49.0 million in Credit Facility borrowings.
In 2022, we repurchased, redeemed, and retired $300.0 million principal of our 2028 Notes, which was partially offset by an increase of $49.0 million in Credit Facility borrowings. Book overdrafts fluctuate based on the timing of payments. Cash dividends paid in 2023 were $24.8 million compared to $19.9 million paid to shareholders in 2022.
As of December 31, 2020, the Company had a valuation allowance of $6.6 million, a decrease of $7.1 million from the prior year mainly related to expiring NOLs and changes to U.S foreign tax credits previously recorded.
As of December 31, 2023, the Company had a valuation allowance of $4.0 million, a decrease of $1.0 million from the prior year mainly related to an adjustment to certain U.S. federal tax credits and deferred tax assets which were fully reserved.
In addition, Ryerson augmented its service center network through the acquisition of four companies, Apogee Steel Fabrication Incorporated, Ford Tool Steels, Inc., Howard Precision Metals, Inc., and Excelsior, Inc.
In addition, Ryerson augmented its service center network through the acquisition of four companies, BLP Holdings, LLC ("BLP"), Norlen Incorporated ("Norlen"), TSA Processing ("TSA"), and Hudson Tool Steel Corporation ("Hudson").
These valuations require management to make estimates and assumptions that are critical in determining the fair values of the assets and liabilities. Pension and postretirement benefit plan assumptions : We sponsor various benefit plans covering a portion of our employees for pension and postretirement medical costs.
Pension and postretirement benefit plan assumptions : We sponsor various benefit plans covering a portion of our employees for pension and postretirement medical costs. Statistical methods are used to anticipate future events when calculating expenses and liabilities related to the plans.
This is evidenced by the Institute for Supply Management’s Purchasing Managers’ Index (“PMI”), which reported decreasing activity during the year with readings declining despite still holding above 50%, indicating decelerating expansion in factory activity. This trend continued to a reading below 50% in November and December of 2022, indicating contraction in factory activity. Similarly, U.S.
This is evidenced by the Institute for Supply Management’s Purchasing Managers’ Index (“PMI”), which reported contracting activity during the year with readings below the growth threshold of 50%, indicating a slowdown in factory activity. Similarly, U.S. Industrial Production, which reports year-over-year industrial sector business output, reported low or slowing growth in output for most of the year.
In 2022, the Company has not purchased material from Russia or the named Ukrainian regions and has no open purchases orders issued to Russian suppliers as of December 31, 2022. On August 10, 2021, the Senate passed the Infrastructure Investment and Jobs Act, a $1.2 trillion bill which features $550 billion in new federal spending over five years.
In 2023, the Company has not purchased material from Russia or the named Ukrainian regions and has no open purchases orders issued to Russian suppliers as of December 31, 2023. Acquisitions On March 1, 2023, JT Ryerson acquired BLP.
Our off-balance sheet arrangements are not likely to have a material effect on our current or future financial condition, results of operations, liquidity, or capital resources. Total Debt Total debt at December 31, 2022 decreased $272.3 million to $367.0 million from $639.3 million at December 31, 2021, mainly due to cash flow generated from operating activities in 2022.
We do not have any other material off-balance sheet financing arrangements. Our off-balance sheet arrangements are not likely to have a material effect on our current or future financial condition, results of operations, liquidity, or capital resources.
Industrial Production, which reports year-over-year industrial sector business output, reported slowing growth in output for most of the year. According to the Metal Service Center Institute, North American service center volumes decreased by 2.3% in 2022 compared to 2021. On a North American basis, Ryerson's North American volumes declined 1.9% over the same period, outpacing the industry.
According to the Metal Service Center Institute, North American service center volumes increased by 1.5% in 2023 compared to 2022. On a North American basis, Ryerson's North American volumes declined 4.8% over the same period.
We had cash and cash equivalents of $39.2 million at December 31,2022, compared to $51.2 million at December 31, 2021. Our total debt outstanding at December 31, 2022 decreased to $367 million compared to $639 million of total debt outstanding at December 31, 2021 due to income from operations in 2022.
We had cash and cash equivalents of $54.3 million at December 31,2023, compared to $39.2 million at December 31, 2022.
As a result of the Company’s exceptional performance, evidenced by record revenue, average selling prices, and gross profit, we generated record net income attributable to Ryerson Holding Corporation of $391.0 million, or $10.21 per diluted share, in 2022.
We generated net income attributable to Ryerson Holding Corporation of $145.7 million, or $4.10 per diluted share, in 2023. This compares to net income attributable to Ryerson Holding Corporation of $391.0 million, or earnings of $10.21 per diluted share, for 2022.
The changes in earnings per share are due to the results of operations discussed above. Liquidity and Capital Resources The Company’s primary sources of liquidity are cash and cash equivalents, cash flows from operations, and borrowing availability under the Ryerson Credit Facility that matures on November 5, 2025.
Liquidity and Capital Resources The Company’s primary sources of liquidity are cash and cash equivalents, cash flows from operations, and borrowing availability under the Ryerson Credit Facility. Our principal source of operating cash is from the sale of metals and other materials.
Other Expenses Year Ended December 31, 2022 2021 $ % of Net Sales $ % of Net Sales Dollar change Percentage change ($ in millions) Interest and other expense on debt $ (33.2 ) (0.5 )% $ (51.0 ) (0.9 )% $ 17.8 (34.9 )% Other income and (expense), net $ (1.3 ) — $ (0.9 ) — $ (0.4 ) 44.4 % Pension settlement charges $ — — $ (98.7 ) (1.7 )% $ 98.7 (100.0 )% Loss on retirement of debt $ (21.3 ) (0.4 )% $ (5.5 ) (0.1 )% $ (15.8 ) 287.3 % Interest and other expense on debt decreased in 2022 compared to 2021 primarily due to the redemption and repurchase of $300.0 million principal amount of our 8.50% senior secured notes due 2028 (the “2028 Notes”) during the first nine months of 2022 and the repurchase in July 2021 of $150.0 million of the 2028 Notes.
Other Expenses Year Ended December 31, 2023 2022 $ % of Net Sales $ % of Net Sales Dollar change Percentage change ($ in millions) Interest and other expense on debt $ (34.7 ) (0.7 )% $ (33.2 ) (0.5 )% $ (1.5 ) 4.5 % Other income and (expense), net $ 0.3 — $ (1.3 ) — $ 1.6 (123.1 )% Loss on retirement of debt $ — — $ (21.3 ) (0.4 )% $ 21.3 (100.0 )% Interest and other expense on debt increased in 2023 compared to 2022 primarily due to higher interest rates on credit facility borrowings under our $1.3 billion revolving credit facility (“the Ryerson Credit Facility”) and a higher level of borrowings outstanding under the Ryerson Credit Facility compared to the prior year.
The metals service center industry is cyclical and volatile in both demand and pricing, and difficult to predict. In 2022, Ryerson experienced higher average selling prices of 15.1% and lower shipments of 3.2%, as global demand outpaced supply availability in the first half of 2022.
The metals service center industry is cyclical and volatile in both demand and pricing, and difficult to predict.
During 2021, LIFO expense was $366 million related to increases in pricing for all product lines with the largest impact from carbon products.
During 2023, LIFO income was $98 million related to decreases in pricing for all product lines, with the largest impact from carbon products, slightly offset by the liquidation of older LIFO layers for stainless and aluminum products that were at a net higher cost.
These additions bring advanced value-added processing capabilities, enhance supply chain networks and service points, and broaden Ryerson’s transactional customer portfolio and exposure to secular end markets including electric vehicles and renewable energy.
These acquisitions bolster value-added processing capabilities in custom engineering and robotic manufacturing, broaden supply chain networks and service points, and diversify Ryerson’s transactional customer portfolio to secular end markets, which include HVAC, Agriculture, Oil & Gas, and Aerospace-related applications.

… 92 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+0 added−5 removed5 unchanged
Biggest changeThe amount reclassified from other comprehensive income for the twelve months ended December 31, 2022 into earnings was a loss of $1.9 million. Approximately 1% of our debt is at fixed interest rates as of December 31, 2022.
Biggest changeAs of December 31, 2023, we have no outstanding interest rate swaps. Approximately 1% of our debt is at fixed interest rates as of December 31, 2023. A hypothetical 1% increase in interest rates on variable debt would have increased interest expense for the twelve months of 2023 by approximately $4.7 million.
For the year ended December 31, 2022, the Company recognized zero gain or loss associated with its foreign currency contracts.
For the year ended December 31, 2023, the Company recognized zero gain or loss associated with its foreign currency contracts.
A hypothetical strengthening or weakening of 10% in the foreign exchange rates 45 underlying the foreign currency contracts from the market rate as of December 31, 2022 would increase or decrease the fair value of the foreign currency contracts by $0.2 million and $0.3 million, respectively.
A hypothetical strengthening or weakening of 10% in the foreign exchange rates underlying the foreign currency contracts from the market rate as of December 31, 2023 would increase or decrease the fair value of the foreign currency contracts by $0.1 million and $0.2 million, respectively.
A hypothetical strengthening or weakening of 10% in the commodity prices underlying the commodity derivative contracts from the market rate as of December 31, 2022 would increase or decrease the fair value of the commodity derivative contracts by $2.4 million. 46
A hypothetical strengthening or weakening of 10% in the commodity prices underlying the commodity derivative contracts from the market rate as of December 31, 2023 would increase or decrease the fair value of the commodity derivative contracts by $2.0 million. 45
We do not currently account for these swaps as hedges, but rather mark these contracts to market with a corresponding offset to current earnings. For the twelve months ended December 31, 2022, the Company recognized a loss of $5.3 million associated with its commodity derivatives.
We do not currently account for these swaps as hedges, but rather mark these contracts to market with a corresponding offset to current earnings. For the twelve months ended December 31, 2023, the Company recognized a gain of $10.7 million associated with its commodity derivatives.
Interest rate risk Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates. We are exposed to market risk related to our fixed-rate and variable-rate long-term debt.
Interest rate risk Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates. We are exposed to market risk related to our fixed-rate and variable-rate long-term debt. As of December 31, 2023 and December 31, 2022, we have no publicly traded debt.
Foreign currency contracts are principally used to purchase U.S. dollars. We had foreign currency contracts with a U.S. dollar notional amount of $2.3 million outstanding at December 31, 2022 and a value of zero. We do not currently account for these contracts as hedges but rather mark these contracts to market with a corresponding offset to current earnings.
We had foreign currency contracts with a U.S. dollar notional amount of $1.6 million outstanding at December 31, 2023 and a fair value of zero. We do not currently account for these contracts as hedges but rather mark these contracts to market with a corresponding offset to current earnings.
As of December 31, 2022, we have no publicly traded debt. The carrying value of our debt was $367.0 million at December 31, 2022. The carrying value approximates our fair value due to the short-term nature of the underlying borrowings on the Ryerson Credit Facility.
The carrying value of our debt was $436.5 million and $367.0 million at December 31, 2023 and December 31, 2022, respectively. The carrying value approximates our fair value due to the short-term nature of the underlying borrowings on the Ryerson Credit Facility. We may use interest rate swaps to manage our exposure to interest rate changes.
As of December 31, 2022, we had 40,036 tons of hot roll coil swap contracts with a net asset value of $1.1 million, 21,116 tons of aluminum swap contracts with a net asset value of $1.1 million, 1,525 tons of nickel swap contracts with a net liability value of $5.8 million, and 70,000 gallons of diesel fuel contracts with a net asset value of $0.1.
As of December 31, 2023, we had 64,819 tons of hot roll coil swap contracts with a net liability value of $1.1 million, 20,319 tons of aluminum swap contracts with a net asset value of $0.9 million, and 1,375 tons of nickel swap contracts with a net asset value of $8.1 million.
A hypothetical 1% increase in interest rates on variable debt would have increased interest expense for the twelve months of 2022 by approximately $4.3 million. Foreign exchange rate risk We are subject to foreign currency risks primarily through our operations in Canada, Mexico, and China and we use foreign currency exchange contracts to reduce our exposure to currency price fluctuations.
Foreign exchange rate risk We are subject to foreign currency risks primarily through our operations in Canada, Mexico, and China and we use foreign currency exchange contracts to reduce our exposure to currency price fluctuations. Foreign currency contracts are principally used to purchase U.S. dollars.
Removed
At December 31, 2021, the estimated fair value of our long-term debt and the current portions thereof using quoted market prices of Company debt securities recently traded and market-based prices of similar securities for those securities not recently traded was $666.8 million as compared with the carrying value of $639.3 million.
Removed
We may use interest rate swaps to manage our exposure to interest rate changes In June 2019, we entered into a forward agreement for $60 million of "pay fixed" interest at 1.729% through June 2022.
Removed
In November 2019, we entered into a forward agreement for $100 million of “pay fixed” interest at 1.539% through November 2022; this swap was terminated in August 2022. As of December 31, 2022, we have no outstanding interest rate swaps.
Removed
Effective November 1, 2020, the Company de-designated its interest rate swaps as cash flow hedges and terminated its hedge accounting treatment. Prior to de-designation, the Company would mark these interest rate swaps to market with all changes in fair value recorded in accumulated other comprehensive income. Subsequent to de-designation, changes in fair value are recorded in current earnings.
Removed
The Company recognized a gain of $1.4 million related to mark-to-market changes and interest expense of $0.6 million in current earnings for the twelve months ended December 31, 2022. After de-designation, the amounts reclassified from other comprehensive income relate to prior gains and losses that are being amortized into income as the forecasted interest payments affect earnings.

Other RYI 10-K year-over-year comparisons