Metallus Inc.

Second-quarter net sales were $341 million, up $36.4 million or 12% year over year. Net income was $8.9 million, or $0.21 per diluted share; adjusted net income was $11.1 million, or $0.26 per diluted share. Adjusted EBITDA was $29 million, up $2.5 million or 9% year over year. Operating cash flow was $12.8 million, capital expenditures were $15.2 million, and cash and cash equivalents were $108.6 million at quarter-end. For full-year 2026, capital expenditures are expected to be approximately $70 million, including approximately $35 million primarily funded by the U.S. government, and the adjusted effective tax rate is expected to be between 27% and 30%. For Q3, management expects shipments to be similar to Q2, price and mix to be slightly better, melt utilization to increase slightly, manufacturing costs to be relatively flat, and adjusted EBITDA to be slightly higher sequentially and year over year.

Mike Williams framed the quarter as evidence that Metallus is executing on its strategy to improve profitability through better utilization, pricing, mix and operational discipline. He highlighted strong end-market demand, an order book up over 50% year over year, and progress on strategic capital projects, including the fully commissioned bloom reheat furnace and the on-track roller furnace. His tone was constructive and confident, especially around aerospace and defense, where he said the company is on track to achieve at least a $250 million revenue run rate by the end of 2026 and expects AS9100D certification to broaden opportunities.

John Zaranec emphasized the financial improvement in Q2, citing $341 million of net sales, $29 million of adjusted EBITDA, and adjusted EPS of $0.26. He said the EBITDA improvement came from better prices, mix and shipments, partly offset by manufacturing performance, energy costs and the first full quarter of labor from the newly ratified union contract. He also highlighted $12.8 million of operating cash flow, $15.2 million of capex, $108.6 million of cash, no outstanding borrowings, and a refinancing that extended the ABL facility to June 2031 with $300 million of committed capacity and total liquidity of $395 million.

Analysts focused on the newly announced price increases, asking whether the full run-rate benefit applies to the roughly 30% of the order book that is spot-priced; management confirmed that it does. Questions also probed the timing of aerospace and defense revenue growth, and Mike Williams said the company expects to achieve at least a $250 million run rate by the end of 2026, driven by munitions demand and new program awards. Analysts also pressed on why melt utilization lagged expectations and on Q3 maintenance downtime; management pointed to power interruptions, shop-floor execution, maintenance reliability, and a planned tube mill/thermal treat outage that was scheduled well in advance.