Russel Metals Announces 2026 Second Quarter Results
Rhea-AI Summary
Russel Metals (RUSMF) reported record second quarter 2026 revenues of $1.655 billion, up 17% versus Q1 2026 and 37% year over year, with adjusted EBITDA of $153.7 million. Net earnings were $78.5 million and adjusted net earnings $89.8 million, or adjusted EPS of $1.63.
Gross margin rose to 22.6%, 130 bps above Q1. Former Kloeckner branches delivered Q2 revenues of $213 million and EBITDA of $16 million, supporting an annualized return on capital of 31%. Liquidity totaled $554 million with net debt of $144 million, and Q2 annualized return on capital reached 24%. The company invested $18 million in capex, generated $135 million of cash from operating activities before working capital, paid a dividend of $0.44 per share and extended its $450 million credit facility to 2030.
Positive
- Revenues $1,655m in Q2 2026, +17% QoQ and +37% YoY
- Adjusted EBITDA $153.7m in Q2 2026, +65% QoQ and +36% YoY
- Adjusted EPS $1.63 vs $0.81 in Q1 2026 and $1.14 in Q2 2025
- Annualized return on capital 24% in Q2 2026, 23% year-to-date
- Kloeckner branches Q2 revenue $213m, EBITDA $16m, 31% annualized ROC
- Liquidity $554m and net debt $144m at June 30, 2026
Negative
- Mark-to-market stock-based compensation expense of $15.3m in Q2 2026
- Employee expenses increased to $163.7m in Q2 2026 from $122.0m in Q2 2025
- No share repurchases executed in Q2 2026 despite active buyback program
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Record Quarterly Revenues and Shipments
Revenues of
Gross Margins Improved by 130 Basis Points in Q2'26 vs. Q1'26
Higher Revenues and EBITDA Contributions from Kloeckner Acquisition
Annualized Return on Capital of
Strong Capital Structure - Liquidity of
Three Months Ended | Six Months Ended | ||||
Jun 30 2026 | Mar 31 2026 | Jun 30 2025 | Jun 30 2026 | Jun 30 2025 | |
Revenues | $ 1,655 | $ 1,418 | $ 1,207 | $ 3,073 | $ 2,381 |
EBITDA 1 | 138 | 124 | 108 | 262 | 194 |
Adjusted EBITDA 1 | 154 | 93 | 113 | 247 | 196 |
Net earnings | 79 | 72 | 60 | 150 | 103 |
Adjusted net earnings 1 | 90 | 45 | 64 | 134 | 105 |
Earnings per share | 1.43 | 1.30 | 1.07 | 2.73 | 1.82 |
Adjusted earnings per share 1 | 1.63 | 0.81 | 1.14 | 2.44 | 1.86 |
All amounts are reported in millions of Canadian dollars except per share figures, which are in Canadian dollars. |
We use a number of measures that are not prescribed by IFRS Accounting Standards ("IFRS" or "GAAP") and as such may not be comparable to similar measures presented by other companies. We believe these measures are commonly employed to measure performance in our industry and are used by analysts, investors, lenders and other interested parties to evaluate financial performance and our ability to incur and service debt to support our business activities. These non-GAAP measures include EBITDA and Liquidity and are defined below. Refer to Non-GAAP Measures and Ratios on page 2 of our Management Discussion and Analysis.
EBIT - represents net earnings before interest and income taxes.
EBITDA - represents net earnings before interest, income taxes, depreciation and amortization.
Liquidity - represents cash on hand less bank indebtedness plus excess availability under our bank credit facility.
Cash (for) from working capital - represents the change in non-cash working capital.
For adjusted EBITDA, adjusted net earnings and adjusted earnings per share, the following items have been excluded:
- Mark-to-market on stock-based compensation - the mark-to-market on stock-based compensation is a non-cash expense on a quarterly basis, it does not impact the ongoing operating decisions taken by management, and is excluded to facilitate period-to-period comparability of our operating performance.
- Gain on
Delta property sale - the gain on sale of a property related to our branch inDelta, British Columbia was a one-time event, it does not impact the ongoing operating decisions taken by management and is excluded to facilitate period-to-period comparability of the Company's operating performance.
1 Defined in Non-GAAP Measures and Ratios |
A reconciliation of net earnings in accordance with GAAP to EBITDA and adjusted EBITDA, as well as a reconciliation of net earnings to adjusted net earnings and adjusted earnings per share can be found below.
Three Months Ended | Six Months Ended | ||||
($ millions, except per share data) | Jun 30 2026 | Mar 31 2026 | Jun 30 2025 | Jun 30 2026 | Jun 30 2025 |
Net earnings | $ 78.5 | $ 71.8 | $ 60.4 | $ 150.3 | $ 103.4 |
Provision for income taxes | 26.6 | 18.9 | 18.3 | 45.5 | 32.8 |
Interest (income) expense, net | 6.9 | 7.0 | 5.9 | 13.9 | 10.6 |
EBIT 1 | 112.0 | 97.7 | 84.6 | 209.7 | 146.8 |
Depreciation and amortization | 26.4 | 26.0 | 23.2 | 52.4 | 46.7 |
EBITDA 1 | $ 138.4 | $ 123.7 | $ 107.8 | $ 262.1 | $ 193.5 |
Mark-to-market on | |||||
stock-based compensation | 15.3 | 4.8 | 5.2 | 20.1 | 2.6 |
Gain on | - | (35.6) | - | (35.6) | - |
Adjusted EBITDA 1 | $ 153.7 | $ 92.9 | $ 113.0 | $ 246.6 | $ 196.1 |
Three Months Ended | Six Months Ended | ||||
($ millions, except per share data) | Jun 30 2026 | Mar 31 2026 | Jun 30 2025 | Jun 30 2026 | Jun 30 2025 |
Net earnings | $ 78.5 | $ 71.8 | $ 60.4 | $ 150.3 | $ 103.4 |
Mark-to-market on stock-based | |||||
compensation, net of tax | 11.3 | 3.6 | 3.8 | 14.9 | 1.9 |
Gain on | - | (30.9) | - | (30.9) | - |
Adjusted net earnings 1 | $ 89.8 | $ 44.5 | $ 64.2 | $ 134.3 | $ 105.3 |
Earnings per share | $ 1.43 | $ 1.30 | $ 1.07 | $ 2.73 | $ 1.82 |
Adjusted earnings per share 1 | $ 1.63 | $ 0.81 | $ 1.14 | $ 2.44 | $ 1.86 |
Our second quarter 2026 results reflect a continuation of improving trend line metrics and illustrates our earnings generation capabilities from our reconfigured business portfolio when combined with favourable market conditions.
- Revenues reached a record quarterly level of
$1.7 billion 17% increase over the first quarter of 2026 and a37% increase over the second quarter of 2025. - Our average gross margin percentage for the second quarter of 2026 was
22.6% , which was an improvement over the21.3% in the first quarter of 2026. The improvement reflected the favourable market conditions and the beginning of improvements in the relative margin profile for the branches that were acquired from Kloeckner Metals Corporation ("Kloeckner"). - In the second quarter of 2026, our adjusted EBITDA was
$154 million 65% increase over the first quarter of 2026 and a36% increase over the second quarter of 2025. - The metal service centers continued their strong recent momentum of shipments. The second quarter tons shipped was an all-time record, as tonnage increased by
6% compared to the first quarter of 2026 and increased28% compared to the second quarter of 2025. - The Kloeckner branches were acquired for total consideration of
$128 million $213 million $16 million $183 million $8 million 13% of our revenues and10% of our adjusted EBITDA, which provided strong earnings accretion and an annualized return on capital of31% . - In the second quarter of 2026, our
U.S . operations represented54% of our revenues and61% of our segment operating profits, compared to53% of revenues and58% of our segment operating profits (excluding the impact from the gain on theDelta (British Columbia ) property sale) in the first quarter of 2026 and44% of revenues and48% of our segment operating profits in the second quarter of 2025. We expect to continue this evolution of aU.S . weighted business mix, as that market continues to present incremental growth opportunities.
1 Defined in Non-GAAP Measures and Ratios |
In the second quarter of 2026, we generated earnings per share of
During our 2026 second quarter, we generated
Market conditions in the second quarter were strong across most of our business units and regions. The average price for
During the three months ended June 30, 2026, we invested
We are continuing to evaluate additional acquisition opportunities with the focus on expanding our metals service center platform in the
As part of the continuing refinement of our portfolio, we disposed of redundant real estate related to our former branch in
In July 2026, we entered into an agreement to sell Color Steels Inc. ("Color"), a wholly-owned subsidiary of the Company. Color generated
We have a flexible approach for returning capital to shareholders through: (i) our ongoing dividend; and (ii) opportunistic share buybacks. In the 2026 second quarter, we paid dividends of
One of our key strategies is to maintain a strong capital structure in order to navigate through market cycles and be in a position to capitalize on opportunities. We ended the quarter with net debt of
During the second quarter we extended the term of our
Over the first half of 2026, metal prices have increased as a result of favourable demand, limited international supply into
Over the medium-term, we expect to benefit from further rebuilding of the
Our energy field stores are expected to continue to benefit from solid energy activity in 2026. Our energy field store segment is also expected to continue to gain market share while maintaining a solid margin profile.
The Company will be holding an Investor Conference Call on Friday, August 7, 2026, at 9:00 a.m. ET to review its 2026 second quarter results. To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/3SlXM1M. The dial-in telephone numbers for the call are 416-945-7677 (
A replay of the call will be available at 289-819-1450 (
Additional supplemental financial information is available in our investor conference call package located on our website at https://www.russelmetals.com/en/documents/conference-calls.
Russel Metals is one of the largest metals distribution companies in
Certain statements contained in this press release constitute forward-looking statements or information within the meaning of applicable securities laws, including statements as to our future capital expenditures, our outlook, the availability of future financing and our ability to pay dividends. Forward-looking statements relate to future events or our future performance. All statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. Forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by us, inherently involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including the factors described below.
We are subject to a number of risks and uncertainties which could have a material adverse effect on our future profitability and financial position, including the risks and uncertainties listed below, which are important factors in our business and the metals distribution industry. Such risks and uncertainties include, but are not limited to: volatility in metal prices; cyclicality of the metals industry; future acquisitions; facilities modernization; volatility in the energy industry; product claims; significant competition; sources of supply and supply chain disruptions; manufacturers selling directly; material substitution; failure of our key computer-based systems; cybersecurity; credit risk; currency exchange risk; restrictive debt covenants; goodwill or long-term asset impairments; the unexpected loss of key individuals; decentralized operating structure; labour interruptions; laws and governmental regulations; litigious environment; environmental liabilities; climate change; carbon emissions; health and safety laws and regulations; geopolitical risk and common share risk.
While we believe that the expectations reflected in our forward-looking statements are reasonable, no assurance can be given that these expectations will prove to be correct, and our forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release and, except as required by law, we do not assume any obligation to update our forward-looking statements. Our actual results could differ materially from those anticipated in our forward-looking statements including as a result of the risk factors described above and under the heading "Risk" in our MD&A and under the heading "Risk Management and Risks Affecting Our Business" in our most recent Annual Information Form and as otherwise disclosed in our filings with securities regulatory authorities which are available on SEDAR+ at www.sedarplus.ca.
If you would like to unsubscribe from receiving Press Releases, you may do so by emailing subscriber@russelmetals.com; or by calling our Investor Relations Line: 905-816-5178.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three Months Ended June 30 | Six Months Ended June 30 | |||
(in millions of Canadian dollars, except per share data) | 2026 | 2025 | 2026 | 2025 |
Revenues | $ 1,655.0 | $ 1,207.3 | $ 3,073.3 | $ 2,380.9 |
Cost of materials | 1,280.1 | 925.8 | 2,395.7 | 1,847.0 |
Employee expenses | 163.7 | 122.0 | 307.1 | 235.0 |
Other operating expenses | 99.2 | 74.9 | 196.4 | 152.1 |
Gain on disposal of assets held for sale | - | - | (35.6) | - |
Earnings before interest and | ||||
provision for income taxes | 112.0 | 84.6 | 209.7 | 146.8 |
Interest expense, net | 6.9 | 5.9 | 13.9 | 10.6 |
Earnings before provision for income taxes | 105.1 | 78.7 | 195.8 | 136.2 |
Provision for income taxes | 26.6 | 18.3 | 45.5 | 32.8 |
Net earnings for the period | $ 78.5 | $ 60.4 | $ 150.3 | $ 103.4 |
Basic earnings per common share | $ 1.43 | $ 1.07 | $ 2.73 | $ 1.82 |
Diluted earnings per common share | $ 1.43 | $ 1.07 | $ 2.73 | $ 1.82 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended June 30 | Six Months Ended June 30 | |||
(in millions of Canadian dollars) | 2026 | 2025 | 2026 | 2025 |
Net earnings for the period | $ 78.5 | $ 60.4 | $ 150.3 | $ 103.4 |
Other comprehensive income (loss) | ||||
Items that may be reclassified to earnings | ||||
Unrealized foreign exchange gains (losses) on | ||||
translation of foreign operations | 24.0 | (55.2) | 43.2 | (56.1) |
Items that may not be reclassified to earnings | ||||
Actuarial (losses) gains on pension and similar | ||||
obligations, net of taxes | 2.5 | (0.8) | 1.7 | (2.8) |
Other comprehensive income (loss) | 26.5 | (56.0) | 44.9 | (58.9) |
Total comprehensive income | $ 105.0 | $ 4.4 | $ 195.2 | $ 44.5 |
Condensed Consolidated Statements of Financial Position (unaudited)
(in millions of Canadian dollars) | June 30 | December 31 |
ASSETS | ||
Current | ||
Cash and cash equivalents | $ 154.0 | $ 114.6 |
Accounts receivable | 828.6 | 554.2 |
Inventories | 1,175.2 | 1,084.2 |
Prepaids and other | 31.2 | 33.1 |
Income taxes receivable | 0.5 | 6.2 |
Assets held for sale | - | 4.9 |
2,189.5 | 1,797.2 | |
Property, Plant and Equipment | 574.0 | 558.6 |
Right-of-Use Assets | 151.7 | 155.2 |
Deferred Income Tax Assets | 0.4 | 0.4 |
Pension and Benefits | 37.2 | 37.0 |
Financial and Other Assets | 5.2 | 5.1 |
Goodwill and Intangible Assets | 129.2 | 131.1 |
Total Assets | $ 3,087.2 | $ 2,684.6 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current | ||
Accounts payable and accrued liabilities | $ 790.2 | $ 552.2 |
Short-term lease obligations | 30.4 | 28.5 |
Income taxes payable | 19.5 | 6.3 |
840.1 | 587.0 | |
Long-Term Debt | 298.4 | 298.3 |
Pensions and Benefits | 1.4 | 1.5 |
Deferred Income Tax Liabilities | 21.2 | 25.8 |
Long-Term Lease Obligations | 153.2 | 156.9 |
Provisions and Other Non-Current Liabilities | 44.1 | 26.2 |
Total Liabilities | 1,358.4 | 1,095.7 |
Shareholders' Equity | ||
Common shares | 507.9 | 509.4 |
Retained earnings | 1,017.9 | 919.7 |
Contributed surplus | 9.9 | 9.9 |
Accumulated other comprehensive income | 193.1 | 149.9 |
Total Shareholders' Equity | 1,728.8 | 1,588.9 |
Total Liabilities and Shareholders' Equity | $ 3,087.2 | $ 2,684.6 |
Condensed Consolidated Statements of Cash Flow (unaudited)
Three Months Ended June 30 | Six Months Ended June 30 | |||
(in millions of Canadian dollars) | 2026 | 2025 | 2026 | 2025 |
Operating Activities | ||||
Net earnings for the period | $ 78.5 | $ 60.4 | $ 150.3 | $ 103.4 |
Depreciation and amortization | 26.4 | 23.2 | 52.4 | 46.7 |
Provision for income taxes | 26.6 | 18.3 | 45.5 | 32.8 |
Interest expense, net | 6.9 | 5.9 | 13.9 | 10.6 |
Gain on sale of property, plant and equipment | (1.1) | (0.3) | (1.2) | (0.5) |
Gain on disposal of assets held for sale | - | - | (35.6) | - |
Difference between pension expense and amount funded | 1.1 | 0.7 | 1.8 | 1.4 |
Interest paid net, including interest on lease obligations | (3.5) | (2.8) | (13.8) | (7.1) |
Cash from operating activities before | ||||
non-cash working capital | 134.9 | 105.4 | 213.3 | 187.3 |
Changes in Non-Cash Working Capital Items | ||||
Accounts receivable | (111.1) | 16.6 | (265.3) | (83.3) |
Inventories | (95.5) | (36.8) | (76.6) | (111.3) |
Accounts payable and accrued liabilities | 155.2 | (27.7) | 245.9 | 55.6 |
Other | 3.0 | 4.5 | 1.9 | (4.2) |
Change in non-cash working capital | (48.4) | (43.4) | (94.1) | (143.2) |
Income tax paid, net | (22.5) | (14.1) | (32.3) | (12.8) |
Cash from operating activities | 64.0 | 47.9 | 86.9 | 31.3 |
Financing Activities | ||||
Issue of common shares | - | - | - | 0.3 |
Repurchase of common shares | (0.3) | (22.8) | (7.5) | (48.6) |
Dividends on common shares | (24.1) | (24.2) | (47.8) | (48.1) |
Decrease in bank indebtedness | - | - | - | (13.4) |
Issuance of long-term debt | - | - | - | 300.0 |
Deferred financing costs | (0.4) | 0.1 | (0.4) | (1.9) |
Lease obligations | (7.5) | (5.7) | (15.4) | (11.6) |
Cash (used in) from financing activities | (32.3) | (52.6) | (71.1) | 176.7 |
Investing Activities | ||||
Purchase of property, plant and equipment | (17.7) | (16.1) | (35.8) | (45.0) |
Proceeds on sale of property, plant and equipment | 4.4 | 0.4 | 4.8 | 0.9 |
Proceeds on disposal of assets held for sale | - | - | 38.5 | - |
Cash from (used in) investing activities | (13.3) | (15.7) | 7.5 | (44.1) |
Effect of exchange rates on cash and cash equivalents | 7.5 | (15.3) | 16.1 | (15.0) |
Increase (decrease) in cash and cash equivalents | 25.9 | (35.7) | 39.4 | 148.9 |
Cash and cash equivalents, beginning of the period | 128.1 | 230.2 | 114.6 | 45.6 |
Cash and cash equivalents, end of the period | $ 154.0 | $ 194.5 | $ 154.0 | $ 194.5 |
Condensed Consolidated Statements of Changes in Equity (unaudited)
(in millions of Canadian dollars) | Common | Retained | Contributed | Accumulated | Total |
Balance, January 1, 2026 | $ 509.4 | $ 919.7 | $ 9.9 | $ 149.9 | |
Payment of dividends | - | (47.8) | - | - | (47.8) |
Net earnings for the period | - | 150.3 | - | - | 150.3 |
Other comprehensive income for the period | - | - | - | 44.9 | 44.9 |
Shares repurchased | (1.5) | (6.0) | - | - | (7.5) |
Transfer of net actuarial losses on defined benefit plans | - | 1.7 | - | (1.7) | - |
Balance, June 30, 2026 | $ 507.9 | $ 9.9 | $ 193.1 |
(in millions of Canadian dollars) | Common | Retained | Contributed | Accumulated | Total |
Balance, January 1, 2025 | $ 528.1 | $ 918.7 | $ 10.0 | $ 201.6 | |
Payment of dividends | - | (48.1) | - | - | (48.1) |
Net earnings for the period | - | 103.4 | - | - | 103.4 |
Other comprehensive loss for the period | - | - | - | (58.9) | (58.9) |
Share options exercised | 0.4 | - | (0.1) | - | 0.3 |
Shares repurchased | (10.7) | (37.9) | - | - | (48.6) |
Transfer of net actuarial losses on defined benefit plans | - | (2.8) | - | 2.8 | - |
Balance, June 30, 2025 | $ 517.8 | $ 933.3 | $ 9.9 | $ 145.5 |
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SOURCE Russel Metals Inc.