Q2 2026 Metallus Inc Earnings Call Transcript
Key Points
- Adjusted EBITDA improved to $29 million in Q2 2026, up 9% year-over-year, driven by higher shipments, improved pricing, and better product mix.
- Order book increased over 50% year-over-year, providing strong visibility into second-half demand, with lead times extended into late Q4 2026.
- Aerospace and defense segment achieved record ship tons and sales, supported by AS9100D certification and progress toward the $250 million revenue run rate target.
- Secured a new multi-year award for ring gears on a leading automaker's hybrid transmission platform, with production starting in 2028, strengthening automotive growth.
- Completed commissioning of the Bloom Reheat Furnace and received final $11.3 million from the U.S. Army, enhancing operational capabilities and supporting defense initiatives.
- Refinanced the asset-based revolving credit facility, extending maturity to 2031, increasing capacity to $300 million, and improving financial terms, with total liquidity at $395 million.
- Announced price increases effective August 2026 for spot customers, expected to fully benefit from 2027, improving pricing power.
- Manufacturing performance fell short of plan, with melt utilization at 74% in Q2, below expectations due to shop floor execution and maintenance reliability issues.
- Higher energy costs and the first full quarter of labor costs from the newly ratified union contract partially offset profitability gains.
- Industrial shipments declined slightly sequentially and year-over-year due to order and shipment timing, despite strong backlog growth.
- Third-quarter results will be impacted by increased planned maintenance outages, limiting sequential EBITDA growth despite higher melt utilization.
- Energy market demand remains stable but cautious due to geopolitical and commodity price uncertainty, moderating activity levels.
- Pension contributions, while reduced, still required $5.4 million in Q2, and the adjusted effective tax rate is expected to be high at 27-30% for 2026.
- Aerospace and defense revenue visibility is limited, with annual contract discussions not yet complete, creating uncertainty for 2027.
Hello, everyone. Thank you for joining us and welcome to the 2Q 2026 Medalists Inc. Earnings Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand.
To withdraw your question, press star 1 again. I will now hand the conference over to Jenna Johnson. Please go ahead.
Good morning, and welcome to Metallus' second quarter 2026 conference call. I'm [Jenna Johnson], Senior Manager, Finance and Investor Relations for Metallus. Joining me today are Mike Williams, Chief Executive Officer. Chris Westbrooks, President and Chief Operating Officer and John Zaranek, Executive Vice President and Chief Financial Officer. You should have received a copy of our press release which was issued last night. During today's conference call, we may make forward-looking statements as defined by the SEC. Actual results may differ materially from those projected or implied due to a variety of factors which we describe in
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