Metallus (NYSE:MTUS) executives said the company saw a commercial recovery in 2025 following market headwinds in the prior year, driven by improved demand across end markets and what management described as a supportive fair-trade environment that reinforced the value of domestically produced steel. On a year-over-year basis, shipments increased 14%, and the company highlighted expanding momentum heading into 2026, including longer lead times and a materially higher order book.
2025 commercial recovery and aerospace/defense progress
Chief Executive Officer Mike Williams said the company expanded its aerospace and defense presence during 2025 through new product offerings and strong growth in Vacuum Arc Remelt (VAR) steel. VAR sales totaled approximately $28 million in 2025, nearly doubling from 2024, supported by increased downstream processing focus and supplier partnerships that helped Metallus meet higher VAR demand and secure new aerospace/defense and industrial customers.
On the broader aerospace and defense outlook, Williams said demand is expected to remain robust through 2026, driven by expansion of existing programs and new platforms. He told analysts the company has already received full-year purchase orders from several large aerospace and defense OEM customers, providing visibility into demand. Williams also reiterated a previously discussed target that aerospace and defense sales could exceed a $250 million run rate by mid-2026, while noting timing depends on downstream capacity ramp-ups in munitions manufacturing at customers. He said that ramp-up has been “about a year and a half, two years late,” but the company continues to expect progress through 2026.
Safety, workforce actions, and labor agreement
Williams emphasized the company’s safety initiatives, including “zero incident planning,” crew safety meetings, and its Stand Up for Safety program involving more than 1,000 employees. He said 2025 results included zero serious injuries, a 35% reduction in days away or restricted cases, and an 11% year-over-year improvement in injury frequency. Metallus also received the Safety Culture Improvement Award from the Metals Service Center Institute, according to management.
To support demand and execution, leadership said Metallus is increasing hourly staffing in targeted areas such as seamless mechanical tube production and made organizational and leadership changes to better align strategic priorities across its Canton-based assets. In February, the company reached a new four-year contract with its local United Steelworkers union. CFO John Zaranec said the agreement provides wage increases of 5% per year and adds premiums for specialized roles, while also adding flexibility to manage future pension obligations and offering defined contribution plan alternatives. The company expects to pay a one-time payment of approximately $2 million in the first quarter of 2026 related to the agreement.
Fourth-quarter results: seasonality, shutdown impact, and compressed spreads
Management said fourth-quarter performance fell below expectations due to seasonality, lower volumes, compressed raw material spread, and a slower ramp-up following the company’s annual maintenance shutdown. Shipments declined by 15,100 tons, or 9%, sequentially. Adjusted EBITDA was $2.4 million, which Williams said was below expectations.
Zaranec said fourth-quarter net sales were $267.3 million, down $38.6 million sequentially. Metallus reported a GAAP net loss of $14.3 million, or a loss of $0.34 per diluted share. On an adjusted basis, the net loss was $7.7 million, or a loss of $0.18 per diluted share.
Adjusted EBITDA was impacted by higher manufacturing costs, including a $10 million sequential increase in annual shutdown costs, as well as lower fixed-cost leverage due to reduced volumes. Zaranec added that shipments were about 10,000 tons below the company’s expectations due to customers managing year-end inventory, customer logistics challenges, and the slower ramp after the shutdown. He also said compressed scrap market prices reduced raw material surcharge revenue by approximately $4 million versus expectations.
Cash flow, liquidity, capital spending, and government-funded projects
Metallus ended the fourth quarter with $156.7 million in cash and cash equivalents. Zaranec said the company generated $16 million of operating cash flow in 2025, and excluding pension contributions, operations produced $80 million in cash—marking the second consecutive year the company exceeded $80 million on that basis.
Fourth-quarter capital expenditures were $35.3 million, including about $30 million tied to government expenditures. For full-year 2026, Metallus expects capital expenditures of approximately $70 million, including about $35 million of government-related capital spending. Zaranec said Metallus expects to contribute approximately $15 million to $20 million of its own funds as part of the partnership.
On government funding, Zaranec said Metallus received $4.1 million of cash in the fourth quarter as part of a previously announced nearly $100 million funding arrangement supporting the U.S. Army’s mission to increase munitions production. Through the end of December, the company had received $85.6 million of government funding, including $32.1 million in 2025. Additional payments of approximately $17 million are expected in the first half of 2026, contingent on achieving mutually agreed milestones. He said the funding has substantially paid for a new bloom reheat furnace at the Faircrest facility and a new roller furnace at the Gambrinus facility.
Regarding depreciation, Zaranec said Metallus expects flat year-over-year depreciation and amortization in 2026, explaining that the government-funded portion does not generate depreciation and amortization expense, and that new base-business capital spending is generally replacing assets that roll off each year.
2026 outlook: higher shipments, pricing actions, and improving costs
Looking ahead, Zaranec said first-quarter 2026 shipments are expected to increase by approximately 10% from the fourth quarter, driven by strength in the order book and improved operational performance following the shutdown. Management said the order book is up more than 50% year-over-year, with lead times extending into mid-second quarter for bars and into mid-third quarter for seamless mechanical tubing.
Annual price agreement negotiations—which Zaranec said cover about 70% of the order book—are “substantially complete,” and the company expects average base price per ton to increase slightly year-over-year depending on mix. Metallus also implemented spot price increases on bar and seamless mechanical tubing not covered by annual agreements, effective through the second quarter and early third quarter depending on product. Based on lead times, management expects pricing benefit and product mix improvements to ramp each quarter of 2026.
Operationally, the company expects sequential improvement in average melt utilization in the first quarter, supported by limited planned shutdown activity and “greater stability and reliability across key assets.” Zaranec said manufacturing costs are expected to improve by about $10 million sequentially in the first quarter, following the fourth-quarter shutdown and improved cost absorption from higher melt utilization.
In the Q&A, Williams said the company expects lead times for seamless mechanical tubing to improve as an additional crew comes online in early March and as investments in key assets ramp. He added that new assets should improve “right the first time” quality, efficiency, and throughput, which should support competitive lead times as demand increases.
For the full year, Zaranec said Metallus expects a low single-digit increase in SG&A expense and currently anticipates delivering year-over-year adjusted EBITDA growth in each quarter of 2026, while remaining mindful of external variables.
About Metallus (NYSE:MTUS)
Metallus, Inc (NYSE:MTUS) is an industrial metals recycling and distribution company that acquires, processes and markets a wide array of ferrous and non-ferrous materials. Its product portfolio includes stainless steel, nickel alloys, aluminum and other specialty metals sourced from manufacturing scrap, obsolete products and post-consumer waste streams. Metallus provides services such as shredding, sorting, melting and baling, enabling its customers to optimize metal recovery and streamline supply chains.
Headquartered in Philadelphia, Pennsylvania, the company operates processing facilities and distribution centers across the United States, facilitating efficient logistics and regional collection of metal grades.
