Russel Metals (RMZ) Q2 2026 Earnings Report

The call conveyed a strongly positive operational and financial quarter: record revenues, shipments, improved margins, significant adjusted EBITDA and EPS uplift, industry-leading ROIC, strong liquidity and disciplined capital allocation. Challenges were noted (Klockner's lower margin profile, inventory dollar growth, a one-time stock‑based compensation mark, modest working capital use, and potential timing risks if prices plateau). Overall, management's messaging emphasized durable demand, improving market breadth, and the ability to translate higher volumes and pricing into outsized earnings — with clear plans to narrow Klockner margin gaps and selectively deploy capital.

Management guided that Q3 2026 should be at least in line with the first half and, in fact, better than Q3 2025, noting July margins were similar to June (and June was above the Q2 average) and activity has continued into early Q3 despite normal seasonal headwinds. Key metrics cited supporting that outlook include record consolidated revenue of $1.7B and service‑center shipments above 500k tons (tons +6% vs Q1; same‑store +6% vs Q2 2025), a 130‑bp gross margin improvement Q2 vs Q1 with service‑center gross margin of $529/ton (+$71/ton vs Q1), Q2 adjusted EBITDA $154M (LTM EBITDA >$400M), EPS $1.43 (GAAP) / adjusted $1.63, ROIC 24% annualized (23% YTD), inventory turns 4.4 (from 4.2), Q2 CapEx $18M with expected pickup as annual CapEx averages ~ $100M (~$25M/quarter) into late‑2026/2027, liquidity >$500M with net debt ~$144M, quarterly dividend $0.44, $48M cash used for working capital in Q2, and continued NCIB activity (cumulative 8.7M shares for $333M at an average $38.13).