Key Highlights

  • Net sales were USD 337.2 million, up 10% from a year earlier, and Net Income rose to USD 23.8 million.
  • Adjusted EBITDA was USD 34.5 million, up 19% both sequentially and year over year from USD 29.0 million.
  • A Defense Logistics Agency contract worth up to USD 995 million carries an initial USD 125 million order.
  • Cash was USD 98.6 million and total Liquidity was USD 388.7 million, with USD 3.6 million spent on repurchases.

Quarter in Numbers

Metallus Inc. (NYSE:MTUS), a producer of high-quality specialty metals, manufactured components and Supply chain solutions, reported third-quarter 2026 net sales of USD 337.2 million, up 10% from USD 305.9 million and down 1% from USD 341.0 million in the second quarter. Net income was USD 23.8 million, or USD 0.55 per diluted share, compared with USD 8.1 million, or USD 0.19, a year earlier and USD 8.9 million, or USD 0.21, in the second quarter. Adjusted net income was USD 14.9 million, or USD 0.35 per diluted share, versus USD 11.8 million and USD 11.1 million. Adjusted EBITDA was USD 34.5 million versus USD 29.0 million in both comparison periods.

Year-over-year sales growth came from higher average base sales prices, higher raw material Surcharge Revenue per ton and favorable mix. Ship tons fell 5% sequentially to 165,800 tons on lower automotive and energy shipments, and rose 2% year over year on aerospace and defense and energy.

Defense Momentum

Chief executive Mike Williams said the company reached its annualized USD 250 million run-rate sales target for aerospace and defense in the quarter, and that product mix, pricing and strength in all end markets delivered a third straight quarter of improved year-over-year profitability. The company won a Defense Logistics Agency award with a contract value of up to USD 995 million over five years and an initial purchase order of USD 125 million, and commissioned new Assets supporting defense materials.

As previously announced, Kristopher Westbrooks, president and chief operating officer, succeeds Williams as chief executive when Williams retires at the end of this year.

Cash, Liquidity and Operations

Operating cash flow was USD 6.8 million, as profitability was largely offset by higher inventory. Capital expenditures were USD 13.1 million, including USD 4.9 million for projects primarily funded by the U.S. government. The company repurchased 0.2 million shares for USD 3.6 million and had USD 78.2 million remaining under its authorization. Melt utilization was 76% excluding about three percentage points of electricity curtailments, compared with 74% in the second quarter and a year earlier. Manufacturing cost performance declined sequentially on planned shutdown timing, curtailments and higher operating costs.

Shutdown and Leadership Indicators

Management anticipates fourth-quarter adjusted EBITDA below the third quarter. Shipments are projected to fall by a high-single-digit percentage sequentially on year-end seasonality while exceeding last year's fourth quarter, and price and mix are projected slightly lower. Annual shutdown maintenance would reduce adjusted EBITDA by about USD 10 million to USD 15 million. Lead times for bar and tube products extend into the second quarter of 2027, and a price increase of USD 60 per ton took effect in early October for customers outside annual pricing agreements.

Full-year adjusted EBITDA is projected at USD 100 million to USD 105 million, with capital expenditures of about USD 70 million and an adjusted tax rate of 27% to 30%. Items to track include the pace of defense orders, shutdown cost, the leadership handoff and inventory levels.