Ryerson Holding Corporation (NYSE:RYI) Q4 2022 Earnings Call Transcript

Edward Lehner: Yes, I’m going to have Jim Claussen chime in here in just a moment. Let me just say this. I mean, we could have done a better job when it came to our cash conversion cycle, and we have higher expectations for ourselves when it comes to managing that component of our business. However, I would say this, given the pandemic hangovers and the extreme oscillations and gyrations in that working capital environment in terms of past due deliveries of metal and then certainly trying to manage on the customer side, what I would call a difficult flow through the value chain really for the entire industry. And I think you’re even seeing it now in some of the dynamics that exist relative to price and demand. Just there’s a lack of flow.

I heard a humorous metaphor that if everybody had to report out, like the NFL reports out their injury reports, you have all these different companies that would be telling you what their injuries are. And so I just think there’s a lack of flow throughout the supply chain, and that certainly showed up in working capital management in the second half of the year. But we expect to get back to our historical and really our own performance expectations when it comes to net working capital management and where that cash conversion cycle should be. Jim?

James Claussen: Yes. Thanks, Eddie. Katja, I think really, Eddie said it really well there. I think on the cash conversion cycle uptick, we really saw it on the days of supply on the inventory front. As noted, as we moved up a little bit outside of our target range of 70 to 75 days and would expect that to moderate. On the AR side, we expect that to perform seasonally. That’s been very consistent across the board. So it was really an inventory-driven event.

Edward Lehner: Yes. The AR performance has been outstanding and continues to be outstanding. On the inventory side, we can — we believe we can do a better job just in terms of managing through some of these distortions that have turned out to be pretty protracted.

Operator: I have no further questions in the queue. I’ll turn it back over to you.

Edward Lehner: Thank you for your continued support of and interest in Ryerson and please stay safe and be well, and we look forward to being with you all in May for our first quarter 2023 earnings release and conference call. Take care.

Operator: And this concludes today’s call. Thank you for your participation. You may now disconnect.