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Metallus makes specialty steel for industrial, automotive, aerospace, defense and energy markets. Aerospace and defense drove most of its latest sales increase, while planned shutdowns weigh on the Q4 profit outlook.
Metallus Inc. (NYSE: MTUS) makes specialty steel bars, seamless mechanical tubing and manufactured components from recycled scrap. It serves industrial, automotive, aerospace and defense, and energy customers from its Canton, Ohio operations.
The table compares the three months ended September 30. Amounts are USD millions, except per-share figures.
| Results | 2026 | 2025 |
|---|---|---|
| Sales | 337.2 | 305.9 |
| Net income, GAAP | 23.8 | 8.1 |
| Diluted EPS, GAAP | 0.55 | 0.19 |
| Adjusted net income | 14.9 | 11.8 |
| Adjusted EBITDA | 34.5 | 29.0 |
| Operating cash flow, GAAP | 6.8 | 22.0 |
| Cash capital spending | 13.1 | 28.4 |
GAAP net income included a $15.7 million pretax gain from remeasuring benefit plans. Adjusted earnings remove that gain and selected transformation, manufacturing and asset-related items, with related tax adjustments. Adjusted EBITDA additionally removes interest, taxes, depreciation and amortization, including cloud-computing amortization.
Adjusted EPS was $0.35, versus $0.27 a year earlier and $0.26 in Q2. The comparative adjusted figures use the current release's treatment of cloud-computing amortization.
Aerospace and defense sales rose to $66.4 million from $47.2 million. Management says it reached its $250 million annualized sales target for that business. Total shipments rose from a year earlier but fell to 165,800 tons from Q2's 174,200 tons.
The company has an initial $125 million purchase order from the U.S. Defense Logistics Agency under a five-year contract with a maximum value of $995 million. The maximum depends on further delivery orders and is not all committed sales.
Lead times for bar and tube products extend into Q2 2027. The company has commissioned new assets supporting defense materials and continues to invest in its production capabilities.
In August, Metallus expected Q3 shipments to be similar to Q2 and adjusted EBITDA to be slightly higher. Shipments instead fell almost 5%, while adjusted EBITDA rose to $34.5 million from $29 million.
For Q4, Metallus expects lower adjusted EBITDA than in Q3. Shipments are expected to fall by a high-single-digit percentage sequentially, while remaining above a year earlier. Planned maintenance and factory overhead spread across fewer tons are expected to reduce adjusted EBITDA by $10 million to $15 million relative to Q3.
The annual adjusted EBITDA forecast is $100 million to $105 million, after $88.1 million in the first nine months. Annual capital spending remains planned at approximately $70 million.
Q3 operating cash flow of $6.8 million was below $13.1 million of capital spending. Inventory used $19.1 million of cash. Metallus also spent $3.6 million on share repurchases during the quarter.
For the first nine months, operating activities used $7.3 million of cash and capital spending was $53 million. The company received $17.2 million of government funding during that period, recorded as an investing cash inflow.
Cash was $98.6 million at September 30, versus $108.6 million in June. Total liquidity of $388.7 million included available undrawn borrowing capacity. The credit facility, refinanced in June, matures in June 2031. Finance leases remain among the company's obligations.
President and Chief Operating Officer Kristopher Westbrooks is due to succeed Chief Executive Officer Mike Williams when Williams retires at year-end.
Analysis MTUS
Metallus' aerospace and defense growth contrasts with a weaker Q4 profit outlook. Our calculations show the source of the sales gain and what the annual target leaves for the final quarter.