Metallus Inc.

call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, simply press star followed by the number one on your telephone keypad. It is now my pleasure to turn the call over to Jennifer Beeman. Jennifer, you may begin.

Good morning and welcome to Metallus' second quarter 2025 conference call. I'm Jennifer Beeman, Director of Communications and Investor Relations for Metallus. Joining me today is Mike Williams, Chief Executive Officer, Chris Westbrooks, President and Chief Operating Officer, John Zarenek, Executive Vice President and Chief Financial Officer, and Kevin Rakitic, Executive Vice President and Chief Commercial Officer. You all should have received a copy of our press release, which was issued last night. During today's conference call, we may make forward-looking statements as defined by the SEC. Our actual results may differ materially from those projected or implied due to a variety of factors, which we describe in greater detail in yesterday's release. Please refer to our SEC filings, including the most recent Form 10-K and Form 10-Q, and the list of factors included in our earnings release, all of which are available on the Natalis website. Where non-GAAP financial information is referenced, additional details and reconciliations to its GAAP equivalents are also included in the earnings release. With that, I'd like to turn the call over to Mike. Mike?

Good morning, and thank you for joining us today. Before we begin, I'd like to take a moment to welcome John Durante to the team. John is our new Executive Vice President and Chief Financial Officer and brings with him more than 20 years of financial leadership in the manufacturing and industrial sectors along with a strong track record of engaging with the investment community. We're excited to have him on board, and I'm confident you'll enjoy working with him. Also, I'm excited that Chris recently assumed new responsibilities as President and Chief Operating Officer after serving as our CFO since 2018. Chris now has oversight of our safety, manufacturing operations and excellence, and supply chain organizations. Now, turning briefly to the trade environment, Section 232 steel tariffs remain firmly in place at 50% for most countries, with little change resulting from the country-specific agreements currently under negotiation by the administration. A fair trade environment is very important for the long-term sustainability of the steel industry, an industry that is vital to our national defense and infrastructure. As a result of the recent trade action, we anticipate growing demand for domestically produced steel. Before we dive into safety and the quarterly results, I want to take a moment to share how honored we were to recently host Vice President J.D. Vance at our Faircrest plant in Canton, Ohio. He spoke to approximately 300 of our employees and local stakeholders. emphasizing the federal government's commitment to investing in American workers and businesses. He also acknowledged our role in supporting national defense, highlighting Metallus' investment in a new bloom reheat furnace and our support of the Army's increased artillery shell production. The visit left many of our employees energized and deeply proud of the vital role They play in strengthening our national industrial and defense capabilities. Moving on to safety, our mission remains clear to be recognized as having the safest specialty metals operation in the world. In 2025, we're on track to invest approximately $5 million to enhance our safety management systems and upgrade critical equipment. I'm pleased to report but our previous safety investments are delivering meaningful results. So far in 2025, we've had zero serious injuries, a 40% reduction in injury severity, and a 6% reduction in injury frequency compared to the same period a year ago. Even more encouraging are our leading indicators, a 25% increase in the number of employees actively participating in the first aid provider program and serving as safety committee representatives. A 41% rise in near-miss reporting and a 48% increase in proactive safety engagement interactions. These trends reflect growing employee engagement and trust in our safety culture. We're also continuing to de-risk our operations through robust, serious injury and fatality prevention measures, comprehensive risk assessments, and targeted lockout, tagout, tryout enhancements. We recognize that safety is a journey. However, these positive indicators give us confidence that we're moving in the right direction toward our goal of industry-leading safety performance. Moving to business results for the second quarter. Overall, shipments increased by 10% compared with the first quarter, driven by higher aerospace and defense, automotive, and energy shipments. When looking at the first half of 2025, we shipped 28% more tons than the second half of 2024. Higher shipments coupled with better manufacturing performance resulted in a $26.5 million adjusted EBITDA. a significant increase from the first quarter. Additionally, we recently announced a price increase on seamless mechanical tubing products of $100 per ton effective in November for customers not covered by annual pricing agreements. Lead times are currently extended to October for our SPQ bars and seamless mechanical tubing products. Turning to our specific markets, Industrial shipments increased slightly in the second quarter on a sequential basis. Distribution customer inventory levels have declined over the last few months. SBQ and seamless mechanical tubes are consistently turning over and customers are regularly ordering from us. Energy shipments improved 17% on a sequential basis. We continue to invest in our thermal treat capabilities for high-pressure, high-temperature applications to further expand our reach in the energy market. Tariffs aimed at protecting domestic steel producers are helping to reduce imports and stimulate demand. Automotive shipments improved by 9% sequentially. The sequential increase in shipments included some market share gains and increased demand on existing programs. The highest-running light truck and SUV programs that Metallus participates in remain strong, and as we mentioned last quarter, we are continuing to see increased customer inquiries driven by tariff-related onshoring. As expected, aerospace and defense shipment nearly doubled sequentially. While the industry continues to work through their short-term supply chain challenges, this market remains on target to continue to grow for the foreseeable future, and we are energized by our participation in this market. We continue to build momentum with vacuum arc remount or VAR steel, driven by our broad downstream processing capabilities and a strategic relationship with a VAR supplier. Metallus is uniquely positioned to procure, engineer, process, and sell these VAR products in an efficient manner that is desired by customers. Year to date, VAR-related sales have more than doubled compared to the first half of 2024, reflecting the focused efforts of our teams. Alongside growing volumes with existing customers, the enhanced strength and durability of VAR steel has enabled us to win new business in the aerospace defense and industrial sectors. As previously shared, We remain on track to achieve approximately $30 million in bar-related revenue by the end of 2025. Switching gears to operations, our melt utilization rate improved to 71% or by six percentage points sequentially on higher production volumes. We're seeing the benefits of ongoing process improvements across our manufacturing facilities, and we expect melt utilization to further increase in the third quarter to support our solid order book. That said, we believe there are still meaningful opportunities to drive improvement in operating performance and cost structure. To support this, we've launched an initiative focused on optimizing the execution of our day-to-day manufacturing operating system across the organization. We expect this initiative will support the long-term sustainability of our operations while reducing costs and enabling profitability growth. In terms of recent capital investments, our automatic grinding line at our Harrison facility has successfully completed high commissioning and is now fully staffed and operational. We're already seeing daily improvements in safety and throughput, clear indications of the project's positive impact. Additionally, our government-funded investments continue to hit key milestones related to the installation of the new bloom reheat furnace and roller furnace to support the army's increased demand for artillery shells the bloom reheat furnaces construction continues to remain on schedule to begin commissioning by the end of the year the new roller furnace building and equipment foundations are nearing completion and equipment has begun to arrive we remain on schedule to begin commissioning in the first half of 2026. lastly As a reminder, we will begin labor negotiations with the United Steelworkers on August 18th regarding the current labor agreement, which expires on September 29th. As always, our aim is to achieve a timely, fair, and equitable contract for both the company and our employees. We remain focused on our daily execution to support our solid order book while maintaining a commitment to safety, delivering exceptional customer service, and making strategic capital investments. These priorities are key to supporting sustainable profitability, generating strong cash flow, and creating long-term value for our shareholders. I'm now going to turn the call over to Chris to review our financial results for the second quarter since he served as CFO for the majority of the quarter, and John will share the company's outlook.