TORONTO, May 3, 2017 /PRNewswire/ - Russel Metals Inc. (RUS - TSX) announces financial results for first quarter ended March 31, 2017.

For the 2017 first quarter, we reported net income of $30 million or $0.48 per share on revenues of $804 million compared to net income of $8 million or $0.13 per share in the first quarter of 2016.  A stronger pricing environment led to higher gross margins and improved operating profits in all three of our operating segments.

First quarter revenues in our metals service centers increased 13% to $386 million compared to the same period in 2016.  Tons shipped were approximately 2% higher in the quarter as volumes increased across most regions.  The average selling price improved 11% over first quarter 2016 and 6% over 2016 fourth quarter reflecting mill price increases, higher activity levels and continued growth in value-added processing.  Gross margins were 22.4% compared to 20.7% in the same quarter last year.  Operating profits increased $12 million to $22 million and, as a percentage of revenues, profits doubled to 5.6% from 2.8% due to stronger gross margins.

First quarter 2017 revenues in our energy products segment increased 37% to $339 million compared to $248 million in the 2016 first quarter due to stronger drilling activity and higher pipe prices as oil and natural gas prices stabilized late in 2016.  Gross margins were 17.3% compared to 16.6% for the 2016 first quarter.  This segment had operating profits of $24 million compared to $7 million in the same quarter last year.  Operating profits as a percentage of revenues were 7.0% compared to 2.7% in first quarter 2016.

Revenues in our steel distributors segment increased by 7% to $78 million in the 2017 first quarter compared to $73 million in the 2016 first quarter reflecting higher steel prices than at this time last year.  Gross margins were 21.6% compared to 20.6% and operating profits as a percentage of revenues rose to 10.8% compared to 9.8% in the first quarter of 2016.  Operating profits were $8 million compared to $7 million in the same quarter last year due to the stronger gross margins.

Mr. Brian R. Hedges, CEO, commented, "Our first quarter results are significantly better this year.  Our operating teams across the business leveraged higher 2017 steel prices, which were largely the result of improvements in steel mill outlook, stronger demand and the easing of imports.  Stable oil prices resulted in increased drilling activity and, just as importantly, the inventory overhang in the North American market was substantially reduced."

Mr. John G. Reid, President and COO, continued, "We continue our disciplined approach to inventory management, efficiency gains and growth of our value-added processing.  These factors all contributed to our strong first quarter gross margins and operating profits.  The increase in revenues was encouraging as it reversed the two year trend.  Our energy products operations reduced their aged inventory position, thereby improved the quality of our working capital in the segment."

The Board of Directors approved a quarterly dividend of $0.38 per common share payable June 15, 2017 to shareholders of record as of May 26, 2017.

The Company will be holding an Investor Conference Call on Thursday, May 4, 2017 at 9:00 a.m. ET to review its 2017 first quarter results.  The dial-in telephone numbers for the call are 416-764-8688 (Toronto and International callers) and 1-888-390-0546 (U.S. and Canada).  Please dial in 10 minutes prior to the call to ensure that you get a line.

A replay of the call will be available at 416-764-8688 (Toronto and International callers) and 1-888-390-0546 (U.S. and Canada) until midnight, Thursday, May 18, 2017.  You will be required to enter pass code 245814 in order to access the call.

Additional supplemental financial information is available in our investor conference call package located on our website at www.russelmetals.com.

Russel Metals is one of the largest metals distribution companies in North America.  It carries on business in three metals distribution segments: metals service centers, energy products and steel distributors, under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Alberta Industrial Metals, Apex Distribution, Apex Monarch, Apex Remington, Apex Western Fiberglass, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, JMS Russel Metals, Leroux Steel, McCabe Steel, Mégantic Métal, Métaux Russel, Métaux Russel Produits Spécialisés, Milspec, Norton Metals, Pioneer Pipe, Russel Metals Processing, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Spartan Energy Tubulars, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.

Cautionary Statement on Forward-Looking Information

Certain statements contained in this press release constitute forward-looking statements or information within the meaning of applicable securities laws, including statements as to our future capital expenditures, our outlook, the availability of future financing and our ability to pay dividends.  Forward-looking statements relate to future events or our future performance.  All statements, other than statements of historical fact, are forward-looking statements.  Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions.  Forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by us, inherently involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including the factors described below.

We are subject to a number of risks and uncertainties which could have a material adverse effect on our future profitability and financial position, including the risks and uncertainties listed below, which are important factors in our business and the metals distribution industry.  Such risks and uncertainties include, but are not limited to: the volatility in metal prices; volatility in oil and natural gas prices; cyclicality of the metals industry and the industries that purchase our products; decreased capital and other expenditures in the energy industry; product claims from customers; significant competition that could reduce our market share; the interruption in sources of metals supply; manufacturers selling directly to our customer base; material substitution; credit risk of our customers; lack of credit availability; change in our credit ratings; currency exchange risk; restrictive debt covenants; non-cash asset impairments; the unexpected loss of key individuals; decentralized operating structure; the availability of future acquisitions and their integration; the failure of our key computer-based systems, including our enterprise resource and planning systems, failure to renegotiate any of our collective agreements and work stoppages; litigious business environment; environmental liabilities; environmental concerns or changes in government regulations; legislation on carbon emissions; workplace health and safety laws and regulations; significant changes in laws and governmental regulations; fluctuation of our common share price; dilution; and variability of dividends.

While we believe that the expectations reflected in our forward-looking statements are reasonable, no assurance can be given that these expectations will prove to be correct, and our forward-looking statements included in this press release should not be unduly relied upon.  These statements speak only as of the date of this press release and, except as required by law, we do not assume any obligation to update our forward-looking statements.  Our actual results could differ materially from those anticipated in our forward-looking statements including as a result of the risk factors described above and under the heading "Risk" in our MD&A and under the heading "Risk Management and Risks Affecting Our Business" in our most recent Annual Information Form and as otherwise disclosed in our filings with securities regulatory authorities which are available on SEDAR at www.sedar.com.

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SOURCE Russel Metals Inc.