Toronto – November 04, 2026 -- Russel Metals Inc. (TSX: RUS) posted record quarterly revenue of $1.8 billion for the three months ended September 30, 2026, up 56% from the third quarter of 2025 and 10% from the second quarter. Adjusted EBITDA reached a record $230 million and adjusted earnings per share a record $2.67.
Gross margin widens 330 basis points to 25.9% in one quarter
Average gross margin rose to 25.9% from 22.6% in the second quarter. Russel attributed the gain to favourable market conditions, an improving margin profile at the branches acquired from Kloeckner Metals Corporation, and better margins at its Canadian service center operations.
Reported EBITDA was a record $200 million. Over the last twelve months, EBITDA totaled $531 million and adjusted EBITDA $548 million. Earnings per share were $2.29, against $1.43 in the second quarter, while adjusted EPS rose from $1.63 to $2.67. Annualized return on invested capital reached 35%, up from 24% in the second quarter, and was 27% for the first nine months.
U.S. steel prices rise 11-12% quarter on quarter
U.S. plate averaged US$1,444 per ton in the quarter, up 12%, and hot rolled coil averaged US$1,201 per ton, up 11%. By September 30, plate was 3% and hot rolled coil 4% above their third-quarter averages.
Service center tons shipped fell 3% from the second quarter on normal seasonal factors. They rose 29% year on year, or 7% on a same-store basis.
Former Kloeckner branches double quarterly EBITDA to $33 million
The acquired branches generated revenue of $237 million and EBITDA of $33 million in the third quarter, compared with $213 million and $16 million in the second. Over nine months they contributed $633 million of revenue and $57 million of EBITDA, or 13% of consolidated revenue and 12% of consolidated adjusted EBITDA. Annualized return on invested capital on the deal was 42% for the period.
U.S. operations accounted for 57% of revenue, versus 54% in the second quarter and 43% a year earlier. Russel expects the U.S.-weighted mix to continue.
Color Steels sale closes at $42 million in cash proceeds
The company sold its Color Steels subsidiary on September 30, 2026, for cash proceeds of $42 million and a pre-tax gain of $7 million. Color Steels sat in the metal service centers segment. Russel excluded the gain, along with a gain on the sale of a property in Delta, British Columbia, from adjusted results.
Russel continues to evaluate acquisitions to expand its U.S. metals service center platform, with an emphasis on tuck-in deals in the near term. Capital expenditures were $26 million in the quarter and $62 million for nine months, covering facility modernization and value-added processing projects.
Working capital absorbs $204 million as net debt stands at $214 million
Cash from operating activities before non-cash working capital was $182 million. Non-cash working capital used $204 million. Russel paid a $24 million dividend, or $0.44 per share, and ended the quarter with net debt of $214 million and liquidity of $418 million.
The company did not buy back shares in the third quarter. Since its normal course issuer bid began in August 2022, it has repurchased 8.7 million shares, 14% of those then outstanding, at an average $38.13 per share for $333 million. A quarterly dividend of $0.44 per share is payable December 15, 2026, to shareholders of record on November 26.
Management expects fourth-quarter daily shipments to hold at year-to-date levels
Russel expects fourth-quarter daily service center shipments to match the first three quarters, with fewer operating days because of holiday schedules in Canada and the U.S. It cited favourable demand, limited international supply into North America, extended North American lead times and energy and transportation cost inflation as drivers of higher metal prices, and expects these dynamics to continue near term.
Over the medium term, the company points to the rebuilding of the U.S. industrial manufacturing base, Canadian nation-building projects, and infrastructure spending on data centers and energy. It also expects its energy field stores to keep gaining market share with solid margins.