Mr. Martin Juravsky reports

RUSSEL METALS ANNOUNCES RATIONALIZATION INITIATIVES IN WESTERN CANADA

Russel Metals Inc. has arranged a series of initiatives related to its Western Canadian operations that will rationalize excess capacity/redundant locations, reduce invested capital and gain operational efficiencies.

In December, 2023, Russel Metals announced the acquisition of seven service centres, including five in Western Canada, from Samuel Son & Co. Ltd. At that time, the initial acquisition price was $225-million, with a plan to reduce the invested capital by $50-million to $100-million. Shortly after closing in the third quarter of 2024, the invested capital was reduced by $58-million due to a reduction in working capital. Upon completion of today's announced initiatives, the invested capital will be further reduced by $40-million to $50-million for a cumulative invested capital reduction of approximately $100-million, which is the upper end of the company's original goal.

The specific initiatives include:

• Binding agreements are in place to sell the real estate associated with Russel's branches in Delta, B.C., and Saskatoon, Sask. Total cash proceeds will be greater than $40-million and result in gains on sale for each transaction upon their completion, which are expected in Q4 2025 for the Saskatoon location and Q2 2026 for the Delta location.
• The permanent closure of the Delta location will result in a repatriation of excess working capital, once the inventories are integrated into Russel's other locations in the region.
• Certain processing equipment, racking and cranes at three of Russel's Western Canadian locations (including the Delta location) will be removed, refurbished and relocated to the company's other operations in North America or sold, resulting in a capital avoidance related to the repurposing of such equipment.
• In Q3 2025, we will record a provision for restructuring relating to the permanent closure of the Delta location of approximately $4-million.

About Russel Metals Inc.

Russel Metals is one of the largest metals distribution companies in North America with a growing focus on value-added processing. It carries on business in three segments: metals service centres, energy field stores and steel distributors. Its network of metals service centres carries an extensive line of metal products in a wide range of sizes, shapes and specifications, including carbon hot-rolled and cold-finished steel, pipe and tubular products, stainless steel, aluminum, and other non-ferrous specialty metals. Its energy field stores carry a specialized product line focused on the needs of energy industry customers. Its steel distributors operations act as master distributors selling steel in large volumes to other steel service centres and large equipment manufacturers mainly on an as-is basis.

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