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Financing Arrangements
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Financing Arrangements

Note 10 - Financing Arrangements

For a detailed discussion of the Company's long-term debt and credit arrangements, refer to “Note 11 - Financing Arrangements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The following table summarizes the current and non-current debt as of March 31, 2025 and December 31, 2024.

 

 

 

March 31,
2025

 

 

December 31,
2024

 

Credit Agreement

 

$

—

 

 

$

—

 

Convertible Senior Notes due 2025

 

 

5.4

 

 

 

5.4

 

Total debt

 

$

5.4

 

 

$

5.4

 

     Less current portion of debt

 

 

5.4

 

 

 

5.4

 

Total non-current portion of debt

 

$

—

 

 

$

—

 

Credit Agreement

On September 30, 2022, the Company, as borrower, and certain domestic subsidiaries of the Company, as subsidiary guarantors (the “Subsidiary Guarantors”), entered into a Fourth Amended and Restated Credit Agreement (the “Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and the lenders party thereto (collectively, the “Lenders”), which further amended and restated the Company’s secured Third Amended and Restated Credit Agreement, dated as of October 15, 2019.

 

As of March 31, 2025, the amount available under the Credit Agreement was $251.7 million, reflective of the Company’s asset borrowing base with no outstanding borrowings. Additionally, the Company is in compliance with all covenants outlined in the Credit Agreement.

 

Convertible Senior Notes due 2025

The principal amount of the Convertible Senior Notes due 2025 upon issuance was $46.0 million. Transaction costs related to the Convertible Senior Notes due 2025 incurred upon issuance were $1.5 million. These costs are amortized to interest expense over the term of the notes. The Convertible Senior Notes due 2025 mature on December 1, 2025. The Convertible Senior Notes due 2025 are convertible at the option of holders in certain circumstances and during certain periods into the Company’s common shares, cash, or a combination thereof, at the Company’s election.

 

The Indenture for the Convertible Senior Notes due 2025 provides that notes will become convertible during a quarter when the share price for 20 trading days during the final 30 trading days of the immediately preceding quarter was greater than 130% of the

conversion price. This criterion was met during the fourth quarter of 2024, and, as such, the notes can be converted at the option of the holder beginning January 1 through March 31, 2025. During the first quarter of 2025, the Company received notice of conversion from the remaining Convertible Senior Note holder to convert the outstanding notes. The Company expects to settle the convertible obligation, including the outstanding principal of $5.5 million, in cash, during the second quarter of 2025.

 

For details regarding all conversion mechanics and methods of settlement, refer to the Indenture for the Convertible Senior Notes due 2025 filed as an exhibit to a Form 8-K on December 15, 2020 and incorporated by reference in our most recent 10-K filing.

The components of the Convertible Senior Notes due 2025 as of March 31, 2025 and December 31, 2024 were as follows:

 

 

March 31,
2025

 

 

December 31,
2024

 

Principal

 

$

5.5

 

 

$

5.5

 

Less: Debt issuance costs, net of amortization

 

 

(0.1

)

 

 

(0.1

)

Convertible Senior Notes due 2025, net

 

$

5.4

 

 

$

5.4

 

 

The following table sets forth total interest expense recognized related to the Convertible Notes:

 

 

Three Months Ended March 31,

 

 

 

2025

 

 

2024

 

Contractual interest expense

 

$

0.1

 

 

$

0.2

 

Amortization of debt issuance costs

 

 

—

 

 

 

—

 

Total

 

$

0.1

 

 

$

0.2

 

The total cash interest paid for the three months ended March 31, 2025 and 2024 was $0.3 million, respectively.

Fair Value Measurement

The fair value of the Convertible Senior Notes due 2025 was approximately $9.7 million as of March 31, 2025. The fair value of the Convertible Senior Notes due 2025, which falls within Level 2 of the fair value hierarchy as defined by applicable accounting guidance, is based on a valuation model primarily using observable market inputs and requires a recurring fair value measurement on a quarterly basis.

Metallus' Credit Facility is variable-rate debt. As such, any outstanding carrying value is a reasonable estimate of fair value as interest rates on these borrowings approximate current market rates. This valuation falls within Level 2 of the fair value hierarchy and is based on quoted prices for similar assets and liabilities in active markets that are observable either directly or indirectly. There were no outstanding borrowings on the Credit Facility as of March 31, 2025.

 

Interest (Income) Expense, net

 

The following table provides the components of interest (income) expense, net for the three months ended March 31, 2025 and 2024:

 

 

Three Months Ended March 31,

 

 

 

2025

 

 

2024

 

Interest expense

 

$

0.5

 

 

$

0.6

 

Interest income

 

 

(2.0

)

 

 

(3.4

)

Interest (income) expense, net

 

$

(1.5

)

 

$

(2.8

)

Interest income primarily relates to interest earned on cash invested in a money market fund and deposits with financial institutions. As of March 31, 2025, the carrying value of the Company's money market investment was $42.6 million, which approximates the fair value. The Company had $146.4 million in cash invested in a money market fund as of March 31, 2024. The

money market fund is a cash equivalent and is included in cash and cash equivalents on the Consolidated Balance Sheets. The fund consists of highly liquid investments with an average maturity of three months or less and falls within Level 1 of the fair value hierarchy as defined by applicable accounting guidance. Additionally as of March 31, 2025 and 2024, the Company had $126.9 and $121.3 million of cash held in other accounts which generate interest income at a rate similar to the money market fund.

Treasury Shares

On December 20, 2021 Metallus announced that its Board of Directors authorized a share repurchase program under which the Company may repurchase up to $50.0 million of its outstanding common shares. On November 2, 2022, the Board of Directors authorized an additional $75.0 million towards its share repurchase program and on May 6, 2024 the Board of Directors authorized an additional $100.0 million. The share repurchase program is intended to return capital to shareholders while also offsetting dilution from annual equity compensation awards. The share repurchase program does not require the Company to acquire any dollar amount or number of shares and may be modified, suspended, extended or terminated by the Company at any time without prior notice.

For the three months ended March 31, 2025, the Company repurchased approximately 0.4 million common shares at an aggregate cost of $5.6 million in the open market, which equates to an average repurchase price of $14.23 per share. For the three months ended March 31, 2024, the Company repurchased approximately 0.2 million common shares at an aggregate cost of $4.4 million in the open market, which equates to an average repurchase price of $20.87 per share. As of March 31, 2025, the Company had a balance of $97.2 million remaining on its authorized share repurchase program.

In April 2025, the Company repurchased approximately 0.1 million common shares at an aggregate cost of $1.2 million, which equates to an average repurchase price of $12.47 per share. As of April 30, 2025, the Company had $96.0 million remaining under its authorized share repurchase program.