メタルスの四半期報告

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-36313

METALLUS INC.

(Exact name of registrant as specified in its charter)


Ohio		46-4024951
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1835 Dueber Avenue SW, Canton, OH		44706
(Address of principal executive offices)		(Zip Code)

330.471.7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:


Title of each class	Trading symbol	Name of exchange in which registered
Common shares	MTUS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial reporting accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class		Outstanding at April 30, 2024
Common Shares, without par value		43,861,978

Table of Contents

Metallus Inc.

Table of Contents


		Page
Part I. Financial Information		3
Item 1.	Financial Statements	3
	Consolidated Statements of Operations (Unaudited)	3
	Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	4
	Consolidated Balance Sheets (Unaudited)	5
	Consolidated Statements of Shareholders’ Equity (Unaudited)	6
	Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 4.	Controls and Procedures	31
Part II. Other Information		31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 5.	Other Information	32
Item 6.	Exhibits	33
	Signatures	34

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

Metallus Inc.

Consolidated Statements of Operations (Unaudited)


	Three Months Ended March 31,
	2024			2023
(Dollars in millions, except per share data)
Net sales	$	321.6		$	323.5
Cost of products sold		271.0			283.1
Gross Profit		50.6			40.4

Selling, general and administrative expenses		24.1			21.0
Loss (gain) on sale or disposal of assets, net		0.1			0.1
Interest (income) expense, net		(2.8	)		(1.5	)
Loss on extinguishment of debt		—			11.4
Other (income) expense, net		(0.8	)		(8.8	)
Income (Loss) Before Income Taxes		30.0			18.2
Provision (benefit) for income taxes		6.0			3.8
Net Income (Loss)	$	24.0		$	14.4

Per Share Data:
Basic earnings (loss) per share	$	0.55		$	0.33
Diluted earnings (loss) per share	$	0.52		$	0.30

See accompanying Notes to the unaudited Consolidated Financial Statements.

Table of Contents

Metallus Inc.

Consolidated Statement of Comprehensive Income (Loss) (Unaudited)


	Three Months Ended March 31,
	2024			2023
(Dollars in millions)
Net income (loss)	$	24.0		$	14.4
Other comprehensive income (loss), net of tax of none and $(0.1) million for the three months ended March 31, 2024 and 2023
Foreign currency translation adjustments		—			(0.5	)
Pension and postretirement liability adjustments		(1.1	)		(0.1	)
Other comprehensive income (loss), net of tax		(1.1	)		(0.6	)
Comprehensive Income (Loss), net of tax	$	22.9		$	13.8

See accompanying Notes to the unaudited Consolidated Financial Statements.

Table of Contents

Metallus Inc.

Consolidated Balance Sheets (Unaudited)


	March 31, 2024			December 31, 2023
(Dollars in millions)
ASSETS
Current Assets
Cash and cash equivalents	$	278.1		$	280.6
Accounts receivable, net of allowances (2024 - $2.0 million; 2023 - $2.0 million)		120.0			113.2
Inventories, net		237.5			228.0
Deferred charges and prepaid expenses		9.0			10.3
Other current assets		3.1			24.7
Total Current Assets		647.7			656.8

Property, plant and equipment, net		492.4			492.5
Operating lease right-of-use assets		10.1			11.4
Pension assets		11.0			9.9
Intangible assets, net		2.6			2.7
Other non-current assets		2.0			2.0
Total Assets	$	1,165.8		$	1,175.3

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	145.4		$	133.3
Salaries, wages and benefits		19.2			26.8
Accrued pension and postretirement costs		26.8			43.5
Current operating lease liabilities		4.4			5.0
Current convertible notes, net		13.2			13.2
Other current liabilities		30.1			26.6
Total Current Liabilities		239.1			248.4

Credit Agreement		—			—
Non-current operating lease liabilities		5.7			6.4
Accrued pension and postretirement costs		153.1			160.5
Deferred income taxes		15.1			15.0
Other non-current liabilities		13.5			13.4
Total Liabilities		426.5			443.7

Shareholders’ Equity
Preferred shares, without par value; authorized 10.0 million shares, none issued		—			—
Common shares, without par value; authorized 200.0 million shares; issued 2024 - 48.2 million shares and 2023 - 47.1 million shares		—			—
Additional paid-in capital		835.0			844.2
Retained deficit		(29.7	)		(53.7	)
Treasury shares - 2024 - 4.2 million; 2023 - 4.0 million		(77.3	)		(71.3	)
Accumulated other comprehensive income (loss)		11.3			12.4
Total Shareholders’ Equity		739.3			731.6
Total Liabilities and Shareholders’ Equity	$	1,165.8		$	1,175.3

Table of Contents

See accompanying Notes to the unaudited Consolidated Financial Statements.

Metallus Inc.

Consolidated Statements of Shareholders’ Equity (Unaudited)


(Dollars in millions)	Common Shares Outstanding			Additional Paid-in Capital			Retained Earnings (Deficit)			Treasury Shares			Accumulated Other Comprehensive Income (Loss)			Total
Balance As of December 31, 2023		43,136,311		$	844.2		$	(53.7	)	$	(71.3	)	$	12.4		$	731.6
Net income (loss)		—			—			24.0			—			—			24.0
Other comprehensive income (loss)		—			—			—			—			(1.1	)		(1.1	)
Stock-based compensation expense		—			3.5			—			—			—			3.5
Stock option activity		104,630			1.1			—			—			—			1.1
Purchase of treasury shares, including excise tax		(211,571	)		—			—			(4.4	)		—			(4.4	)
Issuance of treasury shares		1,707,603			(13.8	)		—			13.8			—			—
Shares surrendered for taxes		(739,352	)		—			—			(15.4	)		—			(15.4	)
Balance As of March 31, 2024		43,997,621		$	835.0		$	(29.7	)	$	(77.3	)	$	11.3		$	739.3


	Common Shares Outstanding			Additional Paid-in Capital			Retained Earnings (Deficit)			Treasury Shares			Accumulated Other Comprehensive Income (Loss)			Total
Balance As of December 31, 2022		44,064,891		$	847.0		$	(123.1	)	$	(52.1	)	$	14.7		$	686.5
Net income (loss)		—			—			14.4			—			—			14.4
Other comprehensive income (loss)		—			—			—			—			(0.6	)		(0.6	)
Stock-based compensation expense		—			2.6			—			—			—			2.6
Stock option activity		101,130			1.3			—			—			—			1.3
Purchase of treasury shares, including excise tax		(514,086	)		—			—			(9.4	)		—			(9.4	)
Issuance of treasury shares		555,062			(11.4	)		—			11.4			—			—
Shares surrendered for taxes		(176,720	)		—			—			(3.4	)		—			(3.4	)
Balance As of March 31, 2023		44,030,277		$	839.5		$	(108.7	)	$	(53.5	)	$	14.1		$	691.4

See accompanying Notes to the unaudited Consolidated Financial Statements.

Table of Contents

Metallus Inc.

Consolidated Statements of Cash Flows (Unaudited)


	Three Months Ended March 31,
	2024			2023
(Dollars in millions)
CASH PROVIDED (USED)
Operating Activities
Net income (loss)	$	24.0		$	14.4
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization		13.4			14.5
Amortization of deferred financing fees		0.1			0.1
Loss on extinguishment of debt		—			11.4
Loss (gain) on sale or disposal of assets, net		0.1			0.1
Deferred income taxes		—			0.7
Stock-based compensation expense		3.5			2.6
Pension and postretirement (benefit) expense, net		2.0			3.8
Changes in operating assets and liabilities:
Accounts receivable, net		(6.7	)		(47.5	)
Inventories, net		(9.3	)		(52.0	)
Accounts payable		16.5			63.7
Other accrued expenses		(4.2	)		(12.8	)
Pension and postretirement contributions and payments		(28.4	)		(1.5	)
Deferred charges and prepaid expenses		1.3			1.8
Other, net		21.1			10.5
Net Cash Provided (Used) by Operating Activities		33.4			9.8

Investing Activities
Capital expenditures		(17.4	)		(10.6	)
Proceeds from disposals of property, plant and equipment		—			1.5
Net Cash Provided (Used) by Investing Activities		(17.4	)		(9.1	)

Financing Activities
Purchase of treasury shares		(4.4	)		(9.4	)
Proceeds from exercise of stock options		1.1			1.3
Shares surrendered for employee taxes on stock compensation		(15.4	)		(3.4	)
Repayments on convertible notes		—			(18.7	)
Net Cash Provided (Used) by Financing Activities		(18.7	)		(30.2	)
Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash		(2.7	)		(29.5	)
Cash, cash equivalents, and restricted cash at beginning of period		281.3			257.8
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	278.6		$	228.3

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows:

Cash and cash equivalents	$	278.1		$	227.4
Restricted cash reported in other current assets		0.5			0.9
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows	$	278.6		$	228.3

See accompanying Notes to the unaudited Consolidated Financial Statements.

Table of Contents

Metallus Inc.

Notes to Unaudited Consolidated Financial Statements

(dollars in millions, except per share data)

Note 1 - Basis of Presentation

The accompanying unaudited Consolidated Financial Statements have been prepared by Metallus Inc. (the “Company” or “Metallus”) in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Metallus' audited Consolidated Financial Statements and Notes included in its Annual Report on Form 10-K for the year ended December 31, 2023.

Note 2 - Recent Accounting Pronouncements

In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-10, "Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance", which requires business entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information around (1) the nature of the assistance, (2) the related accounting policies used to account for government assistance, (3) the effect of government assistance on the entity’s financial statements, and (4) any significant terms and conditions of the agreements, including commitments and contingencies.

The Company prospectively applied the guidance in conjunction with the agreement with United States Army entered into during the first quarter of 2024. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures during the first quarter of 2024; however, the Company anticipates that the adoption of this ASU will have a material impact on the consolidated financial statements and related disclosures beginning in the second quarter of 2024.

The Company will apply the guidance within “International Accounting Standards (“IAS”) 20 - Accounting for Government Grants and Disclosure of Government Assistance” and will record the funding received as a reduction to property, plant and equipment, as the primary conditions for receipt of these funds are to build-out new assets to support increased artillery shell production for the United States Army. The Company anticipates funding to begin in the second quarter of 2024 and will continue to receive funding related to this program into 2025.

There are no other current ASUs issued, but not adopted, that are expected to have a material impact on the Company.

Note 3 - Revenue Recognition

The following table provides the major sources of revenue by end-market sector for the three months ended March 31, 2024 and 2023:


	Three Months Ended March 31,
	2024		2023
Industrial	$	118.9	$	126.3
Automotive		122.9		127.8
Aerospace & Defense (1)		46.3		17.4
Energy		28.0		46.2
Other (2)		5.5		5.8
Total Net Sales	$	321.6	$	323.5

Table of Contents

(1) “Aerospace & Defense” sales by end-market were previously included in "Industrial."

(2) “Other” sales by end-market includes the Company’s scrap sales.

The following table provides the major sources of revenue by product type for the three months ended March 31, 2024 and 2023:


	Three Months Ended March 31,
	2024		2023
Bar	$	193.9	$	218.1
Tube		47.8		45.7
Manufactured components		74.4		53.9
Other (3)		5.5		5.8
Total Net Sales	$	321.6	$	323.5

(3) “Other” sales by product type relates to the Company’s scrap sales.

Contract liabilities are recognized when the Company has received consideration from a customer to transfer goods at a future point in time. Contract liabilities are primarily related to deferred revenue resulting from any cash payments received in advance of shipment to customers and are included in other current liabilities on the Consolidated Balance Sheets. Contract liabilities totaled $0.7 million and $1.8 million as of March 31, 2024 and 2023, respectively.

Note 4 – Other (Income) Expense, net

The following table provides the components of other (income) expense, net for the three months ended March 31, 2024 and 2023:


	Three Months Ended March 31,
	2024			2023
Pension and postretirement non-service benefit (income) loss	$	(1.4	)	$	(1.2	)
Loss (gain) from remeasurement of benefit plans		0.8		$	2.2
Insurance recoveries		—			(9.8	)
Foreign currency exchange loss (gain)		(0.2	)		—
Total other (income) expense, net	$	(0.8	)	$	(8.8	)

Non-service related pension and other postretirement benefit income, for all years, consists primarily of the interest cost, expected return on plan assets and amortization components of net periodic cost.

The Company's Bargaining Unit Pension Plan ("Bargaining Plan"), Retirement Plan (“Salaried Plan”), and the Supplemental Pension Plan ("Supplemental Plan") each have a provision that permits employees to elect to receive their pension benefits in a lump sum upon retirement. In the first quarter of 2024, the cumulative cost of all lump sum payments was expected to exceed the sum of the service cost and interest cost components of net periodic pension cost for the Salaried Plan. As a result, the Company completed a full remeasurement of its pension obligations and plan assets associated with the Salaried Plan during the first quarter of 2024. The Company is required to complete a full remeasurement of the plan each quarter for the remainder of 2024 or until the plan is annuitized with assets and liabilities transferred to a highly-rated insurance company, which is expected to occur in the second quarter of 2024.

A loss of $0.8 million from the remeasurement of the Salaried Plan was recognized for the three months ended March 31, 2024. This loss was due to $1.5 million of investment losses on plan assets and lump sum basis losses, partially offset by a $0.7 million decrease in the liability due to an increase in the discount rate.

Table of Contents

A loss of $2.2 million from the remeasurement of the Salaried Plan was recognized for the three months ended March 31, 2023. This loss was due to a $4.6 million increase in the liability driven by a decrease in the discount rate and lump sum basis losses, partially offset by $2.4 million of investment gains on plan assets.

For more details on the aforementioned remeasurements, refer to “Note 9 - Retirement and Postretirement Plans.”

During 2023, the Company recognized insurance recoveries of $31.3 million related to the 2022 Faircrest melt shop unplanned downtime. In the first quarter of 2023, the Company recognized recoveries of $9.8 million, of which $0.8 million was received during the first quarter and $9.0 million was received in the second quarter of 2023. In the second quarter of 2023, a $1.5 million insurance recovery was received, and the remaining $20.0 million was received in the first quarter of 2024. The 2022 insurance claims were closed in the first quarter of 2024. For further information related to previous insurance recoveries, refer to "Note 7 - Other (Income) Expense, net" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Note 5 - Income Tax Provision

Metallus' provision for income taxes in interim periods is computed by applying the appropriate estimated annual effective tax rates to income or loss before income taxes for the period. In addition, non-recurring or discrete items, including interest on prior-year tax liabilities, are recorded during the periods in which they occur.


	Three Months Ended March 31,
	2024			2023
Provision (benefit) for incomes taxes	$	6.0		$	3.8
Effective tax rate		20.0	%		21.0	%

Income tax expense for the three months ended March 31, 2024 was calculated using forecasted multi-jurisdictional annual effective tax rates to determine a blended annual effective tax rate. The effective tax rate of 20.0% for the three months ended March 31, 2024 was lower than the rate of 21.0% for the three months ended March 31, 2023. The change is primarily related to limitations on the tax deductibility of the loss on extinguishment of debt on the Convertible Senior Notes due 2025 and a state net operating loss discrete adjustment that impacted the first quarter of 2023, partially offset by higher book income in the first quarter of 2024.

Cash taxes were minimal in the first quarter of 2024. In April 2024, the Company made $17.8 million in U.S. federal tax payments and $3.6 million in state and local tax payments.

Note 6 - Earnings (Loss) Per Share

Basic earnings (loss) per share is computed based upon the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed based upon the weighted average number of common shares outstanding plus the dilutive effect of common share equivalents calculated using the treasury stock method or if-converted method. For the Convertible Notes, the Company utilizes the if-converted method to calculate diluted earnings (loss) per share. Under the if-converted method, the Company adjusts net earnings to add back interest expense (including amortization of debt issuance costs) recognized on the Convertible Notes and includes the number of shares potentially issuable related to the Convertible Notes in the weighted average shares outstanding. Treasury shares are excluded from the denominator in calculating both basic and diluted earnings (loss) per share.

Equity-based Awards

Common share equivalents for shares issuable for equity-based awards amounted to 2.9 million shares for the three months ended March 31, 2024. For the three months ended March 31, 2024, 0.6 million shares were excluded from the computation of diluted earnings (loss) per share, primarily related to options with exercise prices above the average market price of our common shares (i.e., “underwater” options), because the effect of their inclusion would have been anti-dilutive.

Table of Contents

The difference between the remaining 2.3 million shares and 0.8 million shares assumed purchased with potential proceeds for the three months ended March 31, 2024, were included in the denominator of the diluted earnings (loss) per share calculation.

Common share equivalents for shares issuable for equity-based awards amounted to 3.5 million shares for the three months ended March 31, 2023. For the three months ended March 31, 2023, 0.5 million shares were excluded from the computation of diluted earnings (loss) per share, primarily related to options with exercise prices above the average market price of our common shares (i.e., “underwater” options), because the effect of their inclusion would have been anti-dilutive. The difference between the remaining 3.0 million shares and 0.9 million shares assumed purchased with potential proceeds for the three months ended March 31, 2023, were included in the denominator of the diluted earnings (loss) per share calculation.

Convertible Notes

Common share equivalents for shares issuable upon the conversion of outstanding Convertible Notes were included in the computation of diluted earnings (loss) per share for the three months ended March 31, 2024 and 2023 as these shares would be dilutive.

The reduction in the dilutive effect on convertible notes is attributable to the repurchase of outstanding Convertible Notes that occurred in the first quarter of 2023. For additional details regarding the Convertible Notes please refer to “Note 14 - Financing Arrangements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The following table sets forth the reconciliation of the numerator and the denominator of basic and diluted earnings (loss) per share for the three months ended March 31, 2024 and 2023:


	Three Months Ended March 31,
	2024		2023
Numerator:
Net income (loss), basic	$	24.0	$	14.4
Add convertible notes interest		0.2		0.3
Net income (loss), diluted	$	24.2	$	14.7

Denominator:
Weighted average shares outstanding, basic		43.6		44.0
Dilutive effect of stock-based awards		1.5		2.1
Dilutive effect of convertible notes		1.7		2.6
Weighted average shares outstanding, diluted		46.8		48.7

Basic earnings (loss) per share	$	0.55	$	0.33
Diluted earnings (loss) per share	$	0.52	$	0.30

Table of Contents

Note 7 - Inventories

The components of inventories, net of reserves as of March 31, 2024 and December 31, 2023 were as follows:


	March 31, 2024			December 31, 2023
Manufacturing supplies	$	54.2		$	51.5
Raw materials		18.3			17.5
Work in process		107.1			109.6
Finished products		58.6			50.1
Gross inventory		238.2			228.7
Allowance for inventory reserves		(0.7	)		(0.7	)
Total inventories, net	$	237.5		$	228.0

Note 8 - Financing Arrangements

For a detailed discussion of the Company's long-term debt and credit arrangements, refer to “Note 14 - Financing Arrangements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The following table summarizes the current and non-current debt as of March 31, 2024 and December 31, 2023.


	March 31, 2024		December 31, 2023
Credit Agreement	$	—	$	—
Convertible Senior Notes due 2025		13.2		13.2
Total debt	$	13.2	$	13.2
Less current portion of debt		13.2		13.2
Total non-current portion of debt	$	—	$	—

Amended 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 “Amended 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, 2024, the amount available under the Amended Credit Agreement was $270.9 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 Amended 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.

Table of Contents

This criterion was met during the first quarter of 2024 and as such the notes can be converted at the option of the holders beginning April 1 through June 30, 2024. Whether the notes will be convertible following such period will depend on if this criterion, or another conversion condition, is met in the future. As such, the Convertible Senior Notes due 2025 are classified as a current liability in the Consolidated Balance Sheets as of March 31, 2024. This criterion was also met as of December 31, 2023. To date, no holders have elected to convert their notes during any optional conversion periods.

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.

In the first quarter of 2023, the Company repurchased a total of $7.5 million aggregate principal amount of its Convertible Senior Notes due 2025. Total cash paid to noteholders was $18.7 million. A loss on extinguishment of debt of $11.4 million was recognized, including a charge of $0.2 million for unamortized debt issuance costs related to the portion of debt extinguished, as well as the related transaction costs.

The components of the Convertible Senior Notes due 2025 as of March 31, 2024 and December 31, 2023 were as follows:


	March 31, 2024			December 31, 2023
Principal	$	13.3		$	13.3
Less: Debt issuance costs, net of amortization		(0.1	)		(0.1	)
Convertible Senior Notes due 2025, net	$	13.2		$	13.2

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


	Three Months Ended March 31,
	2024		2023
Contractual interest expense	$	0.2	$	0.3
Amortization of debt issuance costs		—		—
Total	$	0.2	$	0.3

The total cash interest paid for the three months ended March 31, 2024 and 2023 was $0.3 million and $0.4 million, respectively.

Fair Value Measurement

The fair value of the Convertible Senior Notes due 2025 was approximately $39.2 million as of March 31, 2024. 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, 2024.

Interest (Income) Expense, net

The following table provides the components of interest (income) expense, net for the three months ended March 31, 2024 and 2023:

Table of Contents


	Three Months Ended March 31,
	2024			2023
Interest expense	$	0.6		$	0.7
Interest income		(3.4	)		(2.2	)
Interest (income) expense, net	$	(2.8	)	$	(1.5	)

Interest income primarily relates to interest earned on cash invested in a money market fund and deposits with financial institutions. As of March 31, 2024, the carrying value of the Company's money market investment was $146.4 million, which approximates the fair value. The Company had $94.1 million in cash invested in a money market fund as of March 31, 2023. 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, 2024 and 2023, the Company has $121.3 and $116.0 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, the Company 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. 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, or terminated by the Company at any time without prior notice. On November 2, 2022, the Board of Directors authorized an additional $75.0 million share repurchase program.

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. For the three months ended March 31, 2023, the Company repurchased approximately 0.5 million common shares at an aggregate cost of $9.4 million in the open market, which equates to an average repurchase price of $18.20 per share.

On May 6, 2024, the Board of Directors authorized an additional $100.0 million share repurchase program. This authorization reflects the continued confidence of the Board and senior leadership in the Company’s ability to generate sustainable through-cycle profitability while maintaining a strong balance sheet and cash flow. From April 1, 2024 through May 6, 2024, the Company repurchased approximately 0.2 million common shares at an aggregate cost of $3.9 million, which equates to an average repurchase price of $21.69 per share. In aggregate as of May 6, 2024, the Company has $132.1 million remaining under its authorized share repurchase programs.

Note 9 - Retirement and Postretirement Plans

Plan Amendments and Updates

Bargaining Plan

On October 29, 2021, the United Steelworkers ("USW") Local 1123 voted to ratify a new four-year contract (the “Contract”). The Contract, which is in effect until September 27, 2025, resulted in several changes to the Bargaining Plan including but not limited to closing the plan to new entrants effective January 1, 2022. For a detailed discussion of the Company's Bargaining Plan changes, refer to “Note 14 - Financing Arrangements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

In the first quarter of 2024, the Company contributed a total of $28.4 million in pension contributions, most of which related to the Bargaining Plan. In April 2024, the Company contributed an additional $5.9 million to the Bargaining Plan and anticipates additional contributions of approximately $12.0 million to the Bargaining Plan throughout the remainder of 2024. Required future pension contribution timing and amounts are subject to significant change based on future investment performance, Company estimates and actuarial assumptions, as well as current funding laws.

Table of Contents

Salaried Plan

During the fourth quarter of 2021, termination of the Salaried Plan was approved by the Company's Board of Directors. Participants were notified in January 2022 and the plan was terminated effective March 31, 2022, subject to regulatory approval which was received in the fourth quarter of 2023. The purchase of an irrevocable annuity contract from an insurance company is expected to occur in the second quarter of 2024, after which time the insurance company selected will be responsible for all participant benefit payments.

Pension Net Periodic Benefit Cost (Income)

The components of net periodic benefit cost (income) for the three months ended March 31, 2024 were as follows:


	Pension
	United States of America								United Kingdom			Mexico
	Bargaining Plan			Salaried Plan			Supplemental Plan		Pension Scheme			Pension Plan		Total Pension			Postretirement Plans
Service cost	$	2.2		$	0.2		$	—	$	—		$	—	$	2.4		$	0.1
Interest cost		6.4			1.5			0.2		0.6			—		8.7			1.1
Expected return on plan assets		(7.0	)		(1.6	)		—		(0.7	)		—		(9.3	)		(0.7	)
Amortization of prior service cost		0.3			—			—		—			—		0.3			(1.5	)
Net remeasurement losses (gains)		—			0.8			—		—			—		0.8			—
Net Periodic Benefit Cost (Income)	$	1.9		$	0.9		$	0.2	$	(0.1	)	$	—	$	2.9		$	(1.0	)

The components of net periodic benefit cost (income) for the three months ended March 31, 2023 were as follows:


	Pension
	United States of America								United Kingdom			Mexico
	Bargaining Plan			Salaried Plan			Supplemental Plan		Pension Scheme			Pension Plan		Total Pension			Postretirement Plans
Service cost	$	2.4		$	0.2		$	—	$	—		$	—	$	2.6		$	0.2
Interest cost		6.5			1.7			0.2		0.5			—		8.9			1.2
Expected return on plan assets		(6.7	)		(1.9	)		—		(0.6	)		—		(9.2	)		(0.9	)
Amortization of prior service cost		0.3			—			—		—			—		0.3			(1.5	)
Net remeasurement losses (gains)		—			2.2			—		—			—		2.2			—
Net Periodic Benefit Cost (Income)	$	2.5		$	2.2		$	0.2	$	(0.1	)	$	—	$	4.8		$	(1.0	)

The Bargaining Plan, Salaried Plan, and Supplemental Plan each have a provision that permits employees to elect to receive their pension benefits in a lump sum upon retirement. The Company's accounting policy is to recognize settlements during the quarter in which it is projected that the costs of all settlements during the year will be greater than the sum of the service cost and interest cost components.

In the first quarter of 2024, the cumulative cost of all lump sum payments was expected to exceed the sum of the service cost and interest cost components of net periodic pension cost for the Salaried Plan. As a result, the Company completed a full remeasurement of its pension obligations and plan assets associated with the Salaried Plan during the first quarter of 2024. The Company is required to complete a full remeasurement of the plan each quarter for the remainder of 2024 or until the plan is annuitized with assets and liabilities transferred to a highly-rated insurance company, which is expected to occur in the second quarter of 2024. Subsequent to the first quarter of 2024, on May 1, 2024, the Company made $20.8 million in lump sum payments in advance of the annuitization of the Salaried Plan.

Table of Contents

In the first quarter of 2023, in anticipation of receiving the regulatory approval to move forward with the plan termination process, the cumulative costs of all lump sum payments and other settlements were projected to exceed this threshold during 2023 for the Salaried Plan. Ultimately, these costs did not exceed this threshold for the Salaried Plan during 2023. The Salaried Plan's pension obligations and plan assets were remeasured during each quarter of 2023.

Note 10 – Stock-Based Compensation

During the three months ended March 31, 2024, the Board of Directors granted 370,296 time-based restricted stock units and 205,944 performance-based restricted stock units, which relates to the annual grant to our employees. During the three months ended March 31, 2023, the Board of Directors granted 314,194 time-based restricted stock units and 211,639 performance-based restricted stock units, which relates to the annual grant to our employees.

Time-based restricted stock units are issued with the fair value equal to the closing market price of Metallus common shares on the date of grant. These restricted stock units do not have any performance conditions for vesting. Expense is recognized over the service period, adjusted for any forfeitures that occur during the vesting period. The fair value of the restricted stock units granted during the three months ended March 31, 2024 was $20.66 per share.

Performance-based restricted stock units issued in 2024 vest based on achievement of a total shareholder return (“TSR”) metric. The TSR metric is considered a market condition, which requires Metallus to reflect it in the fair value on grant date using an advanced option-pricing model. The fair value of each performance share was therefore determined using a Monte Carlo valuation model, a generally accepted lattice pricing model under ASC 718 – Stock-based Compensation. The Monte Carlo valuation model, among other factors, uses commonly-accepted economic theory underlying all valuation models, estimates fair value using simulations of future share prices based on stock price behavior and considers the correlation of peer company returns in determining fair value. The fair value of the performance-based restricted stock units granted during the three months ended March 31, 2024 was $18.73 per share.

In the fourth quarter of 2023, the Board approved and authorized a performance-based Transformation Incentive Grant program (the “Transformation Incentive Grant Program”). Under the Transformation Incentive Grant Program, certain employees were granted performance-based restricted stock unit awards designed to be earned based upon the closing price performance of the Company's common shares during a performance period running from December 1, 2023 through December 31, 2026. Similar to the annual performance-based restricted stock units, the fair value of each share is determined using a Monte Carlo valuation model, a generally accepted lattice pricing model. There were no additional grants under the Transformation Incentive Grant Program in the first quarter of 2024. For further information, refer to Metallus' Stock Based Compensation note included in its Annual Report on Form 10-K for the year ended December 31, 2023.

Metallus recognized stock-based compensation expense of $3.5 million for the three months ended March 31, 2024, compared to $2.6 million for the three months ended March 31, 2023. Future stock-based compensation expense related to the unvested portion of all awards is approximately $28.2 million. The future expense is expected to be recognized over the remaining vesting periods through 2027.

Table of Contents

Note 11 - Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023 by component were as follows:


	Foreign Currency Translation Adjustments			Pension and Postretirement Liability Adjustments			Total
Balance As of December 31, 2023	$	(6.5	)	$	18.9		$	12.4
Other comprehensive income (loss) before reclassifications, before income tax		—			—			—
Amounts reclassified from accumulated other comprehensive income (loss), before income tax		—			(1.1	)		(1.1	)
Amounts deferred to accumulated other comprehensive income (loss), before income tax		—			—			—
Tax effect		—			—			—
Net current period other comprehensive income (loss), net of income taxes		—			(1.1	)		(1.1	)
Balance As of March 31, 2024	$	(6.5	)	$	17.8		$	11.3

	Foreign Currency Translation Adjustments			Pension and Postretirement Liability Adjustments			Total
Balance as of December 31, 2022	$	(6.8	)	$	21.5		$	14.7
Other comprehensive income (loss) before reclassifications, before income tax		(0.5	)		—			(0.5	)
Amounts reclassified from accumulated other comprehensive income (loss), before income tax		—			(1.2	)		(1.2	)
Amounts deferred to accumulated other comprehensive income (loss), before income tax		—			1.2			1.2
Tax effect		—			(0.1	)		(0.1	)
Net current period other comprehensive income (loss), net of income taxes		(0.5	)		(0.1	)		(0.6	)
Balance as of March 31, 2023	$	(7.3	)	$	21.4		$	14.1

The amount reclassified from accumulated other comprehensive income (loss) in the three months ended March 31, 2024 and 2023 for the pension and postretirement liability adjustment was included in other (income) expense, net in the unaudited Consolidated Statements of Operations.

Table of Contents

Note 12 – Contingencies

Metallus has a number of loss exposures incurred in the ordinary course of business, such as environmental claims, product warranty claims, employee-related matters, and other litigation. Establishing loss reserves for these matters requires management’s estimate and judgment regarding risk exposure and ultimate liability or realization. These loss reserves are reviewed periodically and adjustments are made to reflect the most recent facts and circumstances. Accruals related to environmental claims represent management’s best estimate of the fees and costs associated with these claims. Although it is not possible to predict with certainty the outcome of such claims, management believes that their ultimate dispositions should not have a material adverse effect on our financial position, cash flows or results of operations. As of March 31, 2024 and December 31, 2023, Metallus had a $1.0 million and a $1.1 million contingency reserve, respectively, related to loss exposures incurred in the ordinary course of business.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(dollars in millions, except per share data)

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help investors understand our results of operations, financial condition and current business environment. The MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q for the three months ended March 31, 2024.

The MD&A is organized as follows:

•

Overview: From management’s point of view, we discuss the following:

Summary of our business and the markets in which we operate

Key trends and events during the current year

•

Results of Operations: An analysis of our results of operations as reflected in our consolidated financial statements

•

Non GAAP (1) Financial Measures: An analysis of our net sales by end-market, adjusted to exclude surcharges, which management uses to better analyze key market indicators and trends and allows for enhanced comparison between our end markets.

•

Liquidity and Capital Resources: An analysis of our cash flows, working capital, debt structure, contractual obligations and other commercial commitments.

•

Critical Accounting Policies: An overview of accounting policies identified by the Company as critical that, as a result of the judgments, uncertainties, and the operations involved, could result in material changes to its financial condition or results of operations under different conditions or using different assumptions.

Overview

Business Overview

We manufacture alloy steel, as well as carbon and micro-alloy steel, using electric arc furnace ("EAF") technology. Our portfolio includes special bar quality (“SBQ”) bars, seamless mechanical tubing (“tubes”), manufactured components such as precision steel components, and billets. Our products and solutions are used in a diverse range of demanding applications in the following end-markets: industrial, automotive, aerospace & defense, and energy.

We conduct our business activities and report financial results as one business segment. The presentation of financial results as one reportable segment is consistent with the way we operate our business and is consistent with the manner in which the Chief Operating Decision Maker ("CODM") evaluates performance and makes resource and operating decisions for the business as described above. Furthermore, the Company notes that monitoring financial results as one reportable segment helps the CODM manage costs on a consolidated basis, consistent with the integrated nature of our operations.

Q1 2024 Business Highlights

The following items represent key trends and events during the three months ended March 31, 2024:

•

Aerospace & Defense end market: We continue to optimize our product portfolio, increasing aerospace & defense ship tons by approximately 136% compared with the three months ended March 31, 2023.

•

Base sales: The Company’s products continued to demand strong base sales prices throughout the first quarter of 2024, with average base sales price per ton improving in all end-markets compared with the same time period in 2023.

•

Capital investments: The Company continues to invest organically with $17.4 million of capital investments during the first quarter of 2024. Investments included targeted spending for improved safety, equipment automation, and continuous improvement to drive best-in-class quality and asset reliability, as well as additional manufactured component capacity for profitable growth.

Table of Contents

•

Liquidity: Our balance sheet has remained strong, with total liquidity of $549.0 million, including cash and cash equivalents of $278.1 million as of March 31, 2024. Operating cash flow of $33.4 million in the first quarter 2024 was primarily driven by profitability and insurance recoveries.

•

Rebranding: On February 26, 2024, the Company changed its name to Metallus Inc. The new name honors the Company's century-long legacy as an industry-leading producer of strong, sustainable steel and reflects its vision to harness the enduring power of high-performance metals to make the world a better place.

•

Defense Contract: On February 27, 2024, the Company announced that it entered into an agreement for up to $99 million in funding from the United States Army, $49.5 million of which is currently obligated with the balance subject to mutual agreement during subsequent project phases after the final project details are presented to the Army. This funding, which will be provided throughout the procurement and installation process, is intended to support a capital project at the Company aimed at bolstering the Army's mission of ramping up artillery shell production in the coming years. We expect approximately $45 million dollars of funding to be received this year, with the majority of that amount to be received in the second half of the year. The Company is targeting late 2025 for the new assets to be operational. It is expected that the funding will cover the majority of the cost of the capital project.

•

Share repurchase program: On May 6, 2024, the Board of Directors authorized an additional $100.0 million share repurchase program. This authorization reflects the continued confidence of the Board and senior leadership in the Company’s ability to generate sustainable through-cycle profitability while maintaining a strong balance sheet and cash flow. In aggregate as of May 6, 2024, the Company has $132.1 million remaining under its authorized share repurchase programs.

(1) Please see discussion of non-GAAP financial measures in Form 10-Q – Net Sales Adjusted to Exclude Surcharges

Table of Contents

Results of Operations

Net Sales

The charts below present net sales and shipments for the three months ended March 31, 2024 and 2023.

Net sales for the three months ended March 31, 2024 were $321.6 million, a decrease of $1.9 million, or 0.6%, compared with the three months ended March 31, 2023. The decrease in sales was primarily driven by lower volume and a decrease in surcharges, mostly offset by favorable price/mix. Lower volume of 17.7 thousand ship tons resulted in a net sales decrease of $25.3 million. Lower market prices for alloy drove the unfavorable surcharges of $13.2 million, partially offset by higher scrap prices. Favorable price/mix of $36.6 million was primarily due to higher base prices across all end-markets as well as a larger proportion of aerospace and defense shipments. Excluding surcharges, net sales increased $11.2 million or 4.7%.

Table of Contents

Gross Profit

The chart below presents the drivers of the gross profit variance for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Gross profit for the three months ended March 31, 2024 increased $10.2 million, or 25.2%, compared with the three months ended March 31, 2023. The increase was driven by favorable price/mix, partially offset by higher manufacturing costs and lower volume. Favorable price/mix was due to higher base prices across all end-markets as well as a larger proportion of aerospace and defense shipments. Higher manufacturing costs were primarily due to higher plant spend and decreased fixed cost leverage on lower production. Lower volume to the automotive, energy and industrial end-markets was partially offset by higher volume to the aerospace & defense end-market.

Table of Contents

Selling, General and Administrative Expenses

The charts below present selling, general and administrative (“SG&A”) expense for the three months ended March 31, 2024 and 2023.

SG&A expense for the three months ended March 31, 2024 increased by $3.1 million, or 14.8%, compared with the three months ended March 31, 2023. The increase was primarily due to higher salaries and benefits, stock-based compensation, and rebranding expenses.

Interest (Income) Expense, net

Net interest income for the three months ended March 31, 2024 was $2.8 million compared with $1.5 million for the three months ended March 31, 2023. The change was due to interest earned on greater cash invested in a money market fund and in other accounts which generate interest income at a rate similar to the money market fund during 2024. Refer to “Note 8 - Financing Arrangements” in the Notes to the unaudited Consolidated Financial Statements for additional information.

Other (Income) Expense, net


	Three Months Ended March 31,
	2024			2023			$ Change
Pension and postretirement non-service benefit (income) loss	$	(1.4	)	$	(1.2	)	$	(0.2	)
Loss (gain) from remeasurement benefit plan		0.8			2.2			(1.4	)
Insurance recoveries		—			(9.8	)		9.8
Foreign currency exchange loss (gain)		(0.2	)		—			—
Total other (income) expense, net	$	(0.8	)	$	(8.8	)	$	8.2

Table of Contents

The Company is required to complete a full remeasurement of the plan each quarter for the remainder of 2024 or until the plan is annuitized with assets and liabilities transferred to a highly-rated insurance company, which is expected to occur in the second quarter of 2024.

For more details on the aforementioned remeasurements, refer to “Note 9 - Retirement and Postretirement Plans.”

During 2023, the Company recognized insurance recoveries of $31.3 million related to the 2022 Faircrest melt shop unplanned downtime. In the first quarter of 2023, the Company recognized recoveries of $9.8 million, of which $0.8 million was received during the first quarter and $9.0 million was received in the second quarter of 2023. In the second quarter of 2023, a $1.5 million insurance recovery was received, and the remaining $20.0 million was received in the first quarter of 2024. The 2022 insurance claims were closed in the first quarter of 2024. Refer to “Note 4 - Other (Income) Expense, net” in the Notes to the Consolidated Financial Statements for additional information. For further information related to previous insurance recoveries, refer to "Note 7 - Other (Income) Expense, net" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Provision for Income Taxes


	Three Months Ended March 31,
	2024			2023			$ Change
Provision (benefit) for income taxes	$	6.0		$	3.8		$	2.2
Effective tax rate		20.0	%		21.0	%		-1.0	%

The provision for income taxes for the quarter ended March 31, 2024 was $6.0 million compared to $3.8 million in 2023. The change from the prior year is primarily related to higher income in the first quarter of 2024, partially offset by discrete state net operating losses in the first quarter of 2023.

Table of Contents

Non-GAAP Financial Measures

Net Sales Adjusted to Exclude Surcharges

The tables below present net sales by end-markets, adjusted to exclude surcharges, which represents a financial measure that has not been determined in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). We believe presenting net sales by end-markets, both on a gross basis and on a per ton basis, adjusted to exclude raw material and energy surcharges, provides additional insight into key drivers of net sales such as base price and product mix. Due to the fact that the surcharge mechanism can introduce volatility to our net sales, net sales adjusted to exclude surcharges provides management and investors clarity of our core pricing and results. Presenting net sales by end-markets, adjusted to exclude surcharges including on a per ton basis, allows management and investors to better analyze key market indicators and trends and allows for enhanced comparison between our end-markets.

When surcharges are included in a customer agreement and are applicable (i.e., reach the threshold amount), based on the terms outlined in the respective agreement, surcharges are then included as separate line items on a customer’s invoice. These additional surcharge line items adjust base prices to match cost fluctuations due to market conditions. Each month, the Company will post on the surcharges page of its external website, as well as our customer portal, the scrap, alloy, and energy surcharges that will be applied (as a separate line item) to invoices dated in the following month (based upon shipment volumes in the following month). All surcharges invoiced are included in GAAP net sales.


(dollars in millions, ship tons in thousands)
	Three Months Ended March 31, 2024
	Industrial		Automotive		Aerospace & Defense		Energy		Other		Total
Ship Tons		60.8		66.5		16.5		11.4		—		155.2

Net Sales	$	118.9	$	122.9	$	46.3	$	28.0	$	5.5	$	321.6
Less: Surcharges		30.1		26.5		6.5		6.6		—		69.7
Base Sales	$	88.8	$	96.4	$	39.8	$	21.4	$	5.5	$	251.9

Net Sales / Ton	$	1,956	$	1,848	$	2,806	$	2,456	$	—	$	2,072
Surcharges / Ton	$	495	$	398	$	394	$	579	$	—	$	449
Base Sales / Ton	$	1,461	$	1,450	$	2,412	$	1,877	$	—	$	1,623

	Three Months Ended March 31, 2023
	Industrial		Automotive		Aerospace & Defense		Energy		Other
Ship Tons		65.2		80.4		7.0		20.3		—		172.9

Net Sales	$	126.3	$	127.8	$	17.4	$	46.2	$	5.8	$	323.5
Less: Surcharges		34.5		31.7		3.5		13.1		—		82.8
Base Sales	$	91.8	$	96.1	$	13.9	$	33.1	$	5.8	$	240.7

Net Sales / Ton	$	1,937	$	1,590	$	2,486	$	2,276	$	—	$	1,871
Surcharges / Ton	$	529	$	394	$	500	$	645	$	—	$	479
Base Sales / Ton	$	1,408	$	1,196	$	1,986	$	1,631	$	—	$	1,392

Table of Contents

Liquidity and Capital Resources

Amended Credit Agreement

The Amended Credit Agreement extended the maturity date of the asset-based revolving credit facility (the “Credit Facility”) from October 2024 to September 2027. Following the amendment, Credit Facility capacity remained at $400.0 million. Pursuant to the terms of the Amended Credit Agreement, the interest rate to be paid on any borrowings under the Credit Facility is now based on a two-tiered schedule rather than a three-tiered schedule with applicable rates decreasing by 25 basis points, references to LIBOR rates have been updated with references to SOFR rates, the advance rate on investment-grade eligible accounts receivable has been increased from 85% to 90%, and there has been an improvement in the springing fixed charge coverage ratio from 1.1x to 1.0x. The Credit Facility remains undrawn at this time.

Refer to “Note 8 - Financing Arrangements” in the Notes to the unaudited Consolidated Financial Statements for additional information.

Convertible Notes

In May 2016, the Company issued $75.0 million aggregate principal amount of Convertible Senior Notes due 2021, plus an additional $11.3 million principal amount to cover over-allotments.

In December 2020, the Company entered into separate, privately negotiated exchange agreements with a limited number of holders of the Company’s then outstanding Convertible Senior Notes due 2021. Pursuant to the exchange agreements, the Company exchanged $46.0 million aggregate principal amount of Convertible Senior Notes due 2021 for $46.0 million aggregate principal amount of its new Convertible Senior Notes due 2025. The Company did not receive any cash proceeds from the issuance of the Convertible Senior Notes due 2025.

The Convertible Senior Notes due 2025 bear cash interest at a rate of 6.0% per year, payable semiannually on June 1 and December 1, beginning on June 1, 2021. The Convertible Senior Notes due 2025 will mature on December 1, 2025, unless earlier repurchased or converted. The net amount of this exchange was $44.5 million, after deducting the initial underwriters’ fees and paying other transaction costs.

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 first quarter of 2024 and as such the notes can be converted at the option of the holders beginning April 1 through June 30, 2024. Whether the notes will be convertible following such period will depend on if this criterion, or another conversion condition, is met in the future. To date, no holders have elected to convert their notes during any optional conversion periods. For additional details regarding the Convertible Notes please refer to “Note 14 - Financing Arrangements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Table of Contents

Additional Liquidity Considerations

The following represents a summary of key liquidity measures under the Amended Credit Agreement as of March 31, 2024 and December 31, 2023:


	March 31, 2024			December 31, 2023
Cash and cash equivalents	$	278.1		$	280.6

Credit Agreement:
Maximum availability	$	400.0		$	400.0
Suppressed availability(1)		(123.7	)		(135.8	)
Availability		276.3			264.2
Amount borrowed		—			—
Letter of credit obligations		(5.4	)		(5.4	)
Availability not borrowed	$	270.9		$	258.8

Total liquidity	$	549.0		$	539.4

(1) As of March 31, 2024, and December 31, 2023, the Company had less than $400.0 million in collateral assets to borrow against.

Our principal sources of liquidity are cash and cash equivalents, cash flows from operations and available borrowing capacity under our Amended Credit Agreement. As of March 31, 2024, taking into account our view of industrial, automotive, aerospace & defense and energy market demand for our products, and our 2024 operating and long-range plan, we believe that our cash balance as of March 31, 2024, projected cash generated from operations, and borrowings available under the Amended Credit Agreement, will be sufficient to satisfy our working capital needs, capital expenditures and other liquidity requirements associated with our operations, including servicing our debt and pension and postretirement benefit obligations, for at least the next twelve months. We expect capital expenditures to be approximately $60 million in 2024.

To the extent our liquidity needs prove to be greater than expected or cash generated from operations is less than anticipated, and cash on hand or credit availability is insufficient, we would seek additional financing to provide additional liquidity. We regularly evaluate our potential access to the equity and debt capital markets as sources of liquidity and we believe additional financing would likely be available if necessary, although we can make no assurance as to the form or terms of any such financing.

We continue to evaluate the best use of our liquidity which would allow us to invest in profitable growth, maintain a strong balance sheet, and return capital to shareholders.

In the first quarter of 2023, the Company privately negotiated early repurchases of $7.5 million aggregate principal amount of our Convertible Senior Notes Due 2025. In addition to reducing outstanding debt and generating annual interest savings of $0.5 million, the repurchases of convertible notes reduced weighted average diluted shares outstanding for the year ended December 31, 2023 by 0.7 million shares and, on a go-forward basis, reduced diluted shares outstanding by 1.0 million shares.

For the three months ended March 31, 2024, the Company repurchased approximately 0.2 million common shares in the open market at an aggregate cost of $4.4 million, which equates to an average repurchase price of $20.87 per share. As of March 31, 2024, the Company had a balance of $36.0 million remaining under its share repurchase program.

On May 6, 2024, the Board of Directors authorized an additional $100.0 million share repurchase program. From April 1, 2024 through May 6, 2024, the Company repurchased approximately 0.2 million common shares at an aggregate cost of $3.9 million, which equates to an average repurchase price of $21.69 per share.

Table of Contents

In aggregate as of May 6, 2024, the Company has $132.1 million remaining under its authorized share repurchase programs.

Cash Flows

The following table reflects the major categories of cash flows for the three months ended March 31, 2024 and 2023. For additional details, please refer to the unaudited Consolidated Statements of Cash Flows included in this quarterly report.


	Three Months Ended March 31,
	2024			2023
Net cash provided (used) by operating activities	$	33.4		$	9.8
Net cash provided (used) by investing activities		(17.4	)		(9.1	)
Net cash provided (used) by financing activities		(18.7	)		(30.2	)
Increase (Decrease) in Cash and Cash Equivalents	$	(2.7	)	$	(29.5	)

Operating activities

Net cash provided by operating activities for the three months ended March 31, 2024 was $33.4 million compared to net cash provided of $9.8 million for the three months ended March 31, 2023. The change was primarily driven by higher profitability, lower working capital and insurance recoveries, partially offset by pension contributions during the first quarter of 2024 compared to the first quarter of 2023.

Investing activities

Net cash used by investing activities for the three months ended March 31, 2024 was $17.4 million compared to net cash used of $9.1 million for the three months ended March 31, 2023. The change was due to higher capital expenditures in the first quarter of 2024 compared to the same time period in 2023.

Financing activities

Net cash used by financing activities for the three months ended March 31, 2024 was $18.7 million compared to net cash used of $30.2 million for the three months ended March 31, 2023. The change was primarily due to lower repurchases of common shares and Convertible Notes in 2024, partially offset by higher shares surrendered for taxes during the first quarter of 2024 compared to the same period in 2023. Refer to “Note 8 - Financing Arrangements” for more detail related to the Convertible Senior Notes due in 2025 and the share repurchase program.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We review our critical accounting policies throughout the year.

New Accounting Guidance

See “Note 2 - Recent Accounting Pronouncements” in the Notes to the unaudited Consolidated Financial Statements.

Forward-Looking Statements

Certain statements set forth in this Quarterly Report on Form 10-Q (including our forecasts, beliefs and expectations) that are not historical in nature are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, Management’s Discussion and Analysis of Financial Condition and Results of Operations contains numerous forward-looking statements. Forward-looking statements generally will be accompanied by words such as “anticipate,” “aspire,” “believe,” “could,” “estimate,” “expect,” “forecast,” “outlook,” “intend,” “may,” “plan,”

Table of Contents

“possible,” “potential,” “predict,” “project,” “seek,” “should,” “strategic direction,” “strategy,” “target,” “will,” “would,” or other similar words, phrases or expressions that convey the uncertainty of future events or outcomes. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Form 10-Q. We caution readers that actual results may differ materially from those expressed or implied in forward-looking statements made by or on behalf of us due to a variety of factors, such as:

•

the effects of fluctuations in customer demand on sales, product mix and prices in the industries in which we operate. This includes: our ability to respond to rapid changes in customer demand including but not limited to changes in customer operating schedules due to supply chain constraints or unplanned work stoppages; the ability of customers to obtain financing to purchase the Company’s products or equipment that contains its products; the effects of customer bankruptcies or liquidations; the impact of changes in industrial business cycles; and whether conditions of fair trade exist in the U.S. markets;

•

changes in operating costs, including the effect of changes in our manufacturing processes; changes in costs associated with varying levels of operations and manufacturing capacity; availability of raw materials and energy; our ability to mitigate the impact of fluctuations in raw materials and energy costs and the effectiveness of our surcharge mechanism; changes in the expected costs associated with product warranty claims; changes resulting from inventory management, cost reduction initiatives and different levels of customer demands; the effects of unplanned work stoppages; availability of skilled labor; and changes in the cost of labor and benefits;

•

the success of our operating plans, announced programs, initiatives and capital investments; the consistency to meet demand levels following unplanned downtime; and our ability to maintain appropriate relations with the union that represents our associates in certain locations in order to avoid disruptions of business;

•

whether we are able to successfully implement actions designed to improve profitability on anticipated terms and timetables and whether we are able to fully realize the expected benefits of such actions;

•

the Company's pension obligations and investment performance;

•

with respect to the Company's ability to achieve its sustainability goals, including its 2030 environmental goals, the ability to meet such goals within the expected timeframe, changes in laws, regulations, prevailing standards or public policy, the alignment of the scientific community on measurement and reporting approaches, the complexity of commodity supply chains and the evolution of and adoption of new technology, including traceability practices, tools and processes;

•

availability of property insurance coverage at commercially reasonable rates or insufficient insurance coverage to cover claims or damages;

•

the availability of financing and interest rates, which affect the Company's cost of funds and/or ability to raise capital;

•

the effects of the conditional conversion feature of the Convertible Senior Notes due 2025, which, if triggered, entitles holders to convert the notes at any time during specified periods at their option and therefore could result in potential dilution if the holder elects to convert and the Company elects to satisfy a portion or all of the conversion obligation by delivering common shares instead of cash;

•

the impacts from any repurchases of our common shares and convertible notes, including the timing and amount of any repurchases;

•

competitive factors, including changes in market penetration; increasing price competition by existing or new foreign and domestic competitors; the introduction of new products by existing and new competitors; and new technology that may impact the way our products are sold or distributed; deterioration in global economic conditions, or in economic conditions in any of the geographic regions in which we conduct business, including additional adverse effects from global economic slowdown, terrorism or hostilities.

Table of Contents

•

This includes: political risks associated with the potential instability of governments and legal systems in countries in which we or our customers conduct business, and changes in currency valuations;

•

the impact of global conflicts on the economy, sourcing of raw materials, and commodity prices;

•

climate-related risks, including environmental and severe weather caused by climate changes, and legislative and regulatory initiatives addressing global climate change or other environmental concerns;

•

unanticipated litigation, claims or assessments, including claims or problems related to intellectual property, product liability or warranty, employment matters, regulatory compliance and environmental issues and taxes, among other matters;

•

cyber-related risks, including information technology system failures, interruptions and security breaches;

•

the potential impact of pandemics, epidemics, widespread illness or other health issues;

•

with respect to the continuous bloom reheat furnace investment, whether the funding awarded to support this investment is received on the anticipated timetable, whether the Company is able to successfully complete the installation and commissioning of the new assets on the targeted budget and timetable, and whether the anticipated increase in throughput is achieved; and

•

those items identified under the caption Risk Factors in our Annual Report on Form 10-K.

You are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, and that the above list should not be considered to be a complete list. Except as required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Further, this report includes our current policy and intent and is not intended to create legal rights or obligations. Certain standards of measurement and performance contained in this report are developing and based on assumptions, and no assurance can be given that any plan, objective, initiative, projection, goal, mission, commitment, expectation, or prospect set forth in this report can or will be achieved. Inclusion of information in this report is not an indication that the subject or information is material to our business or operating results.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our borrowings include both fixed and variable-rate debt. The variable debt consists principally of borrowings under our Credit Agreement. We are exposed to the risk of rising interest rates to the extent we fund our operations with these variable-rate borrowings. As of March 31, 2024, we have $13.2 million of aggregate debt outstanding. None of our outstanding debt as of March 31, 2024 has variable interest rates, thus a rise in interest rates would not impact our interest expense at this point in time.

Foreign Currency Exchange Rate Risk

Fluctuations in the value of the U.S. dollar compared to foreign currencies may impact our earnings. Geographically, our sales are primarily made to customers in the United States. Currency fluctuations could impact us to the extent they impact the currency or the price of raw materials in foreign countries in which our competitors operate or have significant sales.

Table of Contents

Commodity Price Risk

In the ordinary course of business, we are exposed to market risk with respect to commodity price fluctuations, primarily related to our purchases of raw materials and energy, principally scrap steel, other ferrous and non-ferrous metals and alloys. Additionally, the current and potential future global conflicts could also exacerbate inflationary pressures throughout the global economy and lead to potential market disruptions, such as significant volatility in commodity prices and supply chain disruptions. Although our business has not been materially impacted by current conflicts to date, it is difficult to predict the extent to which our operations, or those of our suppliers, will be impacted in the future.

Whenever possible, we manage our exposure to commodity risks primarily through the use of supplier pricing agreements that enable us to establish the purchase prices for certain inputs that are used in our manufacturing business. We utilize a raw material surcharge as a component of pricing steel to pass through the cost increases of scrap, alloys and other raw materials, as well as energy. From time to time, we may use financial instruments to hedge a portion of our exposure to commodity price risk. In periods of stable demand for our products, the surcharge mechanism has worked effectively to reduce the normal time lag in passing through higher raw material costs so that we can maintain our gross margins. When demand and cost of raw materials are lower, however, the surcharge impacts sales prices to a lesser extent.

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)). Based upon that evaluation, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

(b) Changes in Internal Control Over Financial Reporting

During the Company’s most recent fiscal quarter, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

We are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of our management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Item 1A. Risk Factors

We are subject to various risks and uncertainties in the course of our business. The discussion of such risks and uncertainties may be found under Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The table below provides information concerning our repurchase of common shares for the three months ended March 31, 2024.

Table of Contents


(Dollars in millions, except shares and per share data)	Total number of shares purchased (1)		Average price paid per share (2)		Total number of shares purchased as part of publicly announced plans or programs (1)		Maximum dollar value of shares that may yet be purchased under the plans or programs (3)
Beginning shares available							$	40.4
January, 2024		55,754	$	21.09		55,754	$	39.2
February, 2024		12,004	$	19.88		12,004	$	39.0
March, 2024		143,813	$	20.87		143,813	$	36.0
Quarter ended March 31, 2024		211,571	$	20.87		211,571	$	36.0

On May 6, 2024, the Board of Directors authorized an additional $100.0 million share repurchase program. From April 1, 2024 through May 6, 2024, the Company repurchased approximately 0.2 million common shares at an aggregate cost of $3.8 million, which equates to an average repurchase price of $21.69 per share. In aggregate as of May 6, 2024, the Company has $132.1 million remaining under its authorized share repurchase programs.

(1) The Company may utilize various methods to repurchase shares, which could include open market repurchases, including repurchases through Rule 10b5-1 plans, privately-negotiated transactions or by other means. The actual timing, number and value of shares repurchased under the program will depend on a number of factors, including the price of the Company's shares, general market and economic conditions, capital needs and other factors.

(2) The average price paid per share excludes any broker commissions.

(3) On December 20, 2021, the Company 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 share repurchase program. On May 6, 2024, the Board of Directors again authorized an additional $100.0 million share repurchase program. The share repurchase program does not require the Company to acquire any dollar amount or number of shares and does not have an expiration date.

Item 5. Other Information

During the quarter ended March 31, 2024, officers (as defined in Exchange Act Rule 16a-1(f)) of the Company adopted written plans for the sale of the Company’s common shares intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) (“Rule 10b5-1 trading arrangements”) as follows:

On March 6, 2024, Kristine C. Syrvalin, Executive Vice President, General Counsel and Chief Human Resources Officer, adopted a 10b5-1 trading arrangement that provides for the potential sale of up to 9,008 common shares, as well as up to 2,480 common shares acquired upon exercise of stock options, which trading arrangement is scheduled to start no earlier than June 6, 2024 and terminate no later than December 6, 2024.

On March 7, 2024, Kristopher R. Westbrooks, Executive Vice President and Chief Financial Officer, adopted a 10b5-1 trading arrangement that provides for the potential sale of up to 16,559 common shares, as well as up to 28,346 common shares acquired upon exercise of stock options, which trading arrangement is scheduled to start no earlier than June 10, 2024 and terminate no later than December 4, 2024.

Each of the above-named officers is currently and is expected to remain in compliance with his or her share ownership guidelines following the sale of any common shares pursuant to his or her 10b5-1 trading arrangement.

Table of Contents

Item 6. Exhibits


Exhibit Number		Exhibit Description

10.1*		Form of Performance-Based Restricted Share Unit Agreement

10.2*		Form of Time-Based Restricted Share Unit Agreement

31.1*		Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

** Furnished herewith.

Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		METALLUS INC.


Date:	May 9, 2024	/s/ Kristopher R. Westbrooks
		Kristopher R. Westbrooks Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-10.1 2 mtus-ex10_1.htm EX-10.1 EX-10.1

Exhibit 10.1

METALLUS INC.

Performance-Based Restricted Share Unit Agreement

WHEREAS, __________________ (“Grantee”) is an employee of Metallus Inc. (f/k/a TimkenSteel Corporation) (the “Company”) or a Subsidiary thereof; and

WHEREAS, the grant of performance-based Restricted Share Units evidenced hereby was authorized by a resolution of the Compensation Committee (the “Committee”) of the Board, and the execution of a performance-based Restricted Share Unit agreement in the form hereof (this “Agreement”) was authorized by a resolution of the Committee.

NOW, THEREFORE, pursuant to the Metallus Inc. Amended and Restated 2020 Equity and Incentive Compensation Plan (the “Plan”) and subject to the terms and conditions thereof and the terms and conditions hereinafter set forth, the Company hereby confirms to Grantee the grant, effective _____, 2024 (the “Date of Grant”), of _____ performance-based Restricted Share Units (the “PRSUs”). All terms used in this Agreement with initial capital letters that are defined in the Plan and not otherwise defined herein will have the meanings assigned to them in the Plan. Subject to the attainment of the Management Objectives described in Section 3 and Exhibit A of this Agreement, plus the terms of Section 6(d) of this Agreement, Grantee may earn from 0% to 200% of the PRSUs.

Payment of PRSUs. The PRSUs will become payable in accordance with the provisions of Section 6 of this Agreement if the Restriction Period lapses and Grantee’s right to receive payment for an applicable payout percentage of the PRSUs becomes earned and nonforfeitable (“Vest,” “Vesting” or “Vested”) in accordance with Section 3and Section 4 of this Agreement.

PRSUs Not Transferrable. None of the PRSUs nor any interest therein or in any Common Shares underlying such PRSUs is transferable prior to payment other than by will or the laws of descent and distribution upon the death of Grantee.

Vesting of PRSUs.

Subject to the terms and conditions of Section 4,Section 5 and Section 6 of this Agreement, the PRSUs will be earned on the basis of the relative achievement of the Management Objectives approved by the Committee on or before the Date of Grant (the “Performance Metrics”) for the period from January 1, 2024 through December 31, 2026, inclusive (the “Performance Period”), as set forth on Exhibit A of this Agreement. The Vesting of the PRSUs pursuant to this Section 3or pursuant to Section 4is contingent upon a determination of the Committee that the Performance Metrics have been satisfied and the PRSUs have been earned, as described in this Section 3 and set forth in Exhibit A.

If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, the manner in which it conducts business or other events or circumstances render the Performance Metrics specified in this Section 3to be unsuitable, the Committee may modify such Performance Metrics or the goals or actual levels of achievement regarding the Performance Metrics, in whole or in part, as the Committee deems appropriate.

Subject to Section 3(a) and Section 3(b), the PRSUs earned with respect to the Performance Period will Vest if Grantee is in the continuous employ of the Company or a Subsidiary from the Date of Grant through the last day of the Performance Period. For purposes of this Agreement, the continuous employment of Grantee with the Company or a Subsidiary will not be deemed to have been interrupted, and Grantee will not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of the transfer of Grantee’s employment among the Company and its Subsidiaries or if Grantee is absent on leave approved by a duly constituted officer of the Company or its Subsidiaries.

Exhibit 10.1

Alternative Vesting of PRSUs. Notwithstanding the provisions of Section 3 of this Agreement, and subject to the payment provisions of Section 6hereof, to the extent the PRSUs have not been forfeited pursuant to this Section 4 or Section 5 hereof, some or all of the PRSUs will Vest under the following circumstances:

Death or Disability: If Grantee dies or becomes permanently disabled while in the continuous employ of the Company or a Subsidiary, then Grantee will Vest in a number of PRSUs equal to the product of (i) the number of PRSUs in which Grantee would have Vested in accordance with the terms and conditions of Section 3 if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Performance Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first, multiplied by (ii) a fraction (in no case greater than 1) the numerator of which is the number of whole months from the first day of the Performance Period through the date of such death or permanent disability and the denominator of which is 36. PRSUs that Vest in accordance with this Section 4(a) will be paid as provided for in Section 6 of this Agreement, and any PRSUs that do not Vest in accordance with this Section 4(a) will terminate and be forfeited. As used herein, “permanently disabled” means that Grantee has qualified for long-term disability benefits under a disability plan or program of the Company or a Subsidiary or, in the absence of a disability plan or program of the Company or a Subsidiary, under a government-sponsored disability program, and is “disabled” within the meaning of Section 409A(a)(2)(C) of the Code. As used in this Agreement, “Code” means the Internal Revenue Code of 1986, as amended, including any regulations or any other formal guidance promulgated by the U.S. Department of the Treasury or the Internal Revenue Service with respect to the sections of the Code referenced in this Agreement.

Retirement: If Grantee’s continuous employment with the Company or a Subsidiary terminates on or after the 9-month anniversary of the Date of Grant as a result of Grantee’s Retirement, then Grantee will Vest in a number of PRSUs equal to the product of (i) the number of PRSUs in which Grantee would have Vested in accordance with the terms and conditions of Section 3 if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Performance Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first, multiplied by (ii) a fraction (in no case greater than 1) the numerator of which is the number of whole months from the first day of the Performance Period through the date of such Retirement and the denominator of which is 36. PRSUs that Vest in accordance with this Section 4(b) will be paid as provided for in Section 6of this Agreement. As used herein, “Retirement” means Grantee’s voluntary termination of employment at or after (A) Grantee has reached age 62 and has a combination of (1) Grantee’s age in years, plus (2) Grantee’s years of continuous employment with the Company or a Subsidiary, equal to at least 72 (provided, however, that if Grantee is the Company’s President and Chief Executive Officer on the Date of Grant, the required age and years of continuous employment with the Company or a Subsidiary will be at least 70 instead of 72), and (B) Grantee has given at least 6 months’ advance written notice to the President and Chief Executive Officer or Executive Vice President, General Counsel and Chief Human Resources Officer of such voluntary termination of employment.

Change in Control:

Upon a Change in Control occurring during the Restriction Period while Grantee is in the continuous employ of the Company or a Subsidiary or during the period that Grantee is deemed to be in the continuous employ of the Company or a Subsidiary pursuant to Section 4(a),4(b), 4(d) or 4(e), to the extent the PRSUs have not been forfeited, then, notwithstanding any provision of this Agreement (including Exhibit A) to the contrary, but subject to Section 6(d), (A) the Committee as constituted immediately before such Change in Control will determine and certify the number of earned PRSUs in accordance with Exhibit A to this Agreement which will be equal to the greater of (I) the actual achievement of the Performance Metrics as of the date of the Change in Control or (II) the target performance level of the PRSUs (the greater of clause (I) or (II), the “Change in Control Payout Level”), and (B) a number of the PRSUs will Vest (except to the extent that a Replacement Award is provided to Grantee for the PRSUs to continue, replace or assume the PRSUs covered by this Agreement) equal to the number of PRSUs earned at the Change in Control Payout Level, but in no event may negative discretion be exercised with respect to the number of PRSUs Vested.

Exhibit 10.1

Any PRSUs that are not earned and do not Vest in accordance with this Section 4(c)(i) will terminate and be forfeited (except to the extent that a Replacement Award is provided). PRSUs that Vest in accordance with this Section 4(c)(i)will be paid as provided for in Section 6 of this Agreement.

ii.

As used in this Agreement, a “Replacement Award” means an award (A) of service-based restricted share units with no performance-based vesting requirements, (B) that has a value at least equal to the value of the PRSUs earned at the Change in Control Payout Level (excluding, for the avoidance of doubt, any PRSUs forfeited in accordance with Section 6(d)), (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control (or another entity that is affiliated with the Company or its successor following the Change in Control), (D) the tax consequences of which, under the Code, if Grantee is subject to U.S. federal income tax under the Code, are not less favorable to Grantee than the tax consequences relative to the PRSUs, (E) that Vests in full (i.e., in a number that is no less than the Change in Control Payout Level) upon a termination of Grantee’s employment with the Company or a Subsidiary or their successors in the Change in Control (or another entity that is affiliated with the Company or a Subsidiary or their successors following the Change in Control) (as applicable, the “Successor”) for Good Reason by Grantee or without Cause by such employer or upon the death of Grantee or Grantee becoming permanently disabled (as defined in Section 4(a)), in each case prior to the end of the Performance Period and within a period of two years after the Change in Control, and (F) the other terms and conditions of which are not less favorable to Grantee than the terms and conditions of the PRSUs (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it conforms to the requirements of Treasury Regulation 1.409A-3(i)(5)(iv)(B) or otherwise does not result in the PRSUs or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the PRSUs if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 4(c)(ii)are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.

iii.

Exhibit 10.1

Also for purposes of Section 4(c)(ii), “Good Reason” means: a material reduction in the nature or scope of the responsibilities, authorities or duties of Grantee attached to Grantee’s position held immediately prior to the Change in Control, a change of more than 60 miles in the location of Grantee’s principal office immediately prior to the Change in Control, or a material reduction in Grantee’s remuneration upon or after the Change in Control; provided, that, no later than 90 days following an event constituting Good Reason, Grantee gives notice to the Successor of the occurrence of such event and the Successor fails to cure the event within 30 days following the receipt of such notice.

iv.

If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding PRSUs which at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be Vested at the time of such Change in Control and will be paid as provided for in Section 6 of this Agreement.

Divestiture: If Grantee’s continuous employment with the Company or a Subsidiary terminates as the result of a divestiture, then Grantee will Vest in a number of PRSUs equal to the product of (i) the number of PRSUs in which Grantee would have Vested in accordance with the terms and conditions of Section 3if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Performance Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first, multiplied by (ii) a fraction (in no case greater than 1) the numerator of which is the number of whole months from the first day of the Performance Period through the date of such termination and the denominator of which is 36. PRSUs that Vest in accordance with this Section 4(d)will be paid as provided for in Section 6 of this Agreement. As used herein, the term “divestiture” means a permanent disposition to a Person other than the Company or any Subsidiary of a plant or other facility or property at which Grantee performs a majority of Grantee’s services, whether such disposition is effected by means of a sale of assets, a sale of Subsidiary stock or otherwise.

Layoff: If (i) Grantee’s continuous employment with the Company or a Subsidiary terminates as the result of a layoff and (ii) Grantee is entitled to receive severance pay pursuant to the terms of any severance pay plan of the Company in effect at the time of Grantee’s termination of employment that provides for severance pay calculated by multiplying Grantee’s base compensation by a specified severance period, then Grantee will Vest in a number of PRSUs equal to the product of (x) the number of PRSUs in which Grantee would have Vested in accordance with the terms and conditions of Section 3if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the end of the Performance Period or the occurrence of a Change in Control to the extent a Replacement Award is not provided, whichever occurs first, multiplied by (y) a fraction (in no case greater than 1) the numerator of which is the number of whole months from the first day of the Performance Period through the end of the specified severance period and the denominator of which is 36. PRSUs that Vest in accordance with this Section 4(e)will be paid as provided for in Section 6 of this Agreement. As used herein, “layoff” means the involuntary termination by the Company or any Subsidiary of Grantee’s employment with the Company or any Subsidiary due to (A) a reduction in force leading to a permanent downsizing of the salaried workforce, (B) a permanent shutdown of the plant, department or subdivision in which Grantee works, (C) an elimination of position, or (D) any or no reason, except for Cause, at the Company’s discretion; provided that a termination under clause (D) will constitute a “layoff” for purposes of this Agreement only (i) upon the prior approval of the Committee in the case of an executive officer, or (ii) upon the prior approval of the President and Chief Executive Officer or Executive Vice President, General Counsel and Chief Human Resources Officer in the case of any other terminated Grantee.

Forfeiture of PRSUs. Any PRSUs that have not Vested pursuant to Section 3 or Section 4at the end of the Performance Period will be forfeited automatically and without further notice after the end of the Performance Period (or earlier if, and on such date that, Grantee ceases to be an employee of the Company or a Subsidiary prior to the end of the Performance Period for any reason other than as described in Section 4).

Exhibit 10.1

Form and Time of Payment of PRSUs.

General. Subject to Section 5, Section 6(b), and Section 6(c), payment for Vested PRSUs will be made in cash or Common Shares (as determined by the Committee) in the year following the last day of the Performance Period but in no event later than March 15 of that year.

Change in Control. Notwithstanding Section 6(a), to the extent PRSUs are Vested on the date of a Change in Control, Grantee will receive payment for Vested PRSUs in cash or Common Shares (as determined by the Committee) on the date of the Change in Control; provided, however, that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and where Section 409A of the Code applies to such distribution, Grantee will receive the corresponding payment on the date that would have otherwise applied pursuant to this Section 6.

Payment Following a Change in Control. Notwithstanding Section 6(a), if, during the two-year period following a Change in Control, Grantee experiences a “separation from service” (within the meaning of Treasury Regulation section 1.409A-1(h)), the PRSUs that are Vested as of the date of such separation from service will be paid in cash or Common Shares (as determined by the Committee) within 10 days of the separation from service to the extent they have not been previously paid to Grantee; provided, however, that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and where Section 409A of the Code applies to such distribution, Grantee will receive the corresponding payment on the date that would have otherwise applied pursuant to this Section 6.

Payment Cap. Importantly, notwithstanding any other provision of the Agreement, if the Market Value per Share exceeds $60.00 on the Payment Cap Measurement Date, then a portion of the PRSUs earned under this Agreement equal to the Excess Number of PRSUs (plus their related dividend equivalents) shall be permanently forfeited and cease to be earned or payable. As used herein, the following terms will have the meaning given below:

“Payment Cap Measurement Date” means the earlier of: (A) the last day of the Performance Period; and (B) the date of any Change in Control occurring during the Performance Period.

ii.

“Aggregate Value” for the Payment Cap Measurement Date means a dollar amount equal to the product of (A) the number of PRSUs earned under this Agreement, multiplied by (B) the Market Value per Share on such Payment Cap Measurement Date.

iii.

“Aggregate Value Cap” for the Payment Cap Measurement Date means a dollar amount equal to the product of (A) the number of PRSUs earned under this Agreement, multiplied by (B) $60.00.

iv.

“Excess Number of PRSUs” for the Payment Cap Measurement Date means a number of PRSUs equal to the number determined by first calculating the difference between (A) the Aggregate Value and (B) the Aggregate Value Cap, and then dividing the resulting dollar amount by the Market Value per Share on the Payment Cap Measurement Date (rounding up to the nearest whole PRSU).

Dividend Equivalents. Grantee will be credited with cash per PRSU equal to the amount of each cash dividend per Common Share paid by the Company (if any) to holders of Common Shares generally with a record date occurring on or after the Date of Grant and prior to the time when the PRSUs are paid in accordance with Section 6hereof. Any amounts credited pursuant to the immediately preceding sentence will be subject to the same applicable terms and conditions (including earning, Vesting, payment, and forfeitability) as apply to the PRSUs based on which the dividend equivalents were credited, and such amounts will be paid in either cash or Common Shares, as determined by the Committee in its sole discretion, at the same time as the PRSUs to which they relate.

Exhibit 10.1

If such amounts are paid in Common Shares, the number of shares so paid will be rounded down to the nearest whole number and will be determined by dividing such credited amounts by the Market Value per Share on the payment date.

Detrimental Activity and Recapture.

Notwithstanding anything in this Agreement to the contrary, in the event that, as determined by the Committee, Grantee engages in Detrimental Activity during employment with the Company or a Subsidiary, the PRSUs will be forfeited automatically and without further notice at the time of that determination. As used herein, “Detrimental Activity” means:

engaging in any activity, as an employee, principal, agent, or consultant, for another entity that competes with the Company in any actual, researched, or prospective product, service, system, or business activity for which Grantee has had any direct responsibility during the last two years of his or her employment with the Company or a Subsidiary, in any territory in which the Company or a Subsidiary manufactures, sells, markets, services, or installs such product, service, or system, or engages in such business activity;

ii.

soliciting any employee of the Company or a Subsidiary to terminate his or her employment with the Company or a Subsidiary;

iii.

the disclosure to anyone outside the Company or a Subsidiary, or the use in other than the Company’s or one of its Subsidiary’s business, without prior written authorization from the Company, of any confidential, proprietary or trade secret information or material relating to the business of the Company and its Subsidiaries, acquired by Grantee during his or her employment with the Company or its Subsidiaries or while acting as a director of or consultant for the Company or its Subsidiaries thereafter;

iv.

the failure or refusal to disclose promptly and to assign to the Company upon request all right, title and interest in any invention or idea, patentable or not, made or conceived by Grantee during employment by the Company and any Subsidiary, relating in any manner to the actual or anticipated business, research or development work of the Company or any Subsidiary or the failure or refusal to do anything reasonably necessary to enable the Company or any Subsidiary to secure a patent where appropriate in the United States and in other countries;

activity that results in Termination for Cause. For purposes of this Section 8(a)(v), “Termination for Cause” means a termination: (A) due to Grantee’s willful and continuous gross neglect of his or her duties for which he or she is employed; or (B) due to an act of dishonesty on the part of Grantee constituting a felony resulting or intended to result, directly or indirectly, in his or her gain for personal enrichment at the expense of the Company or a Subsidiary; or

vi.

any other conduct or act determined to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary unless Grantee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company.

Nothing in this Agreement prevents Grantee from providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity, Grantee is not prohibited from providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.

Exhibit 10.1

Notwithstanding anything in this Agreement to the contrary, Grantee acknowledges and agrees that this Agreement and the award described herein (and any settlement thereof) are subject to the terms and conditions of the Company’s clawback policy or policies as may be in effect from time to time, including specifically to implement Section 10D of the Exchange Act and any applicable rules or regulations promulgated thereunder (including applicable rules and regulations of any national securities exchange on which the Common Shares at any point may be traded) (the “Compensation Recovery Policy”), and that, to the extent the Compensation Recovery Policy, by its terms, is applicable to Grantee’s PRSUs, applicable terms of this Agreement will be (if necessary) deemed superseded by and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date thereof. Further, by accepting the PRSUs covered by this Agreement, Grantee (i) consents to be bound by the terms of the Compensation Recovery Policy, as applicable, (ii) agrees and acknowledges that Grantee is obligated to and will cooperate with, and will provide any and all assistance necessary to, the Company in any effort to recover or recoup any compensation or other amounts subject to clawback or recovery pursuant to the Compensation Recovery Policy and/or applicable laws, rules, regulations, stock exchange listing standards or other Company policy, and (iii) agrees that the Company may enforce its rights under the Compensation Recovery Policy through any and all reasonable means permitted under applicable law as it deems necessary or desirable under the Compensation Recovery Policy, in each case from and after the effective dates thereof. Such cooperation and assistance shall include, but is not limited to, executing, completing and submitting any documentation necessary to facilitate the recovery or recoupment by the Company from Grantee of any such amounts, including from Grantee’s accounts or from any other compensation, to the extent permissible under Section 409A of the Code.

Compliance with Law. Notwithstanding any other provision of this Agreement, the Company will not be obligated to issue any of the Common Shares covered by this Agreement if the issuance thereof would result in violation of any law or regulation to which the Company is subject.

10.

Adjustments. Subject to Section 11 of the Plan, the Committee will make or provide for such adjustments in the number of and kind of Common Shares covered by the PRSUs, or in other award terms, as the Committee, in its sole discretion, exercised in good faith, determines is equitably required to prevent dilution or enlargement of Grantee’s rights under this Agreement that otherwise would result from any (a) extraordinary cash dividend, stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities involving the Company or (c) any other transaction or event having an effect similar to any of those referred to in Section 10(a)or 10(b) hereof.

11.

Withholding Taxes. If the Company is required to withhold federal, state, local or foreign taxes or other amounts in connection with Grantee’s right to receive Common Shares or cash under this Agreement, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of any such Common Shares or cash (or the realization of any other benefit provided for under this Agreement) that Grantee make arrangements satisfactory to the Company for payment of the balance of such taxes or other amounts. Grantee may satisfy such tax obligation by paying the Company cash via personal check. Alternatively, unless otherwise determined by the Committee, Grantee may elect that all or any part of such tax obligation be satisfied by the Company’s retention of a portion of the Common Shares provided for under this Agreement or by Grantee’s surrender of a portion of the Common Shares that he or she has owned. In no event, however, will the Company accept Common Shares for payment of taxes in excess of required tax withholding rates (unless such higher withholding amounts would not result in adverse accounting implications for the Company and the additional withholding amount is authorized by the Committee). If Grantee’s benefit is to be received in the form of Common Shares, and Grantee fails to make arrangements for the payment of required taxes or other amounts, then, unless otherwise determined by the Committee, the Company will withhold Common Shares having a value equal to the amount required to be withheld. Further, notwithstanding anything in this Section 11 to the contrary, if at any time (a) Grantee is subject to reporting as a Director or an “officer” for purposes of Section 16 of the Exchange Act, (b) withholding is required with respect to the award evidenced by this Agreement, and (c) Grantee is subject to trading restrictions pursuant to a periodic or special closed trading window for the Company under its insider trading policies, then the Company will withhold Common Shares otherwise payable to Grantee under this award in order to satisfy such withholding, with the number of Common Shares withheld having a value equal to the amount required to be withheld.

Exhibit 10.1

The Common Shares used for tax withholding will be valued at an amount equal to the fair market value of such Common Shares on the date the applicable benefit is to be included in Grantee’s income.

12.

Rights as a Shareholder. Grantee will not have any rights as a Shareholder with respect to any Common Shares granted to him or her under this Agreement prior to the date as of which he or she is actually recorded as the holder of such Common Shares upon the share records of the Company.

13.

Right to Terminate Employment. Nothing in this Agreement limits in any way whatsoever any right the Company or a Subsidiary may otherwise have to terminate the employment of Grantee at any time.

14.

Relation to Other Benefits. Any economic or other benefit to Grantee under this Agreement or the Plan will not be taken into account in determining any benefits to which Grantee may be entitled under any profit‑sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.

15.

Amendments. Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent the amendment is applicable to this Agreement; provided, however, that no amendment will adversely affect in a material manner the rights of Grantee with respect to the Common Shares or other securities covered by this Agreement without Grantee’s consent. Notwithstanding the foregoing, the limitation requiring the consent of Grantee to certain amendments will not apply to any amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code, Section 10D of the Exchange Act, or other applicable law.

16.

Severability. In the event one or more of the provisions of this Agreement is unenforceable or is invalidated for any reason by a court of competent jurisdiction, such provision will be deemed to be separable from the other provisions of this Agreement, construed or deemed amended or limited in scope to confirm to the applicable laws or, in the discretion of the Committee, such provision will be stricken and the remaining provisions of this Agreement will continue to be valid and fully enforceable.

17.

Governing Law. This Agreement is made under, and will be construed in accordance with, the internal substantive laws of the State of Ohio. Grantee agrees that the state and federal courts located in the State of Ohio will have jurisdiction in any action, suit or proceeding against Grantee based on or arising out of this Agreement and Grantee hereby: (a) submits to the personal jurisdiction of such courts; (b) consents to service of process in connection with any action, suit or proceeding against Grantee; and (c) waives any other requirement (whether imposed by statute, rule of court or otherwise) with respect to personal jurisdiction, venue or service of process.

18.

Compliance with Section 409A of the Code. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to Grantee. This Agreement and the Plan will be administered in a manner consistent with this intent. Notwithstanding any provision of the Agreement to the contrary, if, at the time of Grantee’s separation from service (within the meaning of Section 409A of the Code), (a) Grantee is a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (b) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the first business day of the seventh month after Grantee’s separation from service.

Exhibit 10.1

[SIGNATURES ON FOLLOWING PAGE]

Exhibit 10.1

The undersigned Grantee hereby acknowledges receipt of an executed original of this Agreement and accepts the award of PRSUs covered hereby, subject to the terms and conditions of the Plan and the terms and conditions herein above set forth.

_________________________________

Grantee

Date: ___________________________

This Agreement is executed by the Company on this ___ day of ____________, 2024.

Metallus Inc.

By ___________________________________

Kristine C. Syrvalin

Executive Vice President, General Counsel and Chief

Human Resources Officer

Exhibit 10.1

Exhibit A

Statement of Management Objectives

This Statement of Management Objectives applies to the PRSUs granted to Grantee on the Date of Grant memorialized in the Agreement. Capitalized terms used in the Agreement that are not specifically defined in this Statement of Management Objectives have the meanings assigned to them in the Agreement or in the Plan, as applicable.

Section 1. Definitions. For purposes hereof:

(a) “Peer Group” means, of a benchmark group of [16][1] entities, the names of which are attached hereto as Annex A, those entities that remain in the Peer Group as of the end of the Performance Period (or the date of the Change in Control if Section 1(e)(ii) of this Exhibit A is applicable) after application of the Peer Group Adjustment Protocol.

(b) “Peer Group Adjustment Protocol” means: (i) if an entity listed in Annex A files for bankruptcy and/or liquidation, is operating under bankruptcy protection, or is delisted from its primary stock exchange because it fails to meet the exchange listing requirement, then such entity will remain in the Peer Group, but RTSR for the Performance Period will be calculated as if such entity achieved Total Shareholder Return placing it at the bottom (chronologically, if more than one such entity) of the Peer Group; (ii) if, by the last day of the Performance Period (or the date of the Change in Control if Section 1(e)(ii)of this Exhibit A is applicable), an entity listed in Annex A has been acquired, or has announced that it has entered into a definitive agreement the consummation of which will result in such entity’s acquisition, and/or the entity is no longer existing as a public company that is traded on its primary stock exchange (other than for the reasons as described in subsection (i) above), then such entity will not remain in the Peer Group and RTSR for the Performance Period will be calculated as if such entity had never been a member of the Peer Group; and (iii) except as otherwise described in subsection (i) and (ii) above, for purposes of this Statement of Management Objectives, for each of the entities listed in Annex A, such entity will be deemed to include any successor to all or substantially all of the primary business of such entity at end of the Performance Period.

(c) “Relative Total Shareholder Return” or “RTSR” means the percentile rank of the Company’s Total Shareholder Return among the Total Shareholder Returns of all members of the Peer Group (including the Company), ranked in descending order, at the end of each of the first year, first two years and full three years, respectively, of the Performance Period, as applicable (the “1-year Nested Period”, “2-year Nested Period” and “3- year Nested Period”, respectively, and each, a “Nested Period”) (or the date of the Change in Control if Section 1(e)(ii) of this Exhibit A is applicable).

(e) “Total Shareholder Return” means, for each Nested Period, with respect to each of the Common Shares and the common stock of each of the members of the Peer Group, a rate of return reflecting stock price appreciation, plus the reinvestment of dividends in additional shares of stock, from the beginning of the Performance Period through the end of such Nested Period. Total Shareholder Return will be calculated as follows:

(i) Except as provided in clause (ii), for each Nested Period, Total Shareholder Return will be calculated for the Company and each member of the Peer Group by measuring the ending stock price for the applicable calendar year against the beginning price at the start of the Performance Period. For purposes of calculating Total Shareholder Return for each of the Company and the members of the Peer Group, the beginning stock price will be based on the average closing stock price for the 20 trading days immediately preceding the first day of the Performance Period on the principal stock exchange on which the stock then traded and the ending stock price for the applicable calendar year during the Nested Period will be based on the average closing stock price for the 20 trading days ending on December 31 of such applicable calendar year in the Nested Period on the principal stock exchange on which the stock then trades.

Exhibit 10.1

(ii) If a Change in Control occurs during the Restriction Period, and Section 4(c)of the Agreement applies to the PRSUs, (A) for purposes of determining Total Shareholder Return, the last day of the Performance Period will be the date of the Change in Control, and (B) Total Shareholder Return for the last Nested Period during the Performance Period will be calculated for the Company and each member of the Peer Group using a beginning stock price based on the average closing stock price for the 20 trading days immediately preceding the first day of the Performance Period on the principal stock exchange on which the stock then traded, and the ending stock price for the Company will be the “Sale Price” (as defined below) and for each member of the Peer Group will be based on the average closing stock price for the 20 trading days ending on the date of the Change in Control on the principal stock exchange on which the stock then traded. The “Sale Price” will be the amount of consideration per Common Share that shareholders of the Company receive upon consummation of the Change in Control (including the fair market value, as determined by the Committee, of any non-cash consideration); provided that if the Change in Control is not the result of a transaction in which shareholders receive consideration, the “Sale Price” will be the closing price of a Common Share on the last trading day immediately preceding the date of the Change in Control.

Section 2. Performance Matrix.

For each Nested Period during the Performance Period, from 0% to 200% of the PRSUs will be deemed to be the payout percentage (“Payout Percentage”) for such Nested Period based on achievement of the Management Objectives measured by RTSR performance during the Nested Period, in each case as follows (with the percentage of PRSUs (rounded to the nearest whole PRSU) earned for the entire Performance Period (including in the event of a Change in Control occurring during the Restriction Period) determined by taking the sum (rounded to two decimal places) of (i) the Payout Percentage calculated for the 1-year Nested Period multiplied by 25%, (ii) the Payout Percentage calculated for the 2-year Nested Period multiplied by 25% and (iii) the Payout Percentage calculated for the 3-year Nested Period multiplied by 50%; provided, however, notwithstanding the percentage determined in accordance with the foregoing calculation, if RTSR performance for the 3-year Nested Period is negative, the percentage of PRSUs earned for the entire Performance Period will be limited to and may not exceed 150% ):


Performance Level	Relative Total Shareholder Return	Payout Percentage
Below Threshold	Ranked below 25th percentile	0%
Threshold	Ranked at 25th percentile	50%
Target	Ranked at 50th percentile	100%
Above Target	Ranked at 75th percentile	150%
Maximum	Ranked at or above 90th percentile	200%

Section 3. Number of PRSUs Earned. The Committee will determine whether and to what extent the goals relating to the Management Objectives described herein have been satisfied for the Performance Period and will determine the number of PRSUs that will become earned hereunder and under the Agreement on the basis of the following:

(a) Below Threshold. If, upon the conclusion of a Nested Period, RTSR for the Nested Period falls below the threshold level, as set forth in the Performance Matrix, the Payout Percentage will be zero for such Nested Period.

(b) Threshold. If, upon the conclusion of a Nested Period, RTSR for the Nested Period equals the threshold level, as set forth in the Performance Matrix, 50% will be the Payout Percentage for such Nested Period.

Exhibit 10.1

(c) Between Threshold and Target. If, upon the conclusion of a Nested Period, RTSR for the Nested Period exceeds the threshold level, but is less than the target level, as set forth in the Performance Matrix, a percentage between 50% and 100% (determined on the basis of straight-line mathematical interpolation) will be the Percentage Payout for such Nested Period.

(d) Target. If, upon the conclusion of a Nested Period, RTSR for the Nested Period equals the target level, as set forth in the Performance Matrix, 100% will be the Payout Percentage for such Nested Period.

(e) Between Target and Above Target. If, upon the conclusion of a Nested Period, RTSR for the Nested Period exceeds the target level, but is less than the above target level, as set forth in the Performance Matrix, a percentage between 100% and 150% (determined on the basis of straight-line mathematical interpolation) will be the Payout Percentage for such Nested Period.

(f) Above Target. If, upon the conclusion of a Nested Period, RTSR for the Nested Period equals the above target level, as set forth in the Performance Matrix, 150% will be the Payout Percentage for such Nested Period.

(g) Between Above Target and Maximum. If, upon the conclusion of a Nested Period, RTSR for the Nested Period exceeds the above target level, but is less than the maximum level, as set forth in the Performance Matrix, a percentage between 150% and 200% (determined on the basis of straight-line mathematical interpolation) will be the Payout Percentage for such Nested Period.

(h) Equals or Exceeds Maximum. If, upon the conclusion of a Nested Period, RTSR for the Nested Period equals or exceeds the maximum level, as set forth in the Performance Matrix, 200% will be the Payout Percentage for such Nested Period

Exhibit 10.1

Annex A

2024 Peer Group


Company Name	Ticker Symbol
Ampco-Pittsburgh Corporation	AP
Ascent Industries Co.	ACNT
ATI Inc.	ATI
Carpenter Technology Corporation	CRS
Commercial Metals Company	CMC
Friedman Industries, Incorporated	FRD
Haynes International, Inc.	HAYN
Nucor Corporation	NUE
Olympic Steel, Inc.	ZEUS
Radius Recycling	RDUS
Reliance Steel & Aluminum Company	RS
Ryerson Holding Corporation	RYI
Steel Dynamics, Inc.	STLD
United States Steel Corporation	X
Universal Stainless & Alloy Products, Inc.	USAP
Worthington Steel, Inc.	WS

EX-10.2 3 mtus-ex10_2.htm EX-10.2 EX-10.2

Exhibit 10.2

METALLUS INC.

Time-Based Restricted Share Unit Agreement

WHEREAS, __________(“Grantee”) is an employee of Metallus Inc. (f/k/a TimkenSteel Corporation) (the “Company”) or a Subsidiary thereof; and

WHEREAS, the grant of service-based Restricted Share Units evidenced hereby was authorized by a resolution of the Compensation Committee (the “Committee”) of the Board, and the execution of a Restricted Share Unit agreement in the form hereof (this “Agreement”) was authorized by a resolution of the Committee.

NOW, THEREFORE, pursuant to the Metallus Inc. Amended and Restated 2020 Equity and Incentive Compensation Plan (the “Plan”) and subject to the terms and conditions thereof and the terms and conditions hereinafter set forth, the Company hereby confirms to Grantee the grant, effective ________ __, 2024 (the “Date of Grant”), of ______ Restricted Share Units (the “RSUs”). All terms used in this Agreement with initial capital letters that are defined in the Plan and not otherwise defined herein have the meanings assigned to them in the Plan.

Payment of RSUs. The RSUs will become payable if the Restriction Period lapses and Grantee’s right to receive payment for the RSUs becomes nonforfeitable (“Vest,” “Vesting” or “Vested”) in accordance with Section 3and Section 4 of this Agreement.

RSUs Not Transferrable. None of the RSUs nor any interest therein or in any Common Shares underlying such RSUs will be transferable prior to payment other than by will or the laws of descent and distribution upon the death of Grantee.

Vesting of RSUs. Subject to the terms and conditions of Section 4 and Section 5of this Agreement, the RSUs will Vest on the third anniversary of the Date of Grant if Grantee is in the continuous employ of the Company or a Subsidiary from the Date of Grant until the third anniversary of the Date of Grant. For purposes of this Agreement, the continuous employment of Grantee with the Company or a Subsidiary will not be deemed to have been interrupted, and Grantee will not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of the transfer of Grantee’s employment among the Company and its Subsidiaries or if Grantee is absent on leave approved by a duly constituted officer of the Company or its Subsidiaries.

Alternative Vesting of RSUs. Notwithstanding the provisions of Section 3of this Agreement, and subject to the payment provisions of Section 6hereof, to the extent the RSUs have not been forfeited pursuant to Section 5 hereof, the RSUs will Vest earlier than the time provided for in Section 3under the following circumstances:

Death or Disability: If Grantee dies or becomes permanently disabled while in the continuous employ of the Company or a Subsidiary, then the RSUs will immediately Vest in full. If Grantee dies or becomes permanently disabled during the period that Grantee is deemed to be in the continuous employ of the Company or a Subsidiary pursuant to Section 4(b), 4(d) or 4(e), then the RSUs will immediately Vest in full, except that to the extent Section 4(e)applies, the RSUs will immediately Vest only to the extent that the RSUs would have become Vested pursuant to Section 4(e). For purposes of this Agreement, “permanently disabled” means that Grantee has qualified for long-term disability benefits under a disability plan or program of the Company or a Subsidiary or, in the absence of a disability plan or program of the Company or a Subsidiary, under a government-sponsored disability program and is “disabled” within the meaning of Section 409A(a)(2)(C) of the Code. As used in this Agreement, “Code” means the Internal Revenue Code of 1986, as amended, including any regulations or any other formal guidance promulgated by the U.S. Department of the Treasury or the Internal Revenue Service with respect to the sections of the Code referenced in this Agreement.

Exhibit 10.2

Retirement: If Grantee’s continuous employment with the Company or a Subsidiary terminates on or after the 9-month anniversary of the Date of Grant as a result of Grantee’s Retirement, then Grantee will Vest in the RSUs in accordance with the terms and conditions of Section 3 as if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the third anniversary of the Date of Grant as described in Section 3 or the occurrence of a circumstance referenced in Section 4(a) or Section 4(c), whichever occurs first. As used herein, “Retirement” means Grantee’s voluntary termination of employment at or after (i) Grantee has reached age 62 and has a combination of (A) Grantee’s age in years, plus (B) Grantee’s years of continuous employment with the Company or a Subsidiary, equal to at least 72 (provided, however, that if Grantee is the Company’s President and Chief Executive Officer on the Date of Grant, the required age and years of continuous employment with the Company or a Subsidiary will be at least 70 instead of 72), and (ii) Grantee has given at least 6 months’ advance written notice to the President and Chief Executive Officer or Executive Vice President, General Counsel and Chief Human Resources Officer of such voluntary termination of employment.

Change in Control:

Upon a Change in Control occurring during the Restriction Period while Grantee is in the continuous employ of the Company or a Subsidiary, to the extent the RSUs have not been forfeited, the RSUs will immediately Vest in full (except to the extent that a Replacement Award is provided to Grantee for the RSUs). If Grantee is deemed to be in the continuous employ of the Company or a Subsidiary pursuant to Section 4(b), 4(d) or 4(e), upon a Change in Control during the Restriction Period, then the RSUs will immediately Vest in full, except that to the extent Section 4(e)applies, the RSUs will Vest only to the extent the RSUs would have become Vested pursuant to Section 4(e).

ii.

As used in this Agreement, a “Replacement Award” means an award (A) of service-based restricted share units, (B) that has a value at least equal to the value of the RSUs, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control (or another entity that is affiliated with the Company or its successor following the Change in Control), (D) the tax consequences of which, under the Code, if Grantee is subject to U.S. federal income tax under the Code, are not less favorable to Grantee than the tax consequences relative to the RSUs, (E) that Vests in full upon a termination of Grantee’s employment with the Company or a Subsidiary or their successors in the Change in Control (or another entity that is affiliated with the Company or a Subsidiary or their successors following the Change in Control) (as applicable, the “Successor”) for Good Reason by Grantee or without Cause by such employer, or upon the death of Grantee or Grantee becoming permanently disabled (as defined in Section 4(a)), within a period of two years after the Change in Control, and (F) the other terms and conditions of which are not less favorable to Grantee than the terms and conditions of the RSUs (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it conforms to the requirements of Treasury Regulation 1.409A-3(i)(5)(iv)(B) or otherwise does not result in the RSUs or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the RSUs if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 4(c)(ii) are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.

Exhibit 10.2

iii.

For purposes of Sections 4(c) and 4(e), “Cause” means with respect to Grantee: (A) any intentional act of fraud, embezzlement or theft in connection with Grantee’s duties with the Company, its Subsidiaries, or Successor, (B) any intentional wrongful disclosure of secret processes or confidential information of the Company, its Subsidiaries, or Successor, or (C) any intentional wrongful engagement in any competitive activity that would constitute a material breach of Grantee’s duty of loyalty to the Company, its Subsidiaries, or Successor; provided, that, no act, or failure to act, on the part of Grantee will be deemed “intentional” unless done or omitted to be done by Grantee not in good faith and without reasonable belief that Grantee’s action or omission was in or not opposed to the best interest of the Company, its Subsidiaries, or Successor; and further provided, that for any Grantee who is party to an individual severance or employment agreement with the Company or a Subsidiary defining Cause, “Cause” will have the meaning set forth in such agreement. Also for purposes of Section 4(c)(ii), “Good Reason” means: a material reduction in the nature or scope of the responsibilities, authorities or duties of Grantee attached to Grantee’s position held immediately prior to the Change in Control, a change of more than 60 miles in the location of Grantee’s principal office immediately prior to the Change in Control, or a material reduction in Grantee’s remuneration upon or after the Change in Control; provided, that, no later than 90 days following an event constituting Good Reason, Grantee gives notice to the Successor of the occurrence of such event and the Successor fails to cure the event within 30 days following the receipt of such notice.

iv.

If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding RSUs which at the time of the Change in Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be Vested at the time of such Change in Control and will be paid as provided for in Section 6 of this Agreement.

Divestiture: If Grantee’s continuous employment with the Company or a Subsidiary terminates as the result of a divestiture, then Grantee will Vest in the RSUs in accordance with the terms and conditions of Section 3 as if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the third anniversary of the Date of Grant as described in Section 3 or the occurrence of a circumstance referenced in Section 4(a) or 4(c), whichever occurs first. As used herein, the term “divestiture” means a permanent disposition to a Person other than the Company or any Subsidiary of a plant or other facility or property at which Grantee performs a majority of Grantee’s services, whether such disposition is effected by means of a sale of assets, a sale of Subsidiary stock or otherwise.

Layoff: If (i) Grantee’s continuous employment with the Company or a Subsidiary terminates as the result of a layoff and (ii) Grantee is entitled to receive severance pay pursuant to the terms of any severance pay plan of the Company in effect at the time of Grantee’s termination of employment that provides for severance pay calculated by multiplying Grantee’s base compensation by a specified severance period, then Grantee will Vest in a number of RSUs equal to the product of (x) the number of RSUs in which Grantee would have Vested in accordance with the terms and conditions of Section 3as if Grantee had remained in the continuous employ of the Company or a Subsidiary from the Date of Grant until the third anniversary of the Date of Grant or the occurrence of a circumstance referenced in Section 4(a)or Section 4(c), whichever occurs first, multiplied by (y) a fraction (in no case greater than 1), the numerator of which is the number of whole months from the Date of Grant through the end of the specified severance period and the denominator of which is 36. As used herein, a “layoff” means the involuntary termination by the Company or any Subsidiary of Grantee’s employment with the Company or any Subsidiary due to (A) a reduction in force leading to a permanent downsizing of the salaried workforce, (B) a permanent shutdown of the plant, department or subdivision in which Grantee works, (C) an elimination of position.

Exhibit 10.2

or (D) any or no reason, except for Cause (as defined in Section 4(c)), at the Company’s discretion; provided that a termination under clause (D) will constitute a “layoff” for purposes of this Agreement only (i) upon the prior approval of the Committee in the case of an executive officer, or (ii) upon the prior approval of the President and Chief Executive Officer or Executive Vice President, General Counsel and Chief Human Resources Officer in the case of any other terminated Grantee.

Forfeiture of RSUs. Any RSUs that have not Vested pursuant to Section 3or Section 4 by the third anniversary of the Date of Grant will be forfeited automatically and without further notice on such date (or earlier if, and on such date that, Grantee ceases to be an employee of the Company or a Subsidiary prior to the third anniversary of the Date of Grant for any reason other than as described in Section 4).

Form and Time of Payment of RSUs.

General. Subject to Section 5 and Section 6(b), payment for Vested RSUs will be made in cash or Common Shares (as determined by the Committee) within 10 days following the Vesting date specified in Section 3.

Other Payment Events. Notwithstanding Section 6(a), to the extent the RSUs are Vested on the dates set forth below, payment with respect to the RSUs will be made as follows:

Change in Control. Upon a Change in Control, Grantee will receive payment for Vested RSUs in cash or Common Shares (as determined by the Committee) on the date of the Change in Control; provided, however, that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and where Section 409A of the Code applies to such distribution, Grantee will receive the corresponding payment on the date that would have otherwise applied pursuant to this Section 6.

ii.

Death or Disability. On the date of Grantee’s death or the date Grantee becomes permanently disabled, Grantee will receive payment for Vested RSUs in cash or Common Shares (as determined by the Committee) on such date.

Dividend Equivalents. Grantee will be credited with cash per RSU equal to the amount of each cash dividend per Common Share paid by the Company (if any) to holders of Common Shares generally with a record date occurring on or after the Date of Grant and prior to the time when the RSUs are paid in accordance with Section 6 hereof. Any amounts credited pursuant to the immediately preceding sentence will be subject to the same applicable terms and conditions (including earning, Vesting, payment, and forfeitability) as apply to the RSUs based on which the dividend equivalents were credited, and such amounts will be paid in either cash or Common Shares, as determined by the Committee in its sole discretion, at the same time as the RSUs to which they relate. If such amounts are paid in Common Shares, the number of shares so paid will be rounded down to the nearest whole number and will be determined by dividing such credited amounts by the Market Value per Share on the payment date.

Detrimental Activity and Recapture.

Notwithstanding anything in this Agreement to the contrary, in the event that, as determined by the Committee, Grantee engages in Detrimental Activity during employment with the Company or a Subsidiary, the RSUs will be forfeited automatically and without further notice at the time of that determination. As used herein, “Detrimental Activity” means:

Exhibit 10.2

ii.

soliciting any employee of the Company or a Subsidiary to terminate his or her employment with the Company or a Subsidiary;

iii.

iv.

vi.

Notwithstanding anything in this Agreement to the contrary, Grantee acknowledges and agrees that this Agreement and the award described herein (and any settlement thereof) are subject to the terms and conditions of the Company’s clawback policy or policies as may be in effect from time to time, including specifically to implement Section 10D of the Exchange Act and any applicable rules or regulations promulgated thereunder (including applicable rules and regulations of any national securities exchange on which the Common Shares at any point may be traded) (the “Compensation Recovery Policy”), and that, to the extent the Compensation Recovery Policy, by its terms, is applicable to Grantee’s RSUs, applicable terms of this Agreement will be (if necessary) deemed superseded by and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date thereof. Further, by accepting the RSUs covered by this Agreement, Grantee (i) consents to be bound by the terms of the Compensation Recovery Policy, as applicable, (ii) agrees and acknowledges that Grantee is obligated to and will cooperate with, and will provide any and all assistance necessary to, the Company in any effort to recover or recoup any compensation or other amounts subject to clawback or recovery pursuant to the Compensation Recovery Policy and/or applicable laws, rules, regulations, stock exchange listing standards or other Company policy, and (iii) agrees that the Company may enforce its rights under the Compensation Recovery Policy through any and all reasonable means permitted under applicable law as it deems necessary or desirable under the Compensation Recovery Policy, in each case from and after the effective dates thereof.

Exhibit 10.2

Such cooperation and assistance shall include, but is not limited to, executing, completing and submitting any documentation necessary to facilitate the recovery or recoupment by the Company from Grantee of any such amounts, including from Grantee’s accounts or from any other compensation, to the extent permissible under Section 409A of the Code.

10.

Adjustments. Subject to Section 11 of the Plan, the Committee will make or provide for such adjustments in the number of and kind of Common Shares covered by the RSUs, or in other award terms, as the Committee, in its sole discretion, exercised in good faith, determines is equitably required to prevent dilution or enlargement of Grantee’s rights under this Agreement that otherwise would result from any (a) extraordinary cash dividend, stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities involving the Company, or (c) any other transaction or event having an effect similar to any of those referred to in Section 10(a) or10(b) hereof.

11.

12.

13.

Right to Terminate Employment. Nothing in this Agreement limits in any way whatsoever any right the Company or a Subsidiary may otherwise have to terminate the employment of Grantee at any time.

Exhibit 10.2

14.

15.

16.

17.

18.

[SIGNATURES ON FOLLOWING PAGE]

Exhibit 10.2

_________________________________

Grantee

Date: ___________________________

This Agreement is executed by the Company on this ___ day of ____________, 2024.

Metallus Inc.

By ___________________________________

Kristine C. Syrvalin

Executive Vice President, General Counsel and Chief

Human Resources Officer

EX-31.1 4 mtus-ex31_1.htm EX-31.1 EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael S. Williams, certify that:

I have reviewed this quarterly report on Form 10-Q of Metallus Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

Exhibit 31.1

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	May 9, 2024	/s/ Michael S. Williams
		Michael S. Williams
		President and Chief Executive Officer (Principal Executive Officer)

EX-31.2 5 mtus-ex31_2.htm EX-31.2 EX-31.2

Exhibit 31.2

CERTIFICATION

I, Kristopher R. Westbrooks, certify that:

I have reviewed this quarterly report on Form 10-Q of Metallus Inc.;

Exhibit 31.2

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	May 9, 2024	/s/ Kristopher R. Westbrooks
		Kristopher R. Westbrooks
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1 6 mtus-ex32_1.htm EX-32.1 EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of TimkenSteel Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

    Date:

    May 9, 2024

    /s/ Michael S. Williams

     
    Michael S. Williams
President and Chief Executive Officer
(Principal Executive Officer)

    Date:

    May 9, 2024

    /s/ Kristopher R. Westbrooks

     
    Kristopher R. Westbrooks
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)