Reliance, Inc. (NYSE: RS) today reported its financial results for
the first quarter ended March 31, 2024.
(in millions, except
tons which are in thousands and per share amounts) |
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Sequential Quarter |
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Year-Over-Year |
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Q1 2024 |
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Q4 2023 |
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% Change |
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Q1 2023 |
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% Change |
Income Statement
Data: |
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Net sales |
$ |
3,644.8 |
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$ |
3,337.3 |
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9.2% |
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$ |
3,965.3 |
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(8.1%) |
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Gross profit1 |
$ |
1,128.2 |
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$ |
1,021.6 |
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10.4% |
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$ |
1,226.0 |
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(8.0%) |
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Gross profit
margin1 |
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31.0% |
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30.6% |
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0.4% |
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30.9% |
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0.1% |
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Non-GAAP gross profit
margin1,2 |
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31.0% |
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30.6% |
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0.4% |
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30.9% |
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0.1% |
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LIFO income |
$ |
(50.0) |
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$ |
(59.5) |
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$ |
(15.0) |
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LIFO income as a % of net
sales |
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(1.4%) |
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(1.8%) |
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0.4% |
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(0.4%) |
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(1.0%) |
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LIFO income per diluted share,
net of tax |
$ |
(0.64) |
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$ |
(0.77) |
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$ |
(0.18) |
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Non-GAAP pretax expense
(income) adjustments² |
$ |
4.9 |
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$ |
2.2 |
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$ |
(4.8) |
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Pretax income |
$ |
396.2 |
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$ |
333.3 |
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18.9% |
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$ |
508.5 |
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(22.1%) |
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Non-GAAP pretax income2 |
$ |
401.1 |
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$ |
335.5 |
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19.6% |
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$ |
503.7 |
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(20.4%) |
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Pretax income margin |
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10.9% |
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10.0% |
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0.9% |
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12.8% |
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(1.9%) |
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Net income attributable to
Reliance |
$ |
302.9 |
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$ |
272.7 |
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11.1% |
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$ |
383.1 |
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(20.9%) |
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Diluted EPS |
$ |
5.23 |
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$ |
4.70 |
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11.3% |
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$ |
6.43 |
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(18.7%) |
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Non-GAAP diluted EPS2 |
$ |
5.30 |
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$ |
4.73 |
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12.1% |
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$ |
6.37 |
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(16.8%) |
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Balance Sheet and Cash
Flow Data: |
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Cash provided by
operations |
$ |
126.3 |
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$ |
525.6 |
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(76.0%) |
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$ |
384.6 |
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(67.2%) |
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Free cash flow3 |
$ |
17.6 |
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$ |
415.4 |
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(95.8%) |
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$ |
281.7 |
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(93.8%) |
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Net debt-to-total
capital4 |
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2.6% |
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0.8% |
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4.3% |
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Net debt-to-EBITDA2,5 |
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0.1x |
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0.0x |
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0.1x |
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Total debt-to-EBITDA2,5 |
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0.6x |
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0.6x |
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0.5x |
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Capital Allocation
Data: |
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Acquisitions, net |
$ |
53.7 |
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$ |
(0.1) |
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$ |
— |
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Capital expenditures |
$ |
108.7 |
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$ |
110.2 |
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$ |
102.9 |
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Dividends |
$ |
65.3 |
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$ |
58.8 |
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$ |
62.0 |
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Share repurchases |
$ |
— |
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$ |
240.3 |
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$ |
38.9 |
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Key Business
Metrics: |
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Tons sold |
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1,494.0 |
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1,354.2 |
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10.3% |
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1,520.1 |
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(1.7%) |
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Tons sold (same-store) |
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1,476.4 |
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1,347.4 |
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9.6% |
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1,520.1 |
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(2.9%) |
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Average selling price per ton
sold |
$ |
2,442 |
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$ |
2,466 |
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(1.0%) |
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$ |
2,623 |
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(6.9%) |
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Average selling price per ton
sold (same-store) |
$ |
2,453 |
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$ |
2,471 |
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(0.7%) |
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$ |
2,623 |
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(6.5%) |
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Please refer to
the footnotes at the end of this press release for additional
information. |
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Management Commentary
“Our resilient business model, most notably the diversity of our
products, end markets and geography, once again delivered strong
performance in a more challenging pricing environment than we
anticipated in the first quarter,” said Karla Lewis, President and
Chief Executive Officer of Reliance. “We continued to drive smart,
profitable growth, increasing our shipments above industry levels
while maintaining pricing discipline resulting in our gross profit
margin at the high end of our sustainable range that collectively
contributed to our first quarter non-GAAP earnings per diluted
share of $5.30. Our significant investments in value-added
processing capabilities continue to bolster our gross profit margin
throughout market cycles.”
Mrs. Lewis continued, “Our profitable operations and consistent
ability to generate cash enable us to allocate capital across our
core priorities. We have completed three acquisitions to-date in
2024, expanding our product offerings, processing capabilities and
geographic reach and collectively adding nearly $500 million in
annualized net sales to the Reliance family. We also invested
$108.7 million back into our business through capital expenditures,
predominantly targeted towards growth opportunities that increase
capacity and value-added processing capabilities. We returned $65.3
million to our valued stockholders in dividends. I’d like to thank
the entire Reliance team for a strong start to 2024 and their
continued commitment to exceptional customer service, and most
importantly, safety. While we anticipate continued near-term
pricing headwinds, we remain bullish on the longer term tailwinds
coming our way through activity related to government stimulus and
re/near-shoring. Reliance is in a strong position to benefit from
these opportunities.”
End Market CommentaryReliance provides a
diverse range of metal products and value-added processing services
to a wide range of end markets, generally in small quantities on an
as-needed basis. The Company’s tons sold in the first quarter of
2024 increased 10.3% compared to the prior quarter, in line with
management’s expectations of up 9% to 11%, and in-line with the
typical seasonal rebound in volumes, as demand remains healthy in
the majority of the end markets Reliance serves.
Demand in non-residential construction (including
infrastructure), Reliance’s largest end market, improved from the
first quarter of 2023. Reliance continues to service new
construction projects in diverse sectors, including public
infrastructure, manufacturing and energy infrastructure. The
Company expects there will be continued strength in non-residential
construction activity in the sectors in which it participates in
the second quarter of 2024.
Demand in commercial aerospace was relatively stable compared to
the first quarter of 2023. Reliance anticipates commercial
aerospace demand will remain stable in the second quarter of 2024,
subject to further changes in build rates that impact the supply
chain. The military and space related portion of Reliance’s
aerospace business is expected to remain stable at strong levels in
the second quarter of 2024.
Demand for the toll processing services Reliance provides to the
automotive market improved compared to the first quarter of 2023,
with increased tolling capacity due to our continued investments in
this space. The Company’s outlook reflects continued strong demand
for automotive toll processing in the second quarter of 2024.
Demand across the broader manufacturing sectors Reliance serves,
including industrial machinery, consumer products and heavy
equipment, was down modestly compared to the first quarter of 2023
primarily due to softness in demand for agricultural equipment and
consumer products which was partially offset by increased activity
in industrial machinery. Reliance anticipates that demand for its
products across the broader manufacturing sector will remain
relatively stable in the second quarter of 2024.
Demand in the semiconductor market seasonally improved after
stabilizing sequentially in the fourth quarter of 2023, but
nonetheless remained lower than the first quarter of 2023. The
Company anticipates relatively stable demand in the second quarter
of 2024. Reliance’s long-term outlook for the semiconductor market
remains positive, reinforced by the CHIPS Act and significant
semiconductor fabrication expansion underway in the United
States.
Balance Sheet & Cash FlowAt March 31, 2024,
Reliance’s cash and cash equivalents totaled $934.9 million with
total debt outstanding of $1.15 billion and no outstanding
borrowings under its $1.5 billion revolving credit facility.
Reliance generated cash flow from operations of $126.3 million in
the first quarter of 2024. The acquisitions of American Alloy
Steel, Inc. and Mid-West Materials, Inc. were completed in April
2024 with cash on hand.
Stockholder Return ActivityOn February 13,
2024, the Company increased its regular quarterly dividend by 10.0%
to $1.10 per share of common stock marking the 31st dividend
increase since Reliance’s 1994 IPO to a current annual rate of
$4.40 per share. On April 23, 2024, the Company’s Board of
Directors declared a quarterly cash dividend of $1.10 per share of
common stock, payable on June 7, 2024 to stockholders of record as
of May 24, 2024. Reliance has paid regular quarterly cash dividends
for 65 consecutive years without reduction or suspension.
AcquisitionsAs previously announced, effective
April 1, 2024, Reliance completed its acquisition of all of the
outstanding equity interests and related real estate assets of
American Alloy Steel, Inc. (“American Alloy”), a leading
distributor of specialty carbon and alloy steel plate and round
bar, including pressure vessel quality (PVQ) material. The
acquisition of American Alloy increases Reliance’s value-added
processing and fabrication capabilities and expands the Company’s
specialty carbon steel plate product portfolio. American Alloy's
net sales for the year ended December 31, 2023 were approximately
$310 million.
As previously announced, effective April 1, 2024, Reliance
completed the acquisition of all the outstanding equity interests
of Mid-West Materials, Inc. (“MidWest Materials”), a premier
flat-rolled steel service center primarily serving North American
original equipment manufacturers (“OEMs”). The addition of MidWest
Materials increases Reliance’s flat-rolled presence in the critical
markets in and around Ohio. MidWest Materials’ net sales for the
year ended December 31, 2023 were approximately $87 million.
As previously announced, effective February 1, 2024, Reliance
completed the acquisition of all the outstanding equity interests
of Cooksey Iron & Metal Company (“Cooksey”). Founded in 1917
and headquartered in Tifton, GA, Cooksey processes and distributes
finished steel products, including tubing, beams, plate and bars.
The acquisition of Cooksey strengthens and expands Reliance’s
position in the fast-growing Southeastern market. Cooksey’s net
sales for the year ended December 31, 2023 were approximately $90
million.
Business Outlook Reliance expects a better than
normal seasonal recovery in demand in the second quarter of 2024
despite prevailing macroeconomic uncertainty and geopolitical
matters. Accordingly, the Company estimates its tons sold will be
up 2.5% to 4.5% in the second quarter of 2024 compared to the first
quarter of 2024, with approximately 2% of the sequential growth
coming from recently completed acquisitions on April 1, 2024. In
addition, Reliance expects its average selling price per ton sold
for the second quarter of 2024 to be down 1% to 3% compared to the
first quarter of 2024. The Company also anticipates short term
gross profit margin pressure in the second quarter of 2024 as it
works through higher cost inventory on hand. Based on these
expectations, the Company anticipates non-GAAP earnings per diluted
share in the range of $4.70 to $4.90 for the second quarter of
2024.
Conference Call DetailsA conference call and
simultaneous webcast to discuss Reliance’s first quarter 2024
financial results and business outlook will be held on Thursday,
April 25, 2024 at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time.
To listen to the live call by telephone, please dial (877) 407-0792
(U.S. and Canada) or (201) 689-8263 (International) approximately
10 minutes prior to the start time and use conference ID: 13745243.
The call will also be broadcast live over the Internet hosted on
the Investors section of the Company's website at
investor.reliance.com.
For those unable to participate during the live broadcast, a
replay of the call will also be available beginning that same day
at 2:00 p.m. Eastern Time until 11:59 p.m. Eastern Time on May 9,
2024, by dialing (844) 512-2921 (U.S. and Canada) or (412) 317-6671
(International) and entering the conference ID: 13745243. The
webcast will remain posted on the Investors section of Reliance’s
website at reliance.com for 90 days.
About Reliance, Inc.Founded in 1939, Reliance,
Inc. (NYSE: RS) is a leading global diversified metal solutions
provider and the largest metals service center company in North
America. Through a network of more than 320 locations in 40 states
and 12 countries outside of the United States, Reliance provides
value-added metals processing services and distributes a full-line
of over 100,000 metal products to more than 125,000 customers in a
broad range of industries. Reliance focuses on small orders with
quick turnaround and value-added processing services. In 2023,
Reliance’s average order size was $3,210, approximately 51% of
orders included value-added processing and approximately 40% of
orders were delivered within 24 hours. Reliance, Inc.’s press
releases and additional information are available on the Company’s
website at reliance.com.
Forward-Looking StatementsThis press release
contains certain statements that are, or may be deemed to be,
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may include, but are not limited to, discussions of
Reliance’s industry and end markets, business strategies,
acquisitions, and expectations concerning the Company’s future
growth and profitability and its ability to generate industry
leading returns for its stockholders, as well as future demand and
metals pricing and the Company’s results of operations, margins,
profitability, taxes, liquidity, macroeconomic conditions,
including inflation and the possibility of an economic recession or
slowdown, litigation matters and capital resources. In some cases,
you can identify forward-looking statements by terminology such as
“may,” “will,” “should,” “could,” “would,” “expect,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,”
“preliminary,” “range,” “intend” and “continue,” the negative of
these terms, and similar expressions.
These forward-looking statements are based on management's
estimates, projections and assumptions as of today’s date that may
not prove to be accurate. Forward-looking statements involve known
and unknown risks and uncertainties and are not guarantees of
future performance. Actual outcomes and results may differ
materially from what is expressed or forecasted in these
forward-looking statements as a result of various important
factors, including, but not limited to, actions taken by Reliance,
as well as developments beyond its control, including, but not
limited to, the possibility that the expected benefits of
acquisitions may not materialize as expected, the impacts of labor
constraints and supply chain disruptions, changes in domestic and
worldwide political and economic conditions such as inflation and
the possibility of an economic recession that could materially
impact the Company, its customers and suppliers, and demand for the
Company’s products and services. Deteriorations in economic
conditions as a result of inflation, economic recession, slowing
growth, outbreaks of infectious disease, conflicts such as the war
in Ukraine and the evolving events in Israel and Gaza or otherwise,
could lead to a decline in demand for the Company’s products and
services and negatively impact its business, and may also impact
financial markets and corporate credit markets which could
adversely impact the Company’s access to financing, or the terms of
any financing. The Company cannot at this time predict all of the
impacts of inflation, product price fluctuations, economic
recession, outbreaks of infectious disease or the war in Ukraine
and the Israel-Gaza conflict and related economic effects, but
these factors, individually or in any combination, could have a
material adverse effect on the Company’s business, financial
position, results of operations and cash flows.
The statements contained in this press release speak only as of
the date hereof, and Reliance disclaims any and all obligations to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or for any other
reason, except as may be required by law. Important risks and
uncertainties about Reliance’s business can be found in “Item 1A.
Risk Factors” of the Company’s Annual Report on Form 10-K for the
year ended December 31, 2023 and in other documents Reliance files
or furnishes with the United States Securities and Exchange
Commission.
CONTACT- (213)
576-2428investor@reliance.com
or Addo Investor Relations(310) 829-5400
(Tables to follow)
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First
Quarter 2024 Major Commodity Metrics |
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Tons Sold (tons in thousands; % change) |
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Average Selling Priceper Ton Sold (% change) |
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Q1 2024 |
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Q4 2023 |
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SequentialQuarterChange |
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Q1 2023 |
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Year-Over-Year Change |
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Sequential Quarter Change |
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Year-Over-Year Change |
Carbon steel |
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1,214.8 |
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1,100.5 |
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10.4 |
% |
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1,232.0 |
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(1.4 |
%) |
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1.0 |
% |
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(4.1 |
%) |
Aluminum |
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81.8 |
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76.3 |
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7.2 |
% |
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86.1 |
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(5.0 |
%) |
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0.4 |
% |
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(6.3 |
%) |
Stainless steel |
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75.5 |
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65.5 |
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15.3 |
% |
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76.8 |
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(1.7 |
%) |
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(6.2 |
%) |
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(13.3 |
%) |
Alloy |
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33.0 |
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29.2 |
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13.0 |
% |
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36.3 |
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(9.1 |
%) |
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(0.4 |
%) |
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(1.2 |
%) |
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Sales ($'s in millions; % change) |
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Q1 2024 |
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Q4 2023 |
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SequentialQuarterChange |
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Q1 2023 |
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Year-Over-Year Change |
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Carbon steel |
$ |
2,012.9 |
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$ |
1,805.2 |
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11.5 |
% |
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$ |
2,128.5 |
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(5.4 |
%) |
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Aluminum |
$ |
596.1 |
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$ |
553.9 |
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7.6 |
% |
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$ |
670.2 |
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(11.1 |
%) |
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Stainless steel |
$ |
559.9 |
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$ |
517.9 |
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8.1 |
% |
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$ |
657.3 |
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(14.8 |
%) |
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Alloy |
$ |
171.9 |
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$ |
152.3 |
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12.9 |
% |
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$ |
191.4 |
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(10.2 |
%) |
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Sales by Product ($'s as a % of total sales) |
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Q1 2024 |
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Q4 2023 |
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Q1 2023 |
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Carbon steel plate |
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11 |
% |
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12 |
% |
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12 |
% |
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Carbon steel structurals |
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11 |
% |
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11 |
% |
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10 |
% |
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Carbon steel tubing |
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10 |
% |
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10 |
% |
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10 |
% |
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Hot-rolled steel sheet &
coil |
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9 |
% |
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8 |
% |
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9 |
% |
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Carbon steel bar |
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5 |
% |
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5 |
% |
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5 |
% |
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Galvanized steel sheet &
coil |
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5 |
% |
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4 |
% |
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4 |
% |
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Cold-rolled steel sheet &
coil |
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2 |
% |
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2 |
% |
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2 |
% |
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Carbon steel |
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53 |
% |
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52 |
% |
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52 |
% |
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Aluminum bar & tube |
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5 |
% |
|
|
5 |
% |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Heat-treated aluminum
plate |
|
5 |
% |
|
|
5 |
% |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Common alloy aluminum sheet
& coil |
|
4 |
% |
|
|
4 |
% |
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Common alloy aluminum
plate |
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Heat-treated aluminum sheet
& coil |
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Aluminum |
|
16 |
% |
|
|
16 |
% |
|
|
16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stainless steel bar &
tube |
|
8 |
% |
|
|
8 |
% |
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Stainless steel sheet &
coil |
|
5 |
% |
|
|
5 |
% |
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Stainless steel plate |
|
2 |
% |
|
|
2 |
% |
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Stainless steel |
|
15 |
% |
|
|
15 |
% |
|
|
16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alloy bar & rod |
|
4 |
% |
|
|
4 |
% |
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Alloy tube |
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Alloy |
|
5 |
% |
|
|
5 |
% |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous |
|
5 |
% |
|
|
6 |
% |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Toll processing &
logistics |
|
4 |
% |
|
|
4 |
% |
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Copper & brass |
|
2 |
% |
|
|
2 |
% |
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
11 |
% |
|
|
12 |
% |
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RELIANCE, INC. |
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME |
(in millions, except number of shares which are reflected
in thousands and per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
2024 |
|
|
2023 |
|
Net sales |
$ |
3,644.8 |
|
|
$ |
3,965.3 |
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
Cost of sales (exclusive of depreciation and amortization shown
below) |
|
2,516.6 |
|
|
|
2,739.3 |
|
Warehouse, delivery, selling, general and administrative
(“SG&A”) |
|
671.5 |
|
|
|
651.3 |
|
Depreciation and amortization |
|
63.6 |
|
|
|
61.1 |
|
|
|
3,251.7 |
|
|
|
3,451.7 |
|
|
|
|
|
|
|
Operating income |
|
393.1 |
|
|
|
513.6 |
|
|
|
|
|
|
|
Other (income) expense: |
|
|
|
|
|
Interest expense |
|
9.7 |
|
|
|
10.9 |
|
Other income, net |
|
(12.8 |
) |
|
|
(5.8 |
) |
Income before income
taxes |
|
396.2 |
|
|
|
508.5 |
|
Income tax provision |
|
92.4 |
|
|
|
124.1 |
|
Net income |
|
303.8 |
|
|
|
384.4 |
|
Less: net income attributable to noncontrolling interests |
|
0.9 |
|
|
|
1.3 |
|
Net income attributable to
Reliance |
$ |
302.9 |
|
|
$ |
383.1 |
|
|
|
|
|
|
|
Earnings per share
attributable to Reliance stockholders: |
|
|
|
|
|
Basic |
$ |
5.28 |
|
|
$ |
6.51 |
|
Diluted |
$ |
5.23 |
|
|
$ |
6.43 |
|
|
|
|
|
|
|
Shares used in computing
earnings per share: |
|
|
|
|
|
Basic |
|
57,340 |
|
|
|
58,832 |
|
Diluted |
|
57,882 |
|
|
|
59,534 |
|
|
|
|
|
|
|
Cash dividends per share |
$ |
1.10 |
|
|
$ |
1.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
RELIANCE, INC. |
UNAUDITED CONSOLIDATED BALANCE SHEETS |
(in millions, except number of shares
which are reflected in thousands and par
value) |
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
2024 |
|
2023* |
ASSETS |
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
934.9 |
|
|
$ |
1,080.2 |
|
Accounts receivable, less allowance for credit losses of $27.2 at
March 31, 2024 and $24.9 at December 31, 2023 |
|
1,686.0 |
|
|
|
1,472.4 |
|
Inventories |
|
2,166.9 |
|
|
|
2,043.2 |
|
Prepaid expenses and other current assets |
|
135.6 |
|
|
|
140.4 |
|
Income taxes receivable |
|
— |
|
|
|
35.6 |
|
Total current assets |
|
4,923.4 |
|
|
|
4,771.8 |
|
Property, plant and
equipment: |
|
|
|
|
|
Land |
|
282.6 |
|
|
|
281.7 |
|
Buildings |
|
1,534.5 |
|
|
|
1,510.9 |
|
Machinery and equipment |
|
2,743.6 |
|
|
|
2,700.4 |
|
Accumulated depreciation |
|
(2,251.4 |
) |
|
|
(2,244.6 |
) |
Property, plant and equipment, net |
|
2,309.3 |
|
|
|
2,248.4 |
|
Operating lease right-of-use
assets |
|
230.7 |
|
|
|
231.6 |
|
Goodwill |
|
2,125.3 |
|
|
|
2,111.1 |
|
Intangible assets, net |
|
986.1 |
|
|
|
981.1 |
|
Cash surrender value of life
insurance policies, net |
|
39.5 |
|
|
|
43.8 |
|
Other long-term assets |
|
97.9 |
|
|
|
92.5 |
|
Total assets |
$ |
10,712.2 |
|
|
$ |
10,480.3 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
449.7 |
|
|
$ |
410.3 |
|
Accrued expenses |
|
118.3 |
|
|
|
118.5 |
|
Accrued compensation and retirement benefits |
|
139.8 |
|
|
|
213.9 |
|
Accrued insurance costs |
|
46.1 |
|
|
|
44.4 |
|
Current maturities of long-term debt |
|
0.3 |
|
|
|
0.3 |
|
Current maturities of operating lease liabilities |
|
56.3 |
|
|
|
56.2 |
|
Income taxes payable |
|
46.9 |
|
|
|
— |
|
Total current liabilities |
|
857.4 |
|
|
|
843.6 |
|
Long-term debt |
|
1,142.6 |
|
|
|
1,141.9 |
|
Operating lease
liabilities |
|
177.8 |
|
|
|
178.9 |
|
Long-term retirement
benefits |
|
27.8 |
|
|
|
25.1 |
|
Other long-term
liabilities |
|
70.8 |
|
|
|
64.0 |
|
Deferred income taxes |
|
493.1 |
|
|
|
494.0 |
|
Total liabilities |
|
2,769.5 |
|
|
|
2,747.5 |
|
Commitments and
contingencies |
|
|
|
|
|
Equity: |
|
|
|
|
|
Preferred stock, $0.001 par value: 5,000 shares authorized; none
issued or outstanding |
|
— |
|
|
|
— |
|
Common stock and additional paid-in capital, $0.001 par value and
200,000 shares authorized |
|
|
|
|
|
Issued and outstanding shares—57,426 at March 31, 2024 and 57,271
at December 31, 2023 |
|
0.1 |
|
|
|
0.1 |
|
Retained earnings |
|
8,025.6 |
|
|
|
7,798.9 |
|
Accumulated other comprehensive loss |
|
(93.3 |
) |
|
|
(76.7 |
) |
Total Reliance stockholders’ equity |
|
7,932.4 |
|
|
|
7,722.3 |
|
Noncontrolling interests |
|
10.3 |
|
|
|
10.5 |
|
Total equity |
|
7,942.7 |
|
|
|
7,732.8 |
|
Total liabilities and equity |
$ |
10,712.2 |
|
|
$ |
10,480.3 |
|
|
|
|
|
|
|
* Derived from audited
financial statements. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RELIANCE, INC. |
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in millions) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
|
2024 |
|
|
2023 |
|
Operating
activities: |
|
|
|
|
|
Net income |
$ |
303.8 |
|
|
$ |
384.4 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
Depreciation and amortization expense |
|
63.6 |
|
|
|
61.1 |
|
Stock-based compensation expense |
|
13.0 |
|
|
|
13.5 |
|
Other |
|
2.8 |
|
|
|
(0.1 |
) |
Changes in operating assets
and liabilities (excluding effect of businesses acquired): |
|
|
|
|
|
Accounts receivable |
|
(211.6 |
) |
|
|
(237.1 |
) |
Inventories |
|
(114.6 |
) |
|
|
13.5 |
|
Prepaid expenses and other assets |
|
73.9 |
|
|
|
50.0 |
|
Accounts payable and other liabilities |
|
(4.6 |
) |
|
|
99.3 |
|
Net cash provided by operating activities |
|
126.3 |
|
|
|
384.6 |
|
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
|
Acquisition, net of cash acquired |
|
(53.7 |
) |
|
|
— |
|
Purchases of property, plant and equipment |
|
(108.7 |
) |
|
|
(102.9 |
) |
Other |
|
(15.0 |
) |
|
|
0.3 |
|
Net cash used in investing activities |
|
(177.4 |
) |
|
|
(102.6 |
) |
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
|
Principal payment on long-term debt |
|
— |
|
|
|
(500.0 |
) |
Cash dividends and dividend equivalents |
|
(65.3 |
) |
|
|
(62.0 |
) |
Share repurchases |
|
— |
|
|
|
(38.9 |
) |
Taxes paid related to net share settlement of restricted stock
units |
|
(23.9 |
) |
|
|
(37.2 |
) |
Other |
|
(1.1 |
) |
|
|
(1.1 |
) |
Net cash used in financing activities |
|
(90.3 |
) |
|
|
(639.2 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
(3.9 |
) |
|
|
— |
|
Decrease in cash and cash
equivalents |
|
(145.3 |
) |
|
|
(357.2 |
) |
Cash and cash equivalents at
beginning of year |
|
1,080.2 |
|
|
|
1,173.4 |
|
Cash and cash equivalents at
end of the period |
$ |
934.9 |
|
|
$ |
816.2 |
|
|
|
|
|
|
|
Supplemental cash flow
information: |
|
|
|
|
|
Interest paid during the
period |
$ |
8.8 |
|
|
$ |
14.4 |
|
Income taxes paid during the
period, net |
$ |
10.2 |
|
|
$ |
21.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RELIANCE, INC. |
NON-GAAP RECONCILIATION |
(in millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
Diluted EPS |
|
Three Months Ended |
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
December 31, |
|
March 31, |
|
2024 |
|
2023 |
|
2023 |
|
2024 |
|
2023 |
|
2023 |
Net income attributable to Reliance |
$ |
302.9 |
|
|
$ |
272.7 |
|
|
$ |
383.1 |
|
|
$ |
5.23 |
|
|
$ |
4.70 |
|
|
$ |
6.43 |
|
Restructuring charges |
|
0.3 |
|
|
|
1.2 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
— |
|
Non-recurring settlement
charges |
|
4.6 |
|
|
|
— |
|
|
|
— |
|
|
|
0.08 |
|
|
|
— |
|
|
|
— |
|
Charges (gains) related to
sales of non-core assets |
|
— |
|
|
|
1.0 |
|
|
|
(4.8 |
) |
|
|
— |
|
|
|
0.02 |
|
|
|
(0.08 |
) |
Income tax (benefit) expense
related to above items |
|
(1.2 |
) |
|
|
(0.5 |
) |
|
|
1.2 |
|
|
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
0.02 |
|
Non-GAAP net income
attributable to Reliance |
$ |
306.6 |
|
|
$ |
274.4 |
|
|
$ |
379.5 |
|
|
$ |
5.30 |
|
|
$ |
4.73 |
|
|
$ |
6.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2023 |
|
|
|
|
|
|
|
Pretax income |
$ |
396.2 |
|
|
$ |
333.3 |
|
|
$ |
508.5 |
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
|
0.3 |
|
|
|
1.2 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Non-recurring settlement
charges |
|
4.6 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Charges (gains) related to
sales of non-core assets |
|
— |
|
|
|
1.0 |
|
|
|
(4.8 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP pretax income |
$ |
401.1 |
|
|
$ |
335.5 |
|
|
$ |
503.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2023 |
|
|
|
|
|
|
|
Gross profit - LIFO |
$ |
1,128.2 |
|
|
$ |
1,021.6 |
|
|
$ |
1,226.0 |
|
|
|
|
|
|
|
|
|
|
Restructuring charge |
|
— |
|
|
|
0.2 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit |
|
1,128.2 |
|
|
|
1,021.8 |
|
|
|
1,226.0 |
|
|
|
|
|
|
|
|
|
|
LIFO income |
|
(50.0 |
) |
|
|
(59.5 |
) |
|
|
(15.0 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit -
FIFO |
$ |
1,078.2 |
|
|
$ |
962.3 |
|
|
$ |
1,211.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit margin -
LIFO |
|
31.0 |
% |
|
|
30.6 |
% |
|
|
30.9 |
% |
|
|
|
|
|
|
|
|
|
Restructuring charge as a % of
sales |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit
margin |
|
31.0 |
% |
|
|
30.6 |
% |
|
|
30.9 |
% |
|
|
|
|
|
|
|
|
|
LIFO income as a % of
sales |
|
(1.4 |
%) |
|
|
(1.8 |
%) |
|
|
(0.4 |
%) |
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit margin -
FIFO |
|
29.6 |
% |
|
|
28.8 |
% |
|
|
30.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2023 |
|
|
|
|
|
|
|
Total debt |
$ |
1,151.4 |
|
|
$ |
1,151.4 |
|
|
$ |
1,159.6 |
|
|
|
|
|
|
|
|
|
|
Less: unamortized debt
discount and debt issuance costs |
|
(8.5 |
) |
|
|
(9.2 |
) |
|
|
(11.2 |
) |
|
|
|
|
|
|
|
|
|
Carrying amount of debt |
|
1,142.9 |
|
|
|
1,142.2 |
|
|
|
1,148.4 |
|
|
|
|
|
|
|
|
|
|
Less: cash and cash
equivalents |
|
(934.9 |
) |
|
|
(1,080.2 |
) |
|
|
(816.2 |
) |
|
|
|
|
|
|
|
|
|
Net debt |
$ |
208.0 |
|
|
$ |
62.0 |
|
|
$ |
332.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2023 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
1,259.5 |
|
|
$ |
1,340.1 |
|
|
$ |
1,704.0 |
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
247.9 |
|
|
|
245.4 |
|
|
|
242.2 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
38.9 |
|
|
|
40.1 |
|
|
|
57.6 |
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
368.9 |
|
|
|
400.6 |
|
|
|
537.7 |
|
|
|
|
|
|
|
|
|
|
EBITDA |
$ |
1,915.2 |
|
|
$ |
2,026.2 |
|
|
$ |
2,541.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt-to-EBITDA |
|
0.1x |
|
|
|
0.0x |
|
|
|
0.1x |
|
|
|
|
|
|
|
|
|
|
Total debt-to-EBITDA |
|
0.6x |
|
|
|
0.6x |
|
|
|
0.5x |
|
|
|
|
|
|
|
|
|
|
Reliance, Inc.’s presentation of non-GAAP pretax income, net income
and EPS over certain time periods is an attempt to provide
meaningful comparisons to the Company's historical performance for
its existing and future stockholders. Adjustments include
restructuring charges, non-recurring settlement charges, and gains
and charges on sales of non-core property, plant, and equipment,
which make comparisons of the Company’s operating results between
periods difficult using GAAP measures. Reliance, Inc.’s
presentation of gross profit margin - FIFO, which is calculated as
gross profit plus LIFO expense (or minus LIFO income) divided by
net sales, is presented in order to provide a means of comparison
amongst its competitors who may not use the same inventory
valuation method. Please see footnote 1 below for additional
information on the Company’s gross profit and gross profit margin.
Reliance, Inc. presents net debt- and total debt-to-EBITDA as a
measurement of leverage utilized by management to monitor its debt
levels in relation to its operating cash flow for which it utilizes
EBITDA as a proxy. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes |
|
|
|
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|
1 Gross profit, calculated as net sales less cost of sales, and
gross profit margin, calculated as gross profit divided by net
sales, are non-GAAP financial measures as they exclude depreciation
and amortization expense associated with the corresponding sales.
About half of Reliance's orders are basic distribution with no
processing services performed. For the remainder of its sales
orders, Reliance performs “first-stage” processing, which is
generally not labor intensive as it is simply cutting the metal to
size. Because of this, the amount of related labor and overhead,
including depreciation and amortization, is not significant and is
excluded from cost of sales. Therefore, Reliance’s cost of sales is
substantially comprised of the cost of the material it sells.
Reliance uses gross profit and gross profit margin, as shown, as
measures of operating performance. Gross profit and gross profit
margin are important operating and financial measures, as their
fluctuations can have a significant impact on Reliance's earnings.
Gross profit and gross profit margin, as presented, are not
necessarily comparable with similarly titled measures for other
companies. |
2 See accompanying Non-GAAP Reconciliation. Certain percentages may
not calculate due to rounding. |
3 Free cash flow is calculated as cash provided by operations
reduced by capital expenditures. |
4 Net debt-to-total capital is calculated as carrying amount of
debt (net of cash) divided by total Reliance stockholders’ equity
plus carrying amount of debt (net of cash). |
5 Net debt- and total debt-to-EBITDA are calculated as carrying
amount of debt (net of cash) or total debt divided by earnings
before interest, income taxes, depreciation, amortization and
impairment of long-lived assets (“EBITDA”) for the most recent
twelve months. |
|
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