UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 20222023
OR
☐ | 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: 001-13122
| | |
(Exact name of registrant as specified in its charter) | ||
| ||
Delaware (State or other jurisdiction of incorporation or organization) | | 95-1142616 (I.R.S. Employer Identification No.) |
350 South Grand Avenue,16100 N. 71st Street, Suite 5100400
Los AngelesScottsdale, CaliforniaArizona
9007185254
(Address of principal executive offices, including zip code)
((480)213) 687-7700564-5700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
Common Stock, $0.001 par value | | RS | | 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 (§232.405 of this chapter) 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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ | Accelerated filer ☐ |
Non-accelerated filer ☐ | Smaller reporting company ☐ |
| Emerging growth company ☐ |
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 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 ☒
As of April 29, 2022, 61,948,11328, 2023, there were 58,793,188 shares of the registrant’s common stock, $0.001 par value, were outstanding.
RELIANCE STEEL & ALUMINUM CO.
TABLE OF CONTENTS
| | ||
| |||
| 1 | ||
| | 1 | |
| | 2 | |
| | 3 | |
| | 4 | |
| | 5 | |
| | 6 | |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| |
|
| ||
|
| ||
| | ||
| |||
|
| ||
|
| ||
|
| ||
|
| ||
|
| ||
|
| ||
|
| ||
| | ||
|
PART I --— FINANCIAL INFORMATION
Item 1. Financial Statements
RELIANCE STEEL & ALUMINUM CO.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in millions, except number of shares which are reflected in thousands and par value)
| | | | | |
| March 31, | | December 31, | ||
| 2022 |
| 2021* | ||
ASSETS | |||||
Current assets: | | | | | |
Cash and cash equivalents | $ | 548.0 | | $ | 300.5 |
Accounts receivable, less allowance for credit losses of $29.6 at March 31, 2022 and $26.7 at December 31, 2021 | | 2,078.7 | | | 1,683.0 |
Inventories | | 2,010.3 | | | 2,065.0 |
Prepaid expenses and other current assets | | 107.0 | | | 111.6 |
Total current assets | | 4,744.0 | | | 4,160.1 |
Property, plant and equipment: | | | | | |
Land | | 259.1 | | | 260.1 |
Buildings | | 1,281.8 | | | 1,285.0 |
Machinery and equipment | | 2,292.1 | | | 2,241.4 |
Accumulated depreciation | | (1,981.3) | | | (1,949.7) |
Property, plant and equipment, net | | 1,851.7 | | | 1,836.8 |
Operating lease right-of-use assets | | 216.4 | | | 224.6 |
Goodwill | | 2,113.0 | | | 2,107.6 |
Intangible assets, net | | 1,059.9 | | | 1,077.7 |
Cash surrender value of life insurance policies, net | | 39.1 | | | 44.9 |
Other assets | | 90.1 | | | 84.3 |
Total assets | $ | 10,114.2 | | $ | 9,536.0 |
| | | | | |
LIABILITIES AND EQUITY | |||||
| | | | | |
Current liabilities: | | | | | |
Accounts payable | $ | 636.2 | | $ | 453.9 |
Accrued expenses | | 132.1 | | | 148.2 |
Accrued compensation and retirement costs | | 184.6 | | | 294.0 |
Accrued insurance costs | | 44.2 | | | 41.0 |
Current maturities of long-term debt and short-term borrowings | | 5.0 | | | 5.0 |
Current maturities of operating lease liabilities | | 54.9 | | | 58.6 |
Income taxes payable | | 141.3 | | | 64.3 |
Total current liabilities | | 1,198.3 | | | 1,065.0 |
Long-term debt | | 1,642.8 | | | 1,642.0 |
Operating lease liabilities | | 159.2 | | | 162.5 |
Deferred compensation and retirement costs | | 85.2 | | | 81.0 |
Other long-term liabilities | | 6.8 | | | 7.0 |
Deferred income taxes | | 483.2 | | | 484.8 |
Commitments and contingencies | | | | | |
Equity: | | | | | |
Preferred stock, $0.001 par value: 5,000 shares authorized; NaN issued or outstanding | | — | | | — |
Common stock and additional paid-in capital, $0.001 par value and 200,000 shares authorized | | | | | |
Issued and outstanding shares—61,948 at March 31, 2022 and 61,806 at December 31, 2021 | | 0.1 | | | 0.1 |
Retained earnings | | 6,599.5 | | | 6,155.3 |
Accumulated other comprehensive loss | | (68.3) | | | (68.9) |
Total Reliance stockholders’ equity | | 6,531.3 | | | 6,086.5 |
Noncontrolling interests | | 7.4 | | | 7.2 |
Total equity | | 6,538.7 | | | 6,093.7 |
Total liabilities and equity | $ | 10,114.2 | | $ | 9,536.0 |
| | | | | |
| March 31, | | December 31, | ||
| 2023 |
| 2022* | ||
ASSETS | |||||
Current assets: | | | | | |
Cash and cash equivalents | $ | 816.2 | | $ | 1,173.4 |
Accounts receivable, less allowance for credit losses of $28.7 at March 31, 2023 and $26.1 at December 31, 2022 | | 1,800.3 | | | 1,565.7 |
Inventories | | 1,981.4 | | | 1,995.3 |
Prepaid expenses and other current assets | | 114.2 | | | 115.6 |
Income taxes receivable | | — | | | 36.6 |
Total current assets | | 4,712.1 | | | 4,886.6 |
Property, plant and equipment: | | | | | |
Land | | 263.3 | | | 262.7 |
Buildings | | 1,381.0 | | | 1,359.3 |
Machinery and equipment | | 2,507.9 | | | 2,446.9 |
Accumulated depreciation | | (2,127.4) | | | (2,094.3) |
Property, plant and equipment, net | | 2,024.8 | | | 1,974.6 |
Operating lease right-of-use assets | | 217.3 | | | 216.4 |
Goodwill | | 2,106.1 | | | 2,105.9 |
Intangible assets, net | | 1,008.0 | | | 1,019.6 |
Cash surrender value of life insurance policies, net | | 37.6 | | | 42.0 |
Other assets | | 97.3 | | | 84.8 |
Total assets | $ | 10,203.2 | | $ | 10,329.9 |
| | | | | |
LIABILITIES AND EQUITY | |||||
| | | | | |
Current liabilities: | | | | | |
Accounts payable | $ | 545.0 | | $ | 412.4 |
Accrued expenses | | 113.7 | | | 118.8 |
Accrued compensation and retirement benefits | | 143.7 | | | 240.0 |
Accrued insurance costs | | 45.2 | | | 43.4 |
Current maturities of long-term debt and short-term borrowings | | 8.2 | | | 508.2 |
Current maturities of operating lease liabilities | | 53.2 | | | 52.5 |
Income taxes payable | | 66.4 | | | — |
Total current liabilities | | 975.4 | | | 1,375.3 |
Long-term debt | | 1,140.2 | | | 1,139.4 |
Operating lease liabilities | | 165.5 | | | 165.2 |
Long-term retirement benefits | | 29.6 | | | 26.1 |
Other long-term liabilities | | 61.9 | | | 51.4 |
Deferred income taxes | | 476.2 | | | 476.6 |
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—58,840 at March 31, 2023 and 58,787 at December 31, 2022 | | 0.1 | | | 0.1 |
Retained earnings | | 7,432.1 | | | 7,173.6 |
Accumulated other comprehensive loss | | (86.5) | | | (86.3) |
Total Reliance stockholders’ equity | | 7,345.7 | | | 7,087.4 |
Noncontrolling interests | | 8.7 | | | 8.5 |
Total equity | | 7,354.4 | | | 7,095.9 |
Total liabilities and equity | $ | 10,203.2 | | $ | 10,329.9 |
* Amounts derived from audited financial statements.
See accompanying notes to unaudited consolidated financial statements.
1
RELIANCE STEEL & ALUMINUM CO.
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, | Three Months Ended March 31, | ||||||||
| 2022 |
| 2021 | 2023 |
| 2022 | ||||
Net sales | $ | 4,485.8 | | $ | 2,838.4 | $ | 3,965.3 | | $ | 4,485.8 |
| | | | | | | | | | |
Costs and expenses: | | | | | | | | | | |
Cost of sales (exclusive of depreciation and amortization shown below) | | 3,098.7 | | | 1,884.7 | | 2,739.3 | | 3,098.7 | |
Warehouse, delivery, selling, general and administrative (SG&A) | | 611.9 | | | 518.5 | |||||
Warehouse, delivery, selling, general and administrative (“SG&A”) | | 651.3 | | 611.9 | ||||||
Depreciation and amortization | | 59.1 | | | 56.9 | | 61.1 | | | 59.1 |
| | 3,769.7 | | | 2,460.1 | | 3,451.7 | | 3,769.7 | |
| | | | | | | | | | |
Operating income | | 716.1 | | | 378.3 | | 513.6 | | 716.1 | |
| | | | | | | | | | |
Other expense: | | | | | | |||||
Other (income) expense: | | | | | ||||||
Interest expense | | 15.6 | | | 15.7 | | 10.9 | | 15.6 | |
Other expense, net | | 3.3 | | | 3.6 | |||||
Other (income) expense, net | | (5.8) | | | 3.3 | |||||
Income before income taxes | | 697.2 | | | 359.0 | | 508.5 | | 697.2 | |
Income tax provision | | 172.6 | | | 90.8 | | 124.1 | | | 172.6 |
Net income | | 524.6 | | | 268.2 | | 384.4 | | 524.6 | |
Less: net income attributable to noncontrolling interests | | 1.3 | | | 1.3 | | 1.3 | | | 1.3 |
Net income attributable to Reliance | $ | 523.3 | | $ | 266.9 | $ | 383.1 | | $ | 523.3 |
| | | | | | | | | | |
Earnings per share attributable to Reliance stockholders: | | | | | | | | | | |
Basic | $ | 6.51 | | $ | 8.46 | |||||
Diluted | $ | 8.33 | | $ | 4.12 | $ | 6.43 | | $ | 8.33 |
Basic | $ | 8.46 | | $ | 4.19 | |||||
| | | | | | | | | | |
Shares used in computing earnings per share: | | | | | | | | | | |
Basic | | 58,832 | | 61,833 | ||||||
Diluted | | 62,784 | | | 64,711 | | 59,534 | | | 62,784 |
Basic | | 61,833 | | | 63,645 | |||||
| | | | | | |||||
Cash dividends per share | $ | 0.8750 | | $ | 0.6875 |
See accompanying notes to unaudited consolidated financial statements.
2
RELIANCE STEEL & ALUMINUM CO.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
| | | | | | |||||
| Three Months Ended | | | | | |||||
| March 31, | Three Months Ended March 31, | ||||||||
| 2022 |
| 2021 | 2023 |
| 2022 | ||||
Net income | $ | 524.6 | | $ | 268.2 | $ | 384.4 | | $ | 524.6 |
Other comprehensive income (loss): | | | | | | | | | | |
Foreign currency translation gain (loss) | | 0.7 | | | (1.2) | |||||
Foreign currency translation gain | | 0.6 | | | 0.7 | |||||
Postretirement benefit plan adjustments, net of tax | | (0.1) | | | — | | (0.8) | | | (0.1) |
Total other comprehensive income (loss) | | 0.6 | | | (1.2) | |||||
Total other comprehensive (loss) income | | (0.2) | | | 0.6 | |||||
Comprehensive income | | 525.2 | | | 267.0 | | 384.2 | | 525.2 | |
Less: comprehensive income attributable to noncontrolling interests | | 1.3 | | | 1.3 | | 1.3 | | | 1.3 |
Comprehensive income attributable to Reliance | $ | 523.9 | | $ | 265.7 | $ | 382.9 | | $ | 523.9 |
See accompanying notes to unaudited consolidated financial statements.
3
RELIANCE STEEL & ALUMINUM CO.
UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY
(in millions, except number of shares which are reflected in thousands and per share amounts)
| | | | | | | | | | | | | | | | |
| Reliance Stockholders’ Equity | | | | | | | |||||||||
| Common Stock | | | | | Accumulated | | | | | | |||||
| and Additional | | | | | Other | | Non- | | | | |||||
| Paid-in Capital | | Retained | | Comprehensive | | controlling | | | | ||||||
| Shares |
| Amount |
| Earnings |
| Income (loss) |
| Interests |
| Total | |||||
Balance at January 1, 2021 | 63,600 | | $ | 0.1 | | $ | 5,193.2 | | $ | (77.9) | | $ | 7.3 | | $ | 5,122.7 |
Net income | — | | | — | | | 266.9 | | | — | | | 1.3 | | | 268.2 |
Other comprehensive loss | — | | | — | | | — | | | (1.2) | | | — | | | (1.2) |
Dividend to noncontrolling interest holder | — | | | — | | | — | | | — | | | (2.4) | | | (2.4) |
Stock-based compensation | 107 | | | 14.7 | | | — | | | — | | | — | | | 14.7 |
Common stock withheld related to net share settlements | — | | | (8.2) | | | — | | | — | | | — | | | (8.2) |
Cash dividends — $0.6875 per share and dividend equivalents | — | | | — | | | (44.8) | | | — | | | — | | | (44.8) |
Balance at March 31, 2021 | 63,707 | | $ | 6.6 | | $ | 5,415.3 | | $ | (79.1) | | $ | 6.2 | | $ | 5,349.0 |
| | | | | | | | | | | | | | | | |
Balance at January 1, 2022 | 61,806 | | $ | 0.1 | | $ | 6,155.3 | | $ | (68.9) | | $ | 7.2 | | $ | 6,093.7 |
Net income | — | | | — | | | 523.3 | | | — | | | 1.3 | | | 524.6 |
Other comprehensive income | — | | | — | | | — | | | 0.6 | | | — | | | 0.6 |
Dividend to noncontrolling interest holder | — | | | — | | | — | | | — | | | (1.1) | | | (1.1) |
Stock-based compensation | 255 | | | 11.8 | | | — | | | — | | | — | | | 11.8 |
Common stock withheld related to net share settlements | — | | | (17.1) | | | — | | | — | | | — | | | (17.1) |
Repurchase of common shares | (113) | | | 5.3 | | | (22.4) | | | — | | | — | | | (17.1) |
Cash dividends — $0.875 per share and dividend equivalents | — | | | — | | | (56.7) | | | — | | | — | | | (56.7) |
Balance at March 31, 2022 | 61,948 | | $ | 0.1 | | $ | 6,599.5 | | $ | (68.3) | | $ | 7.4 | | $ | 6,538.7 |
| | | | | |
| Three Months Ended March 31, | ||||
| 2023 |
| 2022 | ||
Total equity, beginning balances | $ | 7,095.9 | | $ | 6,093.7 |
| | | | | |
Common stock and additional paid-in capital: | | | | | |
Beginning balances | | 0.1 | | | 0.1 |
Stock-based compensation | | 13.5 | | | 11.8 |
Taxes paid related to net share settlement of restricted stock units | | (37.2) | | | (17.1) |
Repurchase of common shares | | 23.7 | | | 5.3 |
Ending balances | | 0.1 | | | 0.1 |
| | | | | |
Retained earnings: | | | | | |
Beginning balances | | 7,173.6 | | | 6,155.3 |
Net income attributable to Reliance | | 383.1 | | | 523.3 |
Cash dividends and dividend equivalents | | (62.0) | | | (56.7) |
Repurchase of common shares | | (62.6) | | | (22.4) |
Ending balances | | 7,432.1 | | | 6,599.5 |
| | | | | |
Accumulated other comprehensive loss: | | | | | |
Beginning balances | | (86.3) | | | (68.9) |
Other comprehensive (loss) income | | (0.2) | | | 0.6 |
Ending balances | | (86.5) | | | (68.3) |
| | | | | |
Total Reliance stockholders' equity, ending balances | | 7,345.7 | | | 6,531.3 |
| | | | | |
Noncontrolling interests: | | | | | |
Beginning balances | | 8.5 | | | 7.2 |
Comprehensive income | | 1.3 | | | 1.3 |
Dividends paid | | (1.1) | | | (1.1) |
Ending balances | | 8.7 | | | 7.4 |
| | | | | |
Total equity, ending balances | $ | 7,354.4 | | $ | 6,538.7 |
| | | | | |
Cash dividends declared per common share | $ | 1.00 | | $ | 0.875 |
See accompanying notes to unaudited consolidated financial statements.
4
RELIANCE STEEL & ALUMINUM CO.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
| | | | | ||||||
| Three Months Ended | | | | | |||||
| March 31, | Three Months Ended March 31, | ||||||||
| 2022 |
| 2021 | 2023 |
| 2022 | ||||
Operating activities: | | | | | | | | | | |
Net income | $ | 524.6 | | $ | 268.2 | $ | 384.4 | | $ | 524.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | ||
Depreciation and amortization expense | | 59.1 | | 56.9 | | 61.1 | | 59.1 | ||
Provision for credit losses | | 3.5 | | 4.5 | ||||||
Deferred income tax benefit | | (0.4) | | (0.1) | ||||||
Stock-based compensation expense | | 11.8 | | | 14.7 | | 13.5 | | | 11.8 |
Other | | 4.9 | | | 0.4 | | (0.1) | | | 8.0 |
Changes in operating assets and liabilities (excluding effect of businesses acquired): | | | | | | | | | ||
Accounts receivable | | (399.6) | | | (346.2) | | (237.1) | | | (399.6) |
Inventories | | 54.0 | | | (50.4) | | 13.5 | | | 54.0 |
Prepaid expenses and other assets | | 19.5 | | | (4.1) | | 50.0 | | | 19.5 |
Accounts payable and other liabilities | | 126.6 | | | 217.9 | | 99.3 | | | 126.6 |
Net cash provided by operating activities | | 404.0 | | | 161.8 | | 384.6 | | | 404.0 |
| | | | | | | | | | |
Investing activities: | | | | | | | | | | |
Purchases of property, plant and equipment | | (66.7) | | | (43.7) | | (102.9) | | | (66.7) |
Proceeds from sales of property, plant and equipment | | 8.2 | | | 20.6 | | 8.3 | | | 8.2 |
Deferred compensation plan contributions, net | | (7.4) | | | (7.5) | |||||
Other | | (4.8) | | | (4.6) | | (0.6) | | | 2.7 |
Net cash used in investing activities | | (63.3) | | | (27.7) | | (102.6) | | | (63.3) |
| | | | | | | | | | |
Financing activities: | | | | | | | | | | |
Net short-term debt repayments | | — | | | (0.8) | |||||
Dividends and dividend equivalents paid | | (56.7) | | | (44.8) | |||||
Principal payment on long-term debt | | (500.0) | | | — | |||||
Cash dividends and dividend equivalents | | (62.0) | | | (56.7) | |||||
Share repurchases | | (17.1) | | | — | | (38.9) | | | (17.1) |
Payments for taxes related to net share settlements | | (17.1) | | | (8.2) | |||||
Taxes paid related to net share settlement of restricted stock units | | (37.2) | | | (17.1) | |||||
Other | | (1.1) | | | (2.6) | | (1.1) | | | (1.1) |
Net cash used in financing activities | | (92.0) | | | (56.4) | | (639.2) | | | (92.0) |
Effect of exchange rate changes on cash and cash equivalents | | (1.2) | | | (0.9) | | — | | | (1.2) |
Increase in cash and cash equivalents | | 247.5 | | 76.8 | ||||||
(Decrease) increase in cash and cash equivalents | | (357.2) | | 247.5 | ||||||
Cash and cash equivalents at beginning of year | | 300.5 | | | 683.5 | | 1,173.4 | | | 300.5 |
Cash and cash equivalents at end of period | $ | 548.0 | | $ | 760.3 | |||||
Cash and cash equivalents at end of the period | $ | 816.2 | | $ | 548.0 | |||||
| | | | | | | | | | |
Supplemental cash flow information: | | | | | | | | | | |
Interest paid during the period | $ | 9.6 | | $ | 9.5 | $ | 14.4 | | $ | 9.6 |
Income taxes paid during the period, net | $ | 89.8 | | $ | 6.9 | $ | 21.2 | | $ | 89.8 |
See accompanying notes to unaudited consolidated financial statements.
5
RELIANCE STEEL & ALUMINUM CO.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 20222023
Note 1. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying unaudited consolidated financial statements include the accounts of Reliance Steel & Aluminum Co. and its subsidiaries (collectively “Reliance”, the “Company”, “we”, “our” or “us”). These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. 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, ourthe consolidated financial statements reflect all material adjustments, which are of a normal recurring nature, necessary for presentation of financial statements for interim periods in accordance with U.S. GAAP. TheInterim results of operations for the quarter ended March 31, 2022 are not necessarily indicative of the results for a full year. All significant intercompany accounts and transactions have been eliminated. The ownership of the full year ending December 31, 2022.other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. Investments in unconsolidated subsidiaries are recorded under the equity method of accounting. These consolidated financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and footnotes theretoaccompanying notes included in Reliance’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, included in the Reliance Steel & Aluminum Co. (“Reliance,” the “Company,” “we,” “our” or “us”) Annual Report on Form 10-K.2022.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Our consolidated financial statements include the assets, liabilities and operating results of majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The ownership of the other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. Our investments in unconsolidated subsidiaries are recorded under the equity method of accounting.
Inventories
The majority of our inventory is valued using the last-in, first-out (“LIFO”) method, which is not in excess of market. Under this method, older costs are included in inventory, which may be higher or lower than current costs. We estimate the effect of LIFO on interim periods by allocating the projected year-end LIFO calculation to interim periods on a pro rata basis.
Recently Issued Accounting Standards—Not Yet Adopted
Reference Rate Reform—In March 2020, the FASB issued accounting changes that provide optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The accounting changes may be applied prospectively through December 31, 2022. The Company expects to adopt this guidance for any contracts that are modified as a result of reference rate reform. We do not expect the transition from LIBOR to have a material impact on our consolidated financial statements.
Note 2. Acquisitions
2021 Acquisitions
On October 1, 2021, we acquired Merfish United, Inc. (“Merfish United”), a leading master distributor of tubular building products that are distributed to its independent wholesale distributor customers across a variety of end markets in the United States. Merfish United, headquartered in Ipswich, Massachusetts, serves 47 U.S. states through its 12 strategically located distribution centers.
6
On December 10, 2021, we acquired Admiral Metals Servicenter Company, Incorporated (“Admiral Metals”), a leading distributor of non-ferrous metals products in the Northeastern U.S. Admiral Metals, headquartered in Woburn, Massachusetts, serves a variety of end markets, including semiconductor, automotive, medical, infrastructure, aerospace and industrial markets through its 8 strategically located service centers.
On December 10, 2021, we acquired Nu-Tech Precision Metals Inc. (“Nu-Tech Precision Metals”), a custom manufacturer of specialty extruded metals, fabricated parts and welded components. Nu-Tech Precision Metals, services the nuclear energy, aerospace and defense end markets from its location near Ottawa, Ontario, Canada.
On December 17, 2021, we acquired Rotax Metals, Inc. (“Rotax Metals”), a metals service center specializing in copper, bronze and brass alloys. Located in Brooklyn, New York, Rotax Metals operates as a subsidiary of Yarde Metals, Inc., a wholly owned subsidiary of Reliance.
Included in our net sales for the quarter ended March 31, 2022 were combined net sales of $226.5 million from our 2021 acquisitions.
We funded our 2021 acquisitions with cash on hand.
The preliminary allocations of the total purchase for our 2021 acquisitions to the fair values of the assets acquired and liabilities assumed were as follows:
| | |
| (in millions) | |
Cash | $ | 1.0 |
Accounts receivable | | 107.2 |
Inventories | | 134.4 |
Property, plant and equipment | | 33.6 |
Operating lease right-of-use assets | | 29.8 |
Goodwill | | 176.5 |
Intangible assets subject to amortization | | 116.3 |
Intangible assets not subject to amortization | | 51.2 |
Other current and long-term assets | | 4.0 |
Total assets acquired | | 654.0 |
Deferred taxes | | 49.3 |
Operating lease liabilities | | 24.6 |
Other current and long-term liabilities | | 139.8 |
Total liabilities assumed | | 213.7 |
Net assets acquired | $ | 440.3 |
The completion of the purchase price allocations for our 2021 acquisitions are pending the completion of pre-acquisition period tax returns.
Pro forma financial information for all acquisitions
The pro forma summary financial results present the consolidated results of operations as if our 2021 acquisitions had occurred as of January 1, 2021, after the effect of certain adjustments, including depreciation and amortization of certain identifiable property, plant and equipment and intangible assets, and lease cost fair value adjustments.
7
The pro forma results have been presented for comparative purposes only and are not indicative of what would have occurred had the 2021 acquisitions been made as of January 1, 2021, or of any potential results which may occur in the future.
| | |
| Three Months Ended | |
| March 31, 2021 | |
| (in millions except per share amounts) | |
Pro forma: | | |
Net sales | $ | 3,017.3 |
Net income attributable to Reliance | $ | 284.0 |
Earnings per share attributable to Reliance stockholders: | | |
Diluted | $ | 4.39 |
Basic | $ | 4.46 |
Note 3.2. Revenues
The following table presents our net sales disaggregated by product and service.service:
| | | | | | |||||
| Three Months Ended | | | | | |||||
| March 31, | Three Months Ended March 31, | ||||||||
| 2022 |
| 2021 | 2023 |
| 2022 | ||||
| (in millions) | (in millions) | ||||||||
Carbon steel | $ | 2,547.5 | | $ | 1,659.2 | $ | 2,128.5 | | $ | 2,547.5 |
Aluminum | | 670.2 | | 692.8 | ||||||
Stainless steel | | 764.9 | | | 452.9 | | 657.3 | | 764.9 | |
Aluminum | | 692.8 | | | 462.8 | |||||
Alloy | | 183.7 | | | 117.3 | | 191.4 | | 183.7 | |
Toll processing and logistics | | 135.1 | | | 115.6 | | 155.4 | | 135.1 | |
Copper and brass | | 82.0 | | 86.6 | ||||||
Other and eliminations | | 161.8 | | | 30.6 | | 80.5 | | | 75.2 |
Total | $ | 4,485.8 | | $ | 2,838.4 | $ | 3,965.3 | | $ | 4,485.8 |
6
Note 4.3. Goodwill
The change in the carrying amount of goodwill is as follows:
| | |
| (in millions) | |
Balance at January 1, 2022 | $ | 2,107.6 |
Purchase price allocation adjustments | | 4.5 |
Foreign currency translation gain | | 0.9 |
Balance at March 31, 2022 | $ | 2,113.0 |
| | | | | |
| | |
| (in millions) | |
Balance at January 1, 2023 | | | | $ | 2,105.9 |
Effect of foreign currency translation | | | | | 0.2 |
Balance at March 31, 2023 | | | | $ | 2,106.1 |
We had 0no accumulated impairment losses related to goodwill at March 31, 20222023 and December 31, 2021.2022.
8
Note 5.4. Intangible Assets, net
Intangible assets, net consisted of the following:
| | | | | | | | | | | | | |
| | | March 31, 2022 | | December 31, 2021 | ||||||||
| Weighted Average | | Gross | | | | | Gross | | | | ||
| Amortizable | | Carrying | | Accumulated | | Carrying | | Accumulated | ||||
| Life in Years |
| Amount |
| Amortization |
| Amount |
| Amortization | ||||
| | | (in millions) | ||||||||||
Intangible assets subject to amortization: | | | | | | | | | | | | | |
Customer lists/relationships | 14.2 | | $ | 715.9 | | $ | (446.2) | | $ | 713.0 | | $ | (435.1) |
Backlog of orders | 7.9 | | | 24.2 | | | (1.0) | | | 15.8 | | | (0.2) |
Other | 9.2 | | | 10.0 | | | (9.6) | | | 9.9 | | | (9.4) |
| | | | 750.1 | | | (456.8) | | | 738.7 | | | (444.7) |
Intangible assets not subject to amortization: | | | | | | | | | | | | | |
Trade names | | | | 766.6 | | | — | | | 783.7 | | | — |
| | | $ | 1,516.7 | | $ | (456.8) | | $ | 1,522.4 | | $ | (444.7) |
Certain amounts in prior periods have been reclassified to conform with current period presentation.
| | | | | | | | | | | | | |
| | | March 31, 2023 | | December 31, 2022 | ||||||||
| Weighted Average | | Gross | | | | | Gross | | | | ||
| Amortizable | | Carrying | | Accumulated | | Carrying | | Accumulated | ||||
| Life in Years |
| Amount |
| Amortization |
| Amount |
| Amortization | ||||
| | | (in millions) | ||||||||||
Intangible assets subject to amortization: | | | | | | | | | | | | | |
Customer lists/relationships | 14.2 | | $ | 713.8 | | $ | (490.5) | | $ | 713.6 | | $ | (479.3) |
Backlog of orders | 7.9 | | | 22.3 | | | (3.8) | | | 22.3 | | | (3.1) |
Other | 9.2 | | | 9.9 | | | (9.5) | | | 9.9 | | | (9.5) |
| | | | 746.0 | | | (503.8) | | | 745.8 | | | (491.9) |
Intangible assets not subject to amortization: | | | | | | | | | | | | | |
Trade names | | | | 765.8 | | | — | | | 765.7 | | | — |
| | | $ | 1,511.8 | | $ | (503.8) | | $ | 1,511.5 | | $ | (491.9) |
Amortization expense for intangible assets was $12.2$11.8 million and $9.2$12.2 million for the first quarters ended March 31,of 2023 and 2022, and 2021, respectively. Foreign currency translation gains related to intangible assets, net were $0.4$0.2 million and $0.1$0.4 million for the first quarters ended March 31,of 2023 and 2022, and 2021, respectively.
During the first quarter of 2022, we recorded purchase price adjustments relating to our 2021 acquisitions based on the finalization of intangible asset valuations that decreased trade name intangible assets for $16.9 million, increased the Backlog of orders intangible asset for $8.0 million and increased customer lists/relationships intangible assets for $2.7 million.
The following is a summary of estimated future amortization expense for the remaining nine months of 2022 and each of the succeeding five years:expense:
| | | | | | | |
| (in millions) | | |
| (in millions) | ||
2022 (remaining nine months) | $ | 36.1 | |||||
2023 | | 44.0 | |||||
2023 (remaining nine months) | | | | $ | 31.8 | ||
2024 | | 40.5 | | | | 40.1 | |
2025 | | 36.3 | | | | 35.9 | |
2026 | | 26.8 | | | | 26.4 | |
2027 | | 26.1 | | | | | 25.8 |
Thereafter | | | | | 82.2 | ||
| | | | $ | 242.2 |
97
Note 6.5. Debt
Debt consisted of the following:
| | | | | | | | | | |
| March 31, | | December 31, | March 31, | | December 31, | ||||
| 2022 |
| 2021 | 2023 |
| 2022 | ||||
| (in millions) | (in millions) | ||||||||
Unsecured revolving credit facility maturing September 3, 2025 | $ | — | | $ | — | $ | — | | $ | — |
Senior unsecured notes, interest payable semi-annually at 4.50%, effective rate of 4.63%, maturing April 15, 2023 | | 500.0 | | | 500.0 | |||||
Senior unsecured notes, interest payable semi-annually at 4.50%, effective rate of 4.63%, redeemed on January 15, 2023 | | — | | 500.0 | ||||||
Senior unsecured notes, interest payable semi-annually at 1.30%, effective rate of 1.53%, maturing August 15, 2025 | | 400.0 | | | 400.0 | | 400.0 | | 400.0 | |
Senior unsecured notes, interest payable semi-annually at 2.15%, effective rate of 2.27%, maturing August 15, 2030 | | 500.0 | | | 500.0 | | 500.0 | | 500.0 | |
Senior unsecured notes, interest payable semi-annually at 6.85%, effective rate of 6.91%, maturing November 15, 2036 | | 250.0 | | | 250.0 | | 250.0 | | 250.0 | |
Other notes and revolving credit facilities | | 12.4 | | | 12.4 | | 9.6 | | | 9.6 |
Total | | 1,662.4 | | | 1,662.4 | | 1,159.6 | | 1,659.6 | |
Less: unamortized discount and debt issuance costs | | (14.6) | | | (15.4) | | (11.2) | | (12.0) | |
Less: amounts due within one year and short-term borrowings | | (5.0) | | | (5.0) | | (8.2) | | | (508.2) |
Total long-term debt | $ | 1,642.8 | | $ | 1,642.0 | $ | 1,140.2 | | $ | 1,139.4 |
The weighted average interest rate on the Company’s outstanding borrowings as of March 31, 2023 and December 31, 2022 was 2.89% and 3.37%, respectively.
Unsecured Credit Facility
On September 3, 2020, we entered into a $1.5 billion unsecured five-year Amended and Restated Credit Agreement (“Credit Agreement”) that amended and restated our then-existing $1.5 billion unsecured revolving credit facility and includes a $150.0 million letter of credit sublimit.facility. On January 12, 2023, the agreement was further amended to change the reference rate from LIBOR to SOFR (as amended, the “Credit Agreement”). As of March 31, 2022,2023, borrowings under the Credit Agreement were available at variable rates based on LIBORSOFR plus 1.25%1.10% or the bank prime rate plus 0.25% and we currently pay a commitment fee at an annual rate of 0.20%0.175% on the unused portion of the revolving credit facility. The applicable margins over LIBORSOFR and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our total net leverage ratio, as defined in the Credit Agreement. All borrowings under the Credit Agreement may be prepaid without penalty. Our Credit Agreement includes provisions to change the reference rate to the then-prevailing market convention for similar agreements if a replacement rate for LIBOR is necessary during its term.penalty.
As of March 31, 20222023 and December 31, 2021,2022, we had 0no outstanding borrowings on the revolving credit facility. As of March 31, 20222023 and December 31, 2021,2022, we had $8.3$7.7 million and $8.9 million, respectively, of letters of credit issued onoutstanding under the revolving credit facility.
Senior Unsecured Notes
On January 15, 2023, we redeemed in full the $500.0 million aggregate outstanding principal amount of our 4.50% senior notes due April 15, 2023 using cash on hand.
Under the indentures for each series of our senior notes (“Indentures”(the “indentures”), the notes are senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations. If we experience a change in control accompanied by a downgrade in our credit rating, we will be required to make an offer to repurchase each series of the notes at a price equal to 101% of their principal amount plus accrued and unpaid interest.interest.
Other Notes, Revolving Credit and Letter of Credit/Letters of Guarantee Facilities
A revolving credit facility with a combined credit limit of $8.6$7.9 million is in place for an operation in Asia with an outstanding balance of $4.7$2.2 million as of March 31, 20222023 and December 31, 2021, respectively.
Various industrial revenue bonds had combined outstanding balances of $7.7 million as of March 31, 2022 and December 31, 2021 and have maturities through 2027.2022.
108
Various industrial revenue bonds had combined outstanding balances of $7.4 million as of March 31, 2023 and December 31, 2022 and have maturities through 2027.
A standby letters of credit/letters of guarantee agreement with one of the lenders under our Credit Agreement provides letters of credit and/or letters of guarantee in an amount not to exceed $50.0 million in the aggregate. As of March 31, 2022,2023, a total of $21.9$19.5 million of letters of credit/guarantee were issued on theoutstanding under this facility.
Covenants
The Credit Agreement and the Indenturesindentures include customary representations, warranties, covenants and events of default provisions. The covenants under the Credit Agreement include, among other things, 2two financial maintenance covenants that require us to comply with a minimum interest coverage ratio and a maximum leverage ratio. We were in compliance with all financial maintenance covenants in our Credit Agreement at March 31, 2022.2023.
Note 7.6. Leases
Our metals service center leases are comprised of processing and distribution facilities, equipment, trucks and trailers, ground leases and other leased spaces, such as depots, sales offices, storage and data centers. We also lease various office spaces. Our leases of facilities and other spaces expire at various times through 2045 and our ground leases expire at various times through 2068. Nearly all of our leases are operating leases; we have recognized finance right-of-use assets and obligations of less than $1.0 million.
The following is a summary of our lease cost:
| | | | | | |||||
| Three Months Ended | | | | | |||||
| March 31, | Three Months Ended March 31, | ||||||||
| 2022 |
| 2021 | 2023 |
| 2022 | ||||
| (in millions) | (in millions) | ||||||||
Operating lease cost | $ | 23.0 | | $ | 19.7 | $ | 23.6 | | $ | 23.0 |
Supplemental cash flow and balance sheet information is presented below:
| | | | | |
| Three Months Ended | ||||
| March 31, | ||||
| 2022 |
| 2021 | ||
| (in millions) | ||||
Supplemental cash flow information: | | | | | |
Cash payments for operating leases | $ | 21.8 | | $ | 19.6 |
Right-of-use assets obtained in exchange for operating lease obligations | $ | 7.1 | | $ | 11.5 |
| | | | | |
| March 31, | | December 31, | ||
| 2022 | | 2021 | ||
Other lease information: | | | | | |
Weighted average remaining lease term—operating leases | | 5.9 years | | | 5.8 years |
Weighted average discount rate—operating leases | | 3.3% | | | 3.3% |
Maturities of operating lease liabilities as of March 31, 2022 are as follows:
| | |
| (in millions) | |
2022 (remaining nine months) | $ | 46.8 |
2023 | | 52.3 |
2024 | | 41.5 |
2025 | | 29.3 |
2026 | | 18.8 |
Thereafter | | 52.6 |
Total operating lease payments | | 241.3 |
Less: imputed interest | | (27.2) |
Total operating lease liabilities | $ | 214.1 |
| | | | | |
| Three Months Ended March 31, | ||||
| 2023 |
| 2022 | ||
| (in millions) | ||||
Supplemental cash flow information: | | | | | |
Cash payments for operating leases | $ | 23.5 | | $ | 21.8 |
Right-of-use assets obtained in exchange for operating lease obligations | $ | 15.6 | | $ | 7.1 |
| | | | | |
| March 31, | | December 31, | ||
| 2023 | | 2022 | ||
Other lease information: | | | | | |
Weighted average remaining lease term—operating leases | | 6.5 years | | | 6.6 years |
Weighted average discount rate—operating leases | | 3.9% | | | 3.8% |
119
Maturities of operating lease liabilities as of March 31, 2023 are as follows:
| | | | | |
| | | | (in millions) | |
2023 (remaining nine months) | | | | $ | 46.3 |
2024 | | | | | 52.7 |
2025 | | | | | 39.9 |
2026 | | | | | 27.6 |
2027 | | | | | 19.6 |
Thereafter | | | | | 68.5 |
Total operating lease payments | | | | | 254.6 |
Less: imputed interest | | | | | (35.9) |
Total operating lease liabilities | | | | $ | 218.7 |
Note 8.7. Income Taxes
Our effective income tax rates for the first quarters of 2023 and 2022 were 24.4% and 2021 were 24.8% and 25.3%, respectively. The differences between our effective income tax rates and the U.S. federal statutory rate of 21.0% were mainly due to state income taxes and higher foreign income tax rates, partially offset by the effects of company-owned life insurance policies.
Note 9.8. Equity
Dividends
On April 26, 2022,25, 2023, our Board of Directors declared the 20222023 second quarter cash dividend of $0.8750$1.00 per share of common stock, payable on June 10, 20229, 2023 to stockholders of record as of May 27, 2022.26, 2023.
During the first quarters of 20222023 and 2021,2022, we declared and paid quarterly dividends of $0.8750$1.00 and $0.6875$0.875 per share, or $54.2$59.0 million and $43.8$54.2 million in total, respectively. In addition, we paid $2.5$3.0 million and $1.0$2.5 million in dividend equivalents with respect to vested restricted stock units during the first quarters ended March 31,of 2023 and 2022, and 2021, respectively.
Stock-Based Compensation
We make annual grants of long-term incentive awards to officers and key employees under our Second Amended and Restated 2015 Incentive Award Planin the forms of service-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) that each have approximately 3-year vesting periods. The PSUs include the right to receive a maximum payout of 2two shares of our common stock based on performance goals tied to achieving a three-year3-year return on assets result and include service criteria. We also grant the non-employeenon-management members of our Board of Directors fully vested stock awards that are fully vested on the grant date.under our Directors Equity Plan. The fair values of the RSUs, PSUs and stock awards are determined based on the closing stock price of our common stock on the grant date.
In the first quarters ended March 31,of 2023 and 2022, and 2021, we made payments of $17.1$37.2 million and $8.2$17.1 million, respectively, to tax authorities on our employees’ behalf for shares withheld related to net share settlements.
settlement of vested restricted stock units.
1210
A
The following is a summary of the status ofchanges in our unvested RSUs and PSUs as of March 31, 2022 and changes during the first quarter then ended is as follows:of 2023:
| | | | | | | | | | | | | |
| | | | Weighted | | | | | | | Weighted | ||
| | | | Average | | | | | | | Average | ||
| | | | Grant Date | | Aggregate | | RSU and PSU | | Grant Date | |||
| | | | Fair Value | | Fair Value | | Aggregate Units | | Fair Value | |||
| | RSUs and PSUs | | Per RSU | | (in millions) | |||||||
Unvested at January 1, 2022 | | 831,597 | | $ | 105.12 | | | | |||||
Unvested at January 1, 2023 | | 582,012 | | $ | 164.60 | ||||||||
Granted(1) | | 305,249 | | | 187.31 | | | | | 193,812 | | | 247.90 |
Vested | | (23,280) | | | 95.87 | | | | | (870) | | | 152.93 |
Cancelled or forfeited | | (18,607) | | | 114.28 | | | | | (2,002) | | | 170.84 |
Unvested at March 31, 2022 | | 1,094,959 | | $ | 128.07 | | $ | 257.7 | |||||
Unvested at March 31, 2023 | | 772,952 | | $ | 185.48 | ||||||||
Shares reserved for future grants (all plans) | | 1,569,117 | | | | | | | | 1,457,448 | | |
(1) | Comprised of |
As of March 31, 2022, 59,135 equivalent2023, there was $123.9 million of total unrecognized compensation cost related to unvested RSUs and PSUs in an aggregate amount of 772,952 units that are expected to be settled through the issuance of 993,124 shares of our common stock for vested RSUs and PSUs were unsettled.stock. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.0 years.
Share Repurchase PlanRepurchases
Our share repurchase activity during the first quarters of 2023 and 2022 was as follows:
| | | | | | | | | | | | | | | | |
| | 2023 | | 2022 | ||||||||||||
| | | | Average Cost | | | | | | | Average Cost | | | | ||
| | Shares | | Per Share | | Amount | | Shares | | Per Share | | Amount | ||||
| | | | | | | (in millions) | | | | | | | (in millions) | ||
First quarter | | 160,224 | | $ | 242.86 | | $ | 38.9 | | 113,529 | | $ | 150.97 | | $ | 17.1 |
On July 20, 2021,26, 2022, our Board of Directors authorized a $1.0 billionamended our share repurchase program. As of March 31, 2022, we had remainingprogram to increase the repurchase authorization under the plan to repurchase $695.5 million of our common stock. $1.0 billion. The share repurchase program does not obligate us to repurchase any specific number of shares, does not have a specific expiration date and may be suspended or discontinued at any time. We may repurchase shares through open market purchases, privately negotiated transactions and transactions structured through investment banking institutions under plans relying on Rule 10b5-1 or Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Repurchased and subsequently retired shares are restored to the status of authorized but unissued shares.
During As of March 31, 2023, we had remaining authorization under the first quarter of 2022, we repurchased 113,529 shares at an average cost of $150.97 per share, for a total of $17.1 million. We had 0 repurchasesprogram to repurchase $641.8 million of our common stock in. We repurchase shares through open market purchases and transactions structured through investment banking institutions under plans relying on Rule 10b5-1 and/or Rule 10b-18 under the first quarter of 2021.Exchange Act.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss included the following:
| | | | | | | | | | | | | | | | |
| Foreign Currency | | Postretirement Benefit | | Accumulated Other | | | | Pension and | | | |||||
| Translation | | Plan Adjustments, | | Comprehensive | Foreign Currency | | Postretirement Benefit | | Accumulated Other | ||||||
| (Loss) Gain |
| Net of Tax |
| (Loss) Income | Translation | | Plan Adjustments, | | Comprehensive | ||||||
| | | | (in millions) | | | | (Loss) Gain |
| Net of Tax |
| Loss | ||||
Balance as of January 1, 2022 | $ | (55.2) | | $ | (13.7) | | $ | (68.9) | ||||||||
| | | | (in millions) | | | | |||||||||
Balance as of January 1, 2023 | $ | (84.0) | | $ | (2.3) | | $ | (86.3) | ||||||||
Current-period change | | 0.7 | | | (0.1) | | | 0.6 | | 0.6 | | | (0.8) | | | (0.2) |
Balance as of March 31, 2022 | $ | (54.5) | | $ | (13.8) | | $ | (68.3) | ||||||||
Balance as of March 31, 2023 | $ | (83.4) | | $ | (3.1) | | $ | (86.5) |
Foreign currency translation adjustments have not been adjusted for income taxes. Postretirement benefit plan adjustments are net of taxes of $3.3 million as of March 31, 2022Pension and December 31, 2021. The income tax effects relating to our postretirement benefit plan adjustments are reflected in our income tax provision in future periods as the postretirement benefit plan adjustments are amortized over service periods and reflected in the amortization of net loss component of our net periodic benefit cost or are otherwise released and recognized as a settlement loss as a result of a plan termination.
1311
periodic benefit cost or are otherwise recognized as a loss as a result of plan settlements. Pension and postretirement benefit plan adjustments are net of taxes of $1.3 million as of March 31, 2023 and December 31, 2022. The income tax effects are released from accumulated other comprehensive loss and included in our income tax provision as obligations under our pension and postretirement plans are settled.
Note 10.9. Commitments and Contingencies
Environmental Contingencies
We are currently involved with an environmental remediation project related to activities at former manufacturing operations of Earle M. Jorgensen Company (“EMJ”), our wholly owned subsidiary, that were sold many years prior to our acquisition of EMJ in 2006. Although the potential cleanup costs could be significant, EMJ maintained insurance policies during the time it owned the manufacturing operations that have covered costs incurred to date and are expected to continue to cover the majority of the related costs. We do not expect that this obligation will have a material adverse impact on our consolidated financial position, results of operations or cash flows.
Legal Matters
From time to time, we are named as a defendant in legal actions. These actions generally arise in the ordinary course of business. We are not currently a party to any pending legal proceedings other than routine litigation incidental to the business. We maintain general liability insurance against risks arising in the ordinary course of business. We expect that these matters will be resolved without having a material adverse impact on our consolidated financial position, results of operations or cash flows. We maintain general liability insurance against risks arising in the ordinary course of business.
Risks and Uncertainties
We continue to monitor the impact of the COVID-19 pandemic, and government actions and measures taken to prevent its spread, and the potential to affect our operations. TheIn addition to COVID-19, the conflict between Russia and Ukraine and macroeconomic disruptions such as inflation and the potential for an economic recession or slowdown could also significantly impact the demand for our products and services, as well as those of our customers and suppliers, and our estimates and judgments may be subject to greater volatility than in the past. Refer to Part I, Item 1A “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 20212022 for further discussion of these risks.risks that could adversely affect our estimates and judgments.
12
Note 11.10. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share:
| | | | | | |||||
| Three Months Ended | | | | | |||||
| March 31, | Three Months Ended March 31, | ||||||||
| 2022 |
| 2021 | 2023 |
| 2022 | ||||
| (in millions, except number of shares which are reflected in thousands and per share amounts) | (in millions, except number of shares which are reflected in thousands and per share amounts) | ||||||||
Numerator: | | |
| | | | | | | |
Net income attributable to Reliance | $ | 523.3 |
| $ | 266.9 | $ | 383.1 | | $ | 523.3 |
| | | | | | |||||
Denominator: | | |
| | | | | | | |
Weighted average shares outstanding | | 61,833 |
| | 63,645 | | 58,832 | | | 61,833 |
Dilutive effect of stock-based awards | | 951 |
| | 1,066 | | 702 | | | 951 |
Weighted average diluted shares outstanding | | 62,784 |
| | 64,711 | | 59,534 | | | 62,784 |
| | | | | | | | | | |
Earnings per share attributable to Reliance stockholders: | | | | | | | | | | |
Basic | $ | 6.51 | | $ | 8.46 | |||||
Diluted | $ | 8.33 | | $ | 4.12 | $ | 6.43 | | $ | 8.33 |
Basic | $ | 8.46 | | $ | 4.19 |
The computations of earnings per share for the quarter ended March 31,first quarters of 2023 and 2022 and 2021 do not include 314,042194,304 and 452,124314,042 weighted average shares, respectively, in respect of outstanding RSUs and PSUs, because their inclusion would have been anti-dilutive.
Note 11. Subsequent Event
On May 1, 2023, we acquired Southern Steel Supply, LLC (“Southern Steel”), a metals service center that offers merchant and structural steel, pipe and tube, steel plate, ornamental products and laser cut and fabricated parts. Located in Memphis, Tennessee, Southern Steel will operate as a subsidiary of Siskin Steel & Supply Company, Inc., a wholly owned subsidiary of Reliance. The acquisition was funded with cash on hand. For the twelve months ended December 31, 2022, annual net sales for Southern Steel were $62.9 million.
1413
RELIANCE STEEL & ALUMINUM CO.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This report contains certain statements that are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forward-looking statements may include, but are not limited to, discussions of our industry and end markets, our business strategies and our expectations concerning future demand and metalmajor commodity product pricing and our results of operations, margins, profitability, impairmenttaxes, liquidity, macroeconomic conditions, including inflation and restructuring charges, taxes, liquidity,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. All statements contained in this report, other than statements of historical fact, are forward-looking statements. These forward-looking statements are based on management’s estimates, projections and assumptions as of the date of such statements. We caution readers not to place undue reliance on forward-looking statements.
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 ourthese forward-looking statements as a result of various important factors, including, but not limited to, actions taken by us, including restructuring and impairment charges, as well as developments beyond our control, including, but not limited to, the impactimpacts of labor constraints and supply chain disruptions, the COVID-19 pandemic, as well as the impact of actions taken or contemplated by government authorities to mitigate the spread of the COVID-19continuing pandemic and changes in worldwide and U.S. political and economic conditions (includingsuch as inflation, a prolonged higher interest rate environment and the possibility of an economic recession that could materially impact us, our customers and suppliers and demand for our products and services. Deteriorations in economic conditions, as a result of inflation, elevated interest rates, economic recession, COVID-19, or the ongoing conflict between Russia and Ukraine) that materially impact our customers, theUkraine or otherwise, could lead to a decline in demand and availability offor our products and services including further supply disruptions, labor shortages and inflation.negatively impact our business, and may also impact financial markets and corporate credit markets which could adversely impact our access to financing, or the terms of any financing. Other factors which could cause actual results to differ materially from our forward-looking statements include those disclosed in this report and in other reports we have filed with the United States Securities and Exchange Commission (the “SEC”). Important risks and uncertainties about our business can be found elsewhere in this Quarterly Report on Form 10-Q and in Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 20212022 filed with the SEC and in other documents Reliance files or furnishes with the SEC.
The statements contained in this quarterly report on Form 10-Q speak only as of the date that they were made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. Except as required by law, we disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in assumptions, beliefs, or expectations or any change in events, conditions, or circumstances upon which any such forward-looking statements are based. You should review any additional disclosures we make in any subsequent press releases and Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC.
14
Overview
We generated recorddelivered solid financial performance in the first quarter of 2023. Our first quarter of 2023 results included an increase in tons sold, a strong gross profit margin that was consistent with the first quarter of 2022 and in each of the previous four quarters. Outstandingstrong operating cash flow through outstanding operational execution in an uncertain business environment. We believe our ability to maintain a strong gross profit margin in the first quarter of 2023 was supported by our strategies under our resilientdiversified business model, during a quarter that included strong demandvalue-added processing capabilities and ongoing strength in metals pricing once again resulted in record profitability in the face of continuing operational challenges that included volatile (though improving) metals pricing trends and limited product availability.ability to service small order sizes with quick turnaround.
Certain keyKey results for the first quarter of March 31,2023 compared with the first quarter of 2022 included the following:were as follows:
● |
● |
● |
● | Earnings per diluted share of $6.43. |
● | Cash flow from operations of $384.6 million. |
● | Inventory turnover rate (based on tons) of 4.9x exceeded our |
● | Returns to stockholders of $100.9 million, comprised of $62.0 million of cash dividends and $38.9 million of share repurchases. |
Our net sales decline in the first quarter of 2023 was primarily due to a 17.7% decline in our average selling price per ton sold that offset a strong 7.2% increase in tons sold compared to the first quarter of 2022. The increase in tons sold was due to solid demand in the vast majority of our end markets, with particular strength in non-residential construction, the toll processing services we provide to the automotive market, general manufacturing and aerospace. We continued to execute our strategy in a dynamic operating environment featuring metal pricing volatility, ongoing inflationary headwinds, recessionary concerns, supply chain disruptions and labor shortages.
Our gross profit margin of 30.9% in the first quarter of 2023 was consistent with the first quarter of 2022. Pricing for most of the aluminum, carbon and stainless steel products we sell declined throughout the fourth quarter of 2022; however, early in the first quarter of 2023 the metals pricing declines had generally stabilized, and we operated in a relatively flat pricing environment during most of the quarter. We believe that announced carbon flat-rolled steel price increases during the quarter incentivized some of our customers to increase their purchases to buy ahead of further price increases. Our inventory turnover rate accelerated and our inventory costs on hand continued to align with lower replacement costs as our tons sold improved 17.7% compared to the fourth quarter of 2022, which was one of the best first quarter starts we have seen in our history.
Our SG&A expense in the first quarter of 2023 increased $39.4 million, or 6.4%, from the first quarter of 2022. The increase was primarily due to incremental variable costs associated with a strong 7.2% increase in tons sold, including headcount increases and inflationary pressure on wages, fuel, freight and warehouse costs, offset by decreased incentive-based compensation from lower profitability.
Our cash flow from operations of $384.6 million in the first quarter of 2023 decreased only $19.4 million, or 4.8%, compared to record first quarter levels in 2022 despite a 26.7% decline in net income. The decrease in our profitability in the first quarter of 2023 from then-record levels in the first quarter of 2022 was generally offset by decreased working capital requirements mainly due to lower metals pricing and volatility. Our strong cash flow generation enabled us to grow our business and increase returns to stockholders. During the first quarter of 2023, we invested in our future growth with a quarterly record $102.9 million invested in capital expenditures and we increased our returns to stockholders by 36.7%. Additionally, in the first quarter of 2023 we completed the redemption of $500.0 million aggregate principal amount of senior unsecured notes with cash on hand.
15
Our record quarterly net sales in the first quarter of 2022 were the result of a record quarterly average selling price per ton sold that increased 57.7% compared to the first quarter of 2021 and a 0.6% increase in tons sold.
Our record profitability in the first quarter of 2022 was driven by record metals prices, fundamentally strong underlying demand in most end markets, a strong gross profit margin and careful expense control. Our gross profit margin in the first quarter of 2022 of 30.9% was strong, but declined from record quarterly gross profit margin of 33.6% in the first quarter of 2021 as our inventory costs approached replacement costs. Our same-store SG&A expense in the first quarter of 2022 increased $70.1 million, or 13.5%, compared to the first quarter of 2021 due to higher variable expenses associated with inflationary impacts for wages, fuel, freight and packaging costs and to a lesser extent higher incentive-based compensation attributable to our record gross profit and pretax income.
We generated record first quarter cash flow from operations of $404.0 million in the first quarter of 2022 compared to $161.8 million of cash flow from operations in the first quarter of 2021 as a result of our increased profitability.
We believe our strong liquidity position that includes significantsubstantial cash on hand, strong cash flow generation and $1.5 billion of availability under our revolving credit facility with no borrowings outstanding will support our continued prudent use of capital as we maintain a flexible approach focused on growth, both organically and through acquisitions, and stockholder return activities.
We believe our industry-leading results are due to our unique business model and the strong operational execution of our strategies. We believe our business model characteristics, including broad end market exposure, a wide geographical footprint, diverse product offerings, significant value-added processing capabilities, and focus on small order sizes and when-needed delivery differentiate us from our industry peers. We believe these unique business model characteristics and strong operational execution of our strategies that include pricing discipline, concentrating on higher margin business and cross selling inventory within our operating locations enabled us to persevere during the pandemic in 2020 and were the cornerstone of our record quarterly financial results in each of the past five quarters.
2021 Acquisitions
On October 1, 2021, we acquired Merfish United, Inc. (“Merfish United”), a leading master distributor of tubular building products that are distributed to its independent wholesale distributor customers across a variety of end markets in the United States. Merfish United, headquartered in Ipswich, Massachusetts, serves 47 U.S. states through its twelve strategically located distribution centers.
On December 10, 2021, we acquired Admiral Metals Servicenter Company, Incorporated (“Admiral Metals”), a leading distributor of non-ferrous metals products in the Northeastern U.S. Admiral Metals, headquartered in Woburn, Massachusetts, serves a variety of end markets, including semiconductor, automotive, medical, infrastructure, aerospace and industrial markets through its eight strategically located service centers.
On December 10, 2021, we acquired Nu-Tech Precision Metals Inc. (“Nu-Tech Precision Metals”), a custom manufacturer of specialty extruded metals, fabricated parts and welded components. Nu-Tech Precision Metals, services the nuclear energy, aerospace and defense end markets from its location near Ottawa, Ontario, Canada.
On December 17, 2021, we acquired Rotax Metals, Inc. (“Rotax Metals”), a metals service center specializing in copper, bronze and brass alloys. Located in Brooklyn, New York, Rotax Metals operates as a subsidiary of Yarde Metals, Inc., a wholly owned subsidiary of Reliance.
16
Included in our net sales for the first quarter of 2022 were combined net sales of $226.5 million from our 2021 acquisitions.
We funded our 2021 acquisitions with cash on hand.
Results of Operations
The following table sets forth certain income statement data for the first quarters of 20222023 and 20212022 (dollars are shown in millions, except for per share amounts and certain amounts may not calculate due to rounding):
| | | | | | | | | | | | | | | | | | | | | ||
| Three Months Ended March 31, | | Three Months Ended March 31, | | ||||||||||||||||||
| 2022 | | | 2021 | | 2023 | | 2022 | | |||||||||||||
| | | | % of | | | | | | % of | | | | | % of | | | | % of | | ||
| $ |
| Net Sales | |
| $ |
| Net Sales | | $ |
| Net Sales | |
| $ |
| Net Sales | | ||||
Net sales | $ | 4,485.8 | | 100.0 | % | | $ | 2,838.4 | | 100.0 | % | $ | 3,965.3 | | 100.0 | % | | $ | 4,485.8 | | 100.0 | % |
Cost of sales (exclusive of depreciation and amortization expenses shown below)(1) | | 3,098.7 | | 69.1 | | | | 1,884.7 | | 66.4 | | |||||||||||
Cost of sales (exclusive of depreciation and amortization expense shown below)(1) | | 2,739.3 | | 69.1 | | | | 3,098.7 | | 69.1 | | |||||||||||
Gross profit(2) | | 1,387.1 | | 30.9 | | | | 953.7 | | 33.6 | | | 1,226.0 | | 30.9 | | | 1,387.1 | | 30.9 | | |
Warehouse, delivery, selling, general and administrative expense (SG&A) | | 611.9 | | 13.6 | | | | 518.5 | | 18.3 | | |||||||||||
Depreciation expense | | 46.9 | | 1.0 | | | | 47.7 | | 1.7 | | |||||||||||
Amortization expense | | 12.2 | | 0.3 | | | | 9.2 | | 0.3 | | |||||||||||
Warehouse, delivery, selling, general and administrative expense (“SG&A”) | | 651.3 | | 16.4 | | | 611.9 | | 13.6 | | ||||||||||||
Depreciation and amortization expense | | 61.1 | | 1.5 | | | | 59.1 | | 1.3 | | |||||||||||
Operating income | $ | 716.1 | | 16.0 | % | | $ | 378.3 | | 13.3 | % | $ | 513.6 | | 13.0 | % | | $ | 716.1 | | 16.0 | % |
| | | | | | | | | | | | |||||||||||
Net income attributable to Reliance | $ | 383.1 | | 9.7 | % | | $ | 523.3 | | 11.7 | % | |||||||||||
Diluted earnings per share attributable to Reliance stockholders | $ | 6.43 | | | | | $ | 8.33 | | | |
(1) | Cost of sales in the first quarter of 2022 included $8.1 million of non-recurring amortization of inventory step-up to fair value adjustments for our 2021 acquisitions. |
(2) | 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 |
17
First Quarter Ended March 31, 20222023 Compared to First Quarter Ended March 31, 20212022
Net Sales
| | | | | | | | | | | | |||||||||||
| Three Months Ended | | | | | | | | | | | | | | | | | | ||||
| March 31, | | Dollar | | Percentage | | Three Months Ended March 31, |
| |
| Percentage | | ||||||||||
| 2022 |
| 2021 | | Change | | Change | | 2023 |
| 2022 |
| Change |
| Change | | ||||||
| (in millions) | | | | | | | (dollars in millions, tons in thousands) | | | | | | | ||||||||
Net sales | $ | 4,485.8 |
| $ | 2,838.4 |
| $ | 1,647.4 |
| 58.0 | % | $ | 3,965.3 |
| $ | 4,485.8 |
| $ | (520.5) |
| (11.6) | % |
Net sales, same-store | $ | 4,259.3 |
| $ | 2,838.4 |
| $ | 1,420.9 |
| 50.1 | % | |||||||||||
| | | | | | | | | | | | |||||||||||
| Three Months Ended | | | | | | | |||||||||||||||
| March 31, | | | | Percentage | | ||||||||||||||||
| 2022 |
| 2021 | | Change | | Change | | ||||||||||||||
| (tons in thousands) | | | | | | | |||||||||||||||
Tons sold |
| 1,417.7 |
| | 1,409.7 |
| | 8.0 |
| 0.6 | % | | 1,520.1 | | | 1,417.7 | | | 102.4 | | 7.2 | % |
Tons sold, same-store |
| 1,374.2 |
| | 1,409.7 |
| | (35.5) |
| (2.5) | % | |||||||||||
| | | | | | | | | | | | |||||||||||
| Three Months Ended | | | | | | | |||||||||||||||
| March 31, |
| Price |
| Percentage | | ||||||||||||||||
| 2022 |
| 2021 |
| Change |
| Change | | ||||||||||||||
Average selling price per ton sold | $ | 3,186 |
| $ | 2,020 |
| $ | 1,166 |
| 57.7 | % | $ | 2,623 | | $ | 3,186 | | $ | (563) | | (17.7) | % |
Average selling price per ton sold, same-store | $ | 3,116 |
| $ | 2,020 |
| $ | 1,096 |
| 54.3 | % |
Our tons sold and average selling price per ton sold exclude our tons toll processed. Our average selling price per ton sold includes insignificant intercompany transactions that are eliminated from our consolidated net sales.Same-store amounts exclude the results of our 2021 acquisitions.
Our net sales in thedecreased from record first quarter levels of 2022 were the highest in our history due to a record quarterlysignificant decline in our average selling price per ton sold andthat was partially offset by a modeststrong increase in tons sold comparedsold. Demand was healthy in the vast majority of our end
16
markets, with particular strength in non-residential construction, the toll processing services we provide to the first quarter of 2021. During the months of Januaryautomotive market, general manufacturing and February, prices for certain carbon and stainless steel products fell sharply, and certain customers adjusted their purchasing patterns due to the uncertainty surrounding the direction of metals prices. The Omicron surge in January and to a lesser extent in February further decreased demand by exacerbating existing labor and other supply chain disruptions on us, our customers and suppliers. In early March, these trends and headwinds subsided and metal prices increasing significantly, mainly for the aluminum and stainless steel products we sell, and our shipment levels accelerated with our March daily tons sold being the highest since the start of the pandemic.aerospace.
Since we primarily purchase and sell our inventories in the spot market, the changes in our average selling prices generally fluctuate in accordancesimilarly with the changes in the costs of the various metals we purchase. Our same-store average selling price per ton sold in the first quarter of 2022 was significantlya quarterly record for us, which peaked at an ultimate record in the second quarter of 2022 and then declined for the subsequent three quarters mainly due to mill price decreases for our major product categories; however, metals pricing remained relatively higher thanversus historical levels throughout the first quarter of 2021 mainly due to several significant mill price increases for our major product categories.2023.
The mix of products sold can also have an impact on our overall average selling prices. price per ton sold. As carbon steel sales represented approximately 55%52% of our gross sales for the first quarter of 2022,2023, changes in carbon steel prices have the most significant impact on changes in our overall average selling price per ton sold.Year-over-year changes in the selling prices of our major commodity products and related mix of our tons sold are presented below:
| | | | | | |
| | Change in | | | Change in | |
| | Average Selling | | | Percentage of | |
| | Price Per | | | Total | |
| | Ton Sold |
|
| Tons Sold | |
Carbon steel | | (23.6) | % | | 1.6 | % |
Aluminum | | (1.3) | % | | (0.5) | % |
Stainless steel | | (2.9) | % | | (1.1) | % |
Alloy | | 13.9 | % | | (0.4) | % |
Cost of Sales and Gross Profit
| | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | | | | | | | |||||||||
| 2023 | | | 2022 | | | | | | | | ||||||
| | | | % of | | | | | | % of | | | Dollar | | Percentage | | |
| $ |
| Net Sales |
|
| $ |
| Net Sales |
|
| Change |
| Change | | |||
| (dollars in millions) | | | | | | | | |||||||||
Cost of sales | $ | 2,739.3 | | 69.1 | % | | $ | 3,098.7 | | 69.1 | % | | $ | (359.4) | | (11.6) | % |
Gross profit | $ | 1,226.0 | | 30.9 | % | | $ | 1,387.1 | | 30.9 | % | | $ | (161.1) | | (11.6) | % |
LIFO (income) expense | $ | (15.0) | | (0.4) | % | | $ | 37.5 | | 0.8 | % | | $ | (52.5) | | * | |
* Not meaningful.
Our major commodity selling prices changed year-over-year as follows:
| | | | |
| | | Same-store | |
| Average Selling | | Average Selling | |
| Price per Ton Sold | | Price per Ton Sold | |
| (percentage change) | | ||
Carbon steel | 56.3 | % | 55.8 | % |
Stainless steel | 57.4 | % | 57.7 | % |
Aluminum | 32.8 | % | 33.7 | % |
Alloy | 35.5 | % | 35.5 | % |
18
Cost of Sales
| | | | | | | | | | | | | | | | | |
| Three Months Ended | | | | | | | | |||||||||
| March 31, | | | | | | | | |||||||||
| 2022 | | | 2021 | | | | | | | | ||||||
| | |
| % of | | | | | | % of | | | Dollar | | Percentage | | |
| $ |
| Net Sales |
| | $ |
| Net Sales |
| | Change |
| Change | | |||
| (dollars in millions) | |
| | | | | | |||||||||
Cost of sales | $ | 3,098.7 | | 69.1 | % |
| $ | 1,884.7 | | 66.4 | % |
| $ | 1,214.0 | | 64.4 | % |
The increase in cost of salesGross profit in the first quarter of 2022 compared to the first quarter of 2021 was mainly due to a higher average cost per ton sold and to a lesser extent, higher tons sold. See “Net Sales” above for trends in both demand and costs of our products.
Cost of sales in2023 decreased from the first quarter of 2022 included $8.1 millionmainly due to lower sales as a result of non-recurring amortization of inventory step-up to fair value adjustments related to our 2021 acquisitions.a decrease in average selling price per ton sold that outpaced an increase in tons sold.
In addition, we record non-cash adjustments to our LIFO method inventory valuation reserve, which are included in cost of sales and, in effect, reflects cost of sales at current replacement costs, resulted in expensescosts. The inventory caption of $37.5 million and $100.0 million in the first quarters of 2022 and 2021, respectively. As of March 31, 2022, theour consolidated balance sheet included a LIFO method inventory valuation reserve on our balance sheet was $857.9 million.
Gross Profit
| | | | | | | | | | | | | | | | | |
| Three Months Ended | | | | | | | | |||||||||
| March 31, | | | | | | | | |||||||||
| 2022 | | | 2021 | | | | | | | | ||||||
| | |
| % of | | | | | | % of | | | Dollar | | Percentage | | |
| $ |
| Net Sales |
| | $ |
| Net Sales |
| | Change |
| Change | | |||
| (dollars in millions) | |
| | | | | | |||||||||
Gross profit | $ | 1,387.1 | | 30.9 | % |
| $ | 953.7 | | 33.6 | % |
| $ | 433.4 | | 45.4 | % |
We generated record gross profit in the first quarter of 2022 mainly as a result$728.8 million at March 31, 2023. Furthermore, cost of a record quarterly average selling price per ton sold, a strong gross profit margin and a slight increase in tons sold compared to the first quarter of 2021.
Gross profitsales in the first quarter of 2022 was reduced by $8.1 million of non-recurring amortization of inventory step-up to fair value adjustments related to our 2021 acquisitions. Excluding the impact of the non-recurring amortization, ouracquisitions that decreased gross profit margin declined 25020 basis pointspoints.
Our gross profit margin in the first quarter of 2022 compared to2023 was strong and unchanged from the first quarter of 2021. The decline in2022. We believe our strong and consistent gross profit margin was mainly due to our inventory costs approaching replacement costs. supported by investments in value-added processing equipment in recent years, relatively higher metal pricing versus historical levels and healthy demand.
See “Net Sales” and “Cost of Sales” abovefor further discussion on product pricing trends and our LIFO inventory valuation reserve adjustments, respectively.trends.
Expenses
| | | | | | | | | | | | | | | | | |
| Three Months Ended | | | | | | | | |||||||||
| March 31, | | | | | | | | |||||||||
| 2022 | | | 2021 | | | | | | | | ||||||
| | |
| % of | | | | | | % of | | | Dollar | | Percentage | | |
| $ |
| Net Sales |
| | $ |
| Net Sales |
| | Change |
| Change | | |||
| (dollars in millions) | | | | | | | | |||||||||
SG&A expense | $ | 611.9 | | 13.6 | % |
| $ | 518.5 | | 18.3 | % |
| $ | 93.4 | | 18.0 | % |
SG&A expense, same-store | $ | 588.6 | | 13.8 | % |
| $ | 518.5 | | 18.3 | % |
| $ | 70.1 | | 13.5 | % |
Depreciation & amortization expense | $ | 59.1 | | 1.3 | % |
| $ | 56.9 | | 2.0 | % |
| $ | 2.2 | | 3.9 | % |
Our same-store SG&A expense increase was due to higher variable expenses associated with inflationary impacts for wages, fuel, freight and packaging costs and to a lesser extent higher incentive-based compensation attributable to our
1917
recordExpenses
| | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | | | | | | | |||||||||
| 2023 | | | 2022 | | | | | | | | ||||||
| | | | % of | | | | | | % of | | | Dollar | | Percentage | | |
| $ |
| Net Sales |
|
| $ |
| Net Sales |
|
| Change |
| Change | | |||
| (dollars in millions) | | | | | | | | |||||||||
SG&A expense | $ | 651.3 | | 16.4 | % | | $ | 611.9 | | 13.6 | % | | $ | 39.4 | | 6.4 | % |
Depreciation & amortization expense | $ | 61.1 | | 1.5 | % | | $ | 59.1 | | 1.3 | % | | $ | 2.0 | | 3.4 | % |
The increase in our SG&A expense was mainly due to higher variable costs associated with higher tons sold and inflationary wage increases, which were partially offset by lower incentive-based compensation that is primarily tied to first-in, first-out (“FIFO”) pretax income profitability, which declined 32.8%. Our SG&A expense as a percentage of sales mainly increased due to lower sales levels.
See “Cost of Sales and Gross Profit” above for discussion of our LIFO method inventory valuation reserve.
Operating Income
| | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | | | | | | | |||||||||
| 2023 | | | 2022 | | | | | | | | ||||||
| | | | % of | | | | | | % of | | | Dollar | | Percentage | | |
| $ |
| Net Sales |
|
| $ |
| Net Sales |
|
| Change |
| Change |
| |||
| (dollars in millions) | | | | | | | | |||||||||
Operating income | $ | 513.6 | | 13.0 | % | | $ | 716.1 | | 16.0 | % | | $ | (202.5) | | (28.3) | % |
The decrease in our operating income was mainly a result of lower gross profit, and pretax income. The decreasedriven by lower sales due mainly to lower metals prices along with a moderate increase in SG&A expense that was generally consistent with the increase in our tons sold. Our operating income margin decline was consistent with the increase in our SG&A expense as a percentage of sales in the first quarter of 2022 compared to the first quarter of 2021that was mainly due to our record netlower sales.
Operating Income
| | | | | | | | | | | | | | | | | |
| Three Months Ended | | | | | | | | |||||||||
| March 31, | | | | | | | | |||||||||
| 2022 | | | 2021 | | | | | | | | ||||||
| | | | % of | | | | | | % of | | | Dollar | | Percentage | | |
| $ |
| Net Sales |
| | $ |
| Net Sales |
| | Change |
| Change | | |||
| (dollars in millions) | | | | | | | | |||||||||
Operating income | $ | 716.1 | | 16.0 | % | | $ | 378.3 | | 13.3 | % | | $ | 337.8 | | 89.3 | % |
The increase in our operating income in the first quarter of 2022 compared to the first quarter of 2021 was due to record gross profit, as a result of a record quarterly average selling price per ton sold, fundamentally strong demand and a strong gross profit margin, that was partially offset by inflationary increases in certain SG&A expenses and higher incentive compensation. The increase in our operating margin in the first quarter of 2022 was mainly due to our significantly higher sales that decreased our SG&A expense as a percentage of sales, despite an increase in our SG&A expense.
Income Tax Rate
Our effective income tax raterates for the first quarterquarters of 2023 and 2022 waswere 24.4% and 24.8%, compared to 25.3% in the same 2021 period.respectively. The differences between our effective income tax rates and the U.S. federal statutory rate of 21.0% were mainly due to state income taxes and higher foreign income tax rates, partially offset by the effects of company-owned life insurance policies.
Net Income
| | | | | | | | | | | | | | | | | |
| Three Months Ended | | | | | | | | |||||||||
| March 31, | | | | | | | | |||||||||
| 2022 | | | 2021 | | | | | | | | ||||||
| | | | % of | | | | | | % of | | | Dollar | | Percentage | | |
| $ |
| Net Sales |
| | $ |
| Net Sales |
| | Change |
| Change | | |||
| (dollars in millions) | | | | | | | | |||||||||
Net income attributable to Reliance | $ | 523.3 | | 11.7 | % | | $ | 266.9 | | 9.4 | % | | $ | 256.4 | | 96.1 | % |
The increase in our net income and net income margin in the first quarter of 2022 compared to the first quarter of 2021 were mainly due to increased operating income and operating income margin as a result of record gross profit and a strong gross profit margin partially offset by higher SG&A expense.
Liquidity and Capital ResourcesFinancial Condition
Operating Activities
Net cash provided by operations of $404.0$384.6 million in the first quarter of 20222023 was the highestslightly less than record first quarter resultcash flow of $404.0 million in 2022. We were able to achieve consistent operating cash flow as the decline in our history; increasing $242.2 million, or 149.7%, from $161.8 millionnet income required a similar decrease in working capital investment in the first quarter of 2021. The increase2023 compared to the same period in 2022, due to the relatively flat pricing environment in the first quarter of 2023 compared to the same period in 2022 in which our operating cash flow was mainly the result of cash generated from ouraverage selling price had increased significantly to a record profitability.level. To manage our working capital, we focus on our days sales outstanding and on our inventory turnover rate as receivables and inventory are the two most significant elements of our working capital. As of March 31, 20222023 and 2021,2022, our days sales outstanding rate was 39.140.0 days and 41.139.1 days, respectively. Our inventory turnturnover rate (based on tons) during the first quarter of 20222023 was 4.44.9 times (or 2.72.4 months on hand), compared to 5.44.4 times (or 2.22.7 months on hand) in the first quarter of 2021.2022.
Income taxes paid were $21.2 million in the first quarter of 2023 compared to $89.8 million in the first quarter of 2022, a significant increase from $6.9 million2022. The decrease in our taxes paid was mainly due to income tax extension payments in the first quarter of 2021, mainly due to2022 which were not required in the first quarter of 2022 including income tax extension payments for the 2021 tax year compared to the first quarter of 2021 that did not include similar income tax extension payments. 2023.
2018
Investing Activities
Net cash used in investing activities was $102.6 million in the first quarter of 2023 compared to $63.3 million in the first quarter of 2022 compared to $27.7 million in the first quarterand were substantially comprised of 2021 and was substantially comprisedcapital expenditures. The majority of our capital expenditures partially offset by proceeds from sales of property, plant and equipment. Capital expenditures were $66.7 million in the first quarterquarters of 2023 and 2022 compared to $43.7 million in the first quarter of 2021. The majority of our first quarter 2022 and 2021 capital expenditureswere related to growth initiatives. Proceeds from sales of property, plant and equipment were $8.2 million in the first quarter of 2022 compared to $20.6 million in the same period in 2021. Our proceeds from sales of property, plant and equipment included $7.4 million of proceeds and $2.0 million of gains from sales of non-core assets in the first quarter of 2022 compared to $20.0 million of proceeds and $2.0 million of gains from similar sales in the first quarter of 2021.
Financing Activities
Net cash used in financing activities was $639.2 million in the first quarter of 2023 compared to $92.0 million in the first quarter of 2022, decreased from $56.4 million net cash used in the first quarter of 2021 mainly due to share repurchases and increased payments for dividends and taxes relating to net share settlementsthe redemption of restricted stock units. $500.0 million aggregate outstanding principal amount of senior notes in January 2023. In the first quarter of 2022,2023, we spent $17.1$38.9 million to repurchase shares of our common stock compared to no repurchases$17.1 million in the first quarter of 2021.2022. Our other shareholderstockholder return activities included increasedan increase in our quarterly dividend rate with total dividend payments of $62.0 million in the first quarter of 2023 compared to $56.7 million in the first quarter of 2022 compared to $44.8 million in the first quarter of 2021. In addition, in the first quarter of 2022, we 2022. We also spent $17.1$37.2 million on taxes relating to net share settlementssettlement of performance-based restricted stock units in the first quarter of 2023 compared to $8.2$17.1 million in the first quarter of 2021.2022.
On April 26, 2022,25, 2023, our Board of Directors declared the 20222023 second quarter cash dividend of $0.8750$1.00 per share. We have increased our quarterly dividend 2930 times since our IPO in 1994, with the most recent increase of 27.3%14.3% from $0.6875$0.875 per share to $0.8750$1.00 per share effective in the first quarter of 2022.2023. We have paid quarterly cash dividends on our common stock for 6364 consecutive years and have never reduced or suspended our regular quarterly dividend.
See Note 8—“Equity” to our consolidated financial statements in Part I, Item 1 “Financial Statements” for further information on our stock repurchases.
On July 20, 2021,26, 2022, our Board of Directors authorized a $1.0 billionamended our share repurchase program. As ofprogram to increase the repurchase authorization to $1.0 billion. At March 31, 2022, we had remaining authorization under the plan to repurchase $695.52023, $641.8 million of our common stock.stock remained authorized for repurchase. The share repurchase program does not obligate us to repurchase any specific number of shares, does not have a specific expiration date and may be suspended or discontinued at any time. We may repurchase shares through open market purchases, privately negotiated transactions and transactions structured through investment banking institutions under plans relying on Rule 10b5-1 or Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Repurchased and subsequently retired shares are restored to the status of authorized but unissued shares.
During the first quarter of 2022, we repurchased 113,529 shares of our common stock at an average cost of $150.97 per share, for a total of $17.1 million, compared to no repurchases in the first quarter of 2021.
Since the inception of our share repurchase programs in 1994 through March 31, 2022,2018, we have repurchased approximately 35.016.1 million shares at an average cost of $54.88$115.65 per share, for a total of $1.92$1.86 billion, including approximately 12.9 millionresulting in a 22.2% reduction in our common shares repurchased over the past five years at an average cost of $96.02, for a total of $1.24 billion.outstanding. We expect to continue to be opportunistic in our approach to repurchasing shares of our common stock.
Debt
We have a $1.5 billion unsecured revolving credit facility with no outstanding borrowings at March 31, 2023 under our Amended and Restated Credit Agreement (as amended, the “Credit Agreement”). We also had an aggregate of $1.15 billion principal amount of senior unsecured note obligations with various maturities through 2036 issued under indentures as of March 31, 2023.
On January 15, 2023, we redeemed in full the $500.0 million aggregate outstanding principal amount of our 4.50% senior notes due April 15, 2023 using cash on hand. See Note 5—“Debt” to our consolidated financial statements in Part I, Item 1 “Financial Statements” for further information on our debt obligations.
Liquidity and Capital Resources
We believe our primary sources of liquidity, including funds generated from operations, cash and cash equivalents and our $1.5 billion revolving credit facility, will be sufficient to satisfy our cash requirements and shareholderstockholder return activities over the next 12 months and beyond. Our total outstanding debt as of March 31, 2022 was $1.66 billion, which was consistent with December 31, 2021. As of March 31, 2022,2023, we had no outstanding borrowings on the revolving credit facility. As of March 31, 2022, we had $548.0$816.2 million in cash and cash equivalents and our net debt-to-total capital ratio (net debt-to-total capital is calculated as totalcarrying amount of debt, net of cash, divided by total Reliance stockholders’ equity plus totalcarrying amount of debt, net of cash) was 14.4%4.3%, down from 18.1%6.3% as of December 31, 2021.2022.
2119
On September 3, 2020, we entered into a $1.5 billion unsecured five-year Amended and Restated Credit Agreement (“Credit Agreement”) that amended and restated our then-existing $1.5 billion unsecured revolving credit facility and includes a $150.0 million letter of credit sublimit. As of March 31, 2022, borrowings under the Credit Agreement were available at variable rates based on LIBOR plus 1.25% or the bank prime rate plus 0.25% and we currently pay a commitment fee at an annual rate of 0.20% on the unused portion of the revolving credit facility. The applicable margins over LIBOR and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our total net leverage ratio, as defined in the Credit Agreement. All borrowings under the Credit Agreement may be prepaid without penalty. Our Credit Agreement includes provisions to change the reference rate to the then-prevailing market convention for similar agreements if a replacement rate for LIBOR is necessary during its term.
A revolving credit facility with a combined credit limit of $8.6 million is in place for an operation in Asia with an outstanding balance of $4.7 million as of March 31, 2022 and December 31, 2021, respectively.
During the first quarter of 2022, we increased our 2022 capital expenditure budget, including unspent amounts from prior years, to $455 million from $350 million. Our actual capital expenditure spending over the next 12 months is ultimately dependent on market conditions, lead times and availability of property, plant and equipment when the capital project is initiated.
Capital Resources
On November 20, 2006, we entered into an indenture (the “2006 Indenture”) for the issuance of $600.0 million of unsecured debt securities. The total issuance was comprised of (a) $350.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.20% per annum, which matured and were repaid on November 15, 2016 and (b) $250.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.85% per annum, maturing on November 15, 2036.
On April 12, 2013, we entered into an indenture (the “2013 Indenture”) for the issuance of $500.0 million aggregate principal amount of senior unsecured notes at the rate of 4.50% per annum, maturing on April 15, 2023.
On August 3, 2020, we entered into an indenture (the “2020 Indenture” and, together with the 2013 Indenture and 2006 Indenture, the “Indentures”) for the issuance of $900.0 million of unsecured debt securities. The total issuance was comprised of (a) $400.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 1.30% per annum, maturing on August 15, 2025 and (b) $500.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 2.15% per annum, maturing on August 15, 2030.
Under the Indentures, the notes are senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations. If we experience a change in control accompanied by a downgrade in our credit rating, we will be required to make an offer to repurchase each series of the notes at a price equal to 101% of their principal amount plus accrued and unpaid interest.
Various industrial revenue bonds had combined outstanding balances of $7.7 million as of March 31, 2022 and December 31, 2021 and have maturities through 2027.
As of March 31, 2022,2023, we had $911.4$408.5 million of debt obligations coming due before our $1.5 billion revolving credit facility expires on September 3, 2025.
We believe that we will continue to have sufficient liquidity to fund our future operating needs and to repay our debt obligations as they become due.due. In addition to funds generated from operations and fundsnearly $1.5 billion available under our revolving credit facility, we expect to continue to be able to access the capital markets to raise funds, if desired. We believe our sources of liquidity will continue to be adequate to maintain operations, make necessary capital expenditures, finance strategic growth through acquisitions and internal initiatives, pay dividends and opportunistically repurchase shares of our common stock.shares. Additionally, we believe our investment grade credit ratings enhance our ability to effectively raise capital, if needed. We expect to continue our acquisition and internal growth and stockholder return activities and anticipate that we will be able to fund such activities as they arise.
22
Covenants
The Credit Agreement and the Indenturesindentures governing our debt securities include customary representations, warranties, covenants and events of default provisions. The covenants under the Credit Agreement include, among other things, two financial maintenance covenants that require us to comply with a minimum interest coverage ratio and a maximum leverage ratio.
We were in compliance with all financial maintenance covenants in our Credit Agreement at March 31, 2022.2023.
Seasonality
Some of our customers are in seasonal businesses, especially customers in the construction industry and related businesses. However, our overall operations have not shown any material seasonal trends as a result of our geographic, product and customer diversity. Typically, revenues in the months of July, November and December have been lower than in other months because of a reduced number of working days for shipments of our products, resulting from holidays observed by the Company as well as vacation and extended holiday closures at some of our customers. The number of shipping days in each quarter also has an impact on our quarterly sales and profitability. Particularly in light of the COVID-19 pandemic, we cannot predict whether period-to-period fluctuations will be consistent with historical patterns. Results of any one or more quarters are therefore not necessarily indicative of annual results.
Goodwill and Other Intangible Assets
Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to $2.11 billion at March 31, 2022,2023, or approximately 21% of total assets and 32%29% of total equity. Additionally, other intangible assets, net amounted to $1.06$1.01 billion at March 31, 2022,2023, or approximately 10% of total assets and 16%14% of total equity. Goodwill and other intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests and further evaluation when certain events occur. Other intangible assets with finite useful lives are amortized over their useful lives. We review the recoverability of our long-lived assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable.
Critical Accounting Estimates
Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our Unaudited Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. When we prepare these consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of our accounting policies require that we make subjective judgments, including estimates that involve matters that are inherently uncertain. Our most critical accounting estimates include those related to goodwill and other indefinite-lived intangible assets and long-lived assets. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. The impacts of the COVID-19 pandemic increase uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates and judgments may be subject to greater volatility than in the past.
During the quarter ended March 31, 2022,2023, there were no material changes to our critical accounting estimates as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition
20
and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.2022.
Website Disclosure
The Company may use its website as a distribution channel of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website
23
at www.investor.rsac.com. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” section at www.investor.rsac.com. The website is for informational purposes only and is not intended for use as a hyperlink. The Company is not incorporating any material on its website into this report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the ordinary course of business, we are exposed to various market risk factors, including fluctuations in interest rates, changes in general economic conditions, domestic and foreign competition, foreign currency exchange rates and metals pricing, demand and availability. See Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 20212022 for further discussion on quantitative and qualitative disclosures about market risk.
Item 4. Controls and Procedures
Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company carried out an evaluation ofwe have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to and as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the end of the period covered in this report, the Company’s disclosure controls and procedures are effective to ensure information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
There have been no changes in the Company’s internal control over financial reporting during the first quarter of 20222023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The information contained under the heading “Legal Matters” in Note 10—9—“Commitments and Contingencies” to our Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q is incorporated by reference into this Item 1.
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.2022.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
We repurchase shares of our common stock from time to time pursuant to a combination of one or more open market repurchases and transactions structured through investment banking institutions in reliance upon Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934.
Act.
2421
Our share repurchase activity for the first quarter of 20222023 was as follows:
| | | | | | | | | ||||||||||||
| | | | | | | Total Number of | | Maximum Dollar | |||||||||||
| | Total Number | | Average Price | | Shares Purchased | | Value That May | ||||||||||||
| | | | | | | | | | of Shares | | Paid | | as Part of Publicly | | Yet Be Purchased | ||||
Period | | Total Number of | | Average Price Paid | | Total Number of Shares Purchased as Part of Publicly Announced Plan | | Maximum Dollar Value That May Yet Be Purchased Under the Plan(1) | | Purchased | | Per Share | | Announced Plan | | Under the Plan(1) | ||||
January 1 - January 31, 2022 | | 102,858 | | $ | 149.05 | | 102,858 | | $ | 697,285,313 | ||||||||||
February 1 - February 28, 2022 | | 10,671 | | $ | 169.53 | | 10,671 | | $ | 695,476,225 | ||||||||||
March 1 - March 31, 2022 | | — | | $ | — | | — | | $ | 695,476,225 | ||||||||||
| | | | | | | | | (in millions) | |||||||||||
January 1 - January 31, 2023 | | 3,860 | | $ | 199.85 | | 3,860 | | $ | 680.0 | ||||||||||
February 1 - February 28, 2023 | | 52,190 | | $ | 245.06 | | 52,190 | | $ | 667.2 | ||||||||||
March 1 - March 31, 2023 | | 104,174 | | $ | 243.35 | | 104,174 | | $ | 641.8 | ||||||||||
Total | | 113,529 | | $ | 150.97 | | 113,529 | | | | 160,224 | | $ | 242.86 | | 160,224 | | |
(1) |
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
22
Item 6. Exhibits
| ||
---|---|---|
Exhibit | | Description |
10.1†* | | |
10.2 | | |
31.1* | | |
31.2* | | |
32** | | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101* | | The following unaudited financial information from Reliance Steel & Aluminum Co.’s Quarterly Report on Form 10-Q for the quarter ended March 31, |
104* | | Cover Page Interactive Data File (formatting as Inline XBRL and contained in Exhibit 101). |
| | |
† Indicates management contract or compensatory plan or arrangement.
* Filed herewith.
** Furnished herewith.
2523
SIGNATURE
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.
| | | | ||
| RELIANCE STEEL & ALUMINUM CO. | ||||
| (Registrant) | ||||
| | ||||
| | | | ||
Date: May | By: | /s/ Arthur Ajemyan | | ||
| | Arthur Ajemyan | |||
| | Senior Vice President and Chief Financial Officer | |||
| | (Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer) | |||
| |
2624