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,~~ September 30, 2023

☐	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.)

16100 N. 71st Street, Suite 400

Scottsdale, Arizona 85254

(Address of principal executive offices, including zip code)

(480) 564-5700

(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 28,~~October 27, 2023, there were ~~58,793,188~~57,471,229 shares of the registrant’s common stock, $0.001 par value, outstanding.

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION
	Item 1.	Financial Statements	1
		Unaudited Consolidated Balance Sheets	1
		Unaudited Consolidated Statements of Income	2
		Unaudited Consolidated Statements of Comprehensive Income	3
		Unaudited Consolidated Statements of Equity	4
		Unaudited Consolidated Statements of Cash Flows	5
		Notes to Unaudited Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2122
	Item 4.	Controls and Procedures	2122

PART II — OTHER INFORMATION
	Item 1.	Legal Proceedings	2122
	Item 1A.	Risk Factors	2123
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2123
	Item 3.	Defaults Upon Senior Securities	2223
	Item 4.	Mine Safety Disclosures	2223
	Item 5.	Other Information	2223
	Item 6.	Exhibits	2324

SIGNATURE			2425

Table of Contents

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,		September 30,		December 31,
	2023		2022*		2023		2022*
ASSETS	ASSETS				ASSETS
Current assets:
Cash and cash equivalents	$	816.2	$	1,173.4	$	976.9	$	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
Accounts receivable, less allowance for credit losses of $27.1 at September 30, 2023 and $26.1 at December 31, 2022						1,666.3		1,565.7
Inventories		1,981.4		1,995.3		2,110.2		1,995.3
Prepaid expenses and other current assets		114.2		115.6		104.7		115.6
Income taxes receivable		—		36.6		1.0		36.6
Total current assets		4,712.1		4,886.6		4,859.1		4,886.6
Property, plant and equipment:
Land		263.3		262.7		281.6		262.7
Buildings		1,381.0		1,359.3		1,469.3		1,359.3
Machinery and equipment		2,507.9		2,446.9		2,645.9		2,446.9
Accumulated depreciation		(2,127.4)		(2,094.3)		(2,207.8)		(2,094.3)
Property, plant and equipment, net		2,024.8		1,974.6		2,189.0		1,974.6
Operating lease right-of-use assets		217.3		216.4		227.7		216.4
Goodwill		2,106.1		2,105.9		2,108.7		2,105.9
Intangible assets, net		1,008.0		1,019.6		990.1		1,019.6
Cash surrender value of life insurance policies, net		37.6		42.0		28.0		42.0
Other assets		97.3		84.8		90.3		84.8
Total assets	$	10,203.2	$	10,329.9	$	10,492.9	$	10,329.9

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY				LIABILITIES AND EQUITY

Current liabilities:
Accounts payable	$	545.0	$	412.4	$	445.4	$	412.4
Accrued expenses		113.7		118.8		130.3		118.8
Accrued compensation and retirement benefits		143.7		240.0		203.3		240.0
Accrued insurance costs		45.2		43.4		43.7		43.4
Current maturities of long-term debt and short-term borrowings		8.2		508.2		0.3		508.2
Current maturities of operating lease liabilities		53.2		52.5		55.7		52.5
Income taxes payable		66.4		—
Total current liabilities		975.4		1,375.3		878.7		1,375.3
Long-term debt		1,140.2		1,139.4		1,141.6		1,139.4
Operating lease liabilities		165.5		165.2		174.7		165.2
Long-term retirement benefits		29.6		26.1		30.4		26.1
Other long-term liabilities		61.9		51.4		56.8		51.4
Deferred income taxes		476.2		476.6		475.5		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
Issued and outstanding shares—58,090 at September 30, 2023 and 58,787 at December 31, 2022						0.1		0.1
Retained earnings		7,432.1		7,173.6		7,823.6		7,173.6
Accumulated other comprehensive loss		(86.5)		(86.3)		(99.4)		(86.3)
Total Reliance stockholders’ equity		7,345.7		7,087.4		7,724.3		7,087.4
Noncontrolling interests		8.7		8.5		10.9		8.5
Total equity		7,354.4		7,095.9		7,735.2		7,095.9
Total liabilities and equity	$	10,203.2	$	10,329.9	$	10,492.9	$	10,329.9

* Amounts derived from audited financial statements.

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

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,

2023

2022
Net sales
$
3,965.3

$
4,485.8

Costs and expenses:

Cost of sales (exclusive of depreciation and amortization shown below)

2,739.3

3,098.7
Warehouse, delivery, selling, general and administrative (“SG&A”)

651.3

611.9
Depreciation and amortization

61.1

59.1

3,451.7

3,769.7

Operating income

513.6

716.1

Other (income) expense:

Interest expense

10.9

15.6
Other (income) expense, net

(5.8)

3.3
Income before income taxes

508.5

697.2
Income tax provision

124.1

172.6
Net income

384.4

524.6
Less: net income attributable to noncontrolling interests

1.3

1.3
Net income attributable to Reliance
$
383.1

$
523.3

Earnings per share attributable to Reliance stockholders:

Basic
$
6.51

$
8.46
Diluted
$
6.43

$
8.33

Shares used in computing earnings per share:

Basic

58,832

61,833
Diluted

59,534

62,784


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net sales	$	3,623.0	$	4,247.2	$	11,468.6	$	13,414.2

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		2,546.0		3,008.2		7,942.9		9,292.7
Warehouse, delivery, selling, general and administrative (“SG&A”)		626.9		630.1		1,928.8		1,890.6
Depreciation and amortization		60.6		60.4		182.5		178.8
		3,233.5		3,698.7		10,054.2		11,362.1

Operating income		389.5		548.5		1,414.4		2,052.1

Other (income) expense:
Interest expense		9.7		15.6		30.3		46.8
Other (income) expense, net		(8.2)		8.9		(23.3)		21.5
Income before income taxes		388.0		524.0		1,407.4		1,983.8
Income tax provision		92.0		129.6		340.7		490.9
Net income		296.0		394.4		1,066.7		1,492.9
Less: net income attributable to noncontrolling interests		1.0		0.9		3.5		3.3
Net income attributable to Reliance	$	295.0	$	393.5	$	1,063.2	$	1,489.6

Earnings per share attributable to Reliance stockholders:
Basic	$	5.05	$	6.55	$	18.13	$	24.35
Diluted	$	4.99	$	6.45	$	17.92	$	23.98

Shares used in computing earnings per share:
Basic		58,427		60,055		58,648		61,175
Diluted		59,124		60,984		59,333		62,114

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

Three Months Ended March 31,

2023

2022
Net income
$
384.4

$
524.6
Other comprehensive income (loss):

Foreign currency translation gain

0.6

0.7
Postretirement benefit plan adjustments, net of tax

(0.8)

(0.1)
Total other comprehensive (loss) income

(0.2)

0.6
Comprehensive income

384.2

525.2
Less: comprehensive income attributable to noncontrolling interests

1.3

1.3
Comprehensive income attributable to Reliance
$
382.9

$
523.9


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income	$	296.0	$	394.4	$	1,066.7	$	1,492.9
Other comprehensive (loss) income:
Foreign currency translation loss		(11.9)		(32.0)		(10.7)		(51.3)
Postretirement benefit plan adjustments, net of tax		(0.9)		6.4		(2.4)		6.3
Total other comprehensive loss		(12.8)		(25.6)		(13.1)		(45.0)
Comprehensive income		283.2		368.8		1,053.6		1,447.9
Less: comprehensive income attributable to noncontrolling interests		1.0		0.9		3.5		3.3
Comprehensive income attributable to Reliance	$	282.2	$	367.9	$	1,050.1	$	1,444.6

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY

(in millions, except per share amounts)

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Total equity, beginning balances	$	7,625.5	$	6,863.1	$	7,095.9	$	6,093.7

Common stock and additional paid-in capital:
Beginning balances		0.1		0.1		0.1		0.1
Stock-based compensation		16.8		18.6		48.4		48.4
Taxes paid related to net share settlement of restricted stock units		(4.0)		(4.5)		(41.3)		(21.6)
Repurchase of common shares		(11.6)		(14.1)		(5.3)		(26.8)
Excise tax on repurchase of common shares		(1.2)		—		(1.8)		—
Ending balances		0.1		0.1		0.1		0.1

Retained earnings:
Beginning balances		7,702.1		6,942.5		7,173.6		6,155.3
Net income attributable to Reliance		295.0		393.5		1,063.2		1,489.6
Cash dividends and dividend equivalents		(58.7)		(52.9)		(179.3)		(163.5)
Repurchase of common shares		(114.8)		(322.6)		(233.9)		(520.9)
Ending balances		7,823.6		6,960.5		7,823.6		6,960.5

Accumulated other comprehensive loss:
Beginning balances		(86.6)		(88.3)		(86.3)		(68.9)
Other comprehensive loss		(12.8)		(25.6)		(13.1)		(45.0)
Ending balances		(99.4)		(113.9)		(99.4)		(113.9)

Total Reliance stockholders' equity, ending balances		7,724.3		6,846.7		7,724.3		6,846.7

Noncontrolling interests:
Beginning balances		9.9		8.8		8.5		7.2
Comprehensive income		1.0		0.9		3.5		3.3
Capital contribution		—		—		—		0.3
Dividends paid		—		(0.9)		(1.1)		(2.0)
Ending balances		10.9		8.8		10.9		8.8

Total equity, ending balances	$	7,735.2	$	6,855.5	$	7,735.2	$	6,855.5

Cash dividends declared per common share	$	1.00	$	0.875	$	3.00	$	2.625

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Three Months Ended March 31,

2023

2022
Operating activities:

Net income
$
384.4

$
524.6
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense

61.1

59.1
Stock-based compensation expense

13.5

11.8
Other

(0.1)

8.0
Changes in operating assets and liabilities (excluding effect of businesses acquired):

Accounts receivable

(237.1)

(399.6)
Inventories

13.5

54.0
Prepaid expenses and other assets

50.0

19.5
Accounts payable and other liabilities

99.3

126.6
Net cash provided by operating activities

384.6

404.0

Investing activities:

Purchases of property, plant and equipment

(102.9)

(66.7)
Proceeds from sales of property, plant and equipment

8.3

8.2
Deferred compensation plan contributions, net

(7.4)

(7.5)
Other

(0.6)

2.7
Net cash used in investing activities

(102.6)

(63.3)

Financing activities:

Principal payment on long-term debt

(500.0)

—
Cash dividends and dividend equivalents

(62.0)

(56.7)
Share repurchases

(38.9)

(17.1)
Taxes paid related to net share settlement of restricted stock units

(37.2)

(17.1)
Other

(1.1)

(1.1)
Net cash used in financing activities

(639.2)

(92.0)
Effect of exchange rate changes on cash and cash equivalents

—

(1.2)
(Decrease) increase in cash and cash equivalents

(357.2)

247.5
Cash and cash equivalents at beginning of year

1,173.4

300.5
Cash and cash equivalents at end of the period
$
816.2

$
548.0

Supplemental cash flow information:

Interest paid during the period
$
14.4

$
9.6
Income taxes paid during the period, net
$
21.2

$
89.8


	Nine Months Ended
	September 30,
	2023		2022
Operating activities:
Net income	$	1,066.7	$	1,492.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		182.5		178.8
Provision for credit losses		4.2		5.6
Stock-based compensation expense		48.4		48.4
Net loss on life insurance policies and deferred compensation plan assets		8.0		22.8
Other		(4.7)		2.9
Changes in operating assets and liabilities (excluding effect of businesses acquired):
Accounts receivable		(102.0)		(191.6)
Inventories		(113.5)		(126.6)
Prepaid expenses and other assets		91.1		20.0
Accounts payable and other liabilities		(35.0)		(143.3)
Net cash provided by operating activities		1,145.7		1,309.9

Investing activities:
Acquisition, net of cash acquired		(24.1)		—
Purchases of property, plant and equipment		(358.6)		(249.7)
Proceeds from sales of property, plant and equipment		9.9		9.8
Other		5.0		(4.5)
Net cash used in investing activities		(367.8)		(244.4)

Financing activities:
Net short-term debt repayments		(2.2)		(0.8)
Principal payments on long-term debt		(505.7)		—
Cash dividends and dividend equivalents		(179.3)		(163.5)
Share repurchases		(239.2)		(547.7)
Taxes paid related to net share settlement of restricted stock units		(41.3)		(21.6)
Other		(3.0)		22.5
Net cash used in financing activities		(970.7)		(711.1)
Effect of exchange rate changes on cash and cash equivalents		(3.7)		(11.2)
(Decrease) increase in cash and cash equivalents		(196.5)		343.2
Cash and cash equivalents at beginning of year		1,173.4		300.5
Cash and cash equivalents at end of the period	$	976.9	$	643.7

Supplemental cash flow information:
Interest paid during the period	$	32.5	$	39.1
Income taxes paid during the period, net	$	305.2	$	596.8

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~March 31, 2023~~

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, the 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. Interim results are not necessarily indicative of the results for a full year. All significant intercompany accounts and transactions have been eliminated. The ownership of the 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 accompanying notes included in Reliance’s Annual Report on Form 10-K for the fiscal year ended December 31, 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.

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.

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted. The IRA includes a new 15% minimum tax on book income of certain large corporations. Additionally, the IRA imposes a 1% excise tax, which is paid annually and recorded in paid-in-capital, on the excess of the fair market value of our share repurchases over the fair market value of share issuances, made after December 31, 2022. See our consolidated statements of equity for further information on our accrued 2023 excise tax.

Table of Contents

Note 2. Revenues

The following table presents our net sales disaggregated by product and service:


					Three Months Ended				Nine Months Ended
	Three Months Ended March 31,				September 30,				September 30,
	2023		2022		2023		2022		2023		2022

	(in millions)				(in millions)
Carbon steel	$	2,128.5	$	2,547.5	$	1,996.9	$	2,371.9	$	6,266.6	$	7,545.2
Aluminum		670.2		692.8		592.6		660.3		1,902.5		2,069.9
Stainless steel		657.3		764.9		557.5		712.7		1,818.8		2,284.7
Alloy		191.4		183.7		174.4		188.2		552.6		568.5
Toll processing and logistics		155.4		135.1		154.3		139.5		464.2		414.8
Copper and brass		82.0		86.6		72.2		81.0		232.1		260.4
Other and eliminations		80.5		75.2		75.1		93.6		231.8		270.7
Total	$	3,965.3	$	4,485.8	$	3,623.0	$	4,247.2	$	11,468.6	$	13,414.2

~~Table of Contents~~

Note 3. Goodwill

The change in the carrying amount of goodwill is as follows:


	(in millions)		(in millions)
Balance at January 1, 2023	$	2,105.9	$	2,105.9
Acquisition				2.6
Effect of foreign currency translation		0.2		0.2
Balance at March 31, 2023	$	2,106.1
Balance at September 30, 2023			$	2,108.7

We had no accumulated impairment losses related to goodwill at ~~March 31,~~September 30, 2023 and December 31, 2022.

Note 4. Intangible Assets, net

Intangible assets, net consisted of the following:


		March 31, 2023				December 31, 2022					September 30, 2023				December 31, 2022
	Weighted Average	Gross				Gross				Weighted Average	Gross				Gross
	Amortizable	Carrying		Accumulated		Carrying		Accumulated		Amortizable	Carrying		Accumulated		Carrying		Accumulated
	Life in Years	Amount		Amortization		Amount		Amortization		Life in Years	Amount		Amortization		Amount		Amortization

		(in millions)									(in millions)
Intangible assets subject to amortization:
Customer lists/relationships	14.2	$	713.8	$	(490.5)	$	713.6	$	(479.3)	14.2	$	715.2	$	(510.7)	$	713.6	$	(479.3)
Backlog of orders	7.9		22.3		(3.8)		22.3		(3.1)	7.9		22.3		(5.2)		22.3		(3.1)
Other	9.2		9.9		(9.5)		9.9		(9.5)	9.4		10.3		(9.6)		9.9		(9.5)
			746.0		(503.8)		745.8		(491.9)			747.8		(525.5)		745.8		(491.9)
Intangible assets not subject to amortization:
Trade names			765.8		—		765.7		—			767.8		—		765.7		—
		$	1,511.8	$	(503.8)	$	1,511.5	$	(491.9)		$	1,515.6	$	(525.5)	$	1,511.5	$	(491.9)

Amortization expense for intangible assets was ~~$11.8~~$33.6 million and ~~$12.2~~$36.3 million for the ~~first quarters of~~nine months ended September 30, 2023 and 2022, respectively. As part of the purchase price allocation of our acquisition of Southern Steel Supply, LLC on May 1, 2023, we allocated a total of $4.0 million to the intangible assets acquired. Foreign currency translation ~~gains~~gain related to ~~intangible~~Intangible assets, net ~~were $0.2 million and $0.4~~was $0.1 million for the ~~first quarters~~nine months ended September 30, 2023 compared to foreign currency translation loss of ~~2023 and 2022, respectively.~~

~~The following is a summary of estimated future amortization expense:~~

(in millions)
2023 (remaining nine months)

$
31.8
2024

40.1
2025

35.9
2026

26.4
2027

25.8
Thereafter

82.2

$
242.2

$5.0 million for the nine months ended September 30, 2022.

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The following is a summary of estimated future amortization expense:


	(in millions)
2023 (remaining three months)	$	10.2
2024		40.3
2025		36.1
2026		26.7
2027		26.0
Thereafter		83.0
	$	222.3

Note 5. Debt

Debt consisted of the following:


	March 31,		December 31,		September 30,		December 31,
	2023		2022		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%, redeemed on January 15, 2023		—		500.0		—		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		9.6		9.6		1.7		9.6
Total		1,159.6		1,659.6		1,151.7		1,659.6
Less: unamortized discount and debt issuance costs		(11.2)		(12.0)		(9.8)		(12.0)
Less: amounts due within one year and short-term borrowings		(8.2)		(508.2)		(0.3)		(508.2)
Total long-term debt	$	1,140.2	$	1,139.4	$	1,141.6	$	1,139.4

The weighted average interest rate on the Company’s outstanding borrowings as of ~~March 31,~~September 30, 2023 and December 31, 2022 was ~~2.89%~~2.88% 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 that amended and restated our then-existing $1.5 billion unsecured revolving credit 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,~~September 30, 2023, borrowings under the Credit Agreement were available at variable rates based on SOFR plus 1.10% or the bank prime rate and we currently pay a commitment fee at an annual rate of 0.175% on the unused portion of the revolving credit facility. The applicable margins over SOFR and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our leverage ratio, as defined in the Credit Agreement. All borrowings under the Credit Agreement may be prepaid without penalty.

As of ~~March 31,~~September 30, 2023 and December 31, 2022, we had no outstanding borrowings on the revolving credit facility. ~~As of March 31, 2023~~We had $1.7 million and ~~December 31, 2022, we had~~ $7.7 million of letters of credit outstanding under the revolving credit ~~facility.~~facility as of September 30, 2023 and December 31, 2022, respectively.

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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 (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.

Other Notes, Revolving Credit and Letter of Credit/Letters of Guarantee Facilities

A revolving credit facility with a credit limit of ~~$7.9~~$7.5 million is in place for an operation in Asia with anno outstanding balance as of September 30, 2023 and $2.2 million outstanding as of ~~March 31, 2023 and~~ December 31, 2022.

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Various industrial revenue bonds had combined outstanding balances of $1.7 million and $7.4 million as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively, and have maturities through 2027.

AWe have a $50.0 million 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, 2023, a~~Agreement. A total of ~~$19.5~~$41.4 million ~~of letters of credit/guarantee~~and $18.7 million were outstanding under this ~~facility.~~facility as of September 30, 2023 and December 31, 2022, respectively.

Covenants

The Credit Agreement and the indentures 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,~~September 30, 2023.

Note 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,

2023

2022

(in millions)
Operating lease cost
$
23.6

$
23.0

~~Supplemental cash flow and balance sheet information is presented below:~~


					Three Months Ended				Nine Months Ended
	Three Months Ended March 31,				September 30,				September 30,
	2023		2022		2023		2022		2023		2022

	(in millions)				(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%
Operating lease cost					$	25.0	$	23.1	$	72.0	$	69.8

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Supplemental cash flow and balance sheet information is presented below:


	Nine Months Ended
	September 30,
	2023		2022

	(in millions)
Supplemental cash flow information:
Cash payments for operating leases	$	70.6	$	65.4
Right-of-use assets obtained in exchange for operating lease obligations	$	55.6	$	39.0

	September 30,		December 31,
	2023		2022
Other lease information:
Weighted average remaining lease term—operating leases		5.8 years		6.6 years
Weighted average discount rate—operating leases		4.1%		3.8%

Maturities of operating lease liabilities as of ~~March 31,~~September 30, 2023 are as follows:


	(in millions)		(in millions)
2023 (remaining nine months)	$	46.3
2023 (remaining three months)			$	16.8
2024		52.7		61.2
2025		39.9		48.2
2026		27.6		35.3
2027		19.6		26.5
Thereafter		68.5		79.6
Total operating lease payments		254.6		267.6
Less: imputed interest		(35.9)		(37.2)
Total operating lease liabilities	$	218.7	$	230.4

Note 7. Income Taxes

Our effective income tax rates for the ~~first quarters of~~third quarter and nine months ended September 30, 2023 were 23.7% and 24.2%, respectively, compared to 24.7% for the same 2022 ~~were 24.4% and 24.8%, respectively.~~periods. 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.~~taxes.

Note 8. Equity

Dividends

On ~~April 25,~~October 24, 2023, our Board of Directors declared the 2023 ~~second~~fourth quarter cash dividend of $1.00 per share of common stock, payable on ~~June 9,~~December 1, 2023 to stockholders of record as of ~~May 26,~~November 17, 2023.

During the ~~first~~third quarters of 2023 and 2022, we declared and paid quarterly dividends of $1.00 and $0.875 per share, or ~~$59.0~~$58.5 million and ~~$54.2~~$52.5 million in total, respectively. During the nine months ended September 30, 2023 and 2022, we declared and paid aggregate quarterly dividends of $3.00 and $2.625 per share, or $176.1 million and $160.6 million in total, respectively. In addition, we paid ~~$3.0~~$3.2 million and ~~$2.5~~$2.9 million in dividend equivalents with respect to vested restricted stock units during the ~~first quarters of~~nine months ended September 30, 2023 and 2022, respectively.

Stock-Based Compensation

We make annual grants of long-term equity incentive awards to officers and key employees under our Second Amended and Restated 2015 Incentive Award Plan in 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 two shares of our common stock based on performance goals tied to achieving a 3-year return on assets result and include service criteria. We also grant the non-management members of our Board of ~~Directors fully vested stock awards 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 of 2023 and 2022, we made payments of $37.2 million and $17.1 million, respectively, to tax authorities on our employees’ behalf for shares withheld related to net share settlement of vested restricted stock units.

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Directors fully vested stock awards 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.

~~The following is a~~In the nine months ended September 30, 2023 and 2022, we made payments of $41.3 million and $21.6 million, respectively, to tax authorities on our employees’ behalf for shares withheld related to net share settlement of vested restricted stock units.

A summary of ~~changes in~~the status of our unvested RSUs and PSUs as of September 30, 2023, and changes during the ~~first quarter of 2023:~~nine months then ended is as follows:


		Weighted			Weighted
		Average			Average
	RSU and PSU	Grant Date		RSU and PSU	Grant Date
	Aggregate Units	Fair Value		Aggregate Units	Fair Value
Unvested at January 1, 2023	582,012	$	164.60	582,012	$	164.60
Granted⁽¹⁾	193,812		247.90	193,812		247.90
Vested	(870)		152.93	(4,075)		157.22
Cancelled or forfeited	(2,002)		170.84	(13,693)		177.18
Unvested at March 31, 2023	772,952	$	185.48
Unvested at September 30, 2023				758,056	$	185.71
Shares reserved for future grants (all plans)	1,457,448			1,479,570

(1)	Comprised of 109,683 RSUs and 84,129 PSUs granted in February 2023. The ~~service-based~~ RSUs cliff vest on December 1, 2025 and the ~~performance-based RSUs~~PSUs are subject to a 3-year performance period ending December 31, 2025.

As of ~~March 31,~~September 30, 2023, there was ~~$123.9~~$82.5 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. The unrecognized compensation cost~~ is expected to be recognized, net of actual forfeitures and cancellations, over a weighted average period of ~~2.0~~1.7 years.

Share Repurchases

Our share repurchase activity during the ~~first quarters of~~nine months ended September 30, 2023 and 2022 was as follows:


	2023					2022					2023					2022
		Average Cost					Average Cost					Average Cost					Average Cost
	Shares	Per Share		Amount		Shares	Per Share		Amount		Shares	Per Share		Amount		Shares	Per Share		Amount
				(in millions)					(in millions)					(in millions)					(in millions)
First quarter	160,224	$	242.86	$	38.9	113,529	$	150.97	$	17.1	160,224	$	242.86	$	38.9	113,529	$	150.97	$	17.1
Second quarter											308,454		239.55		73.9	1,085,635		178.61		193.9
Third quarter											467,213		270.49		126.4	1,883,093		178.79		336.7
											935,891	$	255.56	$	239.2	3,082,257	$	177.70	$	547.7

OnFrom October 2, 2023 through October 24, 2023, we repurchased 575,060 shares at an average cost per share of $255.15, for a total of $146.7 million, resulting in $294.8 million of our common stock remaining available for repurchase under our July ~~26,~~ 2022 ~~our~~authorization. Our Board of Directors subsequently amended our share repurchase program to increase the repurchase authorization to ~~$1.0 billion.~~$1.5 billion effective October 30, 2023. 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. Repurchased and subsequently retired shares are restored to the status of authorized but unissued shares. ~~As of March 31, 2023, we had remaining authorization under the program to repurchase $641.8 million of our common stock~~.

We may repurchase shares through a variety of methods including, but not limited to, open market purchases, accelerated share repurchases, negotiated block purchases and transactions structured through investment banking institutions under plans relying on Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange ~~Act.~~Act of 1934, as amended (the “Exchange Act”).

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Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss included the following:


			Pension and						Pension and
	Foreign Currency		Postretirement Benefit		Accumulated Other		Foreign Currency		Postretirement Benefit		Accumulated Other
	Translation		Plan Adjustments,		Comprehensive		Translation		Plan Adjustments,		Comprehensive
	(Loss) Gain		Net of Tax		Loss		Loss		Net of Tax		Loss
			(in millions)						(in millions)
Balance as of January 1, 2023	$	(84.0)	$	(2.3)	$	(86.3)	$	(84.0)	$	(2.3)	$	(86.3)
Current-period change		0.6		(0.8)		(0.2)		(10.7)		(2.4)		(13.1)
Balance as of March 31, 2023	$	(83.4)	$	(3.1)	$	(86.5)
Balance as of September 30, 2023							$	(94.7)	$	(4.7)	$	(99.4)

Foreign currency translation adjustments have not been adjusted for income taxes. Pension and postretirement benefit plan adjustments are amortized over service periods and reflected in the amortization of net loss component of our net

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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,~~September 30, 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 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 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. In 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, 2022 for further discussion of risks that could adversely affect our estimates and judgments.~~

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Note 10. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended March 31,

2023

2022

(in millions, except number of shares which are reflected in thousands and per share amounts)
Numerator:

Net income attributable to Reliance
$
383.1

$
523.3

Denominator:

Weighted average shares outstanding

58,832

61,833
Dilutive effect of stock-based awards

702

951
Weighted average diluted shares outstanding

59,534

62,784

Earnings per share attributable to Reliance stockholders:

Basic
$
6.51

$
8.46
Diluted
$
6.43

$
8.33


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022

	(in millions, except number of shares which are reflected in thousands and per share amounts)
Numerator:
Net income attributable to Reliance	$	295.0	$	393.5	$	1,063.2	$	1,489.6

Denominator:
Weighted average shares outstanding		58,427		60,055		58,648		61,175
Dilutive effect of stock-based awards		697		929		685		939
Weighted average diluted shares outstanding		59,124		60,984		59,333		62,114

Earnings per share attributable to Reliance stockholders:
Basic	$	5.05	$	6.55	$	18.13	$	24.35
Diluted	$	4.99	$	6.45	$	17.92	$	23.98

The computations of earnings per share for the ~~first quarters of~~nine months ended September 30, 2023 and 2022 do not include ~~194,304~~68,453 and ~~314,042~~111,251 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.

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RELIANCE STEEL & ALUMINUM CO.

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

The terms “Company,” “Reliance,” “we,” “our,” and “us” refer to Reliance Steel & Aluminum Co. and all its subsidiaries that are consolidated in accordance with U.S. generally accepted accounting principles, unless otherwise indicated.

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 major commodity product pricing and our results of operations, margins, profitability, taxes, liquidity, macroeconomic conditions, including inflation and the possibility of an economic recession or slowdown, litigation matters and capital resources. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “preliminary,” “range,” “intend” and “continue,” the negative of these terms, and similar expressions. 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 these forward-looking statements as a result of various important factors, including, but not limited to, actions taken by us, as well as developments beyond our control, including, but not limited to, the impacts of labor constraints and supply chain disruptions ~~the continuing pandemic~~ and changes in worldwide and U.S. political and economic conditions such 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,~~slowing growth, outbreaks of infectious disease, conflicts such as the ~~conflict between Russia~~war in Ukraine and ~~Ukraine~~the evolving events in Israel and Gaza or otherwise, could lead to a decline in demand for our products and services and 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, 2022 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.

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Overview

~~We delivered solid financial performance~~Tons sold increased 1.1% and 3.4% for the third quarter and nine months ended September 30, 2023 compared to the same periods in ~~the first quarter of 2023. Our first quarter of 2023 results included an~~2022, respectively, due to healthy demand in our key end markets, including non-residential construction (our largest end market) and aerospace, as well as contributions from our organic growth activities. The 3.4% increase in our tons sold ~~a strong gross profit margin that was consistent with~~for the ~~first quarter of 2022 and strong operating cash flow through outstanding operational execution~~nine months ended September 30, 2023 outperformed the 1.0% increase in ~~an uncertain business environment. We believe our ability to maintain a strong gross profit margin in~~industry shipments as reported by the ~~first quarter of 2023 was supported by our diversified business model, value-added processing capabilities and ability to service small order sizes with quick turnaround.~~Metals Service Center Institute (“MSCI”).

~~Key results for the first quarter of 2023 compared with the first quarter of 2022 were as follows:~~

●

~~7.2% increase in tons sold.~~

●

~~Net sales of $3.97 billion were down 11.6%; reflecting a 17.7% decrease in average selling price per ton sold.~~

●

~~Gross profit margin of 30.9%.~~

●

~~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 Company-wide goal of 4.7x and our 4.4x ratein the prior year quarter.~~

●

~~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~~declined in the ~~first~~third quarter ofand nine months ended September 30, 2023 ~~was primarily~~compared to the same periods in 2022 due to ~~a 17.7% decline~~declines in our average selling price per ton sold that were partially offset ~~a strong 7.2% increase~~by increases in our tons sold. Our average selling price per ton sold peaked at an ultimate record in the second quarter of 2022 and subsequently declined thereafter, including through the nine months ended September 30, 2023.

We believe record metals pricing in 2022 was largely driven by supply chain disruptions caused by the onset of the conflict between Russia and Ukraine, labor supply and microchip shortages, and impacts of the COVID-19 pandemic, including the omicron variant surge and lockdowns in China.

Gross profit margins for the third quarter and nine months ended September 30, 2023 were 29.7% and 30.7%, respectively, compared to 29.2% and 30.7% for the respective 2022 periods.

Earnings per diluted share were $4.99 and $17.92 for the third quarter and nine months ended September 30, 2023, respectively, compared to $6.45 and $23.98 for the respective 2022 periods. Lower gross profit, driven by lower metals prices that more than offset increases in tons sold, ~~compared~~contributed to ~~the first quarter of 2022. The increase~~decreases 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. earnings per share.

~~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~~Cash flow from operations of ~~$384.6 million in~~$1.15 billion for the ~~first quarter of~~nine months ended September 30, 2023 decreased ~~only $19.4 million, or 4.8%, compared to record first quarter levels~~from $1.31 billion for the same period 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~~profitability partially offset by lower working capital needs.

Organic growth activities were substantially comprised of capital expenditures of $358.6 million for the nine months ended September 30, 2023 compared to $249.7 million for the same period in 2022.

Returns to stockholders for the nine months ended September 30, 2023 totaled $418.5 million, comprised of $179.3 million of cash dividends and ~~volatility. Our strong cash flow generation enabled us to grow our business and increase returns to stockholders. During the first quarter~~$239.2 million of share repurchases.

Acquisition

On May 1, 2023, we ~~invested~~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 ~~our future growth with~~Memphis, Tennessee, Southern Steel now operates as 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~~subsidiary of ~~2023 we completed the redemption~~Siskin Steel & Supply Company, Inc., a wholly owned subsidiary of ~~$500.0 million aggregate principal amount of senior unsecured notes~~Reliance. The acquisition was funded with cash on hand. Included in our net sales for the nine months ended September 30, 2023 were net sales of $20.2 million from Southern Steel.

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We believe our strong liquidity position that includes substantial cash on hand, strong cash flow generation and $1.5 billion of availability under our revolving credit facility 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.

Results of Operations

The following sets forth certain income statement data for the ~~first quarters of~~third quarter and nine months ended September 30, 2023 and 2022 (dollars are shown in millions, except ~~for~~ per share amounts, and certain amounts may not calculate due to rounding):


									Three Months Ended								Nine Months Ended
	Three Months Ended March 31,								September 30,								September 30,
	2023				2022				2023				2022				2023				2022
			% of				% of				% of				% of				% of				% of
	$		Net Sales		$		Net Sales		$		Net Sales		$		Net Sales		$		Net Sales		$		Net Sales
Net sales	$	3,965.3	100.0	%	$	4,485.8	100.0	%	$	3,623.0	100.0	%	$	4,247.2	100.0	%	$	11,468.6	100.0	%	$	13,414.2	100.0	%
Cost of sales (exclusive of depreciation and amortization expense shown below)⁽¹⁾		2,739.3	69.1			3,098.7	69.1			2,546.0	70.3			3,008.2	70.8			7,942.9	69.3			9,292.7	69.3
Gross profit⁽²⁾		1,226.0	30.9			1,387.1	30.9			1,077.0	29.7			1,239.0	29.2			3,525.7	30.7			4,121.5	30.7
Warehouse, delivery, selling, general and administrative expense (“SG&A”)		651.3	16.4			611.9	13.6			626.9	17.3			630.1	14.8			1,928.8	16.8			1,890.6	14.1
Depreciation and amortization expense		61.1	1.5			59.1	1.3			60.6	1.7			60.4	1.4			182.5	1.6			178.8	1.3
Operating income	$	513.6	13.0	%	$	716.1	16.0	%	$	389.5	10.8	%	$	548.5	12.9	%	$	1,414.4	12.3	%	$	2,052.1	15.3	%

Net income attributable to Reliance	$	383.1	9.7	%	$	523.3	11.7	%	$	295.0	8.1	%	$	393.5	9.3	%	$	1,063.2	9.3	%	$	1,489.6	11.1	%
Diluted earnings per share attributable to Reliance stockholders	$	6.43			$	8.33			$	4.99			$	6.45			$	17.92			$	23.98

(1)	Cost of sales infor the ~~first quarter of~~nine months ended September 30, 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 expense associated with the corresponding sales. About half of our orders are basic distribution with no processing services performed. For the remainder of our sales orders, we perform “first-stage” processing, which is generally not labor intensive as we are simply cutting the metal to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, is not significant and is excluded from cost of sales. Therefore, our cost of sales is substantially comprised of the cost of the material we sell. We use gross profit and gross profit margin as shown above as measures of operating performance. Gross profit and gross profit margin are important operating and financial measures as their fluctuations can have a significant impact on our earnings. Gross profit and gross profit margin, as presented, are not necessarily comparable with similarly titled measures for other companies.

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~~First~~Third Quarter and Nine Months Ended ~~March 31,~~September 30, 2023 Compared to ~~First~~Third Quarter and Nine Months Ended ~~March 31,~~September 30, 2022

Net Sales

Three Months Ended March 31,



Percentage

2023

2022

Change

Change

(dollars in millions, tons in thousands)

Net sales
$
3,965.3

$
4,485.8

$
(520.5)

(11.6)
%
Tons sold

1,520.1

1,417.7

102.4

7.2
%
Average selling price per ton sold
$
2,623

$
3,186

$
(563)

(17.7)
%


	September 30,				Dollar		Percentage
	2023		2022		Change		Change

	(dollars in millions)
Net sales (three months ended)	$	3,623.0	$	4,247.2	$	(624.2)	(14.7)	%
Net sales (nine months ended)	$	11,468.6	$	13,414.2	$	(1,945.6)	(14.5)	%

	September 30,				Tons		Percentage
	2023		2022		Change		Change

	(tons in thousands)
Tons sold (three months ended)		1,420.8		1,406.0		14.8	1.1	%
Tons sold (nine months ended)		4,425.0		4,279.6		145.4	3.4	%

	September 30,				Price		Percentage
	2023		2022		Change		Change
Average selling price per ton sold (three months ended)	$	2,552	$	3,039	$	(487)	(16.0)	%
Average selling price per ton sold (nine months ended)	$	2,602	$	3,156	$	(554)	(17.6)	%

Our tons sold and average selling price per ton sold exclude our tons toll processed. Our average selling price per ton sold includes intercompany transactions that are eliminated from our consolidated net sales.

Our net sales ~~decreased~~declined from record ~~first quarter~~third-quarter levels ofin the comparable 2022 periods due to ~~a significant decline~~declines in our average selling price per ton sold that ~~was~~were partially offset by ~~a strong increase~~increases in tons sold. ~~Demand was~~The increases in our tons sold were due to healthy demand in ~~the vast majority of~~ our key end

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markets, ~~with particular strength in~~including non-residential construction ~~the toll processing services we provide to the automotive market, general manufacturing~~(our largest end market) and ~~aerospace.~~aerospace, as well as contributions from our organic growth activities.

Our average selling price per ton sold peaked in the second quarter of 2022 and subsequently declined thereafter, including through the nine months ended September 30, 2023. We believe record metals pricing in 2022 was largely driven by supply chain disruptions caused by the onset of the conflict between Russia and Ukraine, labor supply and microchip shortages, and impacts of the COVID-19 pandemic, including the omicron variant surge and lockdowns in China.

Since we primarily purchase and sell our inventories in the spot market, our average selling prices generally fluctuate similarly with the changes in the costs of the various metals we ~~purchase. Our average selling price in~~purchase; the ~~first quarter of 2022 was a 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 versus historical levels throughout the first quarter of 2023.~~

~~The~~ mix of products sold can also have an impact on our ~~overall~~ average selling price per ton sold. As ~~carbon~~carbon steel sales represented ~~approximately 52%~~53% of our gross sales for the ~~first quarter of~~nine months ended September 30, 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:


					Three Months Ended				Nine Months Ended
					September 30				September 30
	Change in		Change in		Change in		Change in		Change in		Change in
	Average Selling		Percentage of		Average Selling		Percentage of		Average Selling		Percentage of
	Price Per		Total		Price Per		Total		Price Per		Total
	Ton Sold		Tons Sold		Ton Sold		Tons Sold		Ton Sold		Tons Sold
Carbon steel	(23.6)	%	1.6	%	(17.2)	%	0.5	%	(20.7)	%	1.0	%
Aluminum	(1.3)	%	(0.5)	%	(7.8)	%	(0.2)	%	(5.9)	%	(0.3)	%
Stainless steel	(2.9)	%	(1.1)	%	(14.1)	%	(0.5)	%	(11.1)	%	(0.8)	%
Alloy	13.9	%	(0.4)	%	4.5	%	(0.3)	%	7.5	%	(0.3)	%

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Cost of Sales and Gross Profit


	Three Months Ended March 31,												September 30,
	2023				2022								2023				2022
			% of				% of		Dollar		Percentage				% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change		$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)												(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)	*
Cost of sales (three months ended)													$	2,546.0	70.3	%	$	3,008.2	70.8	%	$	(462.2)	(15.4)	%
Cost of sales (nine months ended)													$	7,942.9	69.3	%	$	9,292.7	69.3	%	$	(1,349.8)	(14.5)	%
Gross profit (three months ended)													$	1,077.0	29.7	%	$	1,239.0	29.2	%	$	(162.0)	(13.1)	%
Gross profit (nine months ended)													$	3,525.7	30.7	%	$	4,121.5	30.7	%	$	(595.8)	(14.5)	%
LIFO (income) expense (three months ended)													$	(45.0)	(1.2)	%	$	(27.5)	(0.6)	%	$	(17.5)	*
LIFO (income) expense (nine months ended)													$	(105.0)	(0.9)	%	$	22.5	0.2	%	$	(127.5)	*

* Not meaningful.

Gross profit in the ~~first~~third quarter ofand nine months ended September 30, 2023 decreased from the ~~first quarter of~~same periods in 2022 mainly due to lower sales as a result of ~~a decrease~~decreases in average selling price per ton sold that ~~outpaced an increase~~more than offset increases in tons sold.

In addition, we record in cost of sales non-cash adjustments to our LIFO method inventory valuation reserve ~~which are included in cost of sales and,~~that, in effect, reflects cost of sales at current replacement costs. The inventory caption of our consolidated balance sheet included a LIFO method inventory valuation reserve of ~~$728.8~~$638.8 million at ~~March 31,~~September 30, 2023.

Furthermore, cost of sales infor the ~~first quarter of~~nine months ended September 30, 2022 ~~was reduced by~~included $8.1 million of non-recurring amortization of inventory step-up to fair value adjustments related to our 2021 acquisitions that decreased gross profit margin 20by ten basis points.

~~Our~~We were able to achieve stable gross profit ~~margin~~margins despite the significantly different metals pricing environments, with our average selling price per ton sold declining 17.6% during the nine months ended September 30, 2023 compared to the 30.0% increase in our average selling price per ton sold during the ~~first quarter of 2023 was strong and unchanged from the first quarter of~~nine months ended September 30, 2022. We believe that our ~~strong and consistent~~ gross profit ~~margin was~~margins are supported by our product diversity, small order sizes, investments in value-added processing ~~equipment in recent years, relatively higher metal pricing versus historical levels~~capabilities and healthy ~~demand.~~demand in the majority of end markets we serve.

See “Net Sales” above for further discussion on product pricing trends.

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Expenses


	Three Months Ended March 31,												September 30,
	2023				2022								2023				2022
			% of				% of		Dollar		Percentage				% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change		$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)												(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	%
SG&A expense (three months ended)													$	626.9	17.3	%	$	630.1	14.8	%	$	(3.2)	(0.5)	%
SG&A expense (nine months ended)													$	1,928.8	16.8	%	$	1,890.6	14.1	%	$	38.2	2.0	%
Depreciation & amortization expense (three months ended)													$	60.6	1.7	%	$	60.4	1.4	%	$	0.2	0.3	%
Depreciation & amortization expense (nine months ended)													$	182.5	1.6	%	$	178.8	1.3	%	$	3.7	2.1	%

~~The increase in our~~Our SG&A expense ~~was~~increased for the nine months ended September 30, 2023 compared to the same period in 2022 mainly due to higher variable costs associated with ~~higher~~increases in our tons sold, including increased headcount, and inflationary ~~wage increases,~~impacts on wages, 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%.~~ 35.1% compared to the same period in 2022.

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Our SG&A expense as a percentage of sales for the third quarter and nine months ended September 30, 2023 compared to the same periods in 2022 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,												September 30,
	2023				2022								2023				2022
			% of				% of		Dollar		Percentage				% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change		$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)												(dollars in millions)
Operating income	$	513.6	13.0	%	$	716.1	16.0	%	$	(202.5)	(28.3)	%
Operating income (three months ended)													$	389.5	10.8	%	$	548.5	12.9	%	$	(159.0)	(29.0)	%
Operating income (nine months ended)													$	1,414.4	12.3	%	$	2,052.1	15.3	%	$	(637.7)	(31.1)	%

The ~~decrease~~decreases in our operating income ~~was~~for the third quarter and nine months ended September 30, 2023 as compared to the same periods in 2022 were mainly a result of lower gross profit, driven by lower ~~sales due mainly to lower~~ metals prices that more than offset increases in tons sold, along with a moderate ~~increase~~changes in SG&A expense ~~that was~~attributable to increases in our tons sold and inflationary impacts on wages.

Our gross profit margins were generally consistent with the ~~increase~~same periods in 2022 and consequently the decreases in our ~~tons sold. Our~~ operating income ~~margin decline was consistent with~~margins for the ~~increase in our SG&A expense as a percentage of sales that was~~third quarter and nine months ended September 30, 2023 were mainly due to our lower ~~sales.~~sales levels that decreased operating leverage of our SG&A expenses.

Other (Income) Expense, Net


	September 30,
	2023				2022
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
Other (income) expense, net (three months ended)	$	(8.2)	(0.2)	%	$	8.9	0.2	%	$	(17.1)	*
Other (income) expense, net (nine months ended)	$	(23.3)	(0.2)	%	$	21.5	0.2	%	$	(44.8)	*

* Not meaningful.

The changes in other (income) expense, net in the third quarter and nine months ended September 30, 2023 compared to the same periods in 2022 were mainly due to increases in interest income as a result of higher cash and cash equivalent balances and interest rates earned on bank deposits and cash equivalents.

Income Tax Rate

Financial Condition

Operating Activities

Net cash provided by operations of ~~$384.6 million in~~$1.15 billion for the ~~first quarter of~~nine months ended September 30, 2023 ~~was~~decreased slightly less than record first quarter cash flow of $404.0 million in 2022. We were able to achieve consistent operating cash flow as the decline in our net income required a similar decrease in working capital investment in the first quarter of 2023 compared tofrom $1.31 billion for the same period in ~~2022, due to the~~2022. The impact of lower profitability on operating cash flow was offset by

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lower working capital needs, resulting in relatively ~~flat pricing environment~~consistent levels of operating cash flow in ~~the first quarter of 2023 compared to the same period in 2022 in which our average selling price had increased significantly to a record level.~~both periods. To manage our working capital, we focus on our days sales outstanding and inventory turnover rate as receivables and inventory are the two most significant elements of our working capital. As of ~~March 31,~~September 30, 2023 and 2022, our days sales outstanding ~~rate was 40.0~~rates were 40.3 days and ~~39.1~~39.6 days, respectively. Our inventory turnover rate (based on tons) during the ~~first quarter of~~nine months ended September 30, 2023 was ~~4.9~~4.7 times (or ~~2.4~~2.6 months on hand), compared to ~~4.4~~4.3 times (or ~~2.7~~2.8 months on hand) infor the ~~first quarter of~~same period in 2022.

Income taxes paid were ~~$21.2~~$305.2 million in the ~~first quarter of~~nine months ended September 30, 2023 compared to ~~$89.8~~$596.8 million in the ~~first quarter of~~same period in 2022. The decrease in our taxes paid was mainly due to ~~income~~lower estimated tax ~~extension~~ payments in the ~~first quarter~~nine months ended September 30, 2023 compared to the same period in 2022 as a result of ~~2022 which were not required in the first quarter of 2023.~~decreased pretax income.

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Investing Activities

Net cash used in investing activities was ~~$102.6~~$367.8 million infor the ~~first quarter of~~nine months ended September 30, 2023 compared to ~~$63.3~~$244.4 million infor the ~~first quarter of~~same period in 2022 and ~~were~~was substantially comprised of capital ~~expenditures.~~expenditures and the purchase price for our acquisition of Southern Steel on May 1, 2023. The majority of our capital expenditures in the ~~first quarters of~~nine months ended September 30, 2023 and 2022 were related to growth initiatives.

Financing Activities

Net cash used in financing activities was ~~$639.2~~$970.7 million infor the ~~first quarter of~~nine months ended September 30, 2023 compared to ~~$92.0~~$711.1 million infor the ~~first quarter of~~same period in 2022, mainly due to the redemption of $500.0 million aggregate outstanding principal amount of senior notes in January 2023 offset by decreased share repurchases. In the ~~first quarter of~~nine months ended September 30, 2023, we spent ~~$38.9~~$239.2 million to repurchase shares of our common stock compared to ~~$17.1~~$547.7 million in the ~~first quarter of~~same period in 2022. Our other stockholder ~~return activities~~returns included an increase in our quarterly dividend rate with total dividend payments of ~~$62.0~~$179.3 million in the ~~first quarter of~~nine months ended September 30, 2023 compared to ~~$56.7~~$163.5 million in the ~~first quarter of~~same period in 2022. We also spent ~~$37.2~~$41.3 million on taxes relating to net share settlement of ~~performance-based~~ restricted stock units in the ~~first quarter of~~nine months ended September 30, 2023 compared to ~~$17.1~~$21.6 million in the ~~first quarter of~~same period in 2022.

On ~~April 25,~~October 24, 2023, our Board of Directors declared the 2023 ~~second~~fourth quarter cash dividend of $1.00 per share. We have increased our quarterly dividend 30 times since our IPO in 1994, with the most recent increase of 14.3% from $0.875 per share to $1.00 per share effective in the first quarter of 2023. We have paid quarterly cash dividends on our common stock for 64 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~~2023 share repurchases.

On ~~July 26, 2022,~~October 24, 2023, our Board of Directors amended our share repurchase program to increase the repurchase authorization to ~~$1.0 billion.~~$1.5 billion effective October 30, 2023. ~~At March 31, 2023, $641.8 million of our common 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.

~~Since~~From 2018 through September 30, 2023, we have repurchased approximately ~~16.1~~16.9 million shares at an average cost of ~~$115.65~~$122.20 per share, for a total of ~~$1.86~~$2.07 billion, resulting in a ~~22.2%~~23.3% reduction in our common shares 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,~~September 30, 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,~~September 30, 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.

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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,~~Credit Agreement, will be sufficient to satisfy our cash requirements and stockholder return activities over the next 12 months and beyond. As of ~~March 31,~~September 30, 2023, we had ~~$816.2~~$976.9 million in cash and cash equivalents and our net debt-to-total capital ratio (net debt-to-total capital is calculated as carrying amount of debt, net of cash, divided by total Reliance stockholders’ equity plus carrying amount of debt, net of cash) was ~~4.3%~~2.1%, down from 6.3% as of December 31, 2022.

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As of ~~March 31,~~September 30, 2023, we had ~~$408.5~~$400.6 million of debt obligations coming due before our ~~$1.5 billion revolving credit facility expires~~Credit Agreement matures 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. In addition to funds generated from operations and ~~nearly~~ $1.5 billion available under our ~~revolving credit facility,~~Credit Agreement, 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. Additionally, we believe our investment grade credit ratings enhance our ability to effectively raise capital, if ~~needed.~~desired.

Covenants

The Credit Agreement and indentures 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,~~September 30, 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. 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,~~September 30, 2023, or approximately ~~21%~~20% of total assets and ~~29%~~27% of total equity. Additionally, other intangible assets, net amounted to ~~$1.01 billion~~$990.1 million at ~~March 31,~~September 30, 2023, or approximately ~~10%~~9% of total assets and ~~14%~~13% 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

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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.

During the third quarter ended ~~March 31,~~September 30, 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

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and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 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 at ~~www.investor.rsac.com~~www.rsac.com, and our investors relations website, 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~~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.~~quarterly report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

InFor the ~~ordinary course of business, we are exposed to various~~Company’s disclosures about 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. Seeplease see Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to the Company’s exposures to market risk as disclosed in Part II—Item 7A of the Company’s 2022 ~~for further discussion on quantitative and qualitative disclosures about market risk.~~Annual Report.

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, we 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~~third quarter ofended September 30, 2023 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 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.

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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, 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 Exchange Act.

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Our share repurchase activity for the ~~first~~third quarter of 2023 was as follows:


				Total Number of	Maximum Dollar					Total Number of	Maximum Dollar
	Total Number	Average Price		Shares Purchased	Value That May		Total Number	Average Price		Shares Purchased	Value That May
	of Shares	Paid		as Part of Publicly	Yet Be Purchased		of Shares	Paid		as Part of Publicly	Yet Be Purchased
Period	Purchased	Per Share		Announced Plan	Under the Plan⁽¹⁾		Purchased	Per Share		Announced Plan	Under the Plan⁽¹⁾
					(in millions)						(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
July 1 - July 31, 2023							—	$	—	—	$	567.9
August 1 - August 31, 2023							115,435	$	282.43	115,435	$	535.3
September 1 - September 30, 2023							351,778	$	266.57	351,778	$	441.6
Total	160,224	$	242.86	160,224			467,213	$	270.49	467,213

(1)

All repurchases were made under our $1.0 billion share repurchase program authorized by our Board of Directors on July 26, 2022. From October 2, 2023 through October 24, 2023, we repurchased 575,060 shares at an average cost per share of $255.15, for a total of $146.7 million, resulting in $294.8 million of our common stock remaining available for repurchase under our July 2022 authorization. Our Board of Directors subsequently amended our share repurchase program to increase the repurchase authorization to $1.5 billion effective October 30, 2023. 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. Under the share repurchase plan, shares may be repurchased~~pursuant~~ through a variety of methods including, but not limited to, ~~pre-set trading~~open market purchases, accelerated share repurchases, negotiated block purchases and transactions structured through investment banking institutions under plans ~~meeting the requirements of~~relying on Rule 10b5-1 and/or Rule 10b-18 under the ~~Securities~~ Exchange ~~Act of 1934, in the open market, in privately negotiated transactions or otherwise.~~Act.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None.~~During the third quarter ended September 30, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408(a) of Regulation S-K).

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Item 6. Exhibits


Exhibit Number		Description
10.1†*		~~Registrant’s Second Amendment to Deferred Compensation Plan (Amended and Restated Effective January 1, 2013) dated as of February 14, 2023.~~
~~10.2~~		Amendment No. 1, dated as of January 12, 2023, to Amended and Restated Credit Agreement, dated as of September 3, 2020, among Reliance Steel & Aluminum Co., as Borrower, Bank of America N.A., as the Administrative Agent, and each of the lenders party thereto (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed on February 28, 2023).
31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
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,~~September 30, 2023 formatted in iXBRL (Inline eXtensible Business Reporting Language) includes: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income and Comprehensive Income, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Statements of Cash Flows, and (v) related notes to these consolidated financial statements.
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.

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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 4,~~November 2, 2023	By:	/s/ Arthur Ajemyan

		Arthur Ajemyan
		Senior Vice President and Chief Financial Officer
		(Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)

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	(in millions)
2023 (remaining nine months)	$	31.8
2024		40.1
2025		35.9
2026		26.4
2027		25.8
Thereafter		82.2
	$	242.2