Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 29, 2022 | |
Cover Abstract | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-13122 | |
Entity Registrant Name | RELIANCE STEEL & ALUMINUM CO | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-1142616 | |
Entity Address, Address Line One | 16100 N. 71st Street, Suite 400 | |
Entity Address, City or Town | Scottsdale | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85254 | |
City Area Code | 480 | |
Local Phone Number | 564-5700 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | RS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 60,294,131 | |
Entity Central Index Key | 0000861884 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 504.5 | $ 300.5 |
Accounts receivable, less allowance for credit losses of $31.8 at June 30, 2022 and $26.7 at December 31, 2021 | 2,053.3 | 1,683 |
Inventories | 2,352.1 | 2,065 |
Prepaid expenses and other current assets | 106.2 | 111.6 |
Income taxes receivable | 7.8 | |
Total current assets | 5,023.9 | 4,160.1 |
Property, plant and equipment: | ||
Land | 260.7 | 260.1 |
Buildings | 1,298.6 | 1,285 |
Machinery and equipment | 2,346 | 2,241.4 |
Accumulated depreciation | (2,017) | (1,949.7) |
Property, plant and equipment, net | 1,888.3 | 1,836.8 |
Operating lease right-of-use assets | 221.5 | 224.6 |
Goodwill | 2,109.4 | 2,107.6 |
Intangible assets, net | 1,045.8 | 1,077.7 |
Cash surrender value of life insurance policies, net | 32.5 | 44.9 |
Other assets | 81.3 | 84.3 |
Total assets | 10,402.7 | 9,536 |
Current liabilities: | ||
Accounts payable | 663.8 | 453.9 |
Accrued expenses | 175.8 | 148.2 |
Accrued compensation and retirement costs | 222.9 | 294 |
Accrued insurance costs | 39.5 | 41 |
Current maturities of long-term debt and short-term borrowings | 509.7 | 5 |
Current maturities of operating lease liabilities | 53.9 | 58.6 |
Income taxes payable | 64.3 | |
Total current liabilities | 1,665.6 | 1,065 |
Long-term debt | 1,138 | 1,642 |
Operating lease liabilities | 166.8 | 162.5 |
Deferred compensation and retirement costs | 80.2 | 81 |
Other long-term liabilities | 6.9 | 7 |
Deferred income taxes | 482.1 | 484.8 |
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-60,869 at June 30, 2022 and 61,806 at December 31, 2021 | 0.1 | 0.1 |
Retained earnings | 6,942.5 | 6,155.3 |
Accumulated other comprehensive loss | (88.3) | (68.9) |
Total Reliance stockholders' equity | 6,854.3 | 6,086.5 |
Noncontrolling interests | 8.8 | 7.2 |
Total equity | 6,863.1 | 6,093.7 |
Total liabilities and equity | $ 10,402.7 | $ 9,536 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for credit losses | $ 31.8 | $ 26.7 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, Authorized shares | 5,000 | 5,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, Authorized shares | 200,000 | 200,000 |
Common stock, Issued shares | 60,869 | 61,806 |
Common stock, outstanding shares | 60,869 | 61,806 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONSOLIDATED STATEMENTS OF INCOME | ||||
Net sales | $ 4,681.2 | $ 3,418.8 | $ 9,167 | $ 6,257.2 |
Costs and expenses: | ||||
Cost of sales (exclusive of depreciation and amortization shown below) | 3,185.8 | 2,336.6 | 6,284.5 | 4,221.3 |
Warehouse, delivery, selling, general and administrative (SG&A) | 648.6 | 563.3 | 1,260.5 | 1,081.8 |
Depreciation and amortization | 59.3 | 58.5 | 118.4 | 115.4 |
Total costs and expenses | 3,893.7 | 2,958.4 | 7,663.4 | 5,418.5 |
Operating income | 787.5 | 460.4 | 1,503.6 | 838.7 |
Other expense: | ||||
Interest expense | 15.6 | 15.7 | 31.2 | 31.4 |
Other expense, net | 9.3 | 0.6 | 12.6 | 4.2 |
Income before income taxes | 762.6 | 444.1 | 1,459.8 | 803.1 |
Income tax provision | 188.7 | 113.9 | 361.3 | 204.7 |
Net income | 573.9 | 330.2 | 1,098.5 | 598.4 |
Less: net income attributable to noncontrolling interests | 1.1 | 1.1 | 2.4 | 2.4 |
Net income attributable to Reliance | $ 572.8 | $ 329.1 | $ 1,096.1 | $ 596 |
Earnings per share attributable to Reliance stockholders: | ||||
Diluted (in dollars per share) | $ 9.15 | $ 5.08 | $ 17.49 | $ 9.20 |
Basic (in dollars per share) | $ 9.29 | $ 5.17 | $ 17.75 | $ 9.36 |
Shares used in computing earnings per share: | ||||
Diluted (in shares) | 62,594 | 64,793 | 62,688 | 64,752 |
Basic (in shares) | 61,657 | 63,663 | 61,744 | 63,654 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 573.9 | $ 330.2 | $ 1,098.5 | $ 598.4 |
Other comprehensive (loss) income: | ||||
Foreign currency translation (loss) gain | (20) | 4.5 | (19.3) | 3.3 |
Postretirement benefit plan adjustments, net of tax | (0.1) | |||
Total other comprehensive (loss) income | (20) | 4.5 | (19.4) | 3.3 |
Comprehensive income | 553.9 | 334.7 | 1,079.1 | 601.7 |
Less: Comprehensive income attributable to noncontrolling interests | 1.1 | 1.1 | 2.4 | 2.4 |
Comprehensive income attributable to Reliance | $ 552.8 | $ 333.6 | $ 1,076.7 | $ 599.3 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Reliance Shareholders' | Common Stock and Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests | Total |
Balance at Dec. 31, 2020 | $ 0.1 | $ 5,193.2 | $ (77.9) | $ 7.3 | $ 5,122.7 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 596 | 598.4 | ||||
Cash dividends and dividend equivalents | (88.6) | |||||
Other comprehensive (loss) income | 3.3 | 2.4 | 3.3 | |||
Dividend paid | (2.4) | |||||
Stock-based compensation | 37.9 | |||||
Common stock withheld related to net share settlements | (8.3) | |||||
Repurchase of common shares | (24) | (24) | ||||
Balance at Jun. 30, 2021 | $ 5,631.7 | 5.7 | 5,700.6 | (74.6) | 7.3 | 5,639 |
Balance at Mar. 31, 2021 | 6.6 | 5,415.3 | (79.1) | 6.2 | 5,349 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 329.1 | 330.2 | ||||
Cash dividends and dividend equivalents | (43.8) | |||||
Other comprehensive (loss) income | 4.5 | 1.1 | 4.5 | |||
Stock-based compensation | 23.2 | |||||
Common stock withheld related to net share settlements | (0.1) | |||||
Repurchase of common shares | (24) | (24) | ||||
Balance at Jun. 30, 2021 | 5,631.7 | 5.7 | 5,700.6 | (74.6) | 7.3 | 5,639 |
Balance at Dec. 31, 2021 | 0.1 | 6,155.3 | (68.9) | 7.2 | 6,093.7 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Repurchase of common shares | (17.1) | |||||
Balance at Mar. 31, 2022 | 0.1 | 6,599.5 | (68.3) | 7.4 | 6,538.7 | |
Balance at Dec. 31, 2021 | 0.1 | 6,155.3 | (68.9) | 7.2 | 6,093.7 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 1,096.1 | 1,098.5 | ||||
Cash dividends and dividend equivalents | (110.6) | |||||
Other comprehensive (loss) income | (19.4) | 2.4 | (19.4) | |||
Capital contributions | 0.3 | |||||
Dividend paid | (1.1) | |||||
Stock-based compensation | 29.8 | |||||
Common stock withheld related to net share settlements | (17.1) | |||||
Repurchase of common shares | (12.7) | (198.3) | (211) | |||
Balance at Jun. 30, 2022 | 6,854.3 | 0.1 | 6,942.5 | (88.3) | 8.8 | 6,863.1 |
Balance at Mar. 31, 2022 | 0.1 | 6,599.5 | (68.3) | 7.4 | 6,538.7 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 572.8 | 573.9 | ||||
Cash dividends and dividend equivalents | (53.9) | |||||
Other comprehensive (loss) income | (20) | 1.1 | (20) | |||
Capital contributions | 0.3 | |||||
Stock-based compensation | 18 | |||||
Repurchase of common shares | (18) | (175.9) | (193.9) | |||
Balance at Jun. 30, 2022 | $ 6,854.3 | $ 0.1 | $ 6,942.5 | $ (88.3) | $ 8.8 | $ 6,863.1 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONSOLIDATED STATEMENTS OF EQUITY | ||||
Cash dividends per share (in dollars per share) | $ 0.875 | $ 0.6875 | $ 1.75 | $ 1.375 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities: | ||
Net income | $ 1,098.5 | $ 598.4 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 118.4 | 115.4 |
Provision for credit losses | 6.6 | 6.7 |
Deferred income tax benefit | (0.7) | (0.2) |
Stock-based compensation expense | 29.8 | 37.9 |
Net loss on life insurance policies and deferred compensation plan assets | (15.4) | (2.3) |
Other | 3.1 | (4) |
Changes in operating assets and liabilities (excluding effect of businesses acquired): | ||
Accounts receivable | (380.6) | (568.3) |
Inventories | (291.2) | (217.8) |
Prepaid expenses and other assets | 29.2 | 32.1 |
Accounts payable and other liabilities | 45.7 | 260.9 |
Net cash provided by operating activities | 674.2 | 263.4 |
Investing activities: | ||
Purchases of property, plant and equipment | (154.2) | (123.8) |
Proceeds from sales of property, plant and equipment | 9.2 | 26.1 |
Other | (4.4) | (0.9) |
Net cash used in investing activities | (149.4) | (98.6) |
Financing activities: | ||
Net short-term debt repayments | (0.8) | (0.8) |
Dividends and dividend equivalents paid | (110.6) | (88.6) |
Share repurchases | (211) | (24) |
Payments for taxes related to net share settlements | (17.1) | (8.3) |
Other | 23 | (0.7) |
Net cash used in financing activities | (316.5) | (122.4) |
Effect of exchange rate changes on cash and cash equivalents | (4.3) | 1.7 |
Increase in cash and cash equivalents | 204 | 44.1 |
Cash and cash equivalents at beginning of year | 300.5 | 683.5 |
Cash and cash equivalents at end of period | 504.5 | 727.6 |
Supplemental cash flow information: | ||
Interest paid during the period | 30.3 | 30.3 |
Income taxes paid during the period, net | $ 427.2 | $ 181.3 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited consolidated 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, our 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. The results of operations for the six months ended June 30, 2022 are not necessarily indicative of the results for the full year ending December 31, 2022. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto for the 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. 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. 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. 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 To the extent that, prior to December 31, 2022, we enter into any contract modifications for which the optional expedients are applied, the adoption of this standard is not expected to have a material impact on our consolidated results of operations, financial position or cash flows. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2022 | |
Acquisitions | |
Acquisitions | Note 2. Acquisitions 2021 Acquisitions In the fourth quarter of 2021, we acquired each of Merfish United, Inc., Admiral Metals Servicenter Company, Incorporated, Nu-Tech Precision Metals Inc. and Rotax Metals Inc. with cash on hand. Included in our net sales for the six months ended June 30, 2022 were combined net sales of $473.7 million from our 2021 acquisitions. 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. 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 Six Months Ended June 30, 2021 June 30, 2021 (in millions, except per share amounts) Pro forma: Net sales $ 3,662.3 $ 6,679.6 Net income attributable to Reliance $ 371.7 $ 655.7 Earnings per share attributable to Reliance stockholders: Diluted $ 5.74 $ 10.13 Basic $ 5.84 $ 10.30 |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2022 | |
Revenues. | |
Revenues | Note 3. Revenues The following table presents our net sales disaggregated by product and service. Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 (in millions) Carbon steel $ 2,625.8 $ 2,098.1 $ 5,173.3 $ 3,757.3 Stainless steel 807.1 539.5 1,572.0 992.4 Aluminum 716.8 498.8 1,409.6 961.6 Alloy 196.6 134.9 380.3 252.2 Toll processing and logistics 140.2 115.6 275.3 231.2 Other and eliminations 194.7 31.9 356.5 62.5 Total $ 4,681.2 $ 3,418.8 $ 9,167.0 $ 6,257.2 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill. | |
Goodwill | Note 4. 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 loss (2.7) Balance at June 30, 2022 $ 2,109.4 We had no accumulated impairment losses related to goodwill at June 30, 2022 and December 31, 2021. |
Intangible Assets, net
Intangible Assets, net | 6 Months Ended |
Jun. 30, 2022 | |
Intangible Assets, net | |
Intangible Assets, net | Note 5. Intangible Assets, net Intangible assets, net consisted of the following: June 30, 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 $ 714.7 $ (457.0) $ 713.0 $ (435.1) Backlog of orders 7.9 23.4 (1.7) 15.8 (0.2) Other 9.1 10.0 (9.6) 9.9 (9.4) 748.1 (468.3) 738.7 (444.7) Intangible assets not subject to amortization: Trade names 766.0 — 783.7 — $ 1,514.1 $ (468.3) $ 1,522.4 $ (444.7) Certain prior year amounts have been reclassified for consistency with the current period presentation. Amortization expense for intangible assets was $24.3 million and $18.4 million for the six months ended June 30, 2022 and 2021, respectively. Foreign currency translation losses related to intangible assets, net, were $1.6 million for the six months ended June 30, 2022 compared to foreign currency translation gains of $0.2 million for the six months ended June 30, 2021. 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 six months of 2022 and each of the succeeding five years: (in millions) 2022 (remaining six months) $ 23.9 2023 43.8 2024 40.3 2025 36.1 2026 26.6 2027 26.0 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Debt | Note 6. Debt Debt consisted of the following: June 30, December 31, 2022 2021 (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 1.30%, effective rate of 1.53%, maturing August 15, 2025 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 Senior unsecured notes, interest payable semi-annually at 6.85%, effective rate of 6.91%, maturing November 15, 2036 250.0 250.0 Other notes and revolving credit facilities 11.4 12.4 Total 1,661.4 1,662.4 Less: unamortized discount and debt issuance costs (13.7) (15.4) Less: amounts due within one year and short-term borrowings (509.7) (5.0) Total long-term debt $ 1,138.0 $ 1,642.0 The weighted average interest rate on the Company’s outstanding borrowings as of June 30, 2022 and December 31, 2021 was 3.82% and 3.83%, 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. As of June 30, 2022, borrowings under the Credit Agreement were available at variable rates based on LIBOR plus 1.00% 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 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. As of June 30, 2022 and December 31, 2021, we had no outstanding borrowings on the revolving credit facility. As of June 30, 2022 and December 31, 2021, we had $8.3 million and $8.9 million, respectively, of letters of credit issued on the revolving credit facility. Senior Unsecured Notes Under the indentures for each series of our senior notes (“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 combined credit limit of $8.1 million is in place for an operation in Asia with an outstanding balance of $3.7 million and $4.7 million as of June 30, 2022 and December 31, 2021, respectively. Various industrial revenue bonds had combined outstanding balances of $7.7 million as of June 30, 2022 and December 31, 2021 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 or letters of guarantee in an amount not to exceed $50.0 million in the aggregate. As of June 30, 2022, a total of $24.5 million of letters of credit/guarantee were issued on the facility. 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 June 30, 2022. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | Note 7. 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 Six Months Ended June 30, June 30, 2022 2021 2022 2021 (in millions) Operating lease cost $ 23.6 $ 19.3 $ 46.6 $ 39.0 Supplemental cash flow and balance sheet information is presented below: Six Months Ended June 30, 2022 2021 (in millions) Supplemental cash flow information: Cash payments for operating leases $ 43.9 $ 39.1 Right-of-use assets obtained in exchange for operating lease obligations $ 27.7 $ 33.0 June 30, December 31, 2022 2021 Other lease information: Weighted average remaining lease term—operating leases 6.1 years 5.8 years Weighted average discount rate—operating leases 3.3% 3.3% Maturities of operating lease liabilities as of June 30, 2022 are as follows: (in millions) 2022 (remaining six months) $ 30.9 2023 54.3 2024 44.2 2025 31.9 2026 21.1 Thereafter 66.0 Total operating lease payments 248.4 Less: imputed interest (27.7) Total operating lease liabilities $ 220.7 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Income Taxes | Note 8. Income Taxes Our effective income tax rate for each of the second quarter and six months ended June 30, 2022 was 24.7%, compared to 25.6% and 25.5% in the comparable 2021 periods, 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, partially offset by the effects of company-owned life insurance policies. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2022 | |
Equity | |
Equity | Note 9. Equity Dividends On July 26, 2022, our Board of Directors declared the 2022 third quarter cash dividend of $0.875 per share of common stock, payable on September 2, 2022 to stockholders of record as of August 19, 2022. During the second quarters of 2022 and 2021, we declared and paid quarterly dividends of $0.875 and $0.6875 per share, or $53.9 million and $43.8 million in total, respectively. During the six months ended June 30, 2022 and 2021, we declared and paid aggregate quarterly dividends of $1.75 and $1.375 per share, or $108.1 million and $87.6 million in total, respectively. In addition, we paid $2.5 million and $1.0 million in dividend equivalents with respect to vested restricted stock units during the six months ended June 30, 2022 and 2021, respectively. Stock-Based Compensation We make annual grants of long-term incentive awards to officers and key employees in the forms of service-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) that 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 three-year return on assets result and include service criteria. We also grant the non-employee members of our Board of Directors stock awards that are fully vested on the grant date. 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 six months ended June 30, 2022 and 2021, we made payments of $17.1 million and $8.3 million, respectively, to tax authorities on our employees’ behalf for shares withheld related to net share settlement of vested RSUs. A summary of the status of our unvested RSUs and PSUs as of June 30, 2022 and changes during the six months then ended is as follows: Weighted Average Grant Date Aggregate Fair Value Fair Value RSUs and PSUs Per RSU (in millions) Unvested at January 1, 2022 831,597 $ 105.12 Granted (1) 305,249 187.31 Vested (24,363) 95.75 Cancelled or forfeited (21,873) 116.61 Unvested at June 30, 2022 1,090,610 $ 128.10 $ 249.4 Shares reserved for future grants (all plans) 1,566,598 (1) Comprised of 56,452 RSUs granted in January 2022 with a fair value of $152.21 per unit, and 136,346 RSUs and 112,451 PSUs granted in March 2022 with a fair value of $195.28 per unit. The service-based RSUs cliff vest on December 1, 2024 and the performance-based RSUs are subject to a three-year performance period ending December 31, 2024. As of June 30, 2022, 58,618 equivalent shares of our common stock for vested RSUs and PSUs were unsettled. Share Repurchase Plan Our share repurchase activity during the six months ended June 30, 2022 and 2021 was as follows: 2022 2021 Average Cost Average Cost Shares Per Share Amount Shares Per Share Amount (in millions) (in millions) First quarter 113,529 $ 150.97 $ 17.1 — $ — $ — Second quarter 1,085,635 178.61 193.9 147,016 163.50 24.0 1,199,164 $ 176.00 $ 211.0 147,016 $ 163.50 $ 24.0 Our share repurchases in the six months ended June 30, 2022 were made under the $1.0 billion share repurchase program authorized by our Board of Directors on July 20, 2021. Subsequent to quarter end, we repurchased an additional 581,648 shares at an average cost of $171.94 per share, for a total of $100.0 million, resulting in $401.6 million remaining authorized under the plan as of July 25, 2022; on July 26, 2022, our Board of Directors again increased the repurchase authorization to $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 and/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. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss included the following: Foreign Currency Postretirement Benefit Accumulated Other Translation Plan Adjustments, Comprehensive Loss Net of Tax Loss (in millions) Balance as of January 1, 2022 $ (55.2) $ (13.7) $ (68.9) Current-period change (19.3) (0.1) (19.4) Balance as of June 30, 2022 $ (74.5) $ (13.8) $ (88.3) 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 June 30, 2022 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 loss as a result of a plan settlement. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitment and Contingencies | |
Commitments and Contingencies | Note 10. 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 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. 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, 2021 for further discussion of risks that could adversely affect our estimates and judgments. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share | |
Earnings Per Share | Note 11. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 (in millions, except number of shares which are reflected in thousands and per share amounts) Numerator: Net income attributable to Reliance $ 572.8 $ 329.1 $ 1,096.1 $ 596.0 Denominator: Weighted average shares outstanding 61,657 63,663 61,744 63,654 Dilutive effect of stock-based awards 937 1,130 944 1,098 Weighted average diluted shares outstanding 62,594 64,793 62,688 64,752 Earnings per share attributable to Reliance stockholders: Diluted $ 9.15 $ 5.08 $ 17.49 $ 9.20 Basic $ 9.29 $ 5.17 $ 17.75 $ 9.36 The computations of earnings per share for the six months ended June 30, 2022 and 2021 do not include 162,116 and 230,186 weighted average shares, respectively, in respect of RSUs, because their inclusion would have been anti-dilutive. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated 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, our 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. The results of operations for the six months ended June 30, 2022 are not necessarily indicative of the results for the full year ending December 31, 2022. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto for the 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. 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. 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 | Inventories The majority of our inventory is valued using the last-in, first-out (“LIFO”) method, which is not in excess of market. 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 | Recently Issued Accounting Standards—Not Yet Adopted Reference Rate Reform To the extent that, prior to December 31, 2022, we enter into any contract modifications for which the optional expedients are applied, the adoption of this standard is not expected to have a material impact on our consolidated results of operations, financial position or cash flows. |
Acquisitions (Tables)
Acquisitions (Tables) - 2021 Acquisitions | 6 Months Ended |
Jun. 30, 2022 | |
Acquisitions | |
Schedule of allocation of the purchase price of acquisition to the fair value of the assets acquired and liabilities assumed | (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 |
Schedule of pro forma information | Three Months Ended Six Months Ended June 30, 2021 June 30, 2021 (in millions, except per share amounts) Pro forma: Net sales $ 3,662.3 $ 6,679.6 Net income attributable to Reliance $ 371.7 $ 655.7 Earnings per share attributable to Reliance stockholders: Diluted $ 5.74 $ 10.13 Basic $ 5.84 $ 10.30 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenues. | |
Schedule of disaggregation of revenue | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 (in millions) Carbon steel $ 2,625.8 $ 2,098.1 $ 5,173.3 $ 3,757.3 Stainless steel 807.1 539.5 1,572.0 992.4 Aluminum 716.8 498.8 1,409.6 961.6 Alloy 196.6 134.9 380.3 252.2 Toll processing and logistics 140.2 115.6 275.3 231.2 Other and eliminations 194.7 31.9 356.5 62.5 Total $ 4,681.2 $ 3,418.8 $ 9,167.0 $ 6,257.2 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill. | |
Schedule of changes in the carrying amount of goodwill | (in millions) Balance at January 1, 2022 $ 2,107.6 Purchase price allocation adjustments 4.5 Foreign currency translation loss (2.7) Balance at June 30, 2022 $ 2,109.4 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Intangible Assets, net | |
Summary of intangible assets, net | June 30, 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 $ 714.7 $ (457.0) $ 713.0 $ (435.1) Backlog of orders 7.9 23.4 (1.7) 15.8 (0.2) Other 9.1 10.0 (9.6) 9.9 (9.4) 748.1 (468.3) 738.7 (444.7) Intangible assets not subject to amortization: Trade names 766.0 — 783.7 — $ 1,514.1 $ (468.3) $ 1,522.4 $ (444.7) |
Summary of estimated aggregate amortization expense | (in millions) 2022 (remaining six months) $ 23.9 2023 43.8 2024 40.3 2025 36.1 2026 26.6 2027 26.0 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Summary of debt | June 30, December 31, 2022 2021 (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 1.30%, effective rate of 1.53%, maturing August 15, 2025 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 Senior unsecured notes, interest payable semi-annually at 6.85%, effective rate of 6.91%, maturing November 15, 2036 250.0 250.0 Other notes and revolving credit facilities 11.4 12.4 Total 1,661.4 1,662.4 Less: unamortized discount and debt issuance costs (13.7) (15.4) Less: amounts due within one year and short-term borrowings (509.7) (5.0) Total long-term debt $ 1,138.0 $ 1,642.0 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Schedule of lease cost | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 (in millions) Operating lease cost $ 23.6 $ 19.3 $ 46.6 $ 39.0 |
Schedule of supplemental cash flow and other lease information | Six Months Ended June 30, 2022 2021 (in millions) Supplemental cash flow information: Cash payments for operating leases $ 43.9 $ 39.1 Right-of-use assets obtained in exchange for operating lease obligations $ 27.7 $ 33.0 June 30, December 31, 2022 2021 Other lease information: Weighted average remaining lease term—operating leases 6.1 years 5.8 years Weighted average discount rate—operating leases 3.3% 3.3% |
Schedule of maturities of operating lease liabilities | (in millions) 2022 (remaining six months) $ 30.9 2023 54.3 2024 44.2 2025 31.9 2026 21.1 Thereafter 66.0 Total operating lease payments 248.4 Less: imputed interest (27.7) Total operating lease liabilities $ 220.7 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity | |
Summary of the status of the Company's restricted stock units and changes during the year | Weighted Average Grant Date Aggregate Fair Value Fair Value RSUs and PSUs Per RSU (in millions) Unvested at January 1, 2022 831,597 $ 105.12 Granted (1) 305,249 187.31 Vested (24,363) 95.75 Cancelled or forfeited (21,873) 116.61 Unvested at June 30, 2022 1,090,610 $ 128.10 $ 249.4 Shares reserved for future grants (all plans) 1,566,598 (1) Comprised of 56,452 RSUs granted in January 2022 with a fair value of $152.21 per unit, and 136,346 RSUs and 112,451 PSUs granted in March 2022 with a fair value of $195.28 per unit. The service-based RSUs cliff vest on December 1, 2024 and the performance-based RSUs are subject to a three-year performance period ending December 31, 2024. |
Schedule of share repurchase activity | 2022 2021 Average Cost Average Cost Shares Per Share Amount Shares Per Share Amount (in millions) (in millions) First quarter 113,529 $ 150.97 $ 17.1 — $ — $ — Second quarter 1,085,635 178.61 193.9 147,016 163.50 24.0 1,199,164 $ 176.00 $ 211.0 147,016 $ 163.50 $ 24.0 |
Schedule of accumulated other comprehensive loss | Foreign Currency Postretirement Benefit Accumulated Other Translation Plan Adjustments, Comprehensive Loss Net of Tax Loss (in millions) Balance as of January 1, 2022 $ (55.2) $ (13.7) $ (68.9) Current-period change (19.3) (0.1) (19.4) Balance as of June 30, 2022 $ (74.5) $ (13.8) $ (88.3) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share | |
Computation of basic and diluted earnings per share | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 (in millions, except number of shares which are reflected in thousands and per share amounts) Numerator: Net income attributable to Reliance $ 572.8 $ 329.1 $ 1,096.1 $ 596.0 Denominator: Weighted average shares outstanding 61,657 63,663 61,744 63,654 Dilutive effect of stock-based awards 937 1,130 944 1,098 Weighted average diluted shares outstanding 62,594 64,793 62,688 64,752 Earnings per share attributable to Reliance stockholders: Diluted $ 9.15 $ 5.08 $ 17.49 $ 9.20 Basic $ 9.29 $ 5.17 $ 17.75 $ 9.36 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Allocation of the total purchase price of the acquisitions to the fair value of the assets acquired and liabilities assumed | ||||
Goodwill | $ 2,109.4 | $ 2,107.6 | ||
Pro forma: | ||||
Net sales | $ 3,662.3 | $ 6,679.6 | ||
Net income attributable to Reliance | $ 371.7 | $ 655.7 | ||
Diluted earnings per common share attributable to Reliance shareholders (in dollars per share) | $ 5.74 | $ 10.13 | ||
Basic earnings per common share attributable to Reliance shareholders (in dollars per share) | $ 5.84 | $ 10.30 | ||
2021 Acquisitions | ||||
Acquisitions | ||||
Net sales | 473.7 | |||
Allocation of the total purchase price of the acquisitions to the fair value of the assets acquired and liabilities assumed | ||||
Cash | 1 | |||
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 | |||
Total assets acquired | 654 | |||
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 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue Disaggregation | ||||
Revenue | $ 4,681.2 | $ 3,418.8 | $ 9,167 | $ 6,257.2 |
Carbon steel | ||||
Revenue Disaggregation | ||||
Revenue | 2,625.8 | 2,098.1 | 5,173.3 | 3,757.3 |
Aluminum | ||||
Revenue Disaggregation | ||||
Revenue | 716.8 | 498.8 | 1,409.6 | 961.6 |
Stainless steel | ||||
Revenue Disaggregation | ||||
Revenue | 807.1 | 539.5 | 1,572 | 992.4 |
Alloy steel | ||||
Revenue Disaggregation | ||||
Revenue | 196.6 | 134.9 | 380.3 | 252.2 |
Toll processing | ||||
Revenue Disaggregation | ||||
Revenue | 140.2 | 115.6 | 275.3 | 231.2 |
Other. | ||||
Revenue Disaggregation | ||||
Revenue | $ 194.7 | $ 31.9 | $ 356.5 | $ 62.5 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Change in the carrying amount of goodwill | ||
Balance at the beginning of the period | $ 2,107.6 | |
Purchase price allocation adjustments | 4.5 | |
Foreign currency translation gain | (2.7) | |
Balance at the end of the period | 2,109.4 | |
Accumulated impairment losses | $ 0 | $ 0 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Intangible assets subject to amortization: | |||
Intangible assets subject to amortization, Gross Carrying Amount | $ 748.1 | $ 738.7 | |
Intangible assets subject to amortization, Accumulated Amortization | (468.3) | (444.7) | |
Intangible assets | |||
Intangible assets, Gross Carrying Amount | 1,514.1 | 1,522.4 | |
Amortization expense for intangible assets | 24.3 | $ 18.4 | |
Changes in intangible assets due to foreign currency translation gains (losses) | (1.6) | $ 0.2 | |
Summary of estimated aggregate amortization expense for each of the succeeding five years | |||
2022 (remaining six months) | 23.9 | ||
2023 | 43.8 | ||
2024 | 40.3 | ||
2025 | 36.1 | ||
2026 | 26.6 | ||
2027 | 26 | ||
2021 Acquisitions | |||
Intangible assets | |||
Intangible assets not subject to amortization | 51.2 | ||
Intangible assets subject to amortization | 116.3 | ||
Trade names | |||
Intangible assets not subject to amortization: | |||
Intangible assets not subject to amortization, Gross Carrying Amount | 766 | 783.7 | |
Trade names | 2021 Acquisitions | |||
Intangible assets | |||
Increase (decrease) in purchase price allocation of intangible assets | $ (16.9) | ||
Customer lists/relationships | |||
Intangible assets subject to amortization: | |||
Weighted average amortizable life in years | 14 years 2 months 12 days | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 714.7 | 713 | |
Intangible assets subject to amortization, Accumulated Amortization | (457) | (435.1) | |
Customer lists/relationships | 2021 Acquisitions | |||
Intangible assets | |||
Increase (decrease) in purchase price allocation of intangible assets | $ 2.7 | ||
Backlog of orders | |||
Intangible assets subject to amortization: | |||
Weighted average amortizable life in years | 7 years 10 months 24 days | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 23.4 | 15.8 | |
Intangible assets subject to amortization, Accumulated Amortization | (1.7) | (0.2) | |
Backlog of orders | 2021 Acquisitions | |||
Intangible assets | |||
Increase (decrease) in purchase price allocation of intangible assets | $ 8 | ||
Other | |||
Intangible assets subject to amortization: | |||
Weighted average amortizable life in years | 9 years 1 month 6 days | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 10 | 9.9 | |
Intangible assets subject to amortization, Accumulated Amortization | $ (9.6) | $ (9.4) |
Debt - Summary (Details)
Debt - Summary (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Debt | ||
Total | $ 1,661.4 | $ 1,662.4 |
Less: unamortized discount and debt issuance costs | (13.7) | (15.4) |
Less: amounts due within one year and short-term borrowings | (509.7) | (5) |
Total long-term debt | 1,138 | 1,642 |
Unsecured revolving credit facility maturing September 3, 2025 | ||
Debt | ||
Total | 0 | 0 |
Senior unsecured notes, interest payable semi-annually at 4.50%, effective rate of 4.63%, maturing April 15, 2023 | ||
Debt | ||
Total | $ 500 | $ 500 |
Semi-annual rate (as a percent) | 4.50% | 4.50% |
Effective rate (as a percent) | 4.63% | 4.63% |
Senior unsecured notes, interest payable semi-annually at 1.30%, effective rate of 1.53%, maturing August 15, 2025 | ||
Debt | ||
Total | $ 400 | $ 400 |
Semi-annual rate (as a percent) | 1.30% | 1.30% |
Effective rate (as a percent) | 1.53% | 1.53% |
Senior unsecured notes, interest payable semi-annually at 2.15%, effective rate of 2.27%, maturing August 15, 2030 | ||
Debt | ||
Total | $ 500 | $ 500 |
Semi-annual rate (as a percent) | 2.15% | 2.15% |
Effective rate (as a percent) | 2.27% | 2.27% |
Senior unsecured notes, interest payable semi-annually at 6.85%, effective rate of 6.91%, maturing November 15, 2036 | ||
Debt | ||
Total | $ 250 | $ 250 |
Semi-annual rate (as a percent) | 6.85% | 6.85% |
Effective rate (as a percent) | 6.91% | 6.91% |
Other notes and revolving credit facilities | ||
Debt | ||
Total | $ 11.4 | $ 12.4 |
Debt - Other (Details)
Debt - Other (Details) $ in Millions | 6 Months Ended | ||
Sep. 03, 2020 USD ($) | Jun. 30, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Debt | |||
Total | $ 1,661.4 | $ 1,662.4 | |
Weighted average fixed interest rate (as a percent) | 3.82% | 3.83% | |
Number of financial maintenance covenants | item | 2 | ||
Aggregate maturities of long-term debt for each of the next five years and thereafter | |||
Total | $ 1,661.4 | $ 1,662.4 | |
Unsecured revolving credit facility maturing September 3, 2025 | |||
Debt | |||
Maximum borrowing capacity | $ 1,500 | ||
Debt term | 5 years | ||
Total | $ 0 | 0 | |
Commitment fee on unused portion of revolving credit facility (as a percent) | 0.175% | ||
Letters of credit outstanding | $ 8.3 | 8.9 | |
Aggregate maturities of long-term debt for each of the next five years and thereafter | |||
Total | $ 0 | 0 | |
Unsecured revolving credit facility maturing September 3, 2025 | LIBOR | |||
Debt | |||
Variable interest rate | LIBOR | ||
Interest rate added to base (as a percent) | 1% | ||
Unsecured revolving credit facility maturing September 3, 2025 | Bank prime rate | |||
Debt | |||
Variable interest rate | bank prime rate | ||
Senior Unsecured Notes - Publicly Traded | |||
Debt | |||
Percentage of principal amount at which the notes may be required to be repurchased in event of a change of control and a downgrade of the entity's credit rating | 101% | ||
Senior unsecured notes, interest payable semi-annually at 4.50%, effective rate of 4.63%, maturing April 15, 2023 | |||
Debt | |||
Total | $ 500 | 500 | |
Aggregate maturities of long-term debt for each of the next five years and thereafter | |||
Total | 500 | 500 | |
Senior unsecured notes, interest payable semi-annually at 1.30%, effective rate of 1.53%, maturing August 15, 2025 | |||
Debt | |||
Total | 400 | 400 | |
Aggregate maturities of long-term debt for each of the next five years and thereafter | |||
Total | 400 | 400 | |
Senior unsecured notes, interest payable semi-annually at 2.15%, effective rate of 2.27%, maturing August 15, 2030 | |||
Debt | |||
Total | 500 | 500 | |
Aggregate maturities of long-term debt for each of the next five years and thereafter | |||
Total | 500 | 500 | |
Senior unsecured notes, interest payable semi-annually at 6.85%, effective rate of 6.91%, maturing November 15, 2036 | |||
Debt | |||
Total | 250 | 250 | |
Aggregate maturities of long-term debt for each of the next five years and thereafter | |||
Total | 250 | 250 | |
Other separate revolving credit facilities | |||
Debt | |||
Maximum borrowing capacity | 8.1 | ||
Total | 3.7 | 4.7 | |
Aggregate maturities of long-term debt for each of the next five years and thereafter | |||
Total | 3.7 | 4.7 | |
IRB | |||
Debt | |||
Total | 7.7 | 7.7 | |
Aggregate maturities of long-term debt for each of the next five years and thereafter | |||
Total | 7.7 | $ 7.7 | |
Letter of Credit | Standby Facility | |||
Debt | |||
Maximum borrowing capacity | 50 | ||
Letters of credit outstanding | $ 24.5 | ||
Letter of credit sublimit | |||
Debt | |||
Maximum borrowing capacity | $ 150 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Operating lease cost | $ 23.6 | $ 19.3 | $ 46.6 | $ 39 | |
Cash payments for operating leases | 43.9 | 39.1 | |||
Right-of-use assets obtained in exchange for operating lease obligations | $ 27.7 | $ 33 | |||
Weighted average remaining lease term - operating leases | 6 years 1 month 6 days | 6 years 1 month 6 days | 5 years 9 months 18 days | ||
Weighted average discount rate - operating leases | 3.30% | 3.30% | 3.30% | ||
Maturities of operating lease liabilities | |||||
2022 (remaining six months) | $ 30.9 | $ 30.9 | |||
2023 | 54.3 | 54.3 | |||
2024 | 44.2 | 44.2 | |||
2025 | 31.9 | 31.9 | |||
2026 | 21.1 | 21.1 | |||
Thereafter | 66 | 66 | |||
Total operating lease payments | 248.4 | 248.4 | |||
Less: imputed interest | (27.7) | (27.7) | |||
Total operating lease liabilities | 220.7 | 220.7 | |||
Maximum | |||||
Finance right-of-use assets | 1 | 1 | |||
Finance right-of-use obligations | $ 1 | $ 1 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Taxes | ||||
Effective tax rate (as a percent) | 24.70% | 25.60% | 24.70% | 25.50% |
Income tax at U.S. federal statutory tax rate (as a percent) | 21% | 21% | 21% | 21% |
Equity - Share Repurchases, Div
Equity - Share Repurchases, Dividends, Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Apr. 26, 2022 | Jul. 25, 2022 | Mar. 31, 2022 | Jan. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jul. 26, 2022 | Jul. 20, 2021 | |
Share Repurchase Plan | |||||||||||
Value of shares authorized by the Board of Directors to be repurchased under share repurchase plan | $ 1,000 | $ 1,000 | |||||||||
Share repurchases (in shares) | 1,085,635 | 113,529 | 147,016 | 1,199,164 | 147,016 | ||||||
Average costs per share | $ 178.61 | $ 150.97 | $ 163.50 | $ 176 | $ 163.50 | ||||||
Value of shares repurchased | $ 193.9 | $ 17.1 | $ 24 | $ 211 | $ 24 | ||||||
Remaining value of shares authorized by the Board of Directors to be repurchased under share repurchase plan | $ 401.6 | ||||||||||
Common Stock and Additional Paid-In (in Shares) | |||||||||||
Payments made to tax authorities on employees' behalf | $ 17.1 | $ 8.3 | |||||||||
Dividends | |||||||||||
Common stock quarterly dividend per share (in dollars per share) | $ 0.875 | $ 0.6875 | $ 1.75 | $ 1.375 | |||||||
Common stock dividend quarterly declared and paid per share (in dollars per share) | $ 0.875 | $ 0.875 | $ 0.6875 | $ 1.75 | $ 1.375 | ||||||
Dividends paid | $ 53.9 | $ 43.8 | $ 108.1 | $ 87.6 | |||||||
Subsequent event | |||||||||||
Share Repurchase Plan | |||||||||||
Share repurchases (in shares) | 581,648 | ||||||||||
Average costs per share | $ 171.94 | ||||||||||
Value of shares repurchased | $ 100 | ||||||||||
Common Stock and Additional Paid in Capital | |||||||||||
Share Repurchase Plan | |||||||||||
Value of shares repurchased | $ 18 | $ 24 | 12.7 | 24 | |||||||
Restricted stock units (RSUs) | |||||||||||
Dividends | |||||||||||
Dividend equivalents paid | $ 2.5 | $ 1 | |||||||||
Stock-Based Compensation | |||||||||||
Vesting period (in years) | 3 years | 3 years | |||||||||
Changes | |||||||||||
Granted (in units) | 136,346 | 56,452 | |||||||||
Weighted Average Grant Date Fair Value | |||||||||||
Granted (in dollars per unit) | $ 195.28 | $ 152.21 | |||||||||
Restricted stock units (RSUs) and performance stock units (PSUs) | |||||||||||
Changes | |||||||||||
Unvested at the beginning of the year (in units) | 1,090,610 | 831,597 | 831,597 | 831,597 | |||||||
Granted (in units) | 305,249 | ||||||||||
Vested (in units) | (24,363) | ||||||||||
Cancelled or forfeited (in units) | (21,873) | ||||||||||
Unvested at the end of the period (in units) | 1,090,610 | 1,090,610 | |||||||||
Shares reserved for future grants (all plans) | 1,566,598 | 1,566,598 | |||||||||
Weighted Average Grant Date Fair Value | |||||||||||
Unvested at the beginning of the year (in dollars per unit) | $ 128.10 | $ 105.12 | $ 105.12 | $ 105.12 | |||||||
Granted (in dollars per unit) | 187.31 | ||||||||||
Vested (in dollars per unit) | 95.75 | ||||||||||
Cancelled or forfeited (in dollars per unit) | 116.61 | ||||||||||
Unvested at the end of the period (in dollars per unit) | $ 128.10 | $ 128.10 | |||||||||
Aggregate Fair Value | |||||||||||
Unvested at the end of the period | $ 249.4 | $ 249.4 | |||||||||
Number of shares of common stock that were unsettled | 58,618 | ||||||||||
Performance stock units (PSUs) | |||||||||||
Stock-Based Compensation | |||||||||||
Vesting period (in years) | 3 years | 3 years | 3 years | ||||||||
Changes | |||||||||||
Granted (in units) | 112,451 | ||||||||||
Weighted Average Grant Date Fair Value | |||||||||||
Granted (in dollars per unit) | $ 195.28 | ||||||||||
Performance stock units (PSUs) | Maximum | |||||||||||
Stock Based Compensation | |||||||||||
Share of Common Stock | 2 | ||||||||||
All stock-based compensation plans | |||||||||||
Common Stock and Additional Paid-In (in Shares) | |||||||||||
Payments made to tax authorities on employees' behalf | $ 17.1 | $ 8.3 |
Equity - Accumulated Other Comp
Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the period | $ (68.9) | |
Current-period change | (19.4) | |
Balance at the end of the period | (88.3) | |
Deferred tax assets in accumulated other comprehensive loss, pension liabilities | 3.3 | $ 3.3 |
Foreign Currency Loss | ||
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the period | (55.2) | |
Current-period change | (19.3) | |
Balance at the end of the period | (74.5) | |
Pension and Postretirement Benefit Adjustments, Net of Tax | ||
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the period | (13.7) | |
Current-period change | (0.1) | |
Balance at the end of the period | $ (13.8) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 30, 2022 |
Environmental Contingencies | |
Ownership interest in domestic subsidiaries (as a percent) | 100% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Net income attributable to Reliance | $ 572.8 | $ 329.1 | $ 1,096.1 | $ 596 |
Denominator: | ||||
Weighted average shares outstanding (in shares) | 61,657,000 | 63,663,000 | 61,744,000 | 63,654,000 |
Dilutive effect of stock-based awards (in shares) | 937,000 | 1,130,000 | 944,000 | 1,098,000 |
Weighted average diluted shares outstanding (in shares) | 62,594,000 | 64,793,000 | 62,688,000 | 64,752,000 |
Earnings per share attributable to Reliance stockholders - diluted (in dollars per share) | $ 9.15 | $ 5.08 | $ 17.49 | $ 9.20 |
Earnings per share attributable to Reliance stockholders - basic (in dollars per share) | $ 9.29 | $ 5.17 | $ 17.75 | $ 9.36 |
Diluted shares | ||||
Weighted average shares, respectively, for RSU's, not included in the diluted calculation due to their anti-dilutive effect | 162,116 | 230,186 |