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TheStreet Open House

Reliance Steel & Aluminum Co. Reports Second Quarter 2013 Financial Results

Stocks in this article: RS

Reliance Steel & Aluminum Co. (NYSE: RS) today reported its financial results for the second quarter ended June 30, 2013.

Second Quarter 2013 Financial Highlights

  • Sales were $2.45 billion, up 10.8% from $2.21 billion in the second quarter of 2012 and up 20.9% from $2.03 billion in the first quarter of 2013.
  • Tons sold were up 24.2% from the second quarter of 2012 and up 28.7% from the first quarter of 2013.
  • Completed acquisition of Metals USA on April 12, 2013.
  • Net income attributable to Reliance was $81.0 million, down 25.6% from $108.8 million in the second quarter of 2012 and down 3.2% from $83.7 million in the first quarter of 2013.
  • Earnings per diluted share were $1.05, down 27.1% from $1.44 in the second quarter of 2012 and down 3.7% from $1.09 in the first quarter of 2013.
  • Non-GAAP net income, excluding one-time charges, was $88.3 million, or $1.14 per diluted share, down 20.8% from the second quarter of 2012 and up 1.8% from the first quarter of 2013.
  • A pre-tax LIFO credit, or income, of $5.0 million is included in cost of sales compared to a pre-tax LIFO credit of $7.5 million in the second quarter of 2012 and a credit of $5.0 million for the first quarter of 2013.
  • Cash flow from operations was $211.7 million and net debt-to-total capital was 37.6% at June 30, 2013.
  • Increased quarterly cash dividend by 10% to $0.33 per share.

Management Commentary

“Second quarter same store tons sold increased 3.7% compared to the prior quarter, due in part to an extra shipping day in the second quarter along with slight improvement in overall demand levels. However, the weak pricing environment continued, leading to a 2.7% reduction in our same store average price per ton sold, relative to the first quarter,” said David H. Hannah, Chairman and CEO of Reliance. “In general for the 2013 second quarter, both demand and pricing were a bit weaker than we anticipated at the end of the previous quarter. We remain highly focused on managing all aspects of the business that are within our control, which continues to mitigate much of the impact from these challenging market conditions. Inventory turns improved somewhat compared to the prior quarter and gross margins declined slightly but were solid in light of the weak pricing we experienced—each indicative of the strong operational performance of our managers in the field.”

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