February 17, 2022 06:50 ET | Source: Reliance Steel & Aluminium Co. Reliance Steel & Aluminium Co.
- Record annual net sales of $14.09 billion – Record annual gross profit of $4.49 billion, driven by record annual gross margin of 31.9% – Record annual pre-tax income and margin of $1.88 billion and 13.4 % – Record annual EPS of $21.97, non-GAAP EPS of $22.12 – Record quarterly EPS of $6.64, non-GAAP EPS of $6.83 – Repurchased in 2021 $323.5 million in Reliance common stock – Quarterly dividend increased 27.3% to $0.875 per share – Four acquisitions completed, combined annualized sales of $1 billion
LOS ANGELES, Feb. 17, 2022 (GLOBE NEWSWIRE) — Reliance Steel & Aluminium Co. (NYSE: RS) today reported financial results for the fourth quarter and full year ended December 31, 2021.
“Reliance ended the year with strong results, with record numbers in nearly all metrics, driven by the resiliency of our business model and the exceptional execution of our entire family of companies,” said Jim Hoffman, CEO of Reliance. “Despite the macro Economic challenges, including the ongoing pandemic, supply chain disruptions and tight labor markets, but the durability and validity of our model is evident in our results. Strong demand and favorable metals pricing trends throughout 2021, combined with our A highly diversified product and end-market mix and strong relationships with domestic factory partners helped generate record annual sales of $14.09 billion and record EPS of $21.97.”
Mr. Hoffman continued: “Our gross margins continue to be supported by managers in this area, who have appropriately capitalized on the substantial investments we have made to enhance and expand our value-added processing capabilities. In 2021, we are slightly above 50% of orders provided value-added processing services, up from 49% in 2020. We believe our continued focus on value-added processing will continue to support our strong gross margin levels and help stabilize our margins as prices decline. ”
Mr. Hoffman concluded: “The strong cash flow generated by our model allows us to maintain a flexible and balanced capital allocation philosophy. In addition to investing $237 million in our business through capital expenditures in 2021, we completed the fourth quarter Four acquisitions for a total acquisition consideration of $439 million and returned more than $500 million to our shareholders through dividends and Reliance common stock repurchases.”
End Market Reviews Reliance serves diverse end markets and offers a wide range of products and processing services, usually in small quantities when required.In the fourth quarter of 2021, the company’s tonnage sales decreased by 5.7% compared to the third quarter of 2021, in line with Reliance’s expectations of a 5% to 8% decline, which is in line with the typical fourth quarter seasonal release due to customer holiday-related shutdowns. Ease and fewer shipping days, but further impact from reduced shifts due to labor-related shortages at Reliance, its customers and suppliers.The company continues to believe that underlying demand is stronger than its fourth-quarter shipment levels, reflecting good omen for 2022.
Demand for non-residential buildings, including infrastructure, in Reliance’s largest end market was in line with typical fourth-quarter seasonal trends.Reliance is cautiously optimistic that demand for non-residential construction activities will continue to strengthen through 2022 in key areas in which the company is involved.
Demand for Reliance’s toll processing services to the automotive market remained stable in the fourth quarter despite supply chain challenges, including the ongoing impact of a global microchip shortage on production levels.Reliance is optimistic that demand for its toll processing services will remain stable throughout 2022.
Despite longer-than-expected seasonal shutdowns for many customers, as well as broader customer supply chain disruptions, labor constraints and an unforeseen surge in Omicron, heavy industry fundamental demand for agricultural and construction equipment remained stable.Reliance expects positive underlying demand trends in these industries to continue through most of 2022.
Despite global supply chain challenges, semiconductor demand remains strong.The semiconductor segment remains one of Reliance’s strongest end markets and is expected to continue through 2022.
Commercial aerospace demand improved in the fourth quarter compared to the third quarter of 2021, as a recovery in activity led to an increase in tonnage sold.Reliance is cautiously optimistic that demand in commercial aerospace will continue to improve steadily throughout 2022 as construction rates increase.Demand in the military, defense and space segments of Reliance’s aerospace business remained stable with a large backlog that is expected to continue throughout the year.
Demand in the energy (oil and gas) market accelerated in the fourth quarter due to increased activity due to higher oil and gas prices.Reliance is cautiously optimistic that demand in this end market will continue to improve moderately in 2022.
Balance Sheet and Cash Flow As of December 31, 2021, Reliance had cash and cash equivalents of $300.5 million, total debt outstanding of $1.66 billion, net debt-to-EBITDA ratio of 0.6 times, and its $1.5 billion revolving There are no outstanding borrowings under the line of credit. Despite investing more than $950 million in working capital in 2021, Reliance posted operating cash flow of $393.8 million in the fourth quarter and $799.4 million for the full year.The company’s strong cash generation enables it to execute on all aspects of its balanced and flexible capital allocation to deliver shareholder returns through acquisitions and growth-focused capital expenditures, as well as through regular quarterly dividends and opportunistic share repurchases, for 2021 Strategy.
Shareholder Return Event On February 15, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.875 per common share, an increase of 27.3%, payable on March 25, 2022 to shareholders of record as of March 11, 2022.It has regularly paid cash dividends on a quarterly basis for 62 consecutive years, and has not reduced or stopped. Since its initial public offering in 1994, it has increased dividends 29 times.
During the fourth quarter of 2021, the company repurchased approximately 1.1 million shares of common stock at an average cost of $156.85 per share, totaling $168.5 million.For the full year 2021, the company repurchased approximately 2.1 million shares of common stock at an average cost of $153.55 per share, for a total of $323.5 million.Over the past five years, the company has repurchased approximately 12.8 million shares of common stock for a total of $1.22 billion at an average cost of $95.54 per share.
Acquisitions As previously mentioned, Reliance completed four acquisitions in the fourth quarter of 2021 with combined transaction value of approximately $439 million and combined annualized sales of approximately $1 billion in 2021.The four acquisitions together contributed approximately $171 million in sales in the fourth quarter of 2021.
Merfish UnitedReliance acquired Merfish United, a leading US master distributor of tubular construction products, on October 1, 2021.Merfish positioned Reliance in the adjacent industrial distribution market by expanding its offering beyond traditional metal service center offerings.
Nu-Tech Precision Metals Inc. Reliance on December 10, 2021 acquired Nu-Tech Precision Metals Inc., a custom manufacturer of extruded metals, fabricated parts and welded components.Nu-Tech expands Reliance’s range of specialty metals products and supports business growth serving the nuclear, aerospace and defense markets, among others.
Admiral Metals Servicenter Company, Inc. Reliance on December 10, 2021 acquired Admiral Metals Servicenter Company, Inc., a leading distributor of non-ferrous metal products in the Northeast United States.Admiral Metals extends Reliance’s product range to specialty non-ferrous products.
Rotax Metals, Inc. Reliance acquired Rotax Metals, Inc., a metal service center specializing in copper, bronze and brass alloys, on December 17, 2021.Rotax will operate as a subsidiary of Yarde Metals, Inc., which is a wholly owned subsidiary of the company.
Corporate Development Arthur Ajemyan was promoted to Senior Vice President and Chief Financial Officer on February 15, 2022.Mr. Ajemyan has served as Reliance’s Vice President and Chief Financial Officer since January 2021.Suzanne Bonner has also been promoted to Senior Vice President and Chief Information Officer February 15, 2022.Ms. Bonner has served as Corporate Vice President, Chief Information Officer since July 2019.
Business Outlook Reliance remains optimistic about business conditions in the first quarter of 2022, with strong underlying demand in most major end markets.The company estimates that sales tonnage in the first quarter of 2022 will increase by 5% to 7% compared to the fourth quarter of 2021, due to increased seasonal shipping volumes.However, weaker demand in January and early February due to continued supply chain and labor disruptions to Reliance and its customers and suppliers due to the surge in Omicron resulted in a lower than typical first-quarter forecast in tons sold.Despite the sharp drop in prices for carbon HRC and sheet products, Reliance expects its average selling price per tonne of sales in the first quarter of 2022 to decline by only 2% to 4% compared to the fourth quarter of 2021, driven by the company’s diversified The company’s driven product mix, which will only account for around 10% of carbon HRC and sheet product sales in 2021, continues to be strong in pricing for most of its products and the markets in which they are sold.Based on these expectations, Reliance estimates first-quarter 2022 non-GAAP earnings per diluted share to be between $7.05 and $7.15.
Conference Call Details A conference call and simultaneous webcast will be held today (February 17, 2022) at 11:00 am ET / 8:00 am PT to discuss Reliance’s fourth quarter and full year 2021 financial results and business prospects.To listen to the live call by phone, please dial (877) 407-0792 (US and Canada) or (201) 689-8263 (international) approximately 10 minutes before the start time and use Conference ID: 13726284.The call will also be broadcast live over the Internet hosted on the investor section of the company’s website, investor.rsac.com.
For those unable to attend the live broadcast, a replay call can also be made at (844) 512 from 2:00pm ET to Thursday, March 3, 2022 at 11:59pm ET.-2921 (US and Canada) or (412) 317-6671 (International) and enter meeting ID: 13726284.The webcast will be available on the Investors section of the Reliance website (Investor.rsac.com) for 90 days.
About Reliance Steel & Aluminium Co. Founded in 1939 and headquartered in Los Angeles, California, Reliance Steel & Aluminium Co. (NYSE: RS) is a leading global provider of diversified metal solutions and the largest metal services provider in North America Center Company.With a network of approximately 315 locations in 40 states and 13 countries outside the United States, Reliance provides value-added metalworking services and distributes a full line of more than 100,000 metal products to more than 125,000 customers in a variety of industries.Reliance focuses on small orders, providing fast turnaround and value-added processing services.In 2021, Reliance’s average order size is $3,050, with about 50% of orders including value-added processing, and about 40% of orders delivered within 24 hours.
Press releases and other information from Reliance Steel & Aluminium Co. are available on the company’s website at rsac.com.
Forward-Looking Statements Certain statements contained in this press release are or may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Forward-looking statements may include, but are not limited to, discussions of Reliance’s industries, end markets, business strategies, acquisitions and expectations about the company’s future growth and profitability and its ability to generate industry-leading returns for shareholders, as well as future demand and metals pricing and the company’s Operating performance, profit margins, profitability, taxes, liquidity, litigation matters and capital resources.In some cases, you can identify forward looking by terms such as “may,” “will,” “should,” “could,” “will,” “expect,” “plan,” “anticipate,” “believe,” etc. sexual statement.”estimate,” “forecast,” “potential,” “preliminary,” “scope,” “intend,” and “continue,” the negative forms of these terms, and similar expressions.
These forward-looking statements are based on management’s estimates, projections and assumptions as of today that may not be accurate.Forward-looking statements involve known and unknown risks and uncertainties and are not guarantees of future performance.Due to various important factors, including, but not limited to, actions taken by Reliance, and developments beyond its control, including, but not limited to, the expected benefits of the acquisition by Reliance may not materialize as expected, the impact of labor constraints and supply chain disruptions, The ongoing pandemic and changes in global and U.S. economic conditions that could have a significant impact on the company, its customers and suppliers and the demand for the company’s products and services.The extent to which the ongoing COVID-19 pandemic may negatively impact company operations will depend on highly uncertain and unpredictable future developments, including the duration of the pandemic, the re-emergence or mutation of the virus, actions taken to control COVID-19 The spread of -19 or the impact of its treatment, including the speed and effectiveness of vaccination efforts, and the direct and indirect effects of the virus on global and U.S. economic conditions.Deterioration of economic conditions due to COVID-19 or other causes may lead to a further or prolonged decline in demand for the company’s products and services, negatively impact its business, and may also affect financial markets and corporate credit markets, which may affect the company’s credit markets adversely affect the Company’s access to financing or any financing terms.The Company cannot currently predict all impacts and related economic impacts of the COVID-19 pandemic, but they could materially and adversely affect the Company’s business, financial condition, results of operations and cash flows.
The statements contained in this press release speak only as of the date of publication, and Reliance undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or for any other reason, except as may be required by law .Important risks and uncertainties regarding Reliance’s business are set forth in “Item 1A. The Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and other documents Reliance files or provides with the Securities and Exchange Commission” “Risk Factors”.