Reliance Steel & Aluminum 10Q 2021 Q3 Quarterly report

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 September 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-13122


(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		95-1142616 (I.R.S. Employer Identification No.)

350 South Grand Avenue, Suite 5100

Los Angeles, California

90071

(Address of principal executive offices, including zip code)

(213) 687-7700

(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 October 29, 2021, 62,654,519 shares of the registrant’s common stock, $0.001 par value, were outstanding.

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RELIANCE STEEL & ALUMINUM CO.

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION			1

	Item 1.	Financial Statements

		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	15

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

	Item 4.	Controls and Procedures	26

PART II — OTHER INFORMATION			26

	Item 1.	Legal Proceedings	26

	Item 1A.	Risk Factors	26

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

	Item 3.	Defaults Upon Senior Securities	27

	Item 4.	Mine Safety Disclosures	27

	Item 5.	Other Information	27

	Item 6.	Exhibits	28

SIGNATURES			29

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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)


	September 30,		December 31,
	2021		2020*
ASSETS
Current assets:
Cash and cash equivalents	$	638.4	$	683.5
Accounts receivable, less allowance for credit losses of $28.0 at September 30, 2021 and $19.0 at December 31, 2020		1,693.5		926.3
Inventories		1,877.8		1,420.4
Prepaid expenses and other current assets		74.3		80.5
Income taxes receivable		—		2.1
Total current assets		4,284.0		3,112.8
Property, plant and equipment:
Land		256.2		260.1
Buildings		1,266.2		1,240.0
Machinery and equipment		2,208.6		2,107.8
Accumulated depreciation		(1,928.4)		(1,815.7)
Property, plant and equipment, net		1,802.6		1,792.2

Operating lease right-of-use assets		199.8		204.0
Goodwill		1,935.3		1,935.2
Intangible assets, net		919.5		947.1
Cash surrender value of life insurance policies, net		30.8		43.7
Other assets		80.4		71.8
Total assets	$	9,252.4	$	8,106.8

LIABILITIES AND EQUITY

Current liabilities:
Accounts payable	$	519.4	$	259.3
Accrued expenses		117.0		88.9
Accrued compensation and retirement costs		239.6		165.8
Accrued insurance costs		40.8		42.0
Current maturities of long-term debt and short-term borrowings		4.9		6.0
Current maturities of operating lease liabilities		48.9		51.0
Income taxes payable		36.5		—
Total current liabilities		1,007.1		613.0
Long-term debt		1,641.4		1,638.9
Operating lease liabilities		151.9		154.1
Long-term retirement costs		105.8		95.8
Other long-term liabilities		22.3		26.7
Deferred income taxes		456.0		455.6
Commitments and contingencies
Equity:
Preferred stock, $0.001 par value: 5,000 shares authorized; NaN issued or outstanding		—		—
Common stock and additional paid-in capital, $0.001 par value and 200,000 shares authorized
Issued and outstanding shares — 62,694 at September 30, 2021 and 63,600 at December 31, 2020		0.1		0.1
Retained earnings		5,943.5		5,193.2
Accumulated other comprehensive loss		(82.9)		(77.9)
Total Reliance stockholders’ equity		5,860.7		5,115.4
Noncontrolling interests		7.2		7.3
Total equity		5,867.9		5,122.7
Total liabilities and equity	$	9,252.4	$	8,106.8

* Amounts derived from audited financial statements.

See accompanying notes to unaudited consolidated financial statements.

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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				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net sales	$	3,847.4	$	2,085.6	$	10,104.6	$	6,677.8

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		2,636.3		1,409.5		6,857.6		4,606.3
Warehouse, delivery, selling, general and administrative ("SG&A")		606.8		449.2		1,688.6		1,410.4
Depreciation and amortization		56.7		56.4		172.1		170.8
Impairment of long-lived assets		—		10.0		—		107.9
		3,299.8		1,925.1		8,718.3		6,295.4

Operating income		547.6		160.5		1,386.3		382.4

Other (income) expense:
Interest expense		15.6		15.7		47.0		47.2
Other (income) expense, net		(0.6)		17.8		3.6		23.1
Income before income taxes		532.6		127.0		1,335.7		312.1
Income tax provision		135.9		28.7		340.6		70.2
Net income		396.7		98.3		995.1		241.9
Less: net income attributable to noncontrolling interests		1.0		0.7		3.4		2.4
Net income attributable to Reliance	$	395.7	$	97.6	$	991.7	$	239.5

Earnings per share attributable to Reliance stockholders:
Diluted	$	6.15	$	1.51	$	15.35	$	3.66
Basic	$	6.25	$	1.53	$	15.61	$	3.71

Shares used in computing earnings per share:
Diluted		64,350		64,688		64,617		65,503
Basic		63,275		63,758		63,526		64,578

Cash dividends per share	$	0.6875	$	0.6250	$	2.0625	$	1.8750

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net income	$	396.7	$	98.3	$	995.1	$	241.9
Other comprehensive (loss) income:
Foreign currency translation (loss) gain		(8.3)		11.5		(5.0)		(11.2)
Postretirement benefit plan adjustments, net of tax		—		15.8		—		19.5
Total other comprehensive (loss) income		(8.3)		27.3		(5.0)		8.3
Comprehensive income		388.4		125.6		990.1		250.2
Less: comprehensive income attributable to noncontrolling interests		1.0		0.7		3.4		2.4
Comprehensive income attributable to Reliance	$	387.4	$	124.9	$	986.7	$	247.8

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY

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


	Reliance Stockholders’ Equity
	Common Stock and Additional					Accumulated Other
	Paid-In Capital			Retained		Comprehensive		Noncontrolling
	Shares	Amount		Earnings		(Loss) Income		Interests		Total
Balance at January 1, 2020	66,854	$	122.2	$	5,189.5	$	(105.1)	$	7.5	$	5,214.1
Net income	—		—		61.7		—		1.2		62.9
Other comprehensive loss	—		—		—		(31.4)		—		(31.4)
Noncontrolling interest purchased	—		(6.9)		—		—		(1.1)		(8.0)
Dividend to noncontrolling interest holder	—		—		—		—		(0.5)		(0.5)
Stock-based compensation, net	111		3.8		—		—		—		3.8
Stock options exercised	6		0.3		—		—		—		0.3
Repurchase of common shares	(3,330)		(119.3)		(180.7)		—		—		(300.0)
Cash dividends — $0.625 per share and dividend equivalents	—		—		(41.9)		—		—		(41.9)
Balance at March 31, 2020	63,641		0.1		5,028.6		(136.5)		7.1		4,899.3
Net income	—		—		80.2		—		0.5		80.7
Other comprehensive income	—		—		—		12.4		—		12.4
Stock-based compensation, net	13		9.0		—		—		—		9.0
Cash dividends — $0.625 per share and dividend equivalents	—		—		(39.9)		—		—		(39.9)
Balance at June 30, 2020	63,654		9.1		5,068.9		(124.1)		7.6		4,961.5
Net income	—		—		97.6		—		0.7		98.3
Other comprehensive income	—		—		—		27.3		—		27.3
Dividend to noncontrolling interest holder	—		—		—		—		(0.8)		(0.8)
Stock-based compensation, net	104		2.2		—		—		—		2.2
Repurchase of common shares	(2)		(0.2)		—		—		—		(0.2)
Cash dividends — $0.625 per share and dividend equivalents	—		—		(41.0)		—		—		(41.0)
Balance at September 30, 2020	63,756	$	11.1	$	5,125.5	$	(96.8)	$	7.5	$	5,047.3

Balance at January 1, 2021	63,600	$	0.1	$	5,193.2	$	(77.9)	$	7.3	$	5,122.7
Net income	—		—		266.9		—		1.3		268.2
Other comprehensive loss	—		—		—		(1.2)		—		(1.2)
Dividend to noncontrolling interest holder	—		—		—		—		(2.4)		(2.4)
Stock-based compensation, net	107		6.5		—		—		—		6.5
Cash dividends — $0.6875 per share and dividend equivalents	—		—		(44.8)		—		—		(44.8)
Balance at March 31, 2021	63,707		6.6		5,415.3		(79.1)		6.2		5,349.0
Net income	—		—		329.1		—		1.1		330.2
Other comprehensive income	—		—		—		4.5		—		4.5
Stock-based compensation, net	8		23.1		—		—		—		23.1
Repurchase of common shares	(147)		(24.0)		—		—		—		(24.0)
Cash dividends — $0.6875 per share and dividend equivalents	—		—		(43.8)		—		—		(43.8)
Balance at June 30, 2021	63,568		5.7		5,700.6		(74.6)		7.3		5,639.0
Net income	—		—		395.7		—		1.0		396.7
Other comprehensive loss	—		—		—		(8.3)		—		(8.3)
Dividend to noncontrolling interest holder	—		—		—		—		(1.1)		(1.1)
Stock-based compensation, net	12		16.3		—		—		—		16.3
Repurchase of common shares	(886)		(21.9)		(109.1)		—		—		(131.0)
Cash dividends — $0.6875 per share and dividend equivalents	—		—		(43.7)		—		—		(43.7)
Balance at September 30, 2021	62,694	$	0.1	$	5,943.5	$	(82.9)	$	7.2	$	5,867.9

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	Nine Months Ended
	September 30,
	2021		2020
Operating activities:
Net income	$	995.1	$	241.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		172.1		170.8
Impairment of long-lived assets		—		107.9
Provision for credit losses		10.6		8.3
Deferred income tax benefit		(0.2)		(26.7)
Stock-based compensation expense		55.1		29.9
Postretirement benefit plan settlement expense		—		19.4
Other		(1.3)		10.3
Changes in operating assets and liabilities (excluding effect of businesses acquired):
Accounts receivable		(774.6)		114.4
Inventories		(453.3)		221.9
Prepaid expenses and other assets		47.7		81.9
Accounts payable and other liabilities		354.4		(37.2)
Net cash provided by operating activities		405.6		942.8

Investing activities:
Purchases of property, plant and equipment		(178.9)		(134.7)
Proceeds from sales of property, plant and equipment		26.8		6.2
Other		3.9		0.8
Net cash used in investing activities		(148.2)		(127.7)

Financing activities:
Net short-term debt (repayments) borrowings		(0.8)		0.7
Proceeds from long-term debt borrowings		—		1,673.7
Principal payments on long-term debt		(0.3)		(1,615.4)
Debt issuance costs		—		(6.4)
Dividends and dividend equivalents paid		(132.3)		(122.8)
Share repurchases		(155.0)		(300.2)
Noncontrolling interest purchased		—		(8.0)
Other		(13.4)		(16.5)
Net cash used in financing activities		(301.8)		(394.9)
Effect of exchange rate changes on cash and cash equivalents		(0.7)		(2.9)
(Decrease) increase in cash and cash equivalents		(45.1)		417.3
Cash and cash equivalents at beginning of year		683.5		174.3
Cash and cash equivalents at end of period	$	638.4	$	591.6

Supplemental cash flow information:
Interest paid during the period	$	39.1	$	34.6
Income taxes paid during the period, net	$	297.3	$	68.3

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

Note 1. Basis of Presentation

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 nine months ended September 30, 2021 are not necessarily indicative of the results for the full year ending December 31, 2021. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto for the year ended December 31, 2020, 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.

Note 2. Impact of Recently Issued Accounting Guidance

Impact of Recently Issued Accounting Standards—Adopted

Income Taxes—In December 2019, the Financial Accounting Standards Board (“FASB”) issued accounting changes that simplify the accounting for income taxes as part of the FASB’s overall initiative to reduce complexity in accounting standards. We adopted the accounting changes on January 1, 2021. The adoption of these accounting changes did not have a material impact on our consolidated financial statements.

Impact of Recently Issued Accounting Standards—Not Yet Adopted

Reference Rate Reform—In March 2020, the FASB issued accounting changes that provide optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The accounting changes may be applied prospectively through December 31, 2022. The Company expects to adopt this guidance for any contracts that are modified as a result of reference rate reform. We currently do not expect the transition from LIBOR to have a material impact on our consolidated financial statements.

Note 3. Acquisition

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commercial, residential, municipal and industrial building markets. NaN sales of Merfish United were included in our net sales for the nine months ended September 30, 2021. Merfish United’s unaudited total assets and revenues as of September 30, 2021 and for the twelve months then ended were approximately $215 million and $600 million, respectively.

The allocation of the total purchase price for our acquisition of Merfish United to the fair values of the assets acquired and liabilities assumed is not presented as the accounting is incomplete due to the transaction closing in the fourth quarter of 2021.

We funded our acquisition of Merfish United in the fourth quarter of 2021 with cash on hand.

Note 4. Revenues

The following table presents our net sales disaggregated by product and service. Certain sales taxes and value-added taxes collected from customers are excluded from our reported net sales.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020

	(in millions)
Carbon steel	$	2,406.4	$	1,100.8	$	6,163.7	$	3,490.8
Stainless steel		621.3		341.8		1,613.7		1,083.1
Aluminum		534.9		394.3		1,496.5		1,299.9
Alloy		143.8		91.0		396.0		342.3
Toll processing and logistics		119.7		105.7		350.9		279.6
Other and eliminations		21.3		52.0		83.8		182.1
Total	$	3,847.4	$	2,085.6	$	10,104.6	$	6,677.8

Note 5. Goodwill

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



	(in millions)
Balance at January 1, 2021	$	1,935.2
Foreign currency translation gain		0.1
Balance at September 30, 2021	$	1,935.3

We had 0 accumulated impairment losses related to goodwill at September 30, 2021.

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Note 6. Intangible Assets, net

Intangible assets, net consisted of the following:


		September 30, 2021				December 31, 2020
	Weighted Average	Gross				Gross
	Amortizable	Carrying		Accumulated		Carrying		Accumulated
	Life in Years	Amount		Amortization		Amount		Amortization

		(in millions)
Intangible assets subject to amortization:
Covenants not to compete	5.0	$	0.7	$	(0.5)	$	0.7	$	(0.5)
Customer lists/relationships	14.9		623.2		(424.1)		623.2		(396.7)
Software	10.0		8.1		(8.1)		8.1		(8.1)
Other	5.1		0.6		(0.6)		1.1		(0.9)
			632.6		(433.3)		633.1		(406.2)
Intangible assets not subject to amortization:
Trade names			720.2		—		720.2		—
		$	1,352.8	$	(433.3)	$	1,353.3	$	(406.2)

Amortization expense for intangible assets was $27.5 million and $30.3 million for the nine months ended September 30, 2021 and 2020, respectively. Foreign currency translation losses related to intangible assets, net, were $0.1 million and $2.8 million for the nine months ended September 30, 2021 and 2020, respectively.

In the nine months ended September 30, 2020, we recognized impairment losses of $67.8 million on our trade names and $30.7 million on our customer lists/relationships intangible assets, mainly related to certain of our energy-related (oil and natural gas) businesses. See Note 13—“Impairment and Restructuring Charges” for further discussion.

The following is a summary of estimated future amortization expense for the remaining three months of 2021 and each of the succeeding five years:


	(in millions)
2021 (remaining three months)	$	9.0
2022		35.9
2023		31.6
2024		28.1
2025		23.9
2026		14.4

Note 7. Debt

Debt consisted of the following:


	September 30,		December 31,
	2021		2020

	(in millions)
Unsecured revolving credit facility maturing September 3, 2025	$	—	$	—
Senior unsecured notes due April 15, 2023		500.0		500.0
Senior unsecured notes due August 15, 2025		400.0		400.0
Senior unsecured notes due August 15, 2030		500.0		500.0
Senior unsecured notes due November 15, 2036		250.0		250.0
Other notes and revolving credit facilities		12.6		13.7
Total		1,662.6		1,663.7
Less: unamortized discount and debt issuance costs		(16.3)		(18.8)
Less: amounts due within one year and short-term borrowings		(4.9)		(6.0)
Total long-term debt	$	1,641.4	$	1,638.9

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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. As of September 30, 2021, borrowings under the Credit Agreement were available at variable rates based on LIBOR plus 1.25% or the bank prime rate plus 0.25% and we currently pay a commitment fee at an annual rate of 0.20% on the unused portion of the revolving credit facility. The applicable margins over LIBOR and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our total net leverage ratio, as defined in the Credit Agreement. All borrowings under the Credit Agreement may be prepaid without penalty. Our Credit Agreement includes provisions to change the reference rate to the then-prevailing market convention for similar agreements if a replacement rate for LIBOR is necessary during its term.

As of September 30, 2021 and December 31, 2020, we had 0 outstanding borrowings on the revolving credit facility. As of September 30, 2021, we had $16.0 million of letters of credit issued on the revolving credit facility.

Senior Unsecured Notes

On November 20, 2006, we entered into an indenture (the “2006 Indenture”) for the issuance of $600.0 million of unsecured debt securities. The total issuance was comprised of (a) $350.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.20% per annum, which matured and were repaid on November 15, 2016 and (b) $250.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.85% per annum, maturing on November 15, 2036.

On April 12, 2013, we entered into an indenture (the “2013 Indenture”) for the issuance of $500.0 million aggregate principal amount of senior unsecured notes at the rate of 4.50% per annum, maturing on April 15, 2023.

On August 3, 2020, we entered into an indenture (the “2020 Indenture” and, together with the 2013 Indenture and 2006 Indenture, the “Indentures”) for the issuance of $900.0 million of unsecured debt securities. The total issuance was comprised of (a) $400.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 1.30% per annum, maturing on August 15, 2025 and (b) $500.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 2.15% per annum, maturing on August 15, 2030.

Under the Indentures, the notes are senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations. If we experience a change in control accompanied by a downgrade in our credit rating, we will be required to make an offer to repurchase each series of the notes at a price equal to 101% of their principal amount plus accrued and unpaid interest.

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

Revolving credit facilities with a combined credit limit of $13.4 million are in place for operations in Asia with combined outstanding balances of $4.6 million and $5.4 million as of September 30, 2021 and December 31, 2020, respectively.

Various industrial revenue bonds had combined outstanding balances of $8.0 million and $8.3 million as of September 30, 2021 and December 31, 2020, respectively, 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 September 30, 2021, a total of $23.0 million of letters of credit/guarantee were issued on the facility.

Covenants

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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 September 30, 2021.

Note 8. 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. Information regarding our insignificant finance leases is not included as it is not meaningful to an understanding of our lease obligations.

The following is a summary of our lease cost:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020

	(in millions)
Operating lease cost	$	19.9	$	20.4	$	58.8	$	61.9

Supplemental cash flow and balance sheet information is presented below:


	Nine Months Ended
	September 30,
	2021		2020

	(in millions)
Supplemental cash flow information:
Cash payments for operating leases	$	58.9	$	61.5
Right-of-use assets obtained in exchange for operating lease obligations	$	36.6	$	35.8

	September 30,		December 31,
	2021		2020
Other lease information:
Weighted average remaining lease term—operating leases		6.1 years		5.7 years
Weighted average discount rate—operating leases		3.6%		3.7%

Maturities of operating lease liabilities as of September 30, 2021 are as follows:


	(in millions)
2021 (remaining three months)	$	14.7
2022		52.6
2023		42.9
2024		34.4
2025		24.3
Thereafter		61.1
Total operating lease payments		230.0
Less: imputed interest		(29.2)
Total operating lease liabilities	$	200.8

Note 9. Income Taxes

Our effective income tax rate for each of the third quarter and nine months ended September 30, 2021 was 25.5% compared to 22.6% and 22.5% in the same 2020 periods, respectively. The increases in our effective income tax rates were mainly due to significant increases in our profitability in 2021. 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.

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Note 10. Equity

Dividends

On October 26, 2021, our Board of Directors declared the 2021 fourth quarter cash dividend of $0.6875 per share of common stock, payable on December 3, 2021 to stockholders of record as of November 19, 2021.

During the third quarters of 2021 and 2020, we declared and paid quarterly dividends of $0.6875 and $0.625 per share, or $43.6 million and $39.8 million in total, respectively. During the nine months ended September 30, 2021 and 2020, we declared and paid quarterly dividends of $2.0625 and $1.875 per share, or $131.2 million and $120.7 million in total, respectively. In addition, we paid $1.1 million and $2.1 million in dividend equivalents with respect to vested restricted stock units (“RSUs”) during the nine months ended September 30, 2021 and 2020, respectively.

Stock-Based Compensation

We make annual grants of long-term incentive awards to officers and key employees in the forms of service-based and performance-based RSUs that have approximately 3-year vesting periods. The performance-based RSU awards are subject to both service criteria and performance goals based on the Company’s return on assets. We also make annual grants of stock to the non-employee members of the Board of Directors that vest immediately upon grant. The fair value of the RSUs and stock grants is determined based on the closing stock price of our common stock on the grant date.

In the nine months ended September 30, 2021 and 2020, we made payments of $9.2 million and $14.9 million, respectively, to tax authorities on our employees’ behalf for shares withheld related to net share settlements. These payments are reflected in the Stock-based compensation, net caption of our consolidated statements of equity.

A summary of the status of our unvested service-based and performance-based RSUs as of September 30, 2021 and changes during the nine-months then ended is as follows:


		Weighted
		Average
		Grant Date
		Fair Value
Unvested RSUs	Shares	Per RSU
Unvested at January 1, 2021	995,720	$	85.27
Granted⁽¹⁾	318,495		141.41
Vested	(7,812)		86.52
Cancelled or forfeited	(19,107)		89.99
Unvested at September 30, 2021	1,287,296	$	99.08
Shares reserved for future grants (all plans)	1,877,393

(1)	Comprised of 191,139 service-based RSUs and 127,356 performance-based RSUs granted in March 2021 with a fair value of $141.41 per RSU. The service-based RSUs cliff vest on December 1, 2023 and the performance-based RSUs are subject to a three-year performance period ending December 31, 2023.

Share Repurchase Plan

On July 20, 2021, our Board of Directors authorized a $1.0 billion share repurchase program that amended and restated our prior share repurchase program authorized in October 2018. 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.

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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, 2021	$	(52.7)	$	(25.2)	$	(77.9)
Current-period change		(5.0)		—		(5.0)
Balance as of September 30, 2021	$	(57.7)	$	(25.2)	$	(82.9)

Foreign currency translation adjustments have not been adjusted for income taxes. Postretirement benefit plan adjustments are net of taxes of $5.8 million as of September 30, 2021 and December 31, 2020. The income tax effects relating to our postretirement benefit plan adjustments are reflected in our income tax provision in future periods as the postretirement benefit plan adjustments are amortized over service periods and reflected in the amortization of net loss component of our net periodic benefit cost or are otherwise released and recognized as a settlement loss as a result of a plan termination.

Note 11. Commitments and Contingencies

Environmental Contingencies

We are currently involved with an environmental remediation project related to activities at former manufacturing operations of Earle M. Jorgensen Company (“EMJ”), our wholly owned subsidiary, that were sold many years prior to our acquisition of EMJ in 2006. Although the potential cleanup costs could be significant, EMJ maintained insurance policies during the time it owned the manufacturing operations that have covered costs incurred to date and are expected to continue to cover the majority of the related costs. We do not expect that this obligation will have a material adverse impact on our consolidated financial position, results of operations or cash flows.

Legal Matters

From time to time, we are named as a defendant in legal actions. These actions generally arise in the ordinary course of business. We are not currently a party to any pending legal proceedings other than routine litigation incidental to the business. We maintain general liability insurance against risks arising in the ordinary course of business. We expect that these matters will be resolved without having a material adverse impact on our consolidated financial position, results of operations or cash flows.

COVID-19 Risks and Uncertainties

The global COVID-19 outbreak and associated actions implemented by governments around the world, as well as increased business uncertainty and economic contraction, had an adverse impact on our financial results during 2020. We took a variety of actions during 2020 to help mitigate the financial impact, including rightsizing our inventory and reducing our workforce. Activity in many of the end markets we serve sequentially improved as 2020 progressed, however we believe our financial results in the nine months ended September 30, 2021 were limited by impacts of the COVID-19

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pandemic, including labor shortages, raw material and other supply chain constraints on us, our customers and suppliers. While our financial performance improved in each quarter of 2021, evolving government requirements, including vaccination mandates, along with the broader impacts of the continuing pandemic, could significantly impact our workforce and performance as well as those of our customers and suppliers, and our estimates and judgments may be subject to greater volatility than in the past.

Note 12. Earnings Per Share

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020

	(in millions, except number of shares which are reflected in thousands and per share amounts)
Numerator:
Net income attributable to Reliance	$	395.7	$	97.6	$	991.7	$	239.5
Denominator:
Weighted average shares outstanding		63,275		63,758		63,526		64,578
Dilutive effect of stock-based awards		1,075		930		1,091		925
Weighted average diluted shares outstanding		64,350		64,688		64,617		65,503

Earnings per share attributable to Reliance stockholders:
Diluted	$	6.15	$	1.51	$	15.35	$	3.66
Basic	$	6.25	$	1.53	$	15.61	$	3.71

Potentially dilutive securities were not significant for the third quarters of 2021 and 2020. The computations of earnings per share for the nine months ended September 30, 2021 and 2020 do not include 154,882 and 244,006 weighted average shares, respectively, in respect of RSUs, because their inclusion would have been anti-dilutive.

Note 13. Impairment and Restructuring Charges

Our impairment and restructuring charges consisted of the following:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020

	(in millions)
Intangible assets, net	$	—	$	9.5	$	—	$	98.5
Property, plant and equipment		—		0.5		—		9.2
Operating lease right-of-use assets		—		—		—		0.2
Total impairment charges		—		10.0		—		107.9
Restructuring––cost of sales		—		(0.2)		—		39.6
Restructuring––SG&A		—		4.8		0.1		10.2
Total impairment and restructuring charges	$	—	$	14.6	$	0.1	$	157.7

We recorded impairment and restructuring charges of $157.7 million in the nine months ended September 30, 2020 that were mainly comprised of a $137.5 million impairment and restructuring charge recognized during the first quarter of 2020 due to our reduced long-term outlook for our businesses serving the energy (oil and natural gas) market and charges at certain of our other businesses for which our outlook had turned negative based on impacts from the COVID-19 pandemic. Our first quarter of 2020 impairment and restructuring charge also included a property, plant and equipment impairment charge and an inventory provision related to the closure of certain locations where we anticipated losses on the disposition of certain real property, machinery and equipment and inventories.

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The measurement of intangible assets at fair value in each of the first three quarters of 2020 was determined using discounted cash flow techniques. The use of discounted cash flow models requires judgment and the use of inputs by management that are unobservable, including revenue forecasts, discount rates and long-term growth rates. Unobservable inputs are inputs that reflected the Company’s expectations of the assumptions market participants would use in pricing the eventual recovery of the oil and natural gas and aerospace industries based on the best information available in the circumstances at that time.

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RELIANCE STEEL & ALUMINUM CO.

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

This report contains certain statements that are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forward-looking statements may include, but are not limited to, discussions of our industry and end markets, our business strategies and our expectations concerning future demand and our results of operations, margins, profitability, impairment and restructuring charges, taxes, liquidity, 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.

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 our forward-looking statements as a result of various important factors, including, but not limited to, actions taken by us, including restructuring or cash-preservation initiatives, as well as developments beyond our control, including, but not limited to, the impact of the COVID-19 pandemic as well as the impact of actions taken or contemplated by government authorities to mitigate the spread of the COVID-19 pandemic (such as vaccine mandates and anticipated Occupational Health and Safety Administration safety directives, mask mandates, social distancing or other requirements) and changes in worldwide and U.S. economic conditions that materially impact our customers, the demand and availability of our products and services, including supply disruptions, labor shortages and inflation. 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 in our Annual Report on Form 10-K for the year ended December 31, 2020 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.

Overview

We have generated record financial performance in each of the first three quarters of 2021. Our nimble and resilient business model, coupled with outstanding execution once again resulted in record profitability in the face of operational challenges that included significant increases in metals prices and supply chain disruptions.

Certain key results for the third quarter and nine months ended September 30, 2021 included the following:

●

Sequential record quarterly net sales of $3.85 billion in the third quarter of 2021 were up 84.5% from $2.09 billion in the third quarter of 2020. Record net sales of $10.10 billion in the nine months ended September 30, 2021 were up 51.3% from $6.68 billion in the nine months ended September 30, 2020.

●

Sequential record quarterly gross profit of $1.21 billion in the third quarter of 2021 increased 79.1% and record gross profit of $3.25 billion in the nine months ending September 30, 2021 increased 56.7% as compared to the same periods in 2020. Our gross profit margins in the 2021 periods were strong and fell within an approximate range of 31% to 32%, generally consistent with the respective 2020 periods, despite significant last-in, first-out (“LIFO”) charges in the 2021 periods.

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●

We generated sequential record quarterly pretax income and margin of $532.6 million and 13.8% in the third quarter of 2021, and record pretax income and margin of $1.34 billion and 13.2% in the nine months ended September 30, 2021. Excluding $29.2 million and $177.1 million of impairment, restructuring and postretirement benefit plan settlement charges in the third quarter and nine months ended September 30, 2020, our third quarter of 2021 pretax income and margin improved 241.0% and 630 basis points and our nine-month period ended September 30, 2021 pretax income and margin improved 173.0% and 590 basis points compared to the same periods in 2020.

●

Sequential record quarterly earnings per share of $6.15 for the third quarter and $15.35 for the nine months ended September 30, 2021 were each up over 300% compared to the same periods in 2020. As adjusted for the 2020 nonrecurring charges noted above, our third quarter and nine months ended September 30, 2021 earnings per share were up 232.4% and 170.2%, respectively, from the same periods in 2020.

●

We repurchased $131.0 million and $155.0 million of our common stock in the third quarter and nine months ended September 30, 2021, respectively, compared to $0.2 million and $300.2 million of share repurchases in the respective 2020 periods.

●

We improved our inventory turnover rate to 4.9 times (based on tons) during the nine months ended September 2021, surpassing our 2020 annual rate and company-wide turn goal of 4.7 times.

Our record quarterly net sales in the third quarter of 2021 were the result of a record average selling price per ton sold that increased 77.9% and a 5.8% increase in tons sold compared to the third quarter of 2020; however, our third quarter of 2021 tons sold were below our third quarter of 2019 tons sold (the most recent comparable pre-pandemic period). Our net sales for the nine months ended September 30, 2021 increased due to a 44.5% increase in our average selling price and a 5.7% increase in our tons sold compared to the same period in 2020, which was adversely impacted by COVID-19. We believe our tons sold in the third quarter and nine months ended September 30, 2021 in most end markets we served were limited by factors that constrained economic activity such as metal supply constraints, labor shortages and other supply chain disruptions.

Our record profitability in the third quarter and nine months ended September 30, 2021 was driven by record metals prices, fundamentally strong underlying demand in most end markets, strong gross profit margins, despite significant LIFO charges, and effective expense control. Our gross profit margins in the third quarter and nine months ended September 30, 2021 were generally consistent with our 2020 gross profit margins and fell within an approximate range of 31% to 32%, despite significant LIFO charges of $262.5 million and $562.5 million in the third quarter and nine months ended September 30, 2021, respectively, compared to credits of $12.5 million and $37.5 million, respectively, in the same periods in 2020. Our SG&A expenses in the third quarter and nine months ended September 30, 2021 increased $157.6 million, or 35.1%, and $278.2 million, or 19.7%, respectively, over the same periods in 2020, mainly due to higher incentive-based compensation related to our record gross profit and pretax income, higher variable expenses associated with increased shipment levels and to a lesser extent inflationary impacts on certain warehouse and delivery expenses, including fuel, freight and packaging costs.

Our business model enables us to increase our average selling price and gross profit margin during operating environments that include rising prices and low levels of metal inventories and availability. Consequently, we were able to generate strong gross profit margins in the third quarter and nine months ended September 30, 2021 during which we observed ongoing strength in metals pricing with historically high levels for carbon steel products (59% of our gross sales dollars for the nine months ended September 30, 2021) and stainless steel products (15% of our gross sales dollars for the nine months ended September 30, 2021) due to solid demand, increased input costs and limited metal supply.

During the third quarter and nine months ended September 30, 2020, we recorded impairment and restructuring charges of $14.6 million and $157.7 million, respectively, mainly related to COVID-19 permanent headcount reductions, location closures and a revised negative long-term outlook for certain energy-related (oil and natural gas) businesses, and postretirement benefit plan settlement charges of $14.6 million and $19.4 million, respectively, mainly related to the termination of a frozen defined benefit plan. See Note 13—“Impairment and Restructuring Charges” of our Unaudited Consolidated Financial Statements for further information on our 2020 impairment and restructuring charges.

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We generated cash flow from operations in the third quarter and nine months ended September 30, 2021 of $142.2 million and $405.6 million, respectively, compared to $296.3 million and $942.8 million, respectively, in the same periods in 2020, despite significant investments in working capital resulting from significantly higher metals prices.

We believe our strong liquidity position that includes significant cash on hand, strong cash flow generation, an extended long-term debt maturity profile and $1.5 billion revolving credit facility with no borrowings outstanding will support our prudent use of capital as we maintain a flexible approach focused on growth, both through acquisitions and organically, and stockholder return activities.

We experienced the initial adverse impacts to our operations from COVID-19 during the final weeks of the first quarter of 2020. While our results of operations and customer demand in most of our end markets have returned or exceeded levels of that period, we will continue to evaluate the nature and extent of future impacts of COVID-19 on our business. Given the dynamic nature of COVID-19 and the related circumstances, including any potential resurgences of the virus or its variants or the failure to contain the spread of the pandemic by governments, we cannot reasonably estimate the full impact of the COVID-19 pandemic on our ongoing business, results of operations, and overall financial performance.

We believe our industry-leading results are due to our unique business model and strong operational execution of our strategies. We believe our business model characteristics, including broad end market exposure, a wide geographical footprint, diverse product offerings with significant value-added processing capabilities, and focus on small order sizes and when-needed delivery differentiate us from our industry peers. We believe these unique business model characteristics and strong operational execution of our strategies that include pricing discipline, concentrating on higher margin business and cross-selling inventory throughout our network of metals service centers, enabled us to persevere during the pandemic in 2020 and were the cornerstone of our record quarterly financial results in each of the first three quarters of 2021.

Acquisition

On October 1, 2021, we acquired Merfish United, Inc. (“Merfish United”), a leading master distributor of carbon steel pipes, copper tubing, plastic pipe, electrical conduit and related products that are distributed to its independent wholesale distributor customers across a variety of end markets in the United States. Merfish United, headquartered in Ipswich, Massachusetts, serves 47 U.S. states through its twelve strategically located distribution centers. Merfish United’s broad product offering includes full lines of steel pipe, copper tubing, plastic pipe, electrical conduit and related products for the commercial, residential, municipal and industrial building markets. No sales of Merfish United were included in our net sales for the nine months ended September 30, 2021. Merfish United’s unaudited total assets and revenues as of September 30, 2021 and for the twelve months then ended were approximately $215 million and $600 million, respectively.

We funded our acquisition of Merfish United in the fourth quarter of 2021 with cash on hand.

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Results of Operations

The following table sets forth certain income statement data for the third quarter and nine months ended September 30, 2021 and 2020 (dollars are shown in millions and certain amounts may not calculate due to rounding):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
			% of				% of				% of				% of
	$		Net Sales		$		Net Sales		$		Net Sales		$		Net Sales
Net sales	$	3,847.4	100.0	%	$	2,085.6	100.0	%	$	10,104.6	100.0	%	$	6,677.8	100.0	%
Cost of sales (exclusive of depreciation and amortization expenses shown below)⁽¹⁾		2,636.3	68.5			1,409.5	67.6			6,857.6	67.9			4,606.3	69.0
Gross profit⁽²⁾		1,211.1	31.5			676.1	32.4			3,247.0	32.1			2,071.5	31.0
Warehouse, delivery, selling, general and administrative expense ("SG&A")		606.8	15.8			449.2	21.5			1,688.6	16.7			1,410.4	21.1
Depreciation expense		47.6	1.2			47.0	2.3			144.6	1.4			140.5	2.1
Amortization expense		9.1	0.2			9.4	0.5			27.5	0.3			30.3	0.5
Impairment of long-lived assets		—	—			10.0	0.5			—	—			107.9	1.6
Operating income	$	547.6	14.2	%	$	160.5	7.7	%	$	1,386.3	13.7	%	$	382.4	5.7	%

(1)	Cost of sales in the third quarter and nine months ended September 30, 2020 included ($0.2) million and $39.6 million inventory provisions relating to the planned closure of certain energy-related operations.

(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 expenses 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 our 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.

Third Quarter and Nine Months Ended September 30, 2021 Compared to Third Quarter and Nine Months Ended September 30, 2020

Net Sales



	September 30,				Dollar		Percentage
	2021		2020		Change		Change

	(in millions)
Net sales (three months ended)	$	3,847.4	$	2,085.6	$	1,761.8	84.5	%
Net sales (nine months ended)	$	10,104.6	$	6,677.8	$	3,426.8	51.3	%

	September 30,						Percentage
	2021		2020		Change		Change

	(tons in thousands)
Tons sold (three months ended)		1,358.2		1,283.5		74.7	5.8	%
Tons sold (nine months ended)		4,191.9		3,964.1		227.8	5.7	%
Average selling price per ton sold (three months ended)	$	2,862	$	1,609	$	1,253	77.9	%
Average selling price per ton sold (nine months ended)	$	2,428	$	1,680	$	748	44.5	%

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

Our net sales in the third quarter and nine months ended September 30, 2021 were records for us and increased from the same periods in 2020 due to record average selling prices per ton sold and higher tons sold. Underlying demand was fundamentally healthy in most of the end markets we served in the third quarter of 2021. However, we believe our tons sold in most end markets we served in the third quarter and nine months ended September 30, 2021 were limited by factors that constrained economic activity such as metal supply constraints, labor shortages and other supply chain disruptions.

Since we primarily purchase and sell our inventories in the “spot” market, the changes in our average selling prices generally fluctuate in accordance with the changes in the costs of the various metals we purchase. The mix of products sold can also have an impact on our average selling prices.

Our average selling prices per ton sold increased significantly in the third quarter and nine months ended September 30, 2021 compared to the same periods in 2020, mainly due to several announced mill price increases for carbon and stainless steel products in 2021. As carbon steel sales represented approximately 59% of our gross sales for the nine months ended September 30, 2021, changes in carbon steel prices have the most significant impact on changes in our overall average selling price per ton sold.

Our major commodity selling prices changed year-over-year as follows:


		Average Selling Price per Ton Sold
		Three Months Ended		Nine Months Ended
		September 30		September 30

		(percentage change)
Carbon steel		107.1	%	66.8	%
Stainless steel		62.6	%	34.2	%
Aluminum	��	23.7	%	10.3	%
Alloy		26.7	%	13.5	%

Cost of Sales


	September 30,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
Cost of sales (three months ended)	$	2,636.3	68.5	%	$	1,409.5	67.6	%	$	1,226.8	87.0	%
Cost of sales (nine months ended)	$	6,857.6	67.9	%	$	4,606.3	69.0	%	$	2,251.3	48.9	%

The increases in cost of sales in the third quarter and nine months ended September 30, 2021 compared to the same periods in 2020 were mainly due to higher average costs per ton sold and higher tons sold. See “Net Sales” above for trends in both demand and costs of our products.

Cost of sales included ($0.2) million and $39.6 million net inventory provisions related to the planned closure of certain energy-related operations in the third quarter and nine months ended September 30, 2020. See Note 13—“Impairment and Restructuring Charges” of our Unaudited Consolidated Financial Statements for further information on our 2020 restructuring charges.

In addition, our LIFO method inventory valuation reserve adjustment, which is included in cost of sales and, in effect, reflects cost of sales at current replacement costs, resulted in charges, or expenses, of $262.5 million and $562.5 million in the third quarter and nine months ended September 30, 2021, respectively, compared to credits, or income, of $12.5 million and $37.5 million in the same periods in 2020, respectively. As of September 30, 2021, the LIFO method inventory valuation reserve on our balance sheet was $678.1 million.

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Gross Profit


	September 30,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
Gross profit (three months ended)	$	1,211.1	31.5	%	$	676.1	32.4	%	$	535.0	79.1	%
Gross profit (nine months ended)	$	3,247.0	32.1	%	$	2,071.5	31.0	%	$	1,175.5	56.7	%

We generated record gross profits in the third quarter and nine months ended September 30, 2021 as a result of record average selling prices, strong gross profit margins and increases in tons sold compared to the same periods in 2020. Throughout 2021, we experienced ongoing strength in metals pricing, led by several mill price increases for carbon steel products (59% of our gross sales dollars for the nine-month period of 2021), and stainless steel products (15% of our gross sales dollars for the nine-month period of 2021), along with fundamentally strong underlying demand.

Gross profit was reduced by ($0.2) million and $39.6 million net inventory provisions in the third quarter and nine months ended September 30, 2020. Excluding the impact of the 2020 net inventory provisions and our LIFO inventory valuation method inventory reserve adjustments in the comparable periods, our gross profit margins improved 650 basis points and 660 basis points in the third quarter and nine months ended September 30, 2021, respectively, compared to the same periods in 2020. See “Net Sales” and “Cost of Sales” above for further discussion on product pricing trends and our LIFO inventory valuation reserve adjustments, respectively.

Expenses


	September 30,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
SG&A expense (three months ended)	$	606.8	15.8	%	$	449.2	21.5	%	$	157.6	35.1	%
SG&A expense (nine months ended)	$	1,688.6	16.7	%	$	1,410.4	21.1	%	$	278.2	19.7	%
Depreciation & amortization expense (three months ended)	$	56.7	1.5	%	$	56.4	2.7	%	$	0.3	0.5	%
Depreciation & amortization expense (nine months ended)	$	172.1	1.7	%	$	170.8	2.6	%	$	1.3	0.8	%
Impairment of long-lived assets (three months ended)	$	—	—	%	$	10.0	0.5	%	$	(10.0)	(100.0)	%
Impairment of long-lived assets (nine months ended)	$	—	—	%	$	107.9	1.6	%	$	(107.9)	(100.0)	%

Our SG&A expenses were higher in the third quarter and nine months ended September 30, 2021 compared to the same periods in 2020 mainly due to increases in incentive compensation as a result of our record gross profit and earnings, higher variable expenses associated with increased shipment levels and to a lesser extent inflationary increases in certain warehouse and delivery expenses, including fuel, trucking services and packaging costs. Our SG&A expense as a percentage of sales decreased in the third quarter and nine months ended September 30, 2021 compared to the same periods in 2020 mainly due to our higher sales.

During the third quarter and nine months ended September 30, 2020, we recorded impairment and restructuring charges of $14.6 million and $157.7 million, respectively, mainly related to COVID-19 permanent headcount reductions, location closures and revised negative long-term outlook for certain energy-related (oil and natural gas) businesses. See Note 13—“Impairment and Restructuring Charges” of our Unaudited Consolidated Financial Statements for further information on our 2020 impairment and restructuring charges.

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Operating Income


	September 30,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
Operating income (three months ended)	$	547.6	14.2	%	$	160.5	7.7	%	$	387.1	241.2	%
Operating income (nine months ended)	$	1,386.3	13.7	%	$	382.4	5.7	%	$	1,003.9	262.5	%
Impairment and restructuring charges (three months ended)	$	—	—	%	$	14.6	0.7	%	$	(14.6)	(100.0)	%
Impairment and restructuring charges (nine months ended)	$	0.1	—	%	$	157.7	2.4	%	$	(157.6)	(99.9)	%

The increase in our operating income in the third quarter of 2021 compared to the same period in 2020 was due to record gross profit, as the result of a record average selling price per ton sold, fundamentally strong demand and a strong gross profit margin, that was partially offset by higher incentive compensation, increases in certain SG&A expenses related to our increased shipments and to a lesser extent inflationary increases for certain warehouse and delivery expenses. The increase in our operating margin in the third quarter of 2021 was mainly due to our significantly higher sales that decreased our SG&A expense as a percentage of sales, despite an increase in our SG&A expense.

Excluding the impact of significant impairment and restructuring charges in the nine months ended September 30, 2020, our operating income of $1.39 billion in the nine months ended September 30, 2021 increased $846.2 million, or 156.7%, compared to $540.1 million in the same period in 2020, and our operating income margin improved 560 basis points. The increase in our operating income margin, as adjusted, was mainly due to our significantly higher sales that decreased our SG&A expense as a percentage of sales, despite an increase in our SG&A expense. See Note 13—“Impairment and Restructuring Charges” of our Unaudited Consolidated Financial Statements for further information on our 2020 impairment and restructuring charges.

Other (Income) Expense, Net


	September 30,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
Other (income) expense, net (three months ended)	$	(0.6)	—	%	$	17.8	0.9	%	$	(18.4)	(103.4)	%
Other expense, net (nine months ended)	$	3.6	—	%	$	23.1	0.3	%	$	(19.5)	(84.4)	%

The changes in other (income) expense, net in the third quarter and nine months ended September 30, 2021 compared to the same periods in 2020 were mainly due to postretirement benefit plan settlement charges of $14.6 million and $19.4 million in the respective 2020 periods.

Income Tax Rate

Our effective income tax rate for each of the third quarter and nine months ended September 30, 2021 was 25.5%, compared to 22.6% and 22.5% in the same 2020 periods, respectively. The increases in our effective income tax rates were mainly due to significant increases in our profitability in 2021. 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.

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Net Income


	September 30,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
Net income attributable to Reliance (three months ended)	$	395.7	10.3	%	$	97.6	4.7	%	$	298.1	305.4	%
Net income attributable to Reliance (nine months ended)	$	991.7	9.8	%	$	239.5	3.6	%	$	752.2	314.1	%

The increases in our net income and net income margin in the third quarter of 2021 compared to the same period in 2020 were mainly due to increased operating income and operating income margin as a result of record gross profit and a strong gross profit margin partially offset by higher SG&A expense and effective income tax rate.

Our net income in the nine months ended September 30, 2021 increased $619.4 million, or 166.4%, and our net income margin increased from 5.6% to 9.8%, as adjusted for pretax impairment, restructuring and postretirement benefit plan settlement charges that totaled $177.1 million ($132.8 million after-tax) in the nine months ended September 30, 2020. The increase in our net income and net income margin, as adjusted, were mainly due to record gross profit and a strong gross profit margin partially offset by higher SG&A expense and effective income tax rate.

Liquidity and Capital Resources

Operating Activities

Net cash provided by operations of $405.6 million in the nine months ended September 30, 2021 decreased $537.2 million, or 57.0%, from $942.8 million in the same period in 2020. Our decreased operating cash flow was mainly the result of significantly increased working capital requirements in the 2021 nine-month period compared to the same period in 2020, mainly due to strong demand and rising metals pricing during the 2021 nine-month period that achieved record levels compared to the declining demand and pricing trends in the same period in 2020 due to the COVID-19 pandemic. The strong and rising metals pricing environment combined with healthy demand during the nine months ended September 30, 2021 required more investment in accounts receivable and inventories. To manage our working capital, we focus on our days sales outstanding and on our inventory turnover rate as receivables and inventory are the two most significant elements of our working capital. As of September 30, 2021 and 2020, our days sales outstanding rate was 39.1 days and 42.4 days, respectively. Our inventory turn rate (based on tons) during the nine months ended September 30, 2021 was 4.9 times (or 2.4 months on hand), compared to 4.7 times (or 2.6 months on hand) in the same period in 2020.

Income taxes paid were $297.3 million in the nine months ended September 30, 2021, a significant increase from $68.3 million in the nine months ended September 30, 2020, due to our significantly higher pretax income.

Investing Activities

Net cash used in investing activities was $148.2 million in the nine months ended September 30, 2021 compared to $127.7 million in the same period in 2020 and was substantially comprised of our capital expenditures partially offset by proceeds from sales of property, plant and equipment. Capital expenditures were $178.9 million in the nine months ended September 30, 2021 compared to $134.7 million in the same period in 2020. The majority of our 2021 and 2020 capital expenditures related to growth initiatives. Proceeds from sales of property, plant and equipment were $26.8 million in the nine months ended September 30, 2021 compared to $6.2 million in the same period in 2020 and included $24.4 million from the sale of non-core assets for which we recognized $3.3 million of gains.

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Financing Activities

Net cash used in financing activities of $301.8 million in the nine months ended September 30, 2021 decreased from $394.9 million net cash used in the same period in 2020 mainly due to decreased share repurchases and net debt repayments. In the nine months ended September 30, 2021, we spent $155.0 million to repurchase shares of our common stock compared to $300.2 million in the same period in 2020. We had $1.1 million of net debt repayments in the nine months ended September 30, 2021 compared to $59.0 million of net debt repayments in the same period in 2020.

On October 26, 2021, our Board of Directors declared the 2021 fourth quarter cash dividend of $0.6875 per share. We have increased our quarterly dividend 28 times since our IPO in 1994, with the most recent increase of 10.0% from $0.625 per share to $0.6875 per share effective in the first quarter of 2021. We have paid quarterly cash dividends on our common stock for 62 consecutive years and have never reduced or suspended our regular quarterly dividend.

We repurchase shares through open market purchases, privately negotiated transactions and transactions structured through investment banking institutions under plans relying on Rule 10b5-1 or Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Repurchased and subsequently retired shares are restored to the status of authorized but unissued shares.

During the third quarter of 2021, we repurchased 885,606 shares at an average cost of $147.89 per share, for a total of $131.0 million, compared to 2,466 shares repurchased at an average cost of $100.00 per share, for a total of $0.2 million in the third quarter of 2020. In the nine months ended September 30, 2021, we repurchased approximately 1.0 million shares at an average cost of $150.12 per share, for a total of $155.0 million, compared to approximately 3.3 million shares repurchased at an average cost of $90.10 per share, for a total of $300.2 million in the nine months ended September 30, 2020. Through September 30, 2021, we have repurchased approximately 33.8 million shares at an average cost of $51.32 per share, for a total of $1.74 billion since the inception of our share repurchase programs in 1994, including approximately 11.7 million shares repurchased at an average cost of $89.92, for a total of $1.05 billion since 2017. We expect to continue to be opportunistic in our approach to repurchasing shares of our common stock.

Liquidity

Our primary sources of liquidity are funds generated from operations, cash on hand and our $1.5 billion revolving credit facility. Our total outstanding debt at September 30, 2021 and December 31, 2020 was $1.66 billion. As of September 30, 2021 and December 31, 2020, we had no outstanding borrowings on the revolving credit facility. As of September 30, 2021, we had $638.4 million in cash and cash equivalents and our net debt-to-total capital ratio (net debt-to-total capital is calculated as total debt, net of cash, divided by total Reliance stockholders’ equity plus total debt, net of cash) was 14.7%, down from 15.8% as of December 31, 2020.

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. As of September 30, 2021, borrowings under the Credit Agreement were available at variable rates based on LIBOR plus 1.25% or the bank prime rate plus 0.25% and we currently pay a commitment fee at an annual rate of 0.20% on the unused portion of the revolving credit facility. The applicable margins over LIBOR and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our 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.

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Capital Resources

Various industrial revenue bonds had combined outstanding balances of $8.0 million and $8.3 million as of September 30, 2021 and December 31, 2020, respectively, and have maturities through 2027.

As of September 30, 2021, we had $911.5 million of debt obligations coming due before our $1.5 billion revolving credit facility expires on September 3, 2025.

We believe that we will continue to have sufficient liquidity to fund our future operating needs and to repay our debt obligations as they become due. In addition to funds generated from operations and funds available under our revolving credit facility, we expect to continue to be able to access the capital markets to raise funds, if desired. We believe our sources of liquidity will continue to be adequate to maintain operations, make necessary capital expenditures, finance strategic growth through acquisitions and internal initiatives, pay dividends and opportunistically repurchase shares. Additionally, we believe our investment grade credit ratings enhance our ability to effectively raise capital, if needed. We expect to continue our acquisition and internal growth and stockholder return activities and anticipate that we will be able to fund such activities as they arise.

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 total net leverage ratio.

We were in compliance with all financial maintenance covenants in our Credit Agreement at September 30, 2021.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or variable interest entities, which are typically established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

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As of September 30, 2021 and December 31, 2020, we were contingently liable under standby letters of credit and letters of guarantee in the aggregate amount of $30.9 million and $27.8 million, respectively. The letters of credit/guarantee relate to insurance policies and construction projects.

Contractual Obligations and Other Commitments

We had no material changes in commitments for capital expenditures or purchase obligations as of September 30, 2021, as compared to those disclosed in our table of contractual obligations included in our Annual Report on Form 10-K for the year ended December 31, 2020.

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 a significant impact on our quarterly sales and profitability. Particularly in light of the COVID-19 pandemic, we cannot predict whether period-to-period fluctuations will be consistent with historical patterns. Results of any one or more quarters are therefore not necessarily indicative of annual results.

Goodwill and Other Intangible Assets

Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to $1.94 billion at September 30, 2021, or approximately 21% of total assets and 33% of total equity. Additionally, other intangible assets, net amounted to $919.5 million at September 30, 2021, or approximately 10% of total assets and 16% 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. In the nine months ended September 30, 2020, we recorded impairment losses of $67.8 million on our intangible assets with indefinite lives and $30.7 million on our intangible assets subject to amortization. See Note 13—“Impairment and Restructuring Charges” of our Unaudited Consolidated Financial Statements for further information on our 2020 impairment charges.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our Unaudited Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. When we prepare these consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of our accounting policies require that we make subjective judgments, including estimates that involve matters that are inherently uncertain. Our most critical accounting estimates include those related to goodwill and other indefinite-lived intangible assets and long-lived assets. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. The impacts of the COVID-19 pandemic increase uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates and judgments may be subject to greater volatility than in the past.

See “Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2020 for further information regarding the accounting policies that we believe to be critical accounting policies and that affect our more significant judgments and estimates used in preparing our consolidated financial statements. We do not believe that the new accounting guidance implemented in 2021 changed our critical accounting policies.

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New Accounting Guidance

See Note 2—“Impact of Recently Issued Accounting Guidance” of our Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for disclosure on new accounting guidance issued or implemented.

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 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 investor.rsac.com. The website is for informational purposes only and is not intended for use as a hyperlink. The Company is not incorporating any material on its website into this report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the ordinary course of business, we are exposed to various market risk factors, including fluctuations in interest rates, changes in general economic conditions, domestic and foreign competition, foreign currency exchange rates and metals pricing, demand and availability. See Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2020 for further discussion on quantitative and qualitative disclosures about market risk.

Item 4. Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company carried out an evaluation of 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 quarter ended September 30, 2021 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 11—“Commitments and Contingencies” to our Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q is incorporated by reference into this Item 1.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

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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 or Rule 10b-18 under the Securities Exchange Act of 1934.

Our share repurchase activity for the third quarter of 2021 is presented below.


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan	Maximum Dollar Value That May Yet Be Purchased Under the Plan⁽¹⁾
July 1 - July 31, 2021	94,768	$	148.38	94,768	$	998,000,094
August 1 - August 31, 2021	170,728	$	149.66	170,728	$	972,449,048
September 1 - September 30, 2021	620,110	$	147.33	620,110	$	881,085,737
Total	885,606	$	147.89	885,606

(1)

Share repurchases were made through a combination of one or more open market repurchases and transactions structured through investment banking institutions in reliance upon Rule 10b5-1 or Rule 10b-18 under the Securities Exchange Act of 1934. On July 20, 2021, our Board of Directors amended and restated our share repurchase program, increasing the repurchase authorization to $1 billion. Our share repurchase plan does not obligate us to acquire any specific number of shares. Under the share repurchase plan, shares may be repurchased pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 or 10b-18 under the Securities Exchange Act of 1934, in the open market, in privately negotiated transactions or otherwise.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits


Exhibit No.		Description

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 September 30, 2021 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.

101.SCH*		XBRL Taxonomy Extension Schema Document.

101.CAL*		XBRL Taxonomy Calculation Linkbase Document.

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		XBRL Taxonomy Label Linkbase Document.

101.PRE*		XBRL Taxonomy Presentation Linkbase Document.

104*		Cover Page Interactive Data File (formatting as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

** Furnished herewith.

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SIGNATURES

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: November 4, 2021	By:	/s/ Arthur Ajemyan

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

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Reliance Steel & Aluminum (RS) 10-Q2021 Q3 Quarterly report

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