Exhibit 99.1
Reliance Steel & Aluminum Co. Reports 2005 First Quarter Results;
Record Quarterly Sales
LOS ANGELES--(BUSINESS WIRE)--April 21, 2005--Reliance Steel &
Aluminum Co. (NYSE:RS) reported today its financial results for the
first quarter ended March 31, 2005. For the 2005 first quarter, net
income was $46.4 million, up 55% compared with net income of $29.8
million for the same period in 2004. Earnings per diluted share were
$1.41 for the quarter ended March 31, 2005, compared with earnings of
$.92 per diluted share for the same period last year. Sales for the
2005 first quarter were a record $811.9 million, up 24% compared with
2004 first quarter sales of $655.8 million. The 2005 first quarter
financial results include in cost of sales a pre-tax LIFO expense
amount of $12.5 million, or $.24 per diluted share, compared with
$27.5 million, or $.51 per diluted share in the 2004 first quarter.
Chief Executive Officer, David H. Hannah, said, "During the 2005
first quarter, our average sales per day were the highest amounts in
the history of Reliance. Our product diversification played an
important role in our quarterly financial results. The percentage of
total revenues from the higher-priced aluminum and stainless steel
products increased and the percentage from carbon steel products
decreased from the 2004 levels. Improved customer demand from the
aerospace industry was the main driver of the additional sales of
aluminum and stainless steel products. We have not seen any
significant changes in demand from the other industries where we sell
our products."
"Our gross profit margins contracted slightly, as expected, mainly
due to the decline in carbon steel prices. However, our operating
profit increased 43% from the first quarter of 2004 and 25% from the
fourth quarter of 2004. This was the result of a decrease in our
operating expenses to 16.3% of sales compared to 19.7% and 18.1% in
the first and fourth quarters of 2004, respectively," said Hannah.
"Our $35.8 million of cash flow from operations resulted from our
strong financial results and efficient working capital management and
enabled us to reduce our net debt-to-total capital to 30.7% at March
31, 2005, compared to 33.6% at December 31, 2004. We are still excited
about this favorable operating environment and are encouraged by the
growth opportunities in our industry. At this time, we anticipate no
significant changes in current business activity, but we do expect
softness in carbon steel pricing to continue. We estimate earnings per
diluted share for the 2005 second quarter in a range of $1.20 to
$1.30," concluded Hannah.
On February 16, 2005, the Company's Board of Directors declared a
29% increase in the regular quarterly cash dividend to $.09 per share
of common stock. The dividend was paid on April 1, 2005 to
shareholders of record March 11, 2005. In July of 2004, the quarterly
dividend rate was increased 17%, or $.01 per share which, together
with the $.02 per share February increase represents a 50% increase
over the last three quarters. The Company has paid regular quarterly
dividends for 45 consecutive years.
Reliance will host a conference call that will be broadcast live
over the Internet (listen only mode) regarding the 2005 first quarter
financial results for the period ended March 31, 2005. All interested
parties are invited to listen to the webcast on April 21, 2005 at
11:00 a.m. Eastern Time at: http://www.rsac.com/investorinformation or
http://www.streetevents.com. Player format: Windows Media. The webcast
will remain on the Reliance Web site at: www.rsac.com through May 21,
2005 and a printed transcript will be posted on the Reliance Web site
after the completion of the conference call.
Reliance Steel & Aluminum Co., headquartered in Los Angeles,
California, is one of the largest metals service center companies in
the United States. Through a network of more than 100 locations in 30
states and Belgium, France and South Korea, the Company provides
value-added metals processing services and distributes a full line of
over 90,000 metal products. These products include galvanized,
hot-rolled and cold-finished steel; stainless steel; aluminum; brass;
copper; titanium and alloy steel sold to more than 95,000 customers in
various industries.
Reliance Steel & Aluminum Co.'s press releases and additional
information are available on the Company's Web site at www.rsac.com.
The Company was named to the 2005 Forbes Platinum 400 List of
America's Best Big Companies and was also named as one of "America's
Most Admired Companies" listed in the diversified wholesaler's
category in the March 7, 2005 issue of Fortune.
This release may contain forward-looking statements relating to
future financial results. Actual results may differ materially as a
result of factors over which Reliance Steel & Aluminum Co. has no
control. These risk factors and additional information are included in
the Company's reports on file with the Securities and Exchange
Commission.
RELIANCE STEEL & ALUMINUM CO.
SELECTED FINANCIAL DATA
(In thousands except share and per share amounts)
Three Months
Ended March 31,
---------------------
2005 2004
--------- ---------
Income Statement Data:
Net sales $811,907 $655,765
Gross profit 215,936 187,430
Operating profit (1) 83,777 58,696
EBITDA (2) 92,243 67,684
EBIT (2) 81,081 56,638
Pre-tax income 74,780 49,158
Net income 46,363 29,839
EPS -- diluted $1.41 $.92
Weighted average shares outstanding
-- diluted 32,972,593 32,469,082
Gross margin 26.6% 28.6%
Operating profit margin (1) 10.3% 9.0%
EBITDA margin (2) 11.4% 10.3%
EBIT margin (2) 10.0% 8.6%
Pre-tax margin 9.2% 7.5%
Net margin 5.7% 4.6%
Cash dividends per share $.09 $.06
March 31, Dec. 31,
2005 2004
--------- ---------
Balance Sheet and Other Data:
Current assets $809,036 $733,229
Working capital (3) 484,037 458,551
Net fixed assets 458,269 458,813
Total assets 1,638,033 1,563,331
Current liabilities (3) 324,999 274,678
Long-term debt 351,600 380,850
Shareholders' equity 873,519 822,552
Capital expenditures (year-to-date) 10,798 35,982
Net debt-to-total capital (4) 30.7% 33.6%
Return on equity (5) 22.6% 26.2%
Current ratio (3) 2.5 2.7
Book value per share $26.55 $25.18
Cash flow from operations per share (5) $5.17 $3.73
(1) Operating profit is calculated as net sales less cost of
sales, warehouse, delivery, selling, general and administrative
expenses and depreciation expense.
(2) See Consolidated Statements of Income for reconciliation of
EBIT and EBITDA. EBIT is defined as the sum of income before
interest expense and income taxes. EBITDA is defined as the sum of
income before interest expense, income taxes, depreciation expense
and amortization of intangibles. We believe that EBIT and EBITDA
are commonly used as a measure of performance for companies in our
industry and are frequently used by analysts, investors, lenders
and other interested parties to evaluate a company's financial
performance and its ability to incur and service debt. EBIT and
EBITDA should not be considered as a measure of financial
performance under accounting principles generally accepted in the
United States. The items excluded from EBIT and EBITDA are
significant components in understanding and assessing financial
performance. EBIT or EBITDA should not be considered in isolation
or as an alternative to net income, cash flows generated by
operating, investing or financing activities or other financial
statement data presented in the consolidated financial statements
as an indicator of operating performance or as a measure of
liquidity.
(3) The December 31, 2004 balances have been adjusted to reflect a
balance sheet reclassification made as of March 31, 2005.
(4) Net debt-to-total capital is calculated as total debt (net of
cash) divided by shareholders' equity plus total debt (net of
cash).
(5) Calculations are based on the latest twelve months.
RELIANCE STEEL & ALUMINUM CO.
CONSOLIDATED BALANCE SHEETS
(In thousands except share amounts)
ASSETS
March 31, Dec. 31,
2005 2004
----------- -----------
(Unaudited)
Current assets:
Cash and cash equivalents $12,995 $11,659
Accounts receivable, less allowance for
doubtful accounts of $9,635 at March 31, 2005
and $8,699 at December 31, 2004, respectively 371,869 329,991
Inventories 383,149 349,779
Prepaid expenses and other current assets 16,439 17,216
Deferred income taxes 24,584 24,584
----------- -----------
Total current assets 809,036 733,229
Property, plant and equipment, at cost:
Land 57,907 57,982
Buildings 260,994 261,228
Machinery and equipment 378,121 370,229
Accumulated depreciation (238,753) (230,626)
----------- -----------
458,269 458,813
Goodwill 341,780 341,780
Other assets 28,948 29,509
----------- -----------
Total assets $1,638,033 $1,563,331
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $204,181 $140,323
Accrued expenses 18,790 17,561
Accrued compensation and retirement costs 30,759 49,959
Accrued insurance costs 22,731 20,297
Deferred income taxes 138 138
Current maturities of long-term debt 48,400 46,400
----------- -----------
Total current liabilities 324,999 274,678
Long-term debt 351,600 380,850
Long-term retirement costs 14,731 14,102
Deferred income taxes 55,613 55,613
Minority interest 17,571 15,536
Commitments and contingencies -- --
Shareholders' equity:
Preferred stock, no par value:
Authorized shares -- 5,000,000
None issued or outstanding -- --
Common stock, no par value:
Authorized shares -- 100,000,000
Issued and outstanding shares -- 32,905,674
at March 31, 2005 and 32,669,967 at
December 31, 2004, respectively,
stated capital 319,951 313,953
Retained earnings 552,936 508,147
Accumulated other comprehensive income 632 452
----------- -----------
Total shareholders' equity 873,519 822,552
----------- -----------
Total liabilities and shareholders' equity $1,638,033 $1,563,331
=========== ===========
RELIANCE STEEL & ALUMINUM CO.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except share and per share amounts)
Three Months
Ended March 31,
-----------------------
2005 2004
----------- -----------
Net sales $811,907 $655,765
Other income, net 665 507
----------- -----------
812,572 656,272
Costs and expenses:
Cost of sales (exclusive of depreciation
and amortization shown below) 595,971 468,335
Warehouse, delivery, selling, general
and administrative 121,782 118,506
Depreciation and amortization 11,162 11,046
Interest 6,301 7,480
----------- -----------
735,216 605,367
----------- -----------
Income before minority interest
and income taxes 77,356 50,905
Minority interest (2,576) (1,747)
----------- -----------
Income from continuing operations
before income taxes 74,780 49,158
Provision for income taxes 28,417 19,319
----------- -----------
Net income $46,363 $29,839
=========== ===========
Earnings per share:
Income from continuing operations - diluted $1.41 $.92
=========== ===========
Weighted average shares outstanding - diluted 32,972,593 32,469,082
=========== ===========
Income from continuing operations - basic $1.41 $.92
=========== ===========
Weighted average shares outstanding - basic 32,781,391 32,293,160
=========== ===========
Cash dividends per share $.09 $.06
=========== ===========
Reconciliation of EBIT and EBITDA
Income from continuing operations
before income taxes $74,780 $49,158
Interest expense 6,301 7,480
----------- -----------
EBIT 81,081 56,638
=========== ===========
Depreciation and amortization expense 11,162 11,046
----------- -----------
EBITDA $92,243 $67,684
=========== ===========
RELIANCE STEEL & ALUMINUM CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
March 31,
------------------
2005 2004
--------- --------
Operating activities:
Net income $46,363 $29,839
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 11,162 11,046
Loss on sales of machinery and equipment 113 79
Minority interest 2,576 1,747
Tax benefit of stock options exercised 1,387 623
Changes in operating assets and liabilities:
Accounts receivable (41,878) (99,361)
Inventories (33,370) (24,968)
Prepaid expenses and other assets 553 (820)
Accounts payable and accrued expenses 48,883 69,662
--------- --------
Net cash provided by (used in) operating activities 35,789 (12,153)
Investing activities:
Purchases of property, plant and equipment, net (10,798) (8,347)
Proceeds from sales of property and equipment 853 739
--------- --------
Net cash used in investing activities (9,945) (7,608)
Financing activities:
Proceeds from borrowings 111,000 96,000
Principal payments on long-term debt
and short-term borrowings (138,250) (67,250)
Payments to minority shareholders (541) --
Dividends paid (2,961) (1,940)
Exercise of stock options 5,752 2,935
Issuance of common stock 246 236
--------- --------
Net cash (used in) provided by financing activities (24,754) 29,981
Effect of exchange rate changes on cash 246 143
--------- --------
Increase in cash and cash equivalents 1,336 10,363
Cash and cash equivalents at beginning of period 11,659 2,166
--------- --------
Cash and cash equivalents at end of period $12,995 $12,529
========= ========
Supplemental cash flow information:
Interest paid during the period $3,965 $4,691
Income taxes paid during the period $1,149 $4,840
CONTACT: Reliance Steel & Aluminum Co.
Kim P. Feazle
Investor Relations
713-610-9937
213-576-2428
kfeazle@rsac.com
investor@rsac.com