SS 317 stainless steel coil tube chemical component , Reliance Steel & Aluminum Co. reports for the fourth quarter and

February 16, 2023 6:50 AM ET | Source: Reliance Steel & Aluminum Co. Reliance Steel & Aluminum Co.
- Record annual net revenue of $17.03 billion, up 20.8% – Record annual pre-tax earnings of $2.43 billion, pre-tax margin of 14.3% – Record annual earnings per share of $29.92, non-GAAP EPS of $30.03 – Record quarterly and annual operating cash flow of $808.7 million and $2.12 billion – $630.3 million of common stock, repurchased in 2022 – Quarterly dividend increased 14.3% to $1.00 per share (annual: $4.00)

Scottsdale, Arizona, Feb. 16, 2023 (GLOBE NEWSWIRE) — Reliance Steel and Aluminum Corporation (NYSE: RS) today announced financial results for the fourth quarter ended December 31, 2022 and full year financial results.
Management Comments “In the face of continued volatility in metals prices and broader economic uncertainty, we are pleased to post record financial results across virtually every metric in 2022,” said Carla Lewis, President and CEO of Reliance. “Our net sales in 2022 will reach a record $17.03 billion, driven primarily by strong demand in most of our end markets and continued high metal prices. Providing fast services, 50.2% of which include value-added refining in 2022, contributed to a strong full-year gross margin of 30.8%, the highest performance at the end of our strong year despite lower prices for most products in the second half of 2022. We thus achieved a record annual profit pre-tax non-GAAP of $2.44 billion and a record non-GAAP diluted earnings per share of $30.03 I applaud our team for delivering these great results and delivering them safely and 2022 marks what our overall reported accident rate is at an all-time low.”
Ms. Lewis continued: “Thanks to our strong profitability and efficient working capital management, we generated a record annual operating cash flow of US$2.12 billion, well above our previous record of US$1.3 billion in 2019. Our strong cash generation and liquidity enable us to continue to implement our strategy of orderly capital allocation, with a focus on growth and shareholder returns. the budget is a record $500 million, with about two-thirds of that allocated to organic growth initiatives. We are also pleased to return $847.4 million to shareholders in 2022 through share repurchases and quarterly US dollar cash dividends. We ended the year with a very strong balance sheet and liquidity, allowing us to continue to meet our capital allocation priorities with a focus on growth and shareholder returns regardless of the operating environment.”
End Market Comments Reliance supplies a wide range of processing products and services to a wide range of end markets, often in small quantities upon request. The company’s sales volume in the fourth quarter of 2022 increased by 0.8% compared to the fourth quarter of 2021. Reliance sales decreased by 8.2% compared to the third quarter of 2022, in line with management’s forecast of a decline from 6.5% to 8.5%, as well as a typical seasonal decline in the fourth quarter, including customer outages due to holidays etc. Less delivery days. The company continues to believe that underlying demand remains strong and higher than fourth-quarter shipments as many customers face ongoing supply chain challenges.
Demand in Reliance’s largest end market, non-residential construction (including infrastructure), remains solid and has improved slightly since Q4 2021. Reliance is still experiencing a large number of new projects, including in the field of renewable energy, and remains optimistic that the demand for non-residential construction in the company’s core areas of activity will remain at a healthy level in the first quarter of 2023.
Despite continued supply chain challenges, demand for Reliance’s toll processing services in the automotive market has increased from Q3 2022 and Q4 2021 as some automakers ramp up production volumes. Reliance is optimistic that demand for its toll processing services will continue to grow in the first quarter of 2023.
Demand trends across the broader manufacturing industries served by Reliance, including industrial equipment, consumer goods and heavy equipment, were relatively unchanged from the fourth quarter of 2021. Reliance expects underlying demand for its products across the broader manufacturing sector to remain robust during the first quarter of 2021-2023.
Demand for semiconductors in the fourth quarter was well above last year’s level. Although demand in some market segments may decline in the short term, the semiconductor market remains strong and the company has a positive long-term outlook. Reliance continues to invest in capacity expansion to support the significant expansion of semiconductor manufacturing in the United States.
Demand for the commercial aerospace sector continued to grow in the fourth quarter, with shipments up significantly compared to the fourth quarter of 2021. Reliance is cautiously optimistic that aerospace commercial demand will continue to grow steadily in the first quarter of 2023 as the pace of construction continues to pick up. Demand for the military, defense and space segments of Reliance’s aerospace business remains strong, with a significant backlog expected to continue into the first quarter of 2023.
Demand in the energy (oil and gas) market remained relatively stable in the fourth quarter of 2021. Reliance is cautiously optimistic that demand will improve from current levels in the first quarter of 2023.
Balance sheet and cash flow As of December 31, 2022, Reliance had $1.17 billion in cash and cash equivalents. As of December 31, 2022, total outstanding debt was $1.66 billion, with no outstanding loans from the company’s $1.5 billion revolving credit line. For the fourth quarter and full year ended December 31, 2022, Reliance posted a record $808.7 million and $2.12 billion in operating cash flow, respectively.
On January 15, 2023, Reliance completed the redemption of previously announced Senior Unsecured Notes totaling $500 million at 4.50% per annum maturing on April 15, 2023. The notes were repaid in accordance with the terms of the agreement at a price equal to 100% of their principal amount plus accrued and unpaid interest as at 12 April 2013.
Return to Shareholders On February 14, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $1.00 per ordinary share, representing an increase of 14.3% to be paid on March 24, 2023 to shareholders of registered 10 March 2023 Reliance has paid a regular quarterly cash dividend without reduction or suspension for 63 consecutive years and has increased its dividend 30 times since its IPO in 1994, currently at $4.00 per share per year.
Under the $1 billion share repurchase program approved on July 26, 2022, the company repurchased approximately 400,000 shares of common stock for a total of $82.6 million during the fourth quarter of 2022 at an average price of $186.51 per share. For all of 2022, the company repurchased about 3.5 million shares of common stock at an average price of $178.81 per share for a total of $630.3 million. Over the past five years, Reliance has repurchased about 16 million shares of common stock at an average price of $114.38 per share for a total of $1.83 billion.
Business Outlook Reliance expects healthy demand trends to continue through the first quarter of 2023 despite prevailing macroeconomic uncertainties as well as ongoing supply chain disruptions and geopolitical concerns. As a result, the company estimates that its sales volume in the first quarter of 2023 will increase by 11-13% compared to the fourth quarter of 2022, which exceeds the typical seasonal recovery and increase by 1-3% compared to the fourth quarter of 2022. first quarter 2023 %. 2022. In addition, Reliance expects the average selling price per tonne to decrease by 3-5% in the first quarter of 2023 compared to the fourth quarter of 2022, as price trends for many of its products stabilize from December levels, which is the lowest price point in the fourth quarter of 2022. Based on these expectations, Reliance estimates non-GAAP diluted earnings per share in the range of $5.40 to $5.60 for the first quarter of 2023.
Conference Call Details Conference call and simulcast webcast to discuss Reliance’s 2022 Q4 and 2022 financial results and business outlook today, February 16, 2023 at 11:00 AM ET / 8:00 AM Pacific Time. To listen to the live broadcast by phone, dial (877) 407-0792 (U.S. and Canada) or (201) 689-8263 (international) approximately 10 minutes before the start and enter the conference number: 13735727. The conference will also be broadcast live via Internet in the “Investors” section of the company’s website at Investor.rsac.com.
For those unable to attend during the live stream, from 2:00 pm ET today to 11:59 pm ET, March 2, 2023, call (844) 512-2921 (U.S. and Canada) or (412) 317 -6671 (International) and enter Conference ID: 13735727. The webcast will be available for 90 days on the Investors section of the Reliance website at Investor.rsac.com.
About Reliance Steel & Aluminum Co. Founded in 1939, Reliance Steel & Aluminum Co. (NYSE: RS) is the world’s leading provider of diverse metalworking solutions and the largest metal service center in North America. Through a network of approximately 315 offices in 40 states and 12 countries outside of the US, Reliance provides value-added metalworking services and distributes a full range of over 100,000 metal products to over 125,000 customers in a variety of industries. Reliance specializes in small orders with fast turnaround times and additional processing services. In 2022, Reliance’s average order size is $3,670, about 50% of orders include value-added processing, and about 40% of orders ship within 24 hours. Press Releases Reliance Steel & Aluminum Co. and other information is available on the corporate website at rsac.com.
Forward-Looking Statements This press release contains certain statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, discussions of the Reliance industry and end markets, business strategy, acquisitions and expectations regarding the company’s future growth and profitability, its ability to generate industry-leading returns for shareholders, and future metals demand and prices and results of operations. companies, margins, profitability, taxes, liquidity, macroeconomic conditions including inflation and the likelihood of a recession or slowdown, court cases and capital resources. In some cases, you may identify forward-looking statements by terminology such as “may”, “will”, “should”, “may”, “will”, “foresee”, “plan”, “foresee”, “believes”. “, “estimates”, “anticipates”, “potential”, “preliminary”, “range”, “intends” and “continues”, the negation of these terms and similar expressions.
These forward-looking statements are based on management’s estimates, forecasts and assumptions to date, which may not be accurate. Forward-looking statements involve known and unknown risks and uncertainties and are not guarantees of future results. Actual results and results could differ materially from those expressed or forecast in these forward-looking statements as a result of a variety of important factors, including, but not limited to, actions taken by Reliance and events beyond its control, including, but not limited to, , expectations regarding the acquisition. The possibility that benefits may not materialize as expected, the impact of labor constraints and supply chain disruptions, ongoing pandemics, and changes in global and US political and economic conditions such as inflation and the possibility of a recession. , may affect the Company, its customers and Suppliers, as well as economic downturns that have a significant impact on the demand for the Company’s products and services. The extent to which the ongoing COVID-19 pandemic could adversely affect the Company’s operations will depend on highly uncertain and unpredictable future events, including the duration of the pandemic, any re-emergence or mutation of the virus, actions taken to contain the spread of COVID-19, or its impact on treatment, including the speed and effectiveness of vaccination efforts, and the direct and indirect impact of the virus on the global and US economic situation. A deterioration in economic conditions due to inflation, the economic downturn, COVID-19, the conflict between Russia and Ukraine or otherwise may lead to a further or prolonged decrease in demand for the Company’s products and services and adversely affect the Company’s operations, and may also affect financial markets and corporate credit markets, which could adversely affect the company’s access to funding or the terms of any funding. The Company cannot currently predict the full impact of inflation, product price fluctuations, the economic downturn, the COVID-19 pandemic or the Russian-Ukrainian conflict and related economic impacts, but these factors, individually or in combination, could have an impact on the business, financial activity of the company. condition, material adverse effect on results of operations and cash flows.
The statements contained in this press release are current only as of the date of its publication, and Reliance disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or for any other reason, except as when required by law. For information on significant risks and uncertainties in Reliance’s business, see paragraph 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as set out in the Company’s Annual Report on Form 10-K for the year, ended December 31, 2022. Reliance’s Form 10-Q Quarterly Report and other filings for the quarter ended the 30th are updated in Reliance filings or with the SEC.