-- Net sales of $3.48 billion with record tons sold, up 9.0% year-over-year (same-store tons sold up 5.6%)
-- Strong gross profit margin of 29.7%
-- EPS of $3.74; non-GAAP EPS of $3.77
-- Repurchased $253.2 million of common stock
SCOTTSDALE, Ariz., April 23, 2025 (GLOBE NEWSWIRE) -- Reliance, Inc. (NYSE: RS) today reported its financial results for the first quarter ended March 31, 2025.
| (in millions, except tons sold which are in thousands, per ton and per share amounts) | |||||||||||||||||
| Sequential Quarter | Year-Over-
Year | ||||||||||||||||
| Q1 2025* | Q4 2024 | % Change | Q1 2024 | % Change | |||||||||||||
| Income Statement Data: | |||||||||||||||||
| Net sales | $ | 3,484.7 | $ | 3,126.6 | 11.5 | % | $ | 3,644.8 | (4.4 | %) | |||||||
| Gross profit1 | $ | 1,033.3 | $ | 886.1 | 16.6 | % | $ | 1,128.2 | (8.4 | %) | |||||||
| Gross profit margin1 | 29.7% | 28.3% | 1.4 | % | 31.0% | (1.3 | %) | ||||||||||
| Non-GAAP gross profit margin1,2 | 29.7% | 28.6% | 1.1 | % | 31.0% | (1.3 | %) | ||||||||||
| LIFO expense (income) | $ | 25.0 | $ | 5.6 | $ | (50.0 | ) | ||||||||||
| LIFO expense (income) as a % of net sales | 0.7% | 0.2% | 0.5 | % | (1.4% | ) | 2.1 | % | |||||||||
| LIFO expense (income) per diluted share, net of tax | $ | 0.35 | $ | 0.08 | $ | (0.64 | ) | ||||||||||
| Non-GAAP pretax expense adjustments2 | $ | 2.3 | $ | 21.3 | $ | 4.9 | |||||||||||
| Pretax income | $ | 262.4 | $ | 133.5 | 96.6 | % | $ | 396.2 | (33.8 | %) | |||||||
| Non-GAAP pretax income2 | $ | 264.7 | $ | 154.8 | 71.0 | % | $ | 401.1 | (34.0 | %) | |||||||
| Pretax income margin | 7.5% | 4.3% | 3.2 | % | 10.9% | (3.4 | %) | ||||||||||
| Net income attributable to Reliance | $ | 199.7 | $ | 105.3 | 89.6 | % | $ | 302.9 | (34.1 | %) | |||||||
| Diluted EPS | $ | 3.74 | $ | 1.93 | 93.8 | % | $ | 5.23 | (28.5 | %) | |||||||
| Non-GAAP diluted EPS2 | $ | 3.77 | $ | 2.22 | 69.8 | % | $ | 5.30 | (28.9 | %) | |||||||
| Balance Sheet and Cash Flow Data: | |||||||||||||||||
| Cash provided by operations | $ | 64.5 | $ | 473.3 | (86.4 | %) | $ | 126.3 | (48.9 | %) | |||||||
| Free cash flow2 | $ | (22.4 | ) | $ | 362.4 | (106.2 | %) | $ | 17.6 | (227.3 | %) | ||||||
| Net debt-to-total capital2 | 14.4% | 10.2% | 2.6% | ||||||||||||||
| Net debt-to-EBITDA2 | 0.9x | 0.6x | 0.1x | ||||||||||||||
| Total debt-to-EBITDA2 | 1.1x | 0.8x | 0.6x | ||||||||||||||
| Capital Allocation Data: | |||||||||||||||||
| Acquisitions, net | $ | - | $ | (2.1 | ) | $ | 53.7 | ||||||||||
| Capital expenditures | $ | 86.9 | $ | 110.9 | $ | 108.7 | |||||||||||
| Dividends | $ | 65.2 | $ | 61.2 | $ | 65.3 | |||||||||||
| Share repurchases | $ | 253.2 | $ | 142.4 | $ | - | |||||||||||
| Key Business Metrics: | |||||||||||||||||
| Tons sold | 1,628.9 | 1,444.3 | 12.8 | % | 1,494.0 | 9.0 | % | ||||||||||
| Tons sold (same-store) | 1,565.7 | 1,390.9 | 12.6 | % | 1,483.3 | 5.6 | % | ||||||||||
| Average selling price per ton sold | $ | 2,143 | $ | 2,170 | (1.2 | %) | $ | 2,442 | (12.2 | %) | |||||||
| Average selling price per ton sold (same-store) | $ | 2,166 | $ | 2,194 | (1.3 | %) | $ | 2,449 | (11.6 | %) | |||||||
| * Q1 2025 includes one more shipping day compared to Q4 2024 and one less shipping day compared to Q1 2024. | |||||||||||||||||
| Please refer to the footnotes at the end of this press release for additional information. | |||||||||||||||||
Operating results for the first quarter of 2025 were stronger than anticipated due to better-than-expected shipment levels and gross profit margin. The Company's record 1.63 million tons sold in the first quarter of 2025, representing increases of 9.0% year-over-year and 5.6% on a same-store basis, reflect solid organic growth and contributions from 2024 acquisitions. In addition, shipments during the first quarter benefited from Reliance's ability to access metal due to our strong domestic mill relationships and certain customers' acceleration of metal purchases in advance of anticipated carbon steel and aluminum product price increases. Reliance's average selling price per ton sold decreased slightly compared to the fourth quarter of 2024 mainly due to product mix with a significant increase in carbon steel shipments. A dynamic trade environment supported pricing improvements in March that have continued into April. Continued alignment of replacement costs with inventory costs on hand, along with March selling price increases drove expansion of the Company's non-GAAP FIFO gross profit margin to 30.4% from 28.8% in the fourth quarter of 2024.
LIFO gross profit margin increased to 29.7% from 28.3% in the fourth quarter of 2024 despite $25.0 million of LIFO expense compared to the Company's $15.0 million estimate for LIFO income due to higher-than-expected increases in carbon steel product costs. As a result, the Company's non-GAAP earnings per diluted share of $3.77 include a net unfavorable LIFO per share impact of $0.57 compared to assumptions used in management's non-GAAP earnings per diluted share guidance of $3.30 to $3.50 for the first quarter of 2025.
Management Commentary
"We delivered stronger than expected results in the first quarter due to our targeted focus on smart, profitable growth, once again demonstrating the resilience of our proven business model and ability of our teams to provide solutions to our customers in a backdrop of significant market uncertainty,” said Karla Lewis, President and Chief Executive Officer of Reliance. "By maintaining our commitment to growth and profitability, we shipped record tons, well in excess of industry shipment trends, while increasing our gross profit margin that expanded 140 basis points quarter-over-quarter, which drove non-GAAP earnings per share well ahead of our expectations.”
Mrs. Lewis continued, "Despite ongoing uncertainty in both domestic and international economic policy, we are encouraged by the positive pricing momentum and continuing stable demand conditions, most notably in our non-residential construction market. We applaud our team for their ability to execute on our strategic profitable growth efforts in a disruptive market. Our model of both buying and selling metal primarily in the U.S. market are positive for Reliance, and our employees, customers and suppliers. We remain confident in our ability to maximize earnings power, while maintaining our consistent focus on increasing value for our stockholders.”
End Market Commentary
Reliance provides a diverse range of metal products and value-added processing services to a wide variety of end markets, generally in small quantities on an as-needed basis. The Company's tons sold in the first quarter of 2025 increased 9.0% compared to the prior-year quarter and increased 12.8% compared to the fourth quarter of 2024, exceeding management's expectations of up 6% to 8%. On a same-store basis, the Company's first quarter tons sold increased 5.6% compared to the first quarter of 2024, surpassing the industry-wide decline of 0.5% reported by the Metals Service Center Institute.
Demand for non-residential construction (including infrastructure), Reliance's largest end market by tons, improved from the first quarter of 2024. The Company expects non-residential construction demand to remain at healthy levels in the second quarter of 2025, supported by continued new construction projects across diverse sectors including data centers, energy infrastructure, manufacturing, and public infrastructure.
Demand across the broader manufacturing sectors Reliance serves increased compared to the first quarter of 2024 led by strength in industrial machinery, military, shipbuilding, rail, and heavy construction equipment. Demand in the consumer products and heavy agricultural equipment sectors was up marginally year-over-year, but comparatively weaker than in other segments. Management believes a component of realized demand in the first quarter of 2025 was attributable to demand pull-forward in anticipation of price increases, including tariff actions. Reliance anticipates that demand for its products across the broader manufacturing sector will remain relatively stable in the second quarter of 2025, subject to trade policy action.
Demand in aerospace was stable compared to the first quarter of 2024. Reliance anticipates mildly weaker commercial aerospace demand in the second quarter of 2025, due to excess inventory build in the supply chain and subject to changes in build rates. Demand in the military and space related portions of Reliance's aerospace business is expected to remain consistent at strong levels in the second quarter of 2025.
Demand for the toll processing services Reliance provides to the automotive market was down slightly compared to the first quarter of 2024. The Company expects demand for automotive toll processing to remain stable in the second quarter of 2025, subject to significant uncertainty on North American trade policy. Reliance's toll processing operations are flexible and able to quickly adapt to changes in the market.
Demand in the semiconductor market remained depressed compared to the first quarter of 2024. The Company anticipates semiconductor demand will remain under pressure in the second quarter of 2025 due to continued excess inventory in the supply chain.
Balance Sheet & Cash Flow
At March 31, 2025, Reliance's cash and cash equivalents totaled $277.8 million with total debt outstanding of $1.48 billion, including $330.0 million of outstanding borrowings under the Company's $1.5 billion revolving credit facility.
Reliance generated cash flow from operations of $64.5 million in the first quarter of 2025, which included a typical seasonal investment in working capital. Reliance continues to generate strong cash flow from operations throughout market cycles that it redeploys to fund execution of the Company's flexible and opportunistic capital allocation strategies.
Stockholder Return Activity
On February 18, 2025, Reliance increased its regular quarterly dividend by 9.1% to $1.20 per share of common stock, marking the 32nd increase since the Company's 1994 IPO to a current annual rate of $4.80 per share. On April 21, 2025, the Board of Directors declared a quarterly cash dividend of $1.20 per share of common stock, payable on June 6, 2025 to stockholders of record as of May 23, 2025.
In the first quarter of 2025, outstanding shares were reduced approximately 2% through Reliance's repurchase of 922,656 shares of its common stock at an average price of $274.41 per share, for a total of $253.2 million. As of April 22, 2025, Reliance has repurchased an additional 301,279 shares of its common stock at an average cost of $265.17 per share for a total of $79.9 million. As of April 22, 2025, $1.02 billion remained available for share repurchases under the Company's share repurchase program that was replenished to $1.5 billion on October 22, 2024. Since 2020, Reliance has repurchased approximately 16.3 million shares of its common stock at an average cost of $196.48 per share for a total of $3.2 billion.
Ronald McDonald House Charities Nourishing Families Grant Program
Reliance is pleased to announce expansion of its relationship with Ronald McDonald House Charities® ("RMHC®”) with a commitment to donate $10 million over the next five years as the founding sponsor of the Nourishing Families Grant Program. Reliance's commitment will support RMHC Chapters around the world to provide healthy, nutritious meals to families staying at Ronald McDonald House programs - helping ease daily burdens so parents can focus on their child's care and recovery. The first round of Nourishing Families grants has been awarded to 32 RMHC Chapters across six continents and Reliance encourages others to join in expanding this essential support for families during their most challenging moments.
Business Outlook
Reliance anticipates demand in the second quarter of 2025 will remain stable across the diversified end markets it serves, despite ongoing uncertainty regarding domestic and international economic policy. Accordingly, the Company estimates its tons sold in the second quarter of 2025 will be down 1.0% to up 1.0% compared to the first quarter of 2025, consistent with seasonal trends supported by healthy demand in the non-residential construction market and continued targeted growth efforts to regain market share, and up 3% to 5% compared to the second quarter of 2024. Reliance also expects its average selling price per ton sold for the second quarter of 2025 will be up 1% to 3% compared to the first quarter of 2025. Reliance anticipates its FIFO gross profit margin will expand in the second quarter of 2025 following pricing improvements in March for certain products that have continued into April. Based on these expectations, the Company anticipates non-GAAP earnings per diluted share in the range of $4.50 to $4.70 for the second quarter of 2025, which is inclusive of LIFO expense of $25.0 million or $0.35 per diluted share.
Conference Call Details
A conference call and simultaneous webcast to discuss Reliance's first quarter 2025 financial results and business outlook will be held on Thursday, April 24, 2025 at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time. To listen to the live call by telephone, please dial (877) 407-0792 (U.S. and Canada) or (201) 689-8263 (International) approximately 10 minutes prior to the start time and use conference ID: 13752652. The call will also be broadcast live over the Internet hosted on the Investors section of the Company's website at investor.reliance.com.
For those unable to participate during the live broadcast, a replay of the call will also be available beginning that same day at 2:00 p.m. Eastern Time until 11:59 p.m. Eastern Time on May 8, 2025, by dialing (844) 512-2921 (U.S. and Canada) or (412) 317-6671 (International) and entering the conference ID: 13752652. The webcast will remain posted on the Investors section of Reliance's website at reliance.com for 90 days.
About Reliance, Inc.
Founded in 1939, Reliance, Inc. (NYSE: RS) is a leading global diversified metal solutions provider and the largest metals service center company in North America. Through a network of 320 locations in 41 states and 10 countries outside of the United States, Reliance provides value-added metals processing services and distributes a full-line of over 100,000 metal products to more than 125,000 customers in a broad range of industries. Reliance focuses on small orders with quick turnaround and value-added processing services. In 2024, Reliance's average order size was $2,980, approximately 50% of orders included value-added processing, and approximately 40% of orders were delivered within 24 hours. Reliance's press releases and additional information are available on the Company's website at reliance.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 Reliance's industry and end markets, business strategies, acquisitions, and expectations concerning the Company's future growth and profitability and its ability to generate industry leading returns for its stockholders, as well as future demand and metals pricing and the Company's results of operations, margins, profitability, taxes, liquidity, macroeconomic conditions, including inflation and the possibility of an economic recession or slowdown, 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.
These forward-looking statements are based on management's estimates, projections and assumptions as of today's date that may not prove to be accurate. 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 these forward-looking statements as a result of various important factors, including, but not limited to, actions taken by Reliance, as well as developments beyond its control, including, but not limited to, changes in domestic and worldwide political and economic conditions due to, among other factors, U.S. and foreign trade policies and the impact on economic conditions, inflation and the increasing likelihood of an economic recession that could materially impact us, our customers and suppliers, metals pricing, and demand for our products and services; U.S. and foreign trade policies affecting metals product markets and pricing specifically; the possibility that the expected benefits of acquisitions and capital expenditures may not materialize as expected; and the impacts of labor constraints and supply chain disruptions. Deteriorations in economic conditions, including as a result of tariffs or trade barriers, economic policies, inflation, economic recession, slowing growth, outbreaks of infectious disease, or geopolitical conflicts such as in Ukraine and the Middle East, could lead to a decline in demand for the Company's products and services and negatively impact its business, and may also impact financial markets and corporate credit markets which could adversely impact the Company's access to financing or the terms of any financing. The Company cannot at this time predict all of the impacts of domestic and foreign tariffs and trade policies, inflation, product price fluctuations, economic recession, outbreaks of infectious disease, or geopolitical conflicts and related economic effects, but these factors, individually or in any combination, could have a material adverse effect on the Company's business, financial position, results of operations and cash flows.
The statements contained in this press release speak only as of the date hereof, and Reliance disclaims any and all obligations 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 may be required by law. Important risks and uncertainties about Reliance's business can be found in "Item 1A. Risk Factors” of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and in other documents Reliance files or furnishes with the United States Securities and Exchange Commission.
CONTACT:
(213) 576-2428
or Addo Investor Relations
(310) 829-5400
(Tables to follow)
| First Quarter 2025 Major Commodity Metrics | ||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||