- Record gross profit margin of 32.4%
- EPS of
- Pretax income of
- Generated cash flow from operations of
- Declared quarterly dividend of
Sequential Quarter | Nine Months Ended | Year-Over- Year | Year-Over- Year | |||||||||||||||||||||||||
Q3 2020 | Q2 2020 | % Change | 2020 | 2019 | % Change | Q3 2019 | % Change | |||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||||||
Net sales | $ | 2,085.6 | $ | 2,019.3 | 3.3 | % | $ | 6,677.8 | $ | 8,526.0 | (21.7 | %) | $ | 2,685.9 | (22.4 | %) | ||||||||||||
Gross profit1 | $ | 676.1 | $ | 614.7 | 10.0 | % | $ | 2,071.5 | $ | 2,535.2 | (18.3 | %) | $ | 814.7 | (17.0 | %) | ||||||||||||
Gross profit margin1 | 32.4 | % | 30.4 | % | 2.0 | % | 31.0 | % | 29.7 | % | 1.3 | % | 30.3 | % | 2.1 | % | ||||||||||||
Non-GAAP gross profit margin1,2 | 32.4 | % | 30.4 | % | 2.0 | % | 31.6 | % | 29.7 | % | 1.9 | % | 30.3 | % | 2.1 | % | ||||||||||||
Non-GAAP pretax income adjustments2 | $ | 31.0 | $ | 10.4 | 198.1 | % | $ | 178.9 | $ | 0.3 | * | $ | (0.9 | ) | * | |||||||||||||
Pretax income | $ | 127.0 | $ | 102.0 | 24.5 | % | $ | 312.1 | $ | 719.7 | (56.6 | %) | $ | 218.4 | (41.8 | %) | ||||||||||||
Non-GAAP pretax income2 | $ | 158.0 | $ | 112.4 | 40.6 | % | $ | 491.0 | $ | 720.0 | (31.8 | %) | $ | 217.5 | (27.4 | %) | ||||||||||||
Net income attributable to Reliance | $ | 97.6 | $ | 80.2 | 21.7 | % | $ | 239.5 | $ | 535.9 | (55.3 | %) | $ | 162.7 | (40.0 | %) | ||||||||||||
Diluted EPS | $ | 1.51 | $ | 1.24 | 21.8 | % | $ | 3.66 | $ | 7.90 | (53.7 | %) | $ | 2.40 | (37.1 | %) | ||||||||||||
Non-GAAP diluted EPS2 | $ | 1.87 | $ | 1.36 | 37.5 | % | $ | 5.71 | $ | 7.90 | (27.7 | %) | $ | 2.39 | (21.8 | %) | ||||||||||||
Balance Sheet and Cash Flow Data: | ||||||||||||||||||||||||||||
Cash provided by operations | $ | 296.3 | $ | 475.7 | (37.7 | %) | $ | 942.8 | $ | 954.1 | (1.2 | %) | $ | 490.9 | (39.6 | %) | ||||||||||||
Free cash flow3 | $ | 258.1 | $ | 434.7 | (40.6 | %) | $ | 808.1 | $ | 771.3 | 4.8 | % | $ | 432.0 | (40.3 | %) | ||||||||||||
Net debt-to-total capital4 | 17.3 | % | 20.4 | % | 17.3 | % | 22.6 | % | 22.6 | % | ||||||||||||||||||
Capital Allocation Data: | ||||||||||||||||||||||||||||
Capital expenditures | $ | 38.2 | $ | 41.0 | $ | 134.7 | $ | 182.8 | $ | 58.9 | ||||||||||||||||||
Acquisitions, net | $ | — | $ | — | $ | — | $ | 1.0 | $ | — | ||||||||||||||||||
Dividends | $ | 41.0 | $ | 39.9 | $ | 122.8 | $ | 113.3 | $ | 36.8 | ||||||||||||||||||
Share repurchases | $ | 0.2 | $ | — | $ | 300.2 | $ | 50.0 | $ | — | ||||||||||||||||||
Key Business Metrics: | ||||||||||||||||||||||||||||
Tons sold | 1,283.5 | 1,211.8 | 5.9 | % | 3,964.1 | 4,485.9 | (11.6 | %) | 1,476.6 | (13.1 | %) | |||||||||||||||||
Tons sold (same-store) | 1,282.2 | 1,210.6 | 5.9 | % | 3,959.6 | 4,485.9 | (11.7 | %) | 1,476.6 | (13.2 | %) | |||||||||||||||||
Average selling price per ton sold | $ | 1,609 | $ | 1,681 | (4.3 | %) | $ | 1,680 | $ | 1,890 | (11.1 | %) | $ | 1,807 | (11.0 | %) | ||||||||||||
Average selling price per ton sold (same-store) | $ | 1,597 | $ | 1,668 | (4.3 | %) | $ | 1,667 | $ | 1,890 | (11.8 | %) | $ | 1,807 | (11.6 | %) | ||||||||||||
* Not meaningful. | ||||||||||||||||||||||||||||
Please refer to the footnotes at the end of this press release for additional information. | ||||||||||||||||||||||||||||
Management Commentary
“Our third quarter results once again demonstrate the strength of Reliance’s resilient business model. Our diverse product mix and end market exposures, along with our decentralized operating structure, enabled us to quickly respond to varied and fluid market conditions, achieving non-GAAP earnings per diluted share of
End Market Commentary
Reliance services diverse end markets and provides a wide range of products and processing services, generally in small quantities on a when-needed basis. During the third quarter of 2020, the Company experienced improving demand in nearly all of the end markets it serves following customer shut-downs and project delays in the second quarter of 2020 attributable to COVID-19.
Demand in non-residential construction, Reliance’s largest end market, continued to slowly increase during the third quarter due to healthy bidding activity for new projects and the restart of projects that had previously been put on hold. Reliance is cautiously optimistic that demand for non-residential construction activity will continue to improve in the fourth quarter of 2020 based on healthy backlogs and positive customer sentiment.
Demand for the toll processing services Reliance provides to the automotive market rebounded significantly in the third quarter as automotive OEMs and steel and aluminum mills continued to ramp production following COVID-19 shutdowns in the second quarter. Reliance increased its processing volumes at its toll processing operations in both the
Demand in heavy industry for both agricultural and construction equipment remained generally consistent with second quarter levels. Production schedules have begun to steadily increase following customer re-openings from COVID-19 related shutdowns, and Reliance is cautiously optimistic that demand should improve through the remainder of 2020.
Semiconductor demand in the third quarter of 2020 continued to improve steadily compared to the second quarter of 2020. Reliance remains optimistic that demand will remain strong through the remainder of the year.
While demand in the aerospace defense market remained fairly stable at solid levels during the third quarter of 2020, commercial aerospace demand continued to decline as a direct result of reduced air travel due to COVID-19. In response to reduced commercial airplane build rates that are expected to continue at low levels in the near term, Reliance further reduced its workforce and recorded impairment and restructuring charges at certain of its businesses serving the commercial aerospace market during the third quarter. Reliance will continue to monitor and assess the health of its aerospace businesses and take appropriate cost reduction actions if and when necessary to ensure the continued long-term profitability of these businesses.
Demand in the energy (oil and gas) market remains under significant pressure. Reliance closed certain facilities earlier in 2020 and continues to implement proactive cost reduction measures. The Company believes its remaining businesses servicing the energy sector are well positioned to support any future recovery in this market.
Balance Sheet & Cash Flow
As previously announced, in early August of 2020 Reliance completed the public offering of
At
“We were very pleased to significantly strengthen our liquidity position and extend our debt maturity profile during the third quarter of 2020 with the successful execution of both our
Stockholder Return Activity
On
During the third quarter of 2020, Reliance repurchased a total of
Business Outlook
While macroeconomic uncertainty stemming from the COVID-19 pandemic continues, based on current expectations and market conditions, Reliance management anticipates overall demand to continue its slow improvement in the fourth quarter of 2020. However, due to normal seasonal factors including customer holiday-related shutdowns and fewer shipping days in the fourth quarter of 2020 compared to the third quarter of 2020, the Company expects shipping volumes to decline but believes the impact of seasonal factors could be less than in prior years. As a result, the Company estimates that tons sold will be down 4% to 6% in the fourth quarter of 2020 compared to the prior quarter. Further, the Company expects metals pricing, primarily for carbon steel products, in the fourth quarter will improve due to mill price increases. However, management believes these price increases will be partially offset given Reliance’s diverse product mix and declining sales in certain markets such as aerospace which typically involve higher priced products. As such, management estimates its average selling price per ton sold for the fourth quarter of 2020 will be flat to up 2% compared to the third quarter of 2020. Based on these expectations, Reliance management currently anticipates non-GAAP earnings per diluted share in the range of
Conference Call Details
A conference call and simultaneous webcast to discuss Reliance’s third quarter 2020 financial results and business outlook will be held today,
For those unable to participate during the live broadcast, a replay of the call will also be available beginning that same day at
About
Founded in 1939 and headquartered in
Reliance Steel & Aluminum Co.’s press releases and additional information are available on the Company’s website at www.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 Reliance’s industry, end markets, business strategies and expectations concerning future demand and metals pricing and the Company’s results of operations, margins, profitability, impairment 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” 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 us, including restructuring or cash-preservation initiatives, as well as developments beyond our control, including, but not limited to, the impact of COVID-19 and changes in worldwide and
CONTACT:
Investor Relations
(213) 576-2428
investor@rsac.com
or Addo Investor Relations
(310) 829-5400
(Tables to follow)
Third Quarter 2020 Major Commodity Metrics | |||||||||||||||||
Tons Sold (tons in thousands; % change) | Average Selling Price per Ton Sold (% change) | ||||||||||||||||
Q3 2020 Tons Sold | Q2 2020 Tons Sold | Sequential Quarter Change | Q3 2019 Tons Sold | Year-Over-Year Change | Sequential Quarter Change | Year-Over-Year Change | |||||||||||
Carbon steel | 1,040.2 | 987.3 | 5.4 | % | 1,187.2 | (12.4 | %) | (2.8 | %) | (11.3 | %) | ||||||
Aluminum | 70.5 | 68.1 | 3.5 | % | 85.3 | (17.4 | %) | (3.1 | %) | (10.5 | %) | ||||||
Stainless steel | 70.3 | 67.1 | 4.8 | % | 78.1 | (10.0 | %) | (3.0 | %) | (2.3 | %) | ||||||
Alloy | 28.3 | 29.2 | (3.1 | %) | 48.2 | (41.3 | %) | (5.9 | %) | (3.3 | %) | ||||||
Sales ($'s in millions; % change) | |||||||||||||||||
Q3 2020 Sales | Q2 2020 Sales | Sequential Quarter Change | Q3 2019 Sales | Year-Over-Year Change | |||||||||||||
Carbon steel | 2.5 | % | (22.3 | %) | |||||||||||||
Aluminum | 0.2 | % | (25.9 | %) | |||||||||||||
Stainless steel | 1.6 | % | (12.1 | %) | |||||||||||||
Alloy | (8.9 | %) | (43.4 | %) | |||||||||||||
Year-to-Date (9 months) 2020 Major Commodity Metrics | ||||||||||
Tons Sold (tons in thousands; % change) | Average Selling Price per Ton Sold (% change) | |||||||||
2020 | 2019 | Year-Over-Year Change | Year-Over-Year Change | |||||||
Carbon steel | 3,210.6 | 3,591.1 | (10.6 | %) | (14.1 | %) | ||||
Aluminum | 224.0 | 261.9 | (14.5 | %) | (8.6 | %) | ||||
Stainless steel | 216.6 | 234.6 | (7.7 | %) | (2.4 | %) | ||||
Alloy | 103.2 | 153.0 | (32.5 | %) | (1.4 | %) | ||||
Sales ($'s in millions; % change) | ||||||||||
2020 | 2019 | Year-Over-Year Change | ||||||||
Carbon steel | (23.2 | %) | ||||||||
Aluminum | (21.8 | %) | ||||||||
Stainless steel | (9.9 | %) | ||||||||
Alloy | (33.5 | %) | ||||||||
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 | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Net sales | $ | 2,085.6 | $ | 2,685.9 | $ | 6,677.8 | $ | 8,526.0 | |||
Costs and expenses: | |||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 1,409.5 | 1,871.2 | 4,606.3 | 5,990.8 | |||||||
Warehouse, delivery, selling, general and administrative | 449.2 | 518.7 | 1,410.4 | 1,582.2 | |||||||
Depreciation and amortization | 56.4 | 54.8 | 170.8 | 163.2 | |||||||
Impairment of long-lived assets | 10.0 | — | 107.9 | 1.2 | |||||||
1,925.1 | 2,444.7 | 6,295.4 | 7,737.4 | ||||||||
Operating income | 160.5 | 241.2 | 382.4 | 788.6 | |||||||
Other expense: | |||||||||||
Interest expense | 15.7 | 20.5 | 47.2 | 68.4 | |||||||
Other expense, net | 17.8 | 2.3 | 23.1 | 0.5 | |||||||
Income before income taxes | 127.0 | 218.4 | 312.1 | 719.7 | |||||||
Income tax provision | 28.7 | 54.5 | 70.2 | 179.9 | |||||||
Net income | 98.3 | 163.9 | 241.9 | 539.8 | |||||||
Less: Net income attributable to noncontrolling interests | 0.7 | 1.2 | 2.4 | 3.9 | |||||||
Net income attributable to Reliance | $ | 97.6 | $ | 162.7 | $ | 239.5 | $ | 535.9 | |||
Earnings per share attributable to Reliance stockholders: | |||||||||||
Diluted | $ | 1.51 | $ | 2.40 | $ | 3.66 | $ | 7.90 | |||
Basic | $ | 1.53 | $ | 2.44 | $ | 3.71 | $ | 8.01 | |||
Shares used in computing earnings per share: | |||||||||||
Diluted | 64,688 | 67,704 | 65,503 | 67,868 | |||||||
Basic | 63,758 | 66,656 | 64,578 | 66,941 | |||||||
Cash dividends per share | $ | 0.625 | $ | 0.55 | $ | 1.875 | $ | 1.65 | |||
UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||
(in millions, except number of shares which are reflected in thousands and par value) | |||||||
2020 | 2019* | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 591.6 | $ | 174.3 | |||
Accounts receivable, less allowance for credit losses of | 943.9 | 1,067.8 | |||||
Inventories | 1,423.0 | 1,645.7 | |||||
Prepaid expenses and other current assets | 66.6 | 85.2 | |||||
Income taxes receivable | 6.9 | 37.2 | |||||
Total current assets | 3,032.0 | 3,010.2 | |||||
Property, plant and equipment: | |||||||
Land | 258.2 | 239.8 | |||||
Buildings | 1,231.9 | 1,195.1 | |||||
Machinery and equipment | 2,086.9 | 2,044.4 | |||||
Accumulated depreciation | (1,777.6 | ) | (1,684.1 | ) | |||
Property, plant and equipment, net | 1,799.4 | 1,795.2 | |||||
Operating lease right-of-use assets | 195.0 | 201.5 | |||||
1,924.8 | 2,003.8 | ||||||
Intangible assets, net | 955.8 | 1,031.1 | |||||
Cash surrender value of life insurance policies, net | 29.6 | 42.7 | |||||
Other assets | 62.1 | 46.6 | |||||
Total assets | $ | 7,998.7 | $ | 8,131.1 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 260.0 | $ | 275.0 | |||
Accrued expenses | 103.2 | 67.4 | |||||
Accrued compensation and retirement costs | 137.5 | 172.1 | |||||
Accrued insurance costs | 45.2 | 43.4 | |||||
Current maturities of long-term debt and short-term borrowings | 5.8 | 64.9 | |||||
Current maturities of operating lease liabilities | 50.2 | 52.5 | |||||
Total current liabilities | 601.9 | 675.3 | |||||
Long-term debt | 1,638.3 | 1,523.6 | |||||
Operating lease liabilities | 145.9 | 149.5 | |||||
Long-term retirement costs | 87.3 | 87.0 | |||||
Other long-term liabilities | 32.3 | 12.3 | |||||
Deferred income taxes | 445.7 | 469.3 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Preferred stock, | |||||||
Authorized shares — 5,000 | |||||||
None issued or outstanding | — | — | |||||
Common stock and additional paid-in capital, | |||||||
Authorized shares — 200,000 | |||||||
Issued and outstanding shares — 63,756 at | 11.1 | 122.2 | |||||
Retained earnings | 5,125.5 | 5,189.5 | |||||
Accumulated other comprehensive loss | (96.8 | ) | (105.1 | ) | |||
Total Reliance stockholders’ equity | 5,039.8 | 5,206.6 | |||||
Noncontrolling interests | 7.5 | 7.5 | |||||
Total equity | 5,047.3 | 5,214.1 | |||||
Total liabilities and equity | $ | 7,998.7 | $ | 8,131.1 | |||
* Amounts were derived from audited financial statements. | |||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(in millions) | |||||||
Nine Months Ended | |||||||
2020 | 2019 | ||||||
Operating activities: | |||||||
Net income | $ | 241.9 | $ | 539.8 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization expense | 170.8 | 163.2 | |||||
Impairment of long-lived assets | 107.9 | 1.2 | |||||
Provision for uncollectible accounts | 8.3 | 5.2 | |||||
Deferred income tax benefit | (26.7 | ) | (0.3 | ) | |||
Stock-based compensation expense | 29.9 | 37.3 | |||||
Postretirement benefit plan settlement expense | 19.4 | — | |||||
Other | 10.3 | 5.2 | |||||
Changes in operating assets and liabilities (excluding effect of businesses acquired): | |||||||
Accounts receivable | 114.4 | (14.2 | ) | ||||
Inventories | 221.9 | 147.0 | |||||
Prepaid expenses and other assets | 81.9 | 59.7 | |||||
Accounts payable and other liabilities | (37.2 | ) | 10.0 | ||||
Net cash provided by operating activities | 942.8 | 954.1 | |||||
Investing activities: | |||||||
Purchases of property, plant and equipment | (134.7 | ) | (182.8 | ) | |||
Acquisitions, net of cash acquired | — | (1.0 | ) | ||||
Other | 7.0 | 11.9 | |||||
Net cash used in investing activities | (127.7 | ) | (171.9 | ) | |||
Financing activities: | |||||||
Net short-term debt borrowings | 0.7 | — | |||||
Proceeds from long-term debt borrowings | 1,673.7 | 742.0 | |||||
Principal payments on long-term debt | (1,615.4 | ) | (1,304.3 | ) | |||
Debt issuance costs | (6.4 | ) | — | ||||
Dividends and dividend equivalents paid | (122.8 | ) | (113.3 | ) | |||
Share repurchases | (300.2 | ) | (50.0 | ) | |||
Noncontrolling interest purchased | (8.0 | ) | — | ||||
Other | (16.5 | ) | (13.2 | ) | |||
Net cash used in financing activities | (394.9 | ) | (738.8 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (2.9 | ) | (5.6 | ) | |||
Increase in cash and cash equivalents | 417.3 | 37.8 | |||||
Cash and cash equivalents at beginning of year | 174.3 | 128.2 | |||||
Cash and cash equivalents at end of period | $ | 591.6 | $ | 166.0 | |||
Supplemental cash flow information: | |||||||
Interest paid during the period | $ | 34.6 | $ | 57.2 | |||
Income taxes paid during the period, net | $ | 68.3 | $ | 173.7 | |||
NON-GAAP EARNINGS AND GROSS PROFIT RECONCILIATION | |||||||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||
Net Income | Diluted EPS | ||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2020 | 2019 | ||||||||||||||||||
Net income attributable to Reliance | $ | 97.6 | $ | 80.2 | $ | 162.7 | $ | 1.51 | $ | 1.24 | $ | 2.40 | |||||||||||
Impairment and restructuring charges | 14.6 | 5.6 | — | 0.22 | 0.09 | — | |||||||||||||||||
Non-recurring settlement charges | 14.6 | 4.8 | — | 0.23 | 0.07 | — | |||||||||||||||||
Debt restructuring charge | 1.8 | — | — | 0.03 | — | — | |||||||||||||||||
Gains related to sales of non-core assets | — | — | (0.9 | ) | — | — | (0.01 | ) | |||||||||||||||
Income tax benefit related to above items | (7.7 | ) | (2.6 | ) | 0.2 | (0.12 | ) | (0.04 | ) | — | |||||||||||||
Non-GAAP net income attributable to Reliance | $ | 120.9 | $ | 88.0 | $ | 162.0 | $ | 1.87 | $ | 1.36 | $ | 2.39 | |||||||||||
Net Income | Diluted EPS | ||||||||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income attributable to Reliance | $ | 239.5 | $ | 535.9 | $ | 3.66 | $ | 7.90 | |||||||||||||||
Impairment and restructuring charges | 157.7 | 1.2 | 2.41 | 0.02 | |||||||||||||||||||
Non-recurring settlement charges | 19.4 | — | 0.30 | — | |||||||||||||||||||
Debt restructuring charge | 1.8 | — | 0.03 | — | |||||||||||||||||||
Gains related to sales of non-core assets | — | (0.9 | ) | — | (0.02 | ) | |||||||||||||||||
Income tax benefit related to above items | (44.7 | ) | (0.1 | ) | (0.69 | ) | — | ||||||||||||||||
Non-GAAP net income attributable to Reliance | $ | 373.7 | $ | 536.1 | $ | 5.71 | $ | 7.90 | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Pretax income | $ | 127.0 | $ | 102.0 | $ | 218.4 | $ | 312.1 | $ | 719.7 | |||||||||||||
Impairment and restructuring charges | 14.6 | 5.6 | — | 157.7 | 1.2 | ||||||||||||||||||
Non-recurring settlement charges | 14.6 | 4.8 | — | 19.4 | — | ||||||||||||||||||
Debt restructuring charge | 1.8 | — | — | 1.8 | — | ||||||||||||||||||
Gains related to sales of non-core assets | — | — | (0.9 | ) | — | (0.9 | ) | ||||||||||||||||
Non-GAAP pretax income | $ | 158.0 | $ | 112.4 | $ | 217.5 | $ | 491.0 | $ | 720.0 | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Gross profit - LIFO | $ | 676.1 | $ | 614.7 | $ | 814.7 | $ | 2,071.5 | $ | 2,535.2 | |||||||||||||
Restructuring (credits) charges | (0.2 | ) | — | — | 39.6 | — | |||||||||||||||||
Non-GAAP gross profit | 675.9 | 614.7 | 814.7 | 2,111.1 | 2,535.2 | ||||||||||||||||||
LIFO income | (12.5 | ) | (5.0 | ) | (40.0 | ) | (37.5 | ) | (75.0 | ) | |||||||||||||
Non-GAAP gross profit - FIFO | $ | 663.4 | $ | 609.7 | $ | 774.7 | $ | 2,073.6 | $ | 2,460.2 | |||||||||||||
Gross profit margin - LIFO | 32.4 | % | 30.4 | % | 30.3 | % | 31.0 | % | 29.7 | % | |||||||||||||
Restructuring (credits) charges as a % of sales | — | — | — | 0.6 | % | — | |||||||||||||||||
Non-GAAP gross profit margin | 32.4 | % | 30.4 | % | 30.3 | % | 31.6 | % | 29.7 | % | |||||||||||||
LIFO income as a % of sales | (0.6 | %) | (0.2 | %) | (1.5 | %) | (0.5 | %) | (0.8 | %) | |||||||||||||
Non-GAAP gross profit margin - FIFO | 31.8 | % | 30.2 | % | 28.8 | % | 31.1 | % | 28.9 | % | |||||||||||||
Footnotes | |||||||||
1 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 expense associated with the corresponding sales. About half of Reliance's orders are basic distribution with no processing services performed. For the remainder of its sales orders, Reliance performs “first-stage” processing, which is generally not labor intensive as it is 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 cost of sales. Therefore, Reliance's cost of sales is substantially comprised of the cost of the material it sells. Reliance uses gross profit and gross profit margin, as shown, 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 Reliance's earnings. Gross profit and gross profit margin, as presented, are not necessarily comparable with similarly titled measures for other companies. | |||||||||
2 See accompanying Non-GAAP Earnings and Gross Profit Reconciliation. | |||||||||
3 Free cash flow is calculated as cash provided by operations reduced by capital expenditures. | |||||||||
4 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). |
Source:
2020 GlobeNewswire, Inc., source