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Reliance Annual Report, Year Ended Dec 31, 1998

Filing Date
Filed March 29, 1999
Period End
December 31, 1998
Security
RS
In the record · 2016–202610-K1110-Q338-K74

RS filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 74 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Oct ’16Oct ’16
  2. FY2018 annual report10-K · Feb ’19Feb ’19
  3. Leadership change8-K · Oct ’21Oct ’21
  4. Leadership change8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed March 29, 1999. Cited figures are marked; the original filing is the authoritative source.

Reliance Steel & Aluminum Co. reported record 1998 results, driven mainly by acquisitions completed in 1997 and 1998.

Net sales rose to $1,352,807 thousanda from $961,518 thousand in 1997, and net income rose to $47,675 thousand from $34,176 thousand. Diluted earnings per share were $2.53, versus $2.15 in 1997. Gross margin improved to 24.3% of sales from 23.3%, as raw material costs fell faster than selling prices.

Management noted that pricing pressure persisted through 1998, and it does not anticipate the same rate of growth in revenues and net income in 1999. The company's growth was financed largely with debt. Long-term debt increased to $343,250 thousandb at December 31, 1998, from $143,350 thousand a year earlier, following a $150 million senior unsecured notes private placement in November 1998 and borrowings under a $200 million syndicated line of credit.

Total assets grew to $841,395 thousandc from $583,866 thousand. The filing states that the company's higher leverage increases its risks. Shareholders' equity rose modestly to $345,802 thousand, and the company repurchased 430,800 shares during 1998.

After year-end, the company acquired Liebovich Bros., Inc. on March 1, 1999, for approximately $60 milliond in cash, adding a Midwest presence. The company describes its Year 2000 cost estimate as approximately $1.5 million and does not expect a material impact on operations.

02—Key points

Key Highlights

  1. Net sales of $1,352,807 thousand in 1998, up from $961,518 thousand in 1997, with the filing attributing the increase mainly to acquisitions.
  2. Net income of $47,675 thousand, or $2.53 per diluted share, compared with $34,176 thousand, or $2.15 per diluted share, in 1997.
  3. Gross profit of $328,593 thousand, or 24.3% of net sales, compared with 23.3% in 1997.
  4. Long-term debt of $343,250 thousand at year-end 1998, up from $143,350 thousand, after a $150 million senior unsecured notes placement.
  5. Seven acquisitions completed in 1998, with total purchase price of approximately $160,000 thousand, and Liebovich Bros., Inc. acquired March 1, 1999 for about $60 million in cash.
  6. Quarterly cash dividend increased to $0.065 per share in February 1999, and 430,800 shares repurchased in 1998 at an average price of $25.79.

03—Questions

Frequently Asked Questions

  1. What drove the increase in sales and earnings in 1998?

    The filing states that the increase was primarily due to the inclusion of sales and earnings from companies acquired in 1997 and 1998. Excluding acquisitions, tons sold rose 0.7%, and the average selling price fell 3.9% from 1997.

  2. How did the company's debt position change?

    Long-term debt rose to $343,250 thousand from $143,350 thousand. The increase reflects the $150 million senior unsecured notes issued in November 1998, which carry an average rate of 6.55% and mature between 2005 and 2010, plus borrowings under the syndicated credit facility. The filing notes that higher leverage increases risk.

  3. What is the company's Year 2000 exposure?

    The company estimates Year 2000 costs of approximately $1.5 million, with about $0.75 million expected to be capitalized. Management does not expect a material impact on results of operations or cash flows, and expects remaining modifications to be completed by August 1999.

04—Continue

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