Skip to content
AnalystLens

Reliance Annual Report, Year Ended Dec 31, 2002

Filing Date
Filed March 27, 2003
Period End
December 31, 2002
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 27, 2003. Cited figures are marked; the original filing is the authoritative source.

Reliance Steel & Aluminum Co. reported net sales of $1.75 billiona and net income of $30.2 million for 2002, compared with $1.66 billion and $36.3 million in 2001.

Diluted earnings per share were $.95, down from $1.28b. Income from operations fell to $70.3 million (4.0% of sales) from $91.5 million (5.5%), as gross margin declined to 27.3% from 27.9% amid competitive pricing pressure and LIFO expense of $8.0 million, versus LIFO income of $11.7 million in 2001. Net sales rose 5.3% mainly because of 2002 acquisitions, while same-store sales fell 6.1%, with tons sold down 4.1% and the average selling price per ton down 2.0%.

The company consolidated American Steel, L.L.C. from May 1, 2002, after raising its ownership to 50.5%, and completed the Pacific Metal, Central Plains Steel and Olympic Metals acquisitions. Operating cash flow was $90.7 millionc, which funded $53.3 million of acquisitions and $17.6 million of debt repayment. The net debt-to-total capital ratio improved to 35.5% from 36.3%.

Shareholders' equity rose to $609.9 milliond and total assets reached $1.14 billion. Management stated it does not expect significant improvement in demand or pricing in 2003 and expects competitive pressure on gross margins to continue into at least early 2003. The company operates 99 processing and distribution facilities in 27 states, Belgium, France and South Korea, with 2002 sales of $1.75 billion.

The filing describes an industry facing low demand from aerospace, semiconductor and related markets, and it notes that carbon steel flat-rolled costs rose sharply in 2002 because of supply constraints and tariffs. Management stated that it believes the Company is positioned to benefit from improved economic conditions.

02—Key points

Key Highlights

  1. Net sales were $1,745.0 million in 2002, up from $1,657.0 million in 2001, but net income fell to $30.2 million from $36.3 million.
  2. Diluted EPS was $.95 in 2002 versus $1.28 in 2001; income from operations declined to $70.3 million from $91.5 million.
  3. Gross profit margin fell to 27.3% from 27.9%, reflecting competitive pricing pressure and $8.0 million of LIFO expense versus $11.7 million of LIFO income in 2001.
  4. Same-store sales decreased $90.4 million (6.1%), with tons sold down 4.1% and average selling price per ton down 2.0%.
  5. Operating cash flow was $90.7 million; net debt-to-total capital improved to 35.5% from 36.3%.
  6. Three acquisitions in 2002 (Pacific Metal Company, Central Plains Steel Co., Olympic Metals, Inc.) plus consolidation of American Steel, L.L.C. from May 1, 2002 after raising ownership to 50.5%.
  7. Management does not anticipate significant improvement in demand or pricing in 2003, and expects competitive pressure on gross margins to continue into at least early 2003.

03—Questions

Frequently Asked Questions

  1. How did Reliance Steel & Aluminum perform financially in 2002?

    Net sales rose 5.3% to $1.75 billion, but net income fell to $30.2 million ($.95 diluted EPS) from $36.3 million ($1.28 diluted EPS) in 2001, as gross margin declined and operating expenses rose.

  2. What drove the decline in margins?

    Gross profit as a percentage of sales fell to 27.3% from 27.9%, due to competitive pressure from weak customer demand and $8.0 million of LIFO expense in 2002, compared with $11.7 million of LIFO income in 2001. Sales of higher-priced aerospace and semiconductor products also declined.

  3. How is the company's balance sheet and liquidity position?

    Shareholders' equity rose to $609.9 million and total assets were $1.14 billion at December 31, 2002. The net debt-to-total capital ratio improved to 35.5% from 36.3%. The $335 million syndicated credit facility had $38 million outstanding, and $280 million of senior unsecured notes were outstanding.

  4. What did management say about 2003?

    Management does not anticipate significant improvements in demand or pricing in 2003 and expects competitive factors to pressure gross margins into at least early 2003. It also stated that the company is positioned to benefit from improved economic conditions.

  5. Did the company pay dividends?

    Yes. Cash dividends were $.24 per share in 2002, paid at $.06 per quarter, and represented 25% of 2002 earnings. The company has paid quarterly dividends for 43 years, but future payments depend on earnings, financial condition and covenant limits.

04—Continue

← View all 10-K filings