Why did the company change its name, and does it affect shareholders?

The company changed its name from Reliance Steel & Aluminum Co. to Reliance, Inc. effective February 14, 2024, to reflect its evolution to 'more than metal' as a diversified metals solutions provider. The filing states the name change does not affect stockholders' rights, the NYSE ticker 'RS' and the CUSIP number remain unchanged, and no stockholder action is required. Trading under the new name begins February 26, 2024.

How did profitability trend in 2023?

Net income attributable to Reliance fell to $1,335.9 million in 2023 from $1,840.1 million in 2022, and pretax income fell to $1,740.7 million from $2,430.4 million. Gross profit margin was 30.7% for the full year versus 30.8% in 2022. The decline was driven mainly by lower average selling prices per ton, which the CEO noted fell across nearly all major commodity products.

What is the outlook for the first quarter of 2024?

The company expects healthy demand to continue, with tons sold up 9% to 11% compared with the fourth quarter of 2023, consistent with seasonal trends. Average selling price per ton is expected to rise 1.0% to 3.0%, and non-GAAP diluted EPS is projected between $5.30 and $5.50. The filing notes continuing macroeconomic uncertainty and geopolitical risks.

What acquisitions has the company made or agreed to make?

Reliance completed the acquisition of Cooksey Iron & Metal Company on February 1, 2024, a metals service center with approximately $90 million in annual net sales for 2023, which operates under Metals USA, Inc. It also entered into a definitive agreement on February 14, 2024 to acquire American Alloy Steel, Inc., with approximately $310 million in 2023 net sales. That deal is expected to close within 60 days, subject to regulatory approval and customary closing conditions.

How much capital did the company return to shareholders and how strong is its balance sheet?

The company repurchased $479.5 million of common stock in 2023 and paid $238.1 million in cash dividends. At year-end, it had $1.08 billion in cash and cash equivalents against $1.15 billion of total debt, with net debt-to-EBITDA of 0.0x and total debt-to-EBITDA of 0.6x. The $1.5 billion revolving credit facility was undrawn, and the share repurchase program was replenished to $1.5 billion effective October 30, 2023.

RS 8-K: Earnings & Results & Corporate Changes

01—Abstract

Summary

Summary of the 8-K filed February 15, 2024. Cited figures are marked; the original filing is the authoritative source.

Reliance, Inc. (filed under the name Reliance Steel & Aluminum Co.) reported fourth quarter and full year 2023 results on February 15, 2024, and announced a corporate name change effective February 14, 2024.

For full year 2023, net sales were $14,805.9 million^a, down from $17,025.0 million in 2022, and diluted EPS was $22.64, compared with $29.92 a year earlier. Net income attributable to Reliance was $1,335.9 million versus $1,840.1 million. Fourth quarter diluted EPS was $4.70, against $4.99 in the prior quarter and $5.88 in the fourth quarter of 2022.

Tons sold rose 3.7% for the full year to 5,779.2 thousand tons, while average selling price per ton fell 16.4% to $2,570^b. Cash flow from operations for 2023 was $1,671.3 million, and free cash flow was $1,202.5 million. The company repurchased $479.5 million of stock during 2023 and raised its quarterly dividend 10.0% to $1.10 per share.

At December 31, 2023, cash and cash equivalents were $1.08 billion^c, total debt was $1.15 billion, and there were no borrowings under the $1.5 billion revolving credit facility. Net debt-to-EBITDA was 0.0x. The company completed the acquisition of Cooksey Iron & Metal Company on February 1, 2024, with annual net sales of approximately $90 million, and entered into a definitive agreement to acquire American Alloy Steel, Inc., with annual net sales of approximately $310 million, expected to close within 60 days subject to regulatory approval.

For the first quarter of 2024, the company expects tons sold to rise 9% to 11% compared with the fourth quarter of 2023, average selling price per ton to rise 1.0% to 3.0%, and non-GAAP diluted EPS of $5.30 to $5.50^d. The stock continues to trade on the NYSE under ticker RS, with trading under the Reliance, Inc. name beginning February 26, 2024.

02—Key points

Key Highlights

Full year 2023 diluted EPS of $22.64, the second highest in company history, versus $29.92 in 2022; fourth quarter diluted EPS was $4.70.
Net sales fell to $14,805.9 million in 2023 from $17,025.0 million, while average selling price per ton sold declined to $2,570 from $3,073; tons sold rose 3.7%.
Cash flow from operations was $1,671.3 million for 2023, the second highest in company history, and free cash flow was $1,202.5 million.
Repurchased $479.5 million of common stock in 2023 and raised the quarterly dividend 10.0% to $1.10 per share, or $4.40 annualized.
Balance sheet remained strong, with $1.08 billion in cash, $1.15 billion of total debt, and no borrowings under the $1.5 billion revolving credit facility.
Acquired Cooksey Iron & Metal Company on February 1, 2024 (about $90 million in annual net sales) and agreed to acquire American Alloy Steel, Inc. (about $310 million in annual net sales).
First quarter 2024 guidance calls for tons sold up 9% to 11% and average selling price up 1.0% to 3.0% versus Q4 2023, with non-GAAP diluted EPS of $5.30 to $5.50.

03—Questions

Frequently Asked Questions

Why did the company change its name, and does it affect shareholders?
The company changed its name from Reliance Steel & Aluminum Co. to Reliance, Inc. effective February 14, 2024, to reflect its evolution to 'more than metal' as a diversified metals solutions provider. The filing states the name change does not affect stockholders' rights, the NYSE ticker 'RS' and the CUSIP number remain unchanged, and no stockholder action is required. Trading under the new name begins February 26, 2024.
How did profitability trend in 2023?
Net income attributable to Reliance fell to $1,335.9 million in 2023 from $1,840.1 million in 2022, and pretax income fell to $1,740.7 million from $2,430.4 million. Gross profit margin was 30.7% for the full year versus 30.8% in 2022. The decline was driven mainly by lower average selling prices per ton, which the CEO noted fell across nearly all major commodity products.
What is the outlook for the first quarter of 2024?
The company expects healthy demand to continue, with tons sold up 9% to 11% compared with the fourth quarter of 2023, consistent with seasonal trends. Average selling price per ton is expected to rise 1.0% to 3.0%, and non-GAAP diluted EPS is projected between $5.30 and $5.50. The filing notes continuing macroeconomic uncertainty and geopolitical risks.
What acquisitions has the company made or agreed to make?
Reliance completed the acquisition of Cooksey Iron & Metal Company on February 1, 2024, a metals service center with approximately $90 million in annual net sales for 2023, which operates under Metals USA, Inc. It also entered into a definitive agreement on February 14, 2024 to acquire American Alloy Steel, Inc., with approximately $310 million in 2023 net sales. That deal is expected to close within 60 days, subject to regulatory approval and customary closing conditions.
How much capital did the company return to shareholders and how strong is its balance sheet?
The company repurchased $479.5 million of common stock in 2023 and paid $238.1 million in cash dividends. At year-end, it had $1.08 billion in cash and cash equivalents against $1.15 billion of total debt, with net debt-to-EBITDA of 0.0x and total debt-to-EBITDA of 0.6x. The $1.5 billion revolving credit facility was undrawn, and the share repurchase program was replenished to $1.5 billion effective October 30, 2023.

04—Continue

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