How did Reliance perform in the third quarter of 2024?

Net sales were $3.42 billion, down 5.6% year over year, and net income attributable to Reliance was $199.2 million, down 32.5% from the prior-year quarter. Tons sold increased 7.1% year over year, but lower metals pricing reduced average selling price per ton sold by 12.0%. Diluted EPS was $3.61, and non-GAAP diluted EPS was $3.64.

What is the company's financial position and capital allocation activity?

At September 30, 2024, cash and cash equivalents were $314.6 million and total outstanding debt was $1.28 billion. Under its $1.5 billion unsecured revolving credit facility, $125.0 million was outstanding, with approximately $1.37 billion available. In Q3 2024, the company spent $112.8 million on capital expenditures, $23 million on an acquisition, and returned $492.6 million to stockholders through dividends and repurchases.

What does Reliance expect for the fourth quarter of 2024?

The company expects tons sold to fall 6.0% to 8.0% compared with Q3 2024 and rise 4.0% to 6.0% from Q4 2023, including 0.5% to 2.5% from same-store growth. Average selling price per ton is expected to decline 1.5% to 3.5% sequentially, with continued pricing pressure in carbon steel. Non-GAAP diluted EPS is projected at $2.65 to $2.85.

What was the FerrouSouth acquisition?

Effective August 16, 2024, Reliance completed the acquisition of certain toll processing assets of the FerrouSouth division of Ferragon Corporation, a toll processing operation headquartered in Iuka, Mississippi, using cash on hand. Net sales for these operations for the year ended December 31, 2023 were approximately $15 million.

What changes were made to stockholder returns and the credit facility?

The Board declared a quarterly dividend of $1.10 per share on October 22, 2024, and the company has paid regular quarterly dividends for 65 consecutive years. On October 22, 2024, the Board replenished the share repurchase authorization to $1.5 billion with no set expiration. Reliance also amended and restated its $1.5 billion unsecured revolving credit agreement for a new five-year term, as previously announced on September 10, 2024.

RS 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed October 24, 2024. Cited figures are marked; the original filing is the authoritative source.

Reliance, Inc. (NYSE: RS) reported third-quarter 2024 results in a press release furnished as Exhibit 99.1 to this Form 8-K.

Net sales were $3.42 billion^a, down 5.6% from the prior-year quarter, while tons sold rose 7.1% year over year to 1,521.4 thousand tons. Gross profit margin was 29.4%, and diluted EPS was $3.61 compared with $4.99 a year earlier. Non-GAAP diluted EPS was $3.64.

Management attributed the lower results to metals pricing that declined more than anticipated, partly offset by higher volume. Average selling price per ton sold fell 12.0% year over year. Net income attributable to Reliance was $199.2 million^b, down 32.5% from the prior-year quarter.

Cash flow from operations was $463.9 million^c in the quarter, and free cash flow was $351.1 million. The company repurchased $432.0 million of stock, reducing outstanding shares by nearly 3%, and paid $60.6 million in dividends. Reliance declared a quarterly dividend of $1.10 per share and approved an amendment replenishing its share repurchase authorization to $1.5 billion with no set expiration.

At September 30, 2024, cash and cash equivalents were $314.6 million^d and total outstanding debt was $1.28 billion. The company also completed the FerrouSouth toll processing acquisition on August 16, 2024, using cash on hand. For the fourth quarter of 2024, Reliance expects underlying demand to weaken temporarily across most of its end markets because of uncertainty around U.S. economic policy.

It guided tons sold down 6.0% to 8.0% sequentially and up 4.0% to 6.0% year over year, and average selling price down 1.5% to 3.5% sequentially. It expects non-GAAP diluted EPS in the range of $2.65 to $2.85, and it anticipates the FIFO gross profit margin to stabilize.

02—Key points

Key Highlights

Q3 2024 net sales of $3.42 billion, down 5.6% year over year, with tons sold up 7.1% to 1,521.4 thousand tons.
Gross profit margin of 29.4% in Q3 2024; diluted EPS of $3.61 and non-GAAP diluted EPS of $3.64, versus $4.99 diluted EPS in Q3 2023.
Average selling price per ton sold declined 12.0% year over year to $2,246 in Q3 2024 (sequentially down 4.3%).
Cash flow from operations of $463.9 million and free cash flow of $351.1 million in Q3 2024.
Share repurchases of $432.0 million in Q3 2024; share repurchase authorization replenished to $1.5 billion with no set expiration.
Quarterly dividend of $1.10 per share declared on October 22, 2024, payable December 6, 2024.
Q4 2024 guidance calls for non-GAAP diluted EPS of $2.65 to $2.85 and tons sold down 6.0% to 8.0% sequentially amid economic policy uncertainty.

03—Questions

Frequently Asked Questions

How did Reliance perform in the third quarter of 2024?
Net sales were $3.42 billion, down 5.6% year over year, and net income attributable to Reliance was $199.2 million, down 32.5% from the prior-year quarter. Tons sold increased 7.1% year over year, but lower metals pricing reduced average selling price per ton sold by 12.0%. Diluted EPS was $3.61, and non-GAAP diluted EPS was $3.64.
What is the company's financial position and capital allocation activity?
At September 30, 2024, cash and cash equivalents were $314.6 million and total outstanding debt was $1.28 billion. Under its $1.5 billion unsecured revolving credit facility, $125.0 million was outstanding, with approximately $1.37 billion available. In Q3 2024, the company spent $112.8 million on capital expenditures, $23 million on an acquisition, and returned $492.6 million to stockholders through dividends and repurchases.
What does Reliance expect for the fourth quarter of 2024?
The company expects tons sold to fall 6.0% to 8.0% compared with Q3 2024 and rise 4.0% to 6.0% from Q4 2023, including 0.5% to 2.5% from same-store growth. Average selling price per ton is expected to decline 1.5% to 3.5% sequentially, with continued pricing pressure in carbon steel. Non-GAAP diluted EPS is projected at $2.65 to $2.85.
What was the FerrouSouth acquisition?
Effective August 16, 2024, Reliance completed the acquisition of certain toll processing assets of the FerrouSouth division of Ferragon Corporation, a toll processing operation headquartered in Iuka, Mississippi, using cash on hand. Net sales for these operations for the year ended December 31, 2023 were approximately $15 million.
What changes were made to stockholder returns and the credit facility?
The Board declared a quarterly dividend of $1.10 per share on October 22, 2024, and the company has paid regular quarterly dividends for 65 consecutive years. On October 22, 2024, the Board replenished the share repurchase authorization to $1.5 billion with no set expiration. Reliance also amended and restated its $1.5 billion unsecured revolving credit agreement for a new five-year term, as previously announced on September 10, 2024.

04—Continue

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