How did Reliance perform in the fourth quarter of 2024 relative to expectations?

Management said underlying operating results were stronger than anticipated, with tons sold down 5.1% sequentially, better than its expected decline of 6% to 8%. However, a net unfavorable year-end LIFO and income tax true-up of $0.74 per share pulled non-GAAP diluted EPS to $2.22, below the $2.65 to $2.85 range assumed in its guidance.

What is the company's outlook for the first quarter of 2025?

Reliance expects tons sold to rise 6.0% to 8.0% sequentially and 3.0% to 5.0% year over year, with average selling price per ton between down 1% and up 1% sequentially. It anticipates non-GAAP diluted EPS of $3.30 to $3.50, assuming no significant trade policy disruption to carbon steel, stainless steel and aluminum markets and pricing.

How is Reliance returning capital to shareholders?

In 2024 the company repurchased approximately 3.9 million shares for $1.09 billion, a record, and paid $249.7 million in dividends. Subsequent to year-end, through February 18, 2025, it repurchased 743,262 additional shares for $203.2 million. The quarterly dividend was raised to $1.20 per share, payable March 21, 2025.

What was the financial condition of the company at year-end 2024?

At December 31, 2024, cash and cash equivalents totaled $318.1 million, total debt outstanding was $1.15 billion, and there were no borrowings under the $1.5 billion revolving credit facility. Net debt-to-EBITDA was 0.6x and total debt-to-EBITDA was 0.8x.

What drove the change in sales and margins during 2024?

Full-year net sales declined to $13.84 billion from $14.81 billion as average selling price per ton fell to $2,303 from $2,570, offset by a 4.0% increase in tons sold. Gross profit margin was 29.7% versus 30.7% in 2023. The company attributed resilience to strong pricing discipline, value-added processing and four acquisitions that added $286.2 million to 2024 net sales.

RS 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 19, 2025. Cited figures are marked; the original filing is the authoritative source.

Reliance, Inc. (NYSE: RS) reported fourth quarter and full year 2024 results in a press release furnished as Exhibit 99.1.

For full year 2024, net sales were $13.84 billion^a (down from $14.81 billion in 2023), diluted EPS was $15.56 (non-GAAP diluted EPS $15.92), and gross profit margin was 29.7%. Cash flow from operations was $1.43 billion, described as the third highest annual result in the company's history, and free cash flow was $999.2 million. Tons sold rose 4.0% for the year (1.0% on a same-store basis), while average selling price per ton fell 10.4% to $2,303.

For the fourth quarter, net sales were $3.13 billion^b and diluted EPS was $1.93 (non-GAAP $2.22). Management said underlying results were stronger than anticipated, but the quarter absorbed a net unfavorable year-end LIFO and income tax true-up of $0.74 per share relative to the company's guidance assumptions of $2.65 to $2.85 non-GAAP EPS. Capital allocation remained heavily weighted toward shareholder returns: the company repurchased a record $1.09 billion of stock in 2024, reducing outstanding shares by 6% year over year, and declared a quarterly dividend of $1.20 per share, an increase of 9.1%.

For the first quarter of 2025, the company expects tons sold to rise 6.0% to 8.0% sequentially and 3.0% to 5.0% year over year, with average selling price per ton expected to be down 1% to up 1% sequentially, and non-GAAP diluted EPS in the range of $3.30 to $3.50^c. The outlook assumes no significant trade policy disruption to carbon steel, stainless steel and aluminum markets and pricing.

02—Key points

Key Highlights

Full-year 2024 net sales of $13.84 billion versus $14.81 billion in 2023; full-year gross profit margin of 29.7%.
Diluted EPS of $15.56 for 2024 and non-GAAP diluted EPS of $15.92; fourth-quarter diluted EPS of $1.93 and non-GAAP diluted EPS of $2.22.
Cash flow from operations of $1.43 billion for 2024, the third highest annual result in company history; free cash flow of $999.2 million.
Record share repurchases of $1.09 billion in 2024, with outstanding shares down 6% year over year; $1.15 billion remained available under the repurchase program as of February 18, 2025.
Quarterly dividend increased 9.1% to $1.20 per share (annual rate of $4.80), payable March 21, 2025.
Fourth-quarter LIFO and income tax true-up reduced non-GAAP EPS by a net $0.74 per share versus management's guidance assumptions of $2.65 to $2.85.
First-quarter 2025 outlook: non-GAAP diluted EPS of $3.30 to $3.50; tons sold up 3.0% to 5.0% year over year, with demand expected to improve modestly.

03—Questions

Frequently Asked Questions

How did Reliance perform in the fourth quarter of 2024 relative to expectations?
Management said underlying operating results were stronger than anticipated, with tons sold down 5.1% sequentially, better than its expected decline of 6% to 8%. However, a net unfavorable year-end LIFO and income tax true-up of $0.74 per share pulled non-GAAP diluted EPS to $2.22, below the $2.65 to $2.85 range assumed in its guidance.
What is the company's outlook for the first quarter of 2025?
Reliance expects tons sold to rise 6.0% to 8.0% sequentially and 3.0% to 5.0% year over year, with average selling price per ton between down 1% and up 1% sequentially. It anticipates non-GAAP diluted EPS of $3.30 to $3.50, assuming no significant trade policy disruption to carbon steel, stainless steel and aluminum markets and pricing.
How is Reliance returning capital to shareholders?
In 2024 the company repurchased approximately 3.9 million shares for $1.09 billion, a record, and paid $249.7 million in dividends. Subsequent to year-end, through February 18, 2025, it repurchased 743,262 additional shares for $203.2 million. The quarterly dividend was raised to $1.20 per share, payable March 21, 2025.
What was the financial condition of the company at year-end 2024?
At December 31, 2024, cash and cash equivalents totaled $318.1 million, total debt outstanding was $1.15 billion, and there were no borrowings under the $1.5 billion revolving credit facility. Net debt-to-EBITDA was 0.6x and total debt-to-EBITDA was 0.8x.
What drove the change in sales and margins during 2024?
Full-year net sales declined to $13.84 billion from $14.81 billion as average selling price per ton fell to $2,303 from $2,570, offset by a 4.0% increase in tons sold. Gross profit margin was 29.7% versus 30.7% in 2023. The company attributed resilience to strong pricing discipline, value-added processing and four acquisitions that added $286.2 million to 2024 net sales.

04—Continue

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