-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A+s4SnJWte1rZ3j+ocsrc0nt3WvJa2+vDmEjHXwjAXHTHgkmKKn7e4hn+vlPu7wc w87U1AXRN7EaTPQbVtxcGw== 0001157523-05-006362.txt : 20050721 0001157523-05-006362.hdr.sgml : 20050721 20050721085042 ACCESSION NUMBER: 0001157523-05-006362 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050721 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050721 DATE AS OF CHANGE: 20050721 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RELIANCE STEEL & ALUMINUM CO CENTRAL INDEX KEY: 0000861884 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-METALS SERVICE CENTERS & OFFICES [5051] IRS NUMBER: 951142616 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13122 FILM NUMBER: 05965028 BUSINESS ADDRESS: STREET 1: 350 S GRAND AVE STE 5100 CITY: LOS ANGELES STATE: CA ZIP: 90071 BUSINESS PHONE: 2136877700 MAIL ADDRESS: STREET 1: 350 S GRAND AVE STE 5100 CITY: LOS ANGELES STATE: CA ZIP: 90071 8-K 1 a4935374.txt RELIANCE STEEL & ALUMINUM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ______________________ Date of Report (Date of earliest event reported): July 21, 2005 ______________________ RELIANCE STEEL & ALUMINUM CO. (Exact name of registrant as specified in its charter) California 001-13122 95-1142616 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification Number) 350 S. Grand Ave., Suite 5100 Los Angeles, CA 90071 (Address of principal executive offices) (213) 687-7700 (Registrant's telephone number, including area code) Not applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ Item 2.02. Results of Operations and Financial Condition. On July 21, 2005, the Company issued a press release announcing financial results for the quarter ended June 30, 2005. Attached hereto as Exhibit 99.1 is a copy of the Company's press release dated July 21, 2005 announcing the Company's financial results for this period. The information contained in this report and the exhibit hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. Item 9.01. Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. ------------------------------------------- Not Applicable. (b) Pro Forma Financial Information. ------------------------------- Not Applicable. (c) Exhibits. -------- Exhibit No. Description ----------- ------------------------------------------------------ 99.1 Press Release dated July 21, 2005 (included herewith). SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RELIANCE STEEL & ALUMINUM CO. Dated: July 21, 2005 By: /s/ Karla Lewis ------------------------------------- Karla Lewis Executive Vice President and Chief Financial Officer RELIANCE STEEL & ALUMINUM CO. FORM 8-K INDEX TO EXHIBITS ----------------- Exhibit No. Description - ------------ ------------------------------------------------------------------ 99.1 Press Release dated July 21, 2005 (included herewith). EX-99.1 2 a4935374ex99_1.txt EXHIBIT 99.1 - PRESS RELEASE Exhibit 99.1 Reliance Steel & Aluminum Co. Reports 2005 Second Quarter Results; Record Quarterly Sales LOS ANGELES--(BUSINESS WIRE)--July 21, 2005--Reliance Steel & Aluminum Co. (NYSE:RS) reported today its financial results for the second quarter and six-months ended June 30, 2005. For the 2005 second quarter, net income was $49.0 million, compared with record net income of $52.8 million for the same period in 2004. Earnings per diluted share were $1.48 for the quarter ended June 30, 2005, compared with earnings of $1.62 per diluted share for the same period last year. Sales for the 2005 second quarter were a record $816.3 million, up 7%, compared with 2004 second quarter sales of $760.8 million. There was no LIFO income or expense recorded in the 2005 second quarter, compared with a pre-tax LIFO expense amount of $32.5 million, or $.60 per diluted share in the 2004 second quarter. For the six-months ended June 30, 2005, net income amounted to a record $95.4 million, up 16% compared with net income of $82.6 million for the same period in 2004. Earnings per diluted share were $2.89 for the six-months ended June 30, 2005, compared with earnings of $2.54 per diluted share for the six-months ended June 30, 2004. Sales for the 2005 year-to-date period were a record $1.63 billion, an increase of 15% compared with 2004 six-month sales of $1.42 billion. The 2005 six-month financial results include in cost of sales a pre-tax LIFO expense amount of $12.5 million, or $.23 per diluted share, compared with $60 million, or $1.12 per diluted share in the 2004 year-to-date period. David H. Hannah, Chief Executive Officer, said, "During the second quarter we did not see any meaningful changes, up or down, in the demand for our products when compared to the prior quarter. Our product diversification continues to play an important role in our financial results. Our toughest challenge during this last quarter was managing through the decrease in carbon steel pricing, which we expect to continue throughout the 2005 third quarter. "We continue to believe that the operating environment, while changing, is still very favorable by historical standards, and we are encouraged by the opportunities we see for continued growth for our Company. At this time, anticipating no significant changes from existing business conditions, but expecting some softness in pricing to continue, we estimate earnings per diluted share for the 2005 third quarter will be in a range of $1.20 to $1.30," concluded Hannah. In July of 2005, Reliance acquired Chapel Steel Corp., headquartered in Spring House (Philadelphia), Pennsylvania for $94.2 million in cash plus the assumption of approximately $16.8 million of debt. Chapel was a privately held metals service center company founded in 1972 specializing in high-strength carbon and alloy plate. Chapel's net sales for the fiscal year ended December 31, 2004 were approximately $273 million. Also during the second quarter, the Company entered into a $600 million, five-year, unsecured revolving credit facility that replaced its previous $335 million credit facility. The Company plans to use its credit facility for working capital and general corporate purposes, internal growth initiatives, and the funding of acquisitions. On April 20, 2005, the Company's Board of Directors declared a regular quarterly cash dividend of $.09 per share of common stock. The dividend was paid on June 3, 2005 to shareholders of record May 13, 2005. The Company has paid regular quarterly dividends for 45 consecutive years. Reliance will host a conference call that will be broadcast live over the Internet (listen only mode) regarding the 2005 second quarter and six-months financial results for the period ended June 30, 2005. All interested parties are invited to listen to the web cast on July 21, 2005 at 11:00 a.m. Eastern Time at: http://www.rsac.com/investorinformation or http://www.streetevents.com. Player format: Windows Media. The web cast will remain on the Reliance web site at: www.rsac.com through August 21, 2005 and a printed transcript will be posted on the Reliance web site after the completion of the conference call. Reliance Steel & Aluminum Co., headquartered in Los Angeles, California, is one of the largest metals service center companies in the United States. Through a network of more than 100 locations in 31 states and Belgium, France and South Korea, the Company provides value-added metals processing services and distributes a full line of over 90,000 metal products. These products include galvanized, hot-rolled and cold-finished steel; stainless steel; aluminum; brass; copper; titanium and alloy steel sold to more than 95,000 customers in various industries. Reliance Steel & Aluminum Co.'s press releases and additional information are available on the Company's web site at www.rsac.com. The Company was named to the 2005 Forbes Platinum 400 List of America's Best Big Companies and was also named as one of "America's Most Admired Companies" listed in the diversified wholesaler's category in the March 7, 2005 issue of Fortune. This release may contain forward-looking statements relating to future financial results. Actual results may differ materially as a result of factors over which Reliance Steel & Aluminum Co. has no control. These risk factors and additional information are included in the Company's reports on file with the Securities and Exchange Commission. RELIANCE STEEL & ALUMINUM CO. SELECTED FINANCIAL DATA (In thousands except share and per share amounts) Three Months Six Months Ended June 30, Ended June 30, ------------------------------------------------ 2005 2004 2005 2004 ------------------------------------------------ Income Statement Data: Net sales $816,342 $760,780 $1,628,249 $1,416,545 Gross profit 222,235 228,467 438,171 415,897 Operating profit(1) 88,241 97,478 172,018 156,174 EBITDA(2) 97,423 105,332 189,666 173,016 EBIT(2) 85,316 94,266 166,397 150,904 Pre-tax income 79,110 87,010 153,890 136,168 Net income 49,049 52,797 95,412 82,636 EPS - diluted $1.48 $1.62 $2.89 $2.54 Weighted average shares outstanding -- diluted 33,086,102 32,674,395 33,023,552 32,564,497 Gross margin 27.2% 30.0% 26.9% 29.4% Operating profit margin(1) 10.8% 12.8% 10.6% 11.0% EBITDA margin(2) 11.9% 13.8% 11.6% 12.2% EBIT margin(2) 10.5% 12.4% 10.2% 10.7% Pre-tax margin 9.7% 11.4% 9.5% 9.6% Net margin 6.0% 6.9% 5.9% 5.8% Cash dividends per share $.09 $.06 $.18 $.12 June 30, December 31, 2005 2004 ------------------------ Balance Sheet Data: Current assets $787,680 $733,229 Working capital(3) 501,081 458,551 Net fixed assets 457,942 458,813 Total assets 1,617,072 1,563,331 Current liabilities 286,599 274,678 Long-term debt 325,475 380,850 Shareholders' equity 920,068 822,552 Capital expenditures 21,060 35,982 Net debt-to-total capital(4) 28.0% 33.6% Return on equity(5) 22.2% 26.2% Current ratio(3) 2.8 2.7 Book value per share $27.94 $25.18 Cash flow from operations per share(5) $6.11 $3.73 (1)Operating profit is calculated as net sales less cost of sales, warehouse, delivery, selling, general and administrative expenses and depreciation expense. (2)See Consolidated Statements of Income for reconciliation of EBIT and EBITDA. EBIT is defined as the sum of income before interest expense and income taxes. EBITDA is defined as the sum of income before interest expense, income taxes, depreciation expense and amortization of intangibles. We believe that EBIT and EBITDA are commonly used as a measure of performance for companies in our industry and are frequently used by analysts, investors, lenders and other interested parties to evaluate a company's financial performance and its ability to incur and service debt. EBIT and EBITDA should not be considered as a measure of financial performance under accounting principles generally accepted in the United States. The items excluded from EBIT and EBITDA are significant components in understanding and assessing financial performance. EBIT or EBITDA should not be considered in isolation or as an alternative to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of operating performance or as a measure of liquidity. (3)The December 31, 2004 balances have been adjusted to reflect balance sheet reclassifications made as of June 30, 2005. (4)Net debt-to-total capital is calculated as total debt (net of cash) divided by shareholders' equity plus total debt (net of cash). (5)Calculations are based on the latest twelve months. RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED BALANCE SHEETS (In thousands except share amounts) ASSETS June 30, December 31, 2005 2004 ----------- ----------- Current assets: (Unaudited) Cash and cash equivalents $16,210 $11,659 Accounts receivable, less allowance for doubtful accounts of $9,865 at June 30, 2005 and $8,699 at December 31, 2004, respectively 362,030 329,991 Inventories 369,665 349,779 Prepaid expenses and other current assets 15,183 17,216 Deferred income taxes 24,592 24,584 ----------- ----------- Total current assets 787,680 733,229 Property, plant and equipment, at cost: Land 58,887 57,982 Buildings 262,917 261,228 Machinery and equipment 383,521 370,229 Accumulated depreciation (247,383) (230,626) ----------- ----------- 457,942 458,813 Goodwill 341,780 341,780 Other assets 29,670 29,509 ----------- ----------- Total assets $1,617,072 $1,563,331 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $157,446 $140,323 Accrued expenses 19,066 17,561 Accrued compensation and retirement costs 36,922 49,959 Accrued insurance costs 24,502 20,297 Deferred income taxes 138 138 Current maturities of long-term debt 48,525 46,400 ----------- ----------- Total current liabilities 286,599 274,678 Long-term debt 325,475 380,850 Long-term retirement costs 15,435 14,102 Deferred income taxes 55,613 55,613 Minority interest 13,882 15,536 Commitments and contingencies -- -- Shareholders' equity: Preferred stock, no par value: Authorized shares -- 5,000,000 None issued or outstanding -- -- Common stock, no par value: Authorized shares -- 100,000,000 Issued and outstanding shares -- 32,925,924 at June 30, 2005 and 32,669,967 at December 31, 2004, respectively, stated capital 320,402 313,953 Retained earnings 599,145 508,147 Accumulated other comprehensive income 521 452 ----------- ----------- Total shareholders' equity 920,068 822,552 ----------- ----------- Total liabilities and shareholders' equity $1,617,072 $1,563,331 =========== =========== RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED STATEMENTS OF INCOME (In thousands except share and per share amounts) Three Months Six Months Ended June 30, Ended June 30, -------------------------------------------- 2005 2004 2005 2004 -------------------------------------------- Net sales $816,342 $760,780 $1,628,249 $1,416,545 Other income, net 699 1,386 1,364 1,893 -------------------------------------------- 817,041 762,166 1,629,613 1,418,438 Costs and expenses: Cost of sales (exclusive of depreciation and amortization shown below) 594,107 532,313 1,190,078 1,000,648 Warehouse, delivery, selling, general and administrative 123,571 120,723 245,353 239,229 Depreciation and amortization 12,107 11,066 23,269 22,112 Interest expense 6,206 7,256 12,507 14,736 -------------------------------------------- 735,991 671,358 1,471,207 1,276,725 Income before minority interest and income taxes 81,050 90,808 158,406 141,713 Minority interest (1,940) (3,798) (4,516) (5,545) -------------------------------------------- Income from continuing operations before income taxes 79,110 87,010 153,890 136,168 Provision for income taxes 30,061 34,213 58,478 53,532 -------------------------------------------- Net income $49,049 $52,797 $95,412 $82,636 ============================================ Earnings per share: Income from continuing operations - diluted $1.48 $1.62 $2.89 $2.54 ============================================ Weighted average shares outstanding - diluted 33,086,102 32,674,395 33,023,552 32,564,497 ============================================ Income from continuing operations - basic $1.49 $1.63 $2.90 $2.55 ============================================ Weighted average shares outstanding - basic 32,915,847 32,446,394 32,848,990 32,369,777 ============================================ Cash dividends per share $.09 $.06 $.18 $.12 ============================================ Reconciliation of EBIT and EBITDA Income from continuing operations before income taxes $79,110 $87,010 $153,890 $136,168 Interest expense 6,206 7,256 12,507 14,736 -------------------------------------------- EBIT $85,316 $94,266 $166,397 $150,904 -------------------------------------------- Depreciation expense 10,423 10,266 20,800 20,494 Amortization expense 1,684 800 2,469 1,618 -------------------------------------------- EBITDA $97,423 $105,332 $189,666 $173,016 ============================================ RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Six Months Ended June 30, ------------------- 2005 2004 --------- --------- Operating activities: Net income $95,412 $82,636 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 23,269 22,112 Loss (Gain) on sales of machinery and equipment 2 (667) Deferred taxes (14) -- Minority interest 4,516 5,545 Tax benefit of stock options exercised 1,509 1,188 Changes in operating assets and liabilities: Accounts receivable (32,039) (122,701) Inventories (19,886) (54,034) Prepaid expenses and other assets (597) (2,743) Accounts payable and accrued expenses 11,129 72,390 --------- --------- Net cash provided by operating activities 83,301 3,726 Investing activities: Purchases of property, plant and equipment, net (21,060) (15,883) Tax payments related to prior acquisition -- (16,475) Proceeds from sales of property and equipment 1,129 2,408 --------- --------- Net cash used in investing activities (19,931) (29,950) Financing activities: Proceeds from borrowings 187,000 144,000 Principal payments on long-term debt and short-term borrowings (240,250) (120,250) Payments to minority partner (6,170) -- Dividends paid (5,923) (3,884) Issuance of common stock 246 236 Exercise of stock options 6,203 6,371 --------- --------- Net cash (used in) provided by financing activities (58,894) 26,473 Effect of exchange rate changes on cash 75 177 --------- --------- Increase in cash and cash equivalents 4,551 426 Cash and cash equivalents at beginning of period 11,659 2,166 --------- --------- Cash and cash equivalents at end of period $16,210 $2,592 ========= ========= Supplemental cash flow information: Interest paid during the period $12,372 $14,618 Income taxes paid during the period $57,994 $40,285 CONTACT: Reliance Steel & Aluminum Co. Kim P. Feazle Investor Relations 713-610-9937 213-576-2428 kfeazle@rsac.com investor@rsac.com -----END PRIVACY-ENHANCED MESSAGE-----