-----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, PUnMpb46JpVP051FZ5KbFUi0fToX3Inm/fJcRmJEK5heMyIls1tcIYafmjMjgozU vrkYN3uNfCjCsqn3FF2xQA== 0001157523-06-010059.txt : 20061019 0001157523-06-010059.hdr.sgml : 20061019 20061019085035 ACCESSION NUMBER: 0001157523-06-010059 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061019 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061019 DATE AS OF CHANGE: 20061019 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: 061152095 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 a5253322.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): October 19, 2006 --------------- RELIANCE STEEL & ALUMINUM CO. (Exact name of registrant as specified in its charter) California 001-13122 95-1142616 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) 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 October 19, 2006, the Company issued a press release announcing financial results for the quarter ended September 30, 2006. Attached hereto as Exhibit 99.1 is a copy of the Company's press release dated October 19, 2006 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 October 19, 2006 (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: October 19, 2006 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 October 19, 2006 (included herewith). EX-99.1 2 a5253322ex991.txt RELIANCE STEEL & ALUMINUM EXHIBIT 99.1 Exhibit 99.1 Reliance Steel & Aluminum Co. Reports Record 2006 Third Quarter and Nine-Months Results LOS ANGELES--(BUSINESS WIRE)--Oct. 19, 2006--Reliance Steel & Aluminum Co. (NYSE:RS) reported today its financial results for the third quarter and nine months ended September 30, 2006. Net income was a record $107.5 million, or $1.41 earnings per diluted share for the 2006 third quarter. This compares with net income of $49.4 million, or $.75 earnings per diluted share for the 2005 third quarter. 2006 third quarter sales were a record $1.6 billion, an increase of 87% compared with 2005 third quarter sales of $870.1 million. The 2006 third quarter financial results include in cost of sales a pre-tax LIFO expense amount of $33.3 million, or $.27 per diluted share, compared with a pre-tax LIFO expense amount of $4.0 million, or $.04 per diluted share recorded in the 2005 third quarter. All per share amounts have been adjusted for the two-for-one common stock split effective July 19, 2006. The 2006 third quarter results include Yarde Metals, Inc. that was acquired on August 1, 2006 and Earle M. Jorgensen Company that was acquired on April 3, 2006, that included the issuance of approximately nine million shares of common stock, for a 15% increase in diluted shares outstanding. For the nine-months ended September 30, 2006, net income amounted to a record $279.9 million, up 93% compared with net income of $144.8 million for the same period in 2005. Earnings per diluted share were $3.83 for the nine-months ended September 30, 2006, compared with earnings of $2.19 per diluted share for the nine-months ended September 30, 2005. Sales for the 2006 year-to-date period were a record $4.2 billion, an increase of 67% compared with 2005 nine-month sales of $2.5 billion. The 2006 nine-month financial results include in cost of sales a pre-tax LIFO expense amount of $56.3 million, or $.48 per diluted share, compared with a pre-tax LIFO expense amount of $16.5 million, or $.15 per diluted share in the 2005 year-to-date period. David H. Hannah, Chief Executive Officer of Reliance said, "Demand and pricing for our products continued at a healthy pace during the third quarter. The aerospace, energy and non-residential construction markets stood out as the most improved from the prior year. Our August 1, 2006 acquisition of Yarde Metals, Inc. also favorably affected our financial results." "We are optimistic regarding the current operating environment despite some softening in the prices for some of our products. As usual for the fourth quarter, we also expect some normal seasonal slowdown in purchasing by our customers. Additionally, we estimate higher than previously anticipated LIFO expense for the final quarter of the year. As a result, we currently estimate earnings per diluted share for the 2006 fourth quarter in a range of $1.15 to $1.20," said Hannah. On August 1, 2006, Reliance completed the acquisition of Yarde Metals, Inc., a metals service center company headquartered in Southington, CT, and its second largest acquisition in terms of revenues. The Company paid $100 million in cash and assumed approximately $102 million of net debt for all of the outstanding common stock of Yarde Metals, Inc. The acquisition was immediately accretive to Reliance's earnings. Current management and employees remained in place with Tracy Yarde Smith serving as President of Yarde Metals, Inc., a wholly owned subsidiary of Reliance. Yarde Metals, Inc. was founded in 1976 and specializes in the processing and distribution of stainless steel and aluminum plate, rod and bar products. Yarde has additional metals service centers in Pelham, NH; East Hanover, NJ; Hauppauge, NY; High Point, NC; Streetsboro, OH; and Limerick, PA and a sales office in Ft. Lauderdale, FL. Yarde's net sales for the fiscal year ended June 30, 2006 were approximately $385 million. The regular quarterly cash dividend of $.06 per share of common stock was paid on September 15, 2006 to shareholders of record August 25, 2006, representing a 20% increase over the previous rate of $.05 per share, after giving effect to the two-for-one stock split on July 19, 2006. 2006 marks the 46th consecutive year that Reliance has paid quarterly dividends to its shareholders. Reliance will host a conference call that will be broadcast live over the Internet (listen only mode) regarding the third quarter and year-to-date financial results for the period ended September 30, 2006. All interested parties are invited to listen to the web cast on October 19, 2006 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 November 19, 2006 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 160 locations in 37 states and Belgium, Canada, China 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 2006 Fortune 100 Fastest Growing Companies List and the Forbes Platinum 400 List of America's Best Big Companies. 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 Nine Months Ended September 30, Ended September 30, ------------------------- ------------------------ 2006 2005 2006 2005 ----------- ------------- ------------ ----------- Income Statement Data: Net sales $1,626,208 $870,124 $4,173,416 $2,498,373 Gross profit 432,069 228,728 1,122,127 666,899 Operating profit(1) 192,573 87,842 494,680 259,860 EBITDA(2) 209,258 98,058 538,523 287,724 EBIT(2) 192,747 86,521 493,391 252,918 Pre-tax income 173,393 79,738 451,395 233,628 Net income 107,505 49,437 279,865 144,849 EPS - diluted(3) $1.41 $.75 $3.83 $2.19 Weighted average shares outstanding -Diluted(3) 76,016,596 66,332,166 72,985,065 66,125,898 Gross margin 26.6% 26.3% 26.9% 26.7% Operating profit margin(1) 11.8% 10.1% 11.9% 10.4% EBITDA margin(2) 12.9% 11.3% 12.9% 11.5% EBIT margin(2) 11.9% 9.9% 11.8% 10.1% Pre-tax margin 10.7% 9.2% 10.8% 9.4% Net margin 6.6% 5.7% 6.7% 5.8% Cash dividends per share(3) $.06 $.05 $.16 $.14 September 30, December 31, 2006 2005 ------------- ------------ Balance Sheet Data: Current assets $1,810,731 $847,348 Working capital 1,145,545 513,529 Net fixed assets 736,180 479,719 Total assets 3,732,685 1,769,070 Current liabilities 665,186 333,819 Long-term debt(4) 1,158,099 306,790 Shareholders' equity 1,673,191 1,029,865 Capital expenditures 84,720 53,740 Net debt-to-total capital(5) 42.4% 23.8% Return on equity(6) 28.2% 25.0% Current ratio 2.7 2.5 Book value per share(3) $22.17 $15.56 Cash flow from operations per share(3, 7) $1.66 $4.11 (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) All periods have been adjusted to reflect the two-for-one stock split effected in the form of a 100% stock dividend that was declared on May 17, 2006 and distributed on July 19, 2006 to shareholders of record on July 5, 2006. (4) Long-term debt includes capital lease obligations of $5,098 and $5,515 as of September 30, 2006 and December 31, 2005, respectively. (5) Net debt-to-total capital is calculated as total debt (net of cash) divided by shareholders' equity plus total debt (net of cash). (6) Calculations are based on the latest twelve months net income and beginning shareholders' equity, adjusted for $360.5 million of common stock issued to fund an acquisition on April 3, 2006. (7) Calculations are based on the latest twelve months. RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts) ASSETS September 30, December 31, 2006 2005 -------------- ------------ Current assets: (Unaudited) Cash and cash equivalents $22,041 $35,022 Accounts receivable, less allowance for doubtful accounts of $18,507 at September 30, 2006 and $10,511 at December 31, 2005, respectively 746,007 369,931 Inventories 987,505 387,385 Prepaid expenses and other current assets 19,554 19,009 Deferred income taxes 35,624 36,001 -------------- ------------ Total current assets 1,810,731 847,348 Property, plant and equipment, at cost: Land 107,148 60,207 Buildings 386,075 281,986 Machinery and equipment 547,087 403,403 Accumulated depreciation (304,130) (265,877) -------------- ------------ 736,180 479,719 Goodwill 759,665 384,730 Intangible assets 351,659 44,384 Cash surrender value of life insurance policies, net 38,223 7,299 Deferred income taxes 9,363 -- Other assets 26,864 5,590 -------------- ------------ Total assets $3,732,685 $1,769,070 ============== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $377,736 $184,443 Accrued expenses 51,827 19,234 Accrued compensation and retirement costs 82,409 52,354 Accrued insurance costs 35,413 23,372 Income taxes payable 17,055 4,141 Deferred income taxes 3,835 214 Current maturities of long-term debt 96,358 49,525 Current maturities of capital leases 553 536 -------------- ------------ Total current liabilities 665,186 333,819 Long-term debt 1,153,001 301,275 Capital lease obligations 5,098 5,515 Long-term retirement costs 35,739 15,660 Deferred income taxes 199,303 65,808 Minority interest 1,167 17,128 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 - --75,460,946 at September 30, 2006 and 66,217,998 at December 31, 2005, respectively, stated capital 695,703 325,010 Retained earnings 974,557 704,530 Accumulated other comprehensive income 2,931 325 -------------- ------------ Total shareholders' equity 1,673,191 1,029,865 -------------- ------------ Total liabilities and shareholders' equity $3,732,685 $1,769,070 ============== ============ All share information, except for authorized shares, has been adjusted to reflect the two-for-one stock split effected in the form of a 100% stock dividend that was declared on May 17, 2006 and distributed on July 19, 2006 to shareholders of record on July 5, 2006. RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share amounts) Three Months Nine Months Ended September 30, Ended September 30, ----------------------- ----------------------- 2006 2005 2006 2005 ----------- ----------- ----------- ----------- Net sales $1,626,208 $870,124 $4,173,416 $2,498,373 Other income, net 1,987 1,345 3,641 2,709 ----------- ----------- ----------- ----------- 1,628,195 871,469 4,177,057 2,501,082 Costs and expenses: Cost of sales (exclusive of depreciation and amortization shown below) 1,194,139 641,396 3,051,289 1,831,474 Warehouse, delivery, selling, general and administrative 224,703 130,260 587,018 375,613 Depreciation and amortization 16,511 11,537 45,132 34,806 Interest expense 19,354 6,783 41,996 19,290 ----------- ----------- ----------- ----------- 1,454,707 789,976 3,725,435 2,261,183 Income before minority interest and income taxes 173,488 81,493 451,622 239,899 Minority interest (95) (1,755) (227) (6,271) ----------- ----------- ----------- ----------- Income from continuing operations before income taxes 173,393 79,738 451,395 233,628 Provision for income taxes 65,888 30,301 171,530 88,779 ----------- ----------- ----------- ----------- Net income $107,505 $49,437 $279,865 $144,849 =========== =========== =========== =========== Earnings per share: Income from continuing operations - diluted $1.41 $.75 $3.83 $2.19 =========== =========== =========== =========== Weighted average shares outstanding - diluted 76,016,596 66,332,166 72,985,065 66,125,898 =========== =========== =========== =========== Income from continuing operations - basic $1.42 $.75 $3.87 $2.20 =========== =========== =========== =========== Weighted average shares outstanding - basic 75,451,585 65,933,804 72,315,779 65,777,452 =========== =========== =========== =========== Cash dividends per share $.06 $.05 $.16 $.14 =========== =========== =========== =========== Reconciliation of EBIT and EBITDA Income from continuing operations before income taxes $173,393 $79,738 $451,395 $233,628 Interest expense 19,354 6,783 41,996 19,290 ----------- ----------- ----------- ----------- EBIT $192,747 $86,521 $493,391 $252,918 ----------- ----------- ----------- ----------- Depreciation expense 14,793 10,626 40,429 31,426 Amortization expense 1,718 911 4,703 3,380 ----------- ----------- ----------- ----------- EBITDA $209,258 $98,058 $538,523 $287,724 =========== =========== =========== =========== All share information has been adjusted to reflect the two-for-one stock split effected in the form of a 100% stock dividend that was declared on May 17, 2006 and distributed on July 19, 2006 to shareholders of record on July 5, 2006. RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Nine Months Ended September 30, ------------------- 2006 2005 --------- --------- Operating activities: Net income $279,865 $144,849 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 45,132 34,806 Debt premium amortization (1,779) -- Deferred income taxes (1,297) -- (Gain)/Loss on sales of property and equipment (990) 30 Minority interest 227 6,271 Stock based compensation expense 4,336 -- Tax benefit of stock options exercised -- 2,130 Excess tax benefits from stock based compensation (1,769) -- Decrease/(Increase) in cash surrender value of life insurance policies 494 (135) Changes in operating assets and liabilities (excluding effect of businesses acquired): Accounts receivable (130,298) (39,786) Inventories (172,732) 8,928 Prepaid expenses and other assets 9,593 (2,303) Accounts payable and accrued expenses (19,253) 10,378 --------- --------- Net cash provided by operating activities 11,529 165,168 Investing activities: Purchases of property, plant and equipment, net (84,720) (34,314) Acquisitions of metals service centers and net asset purchases of metals service centers, net of cash acquired (559,393) (94,383) Tax distributions made related to a prior acquisition (894) -- Proceeds from sales of property and equipment 2,956 1,191 Proceeds from redemption of life insurance policies 489 -- Premiums paid on life insurance policies (279) -- --------- --------- Net cash used in investing activities (641,841) (127,506) Financing activities: Proceeds from borrowings 993,316 372,000 Principal payments on long-term debt and short-term borrowings (368,123) (402,381) Payments to minority shareholders (1,291) (7,159) Dividends paid (11,608) (9,220) Excess tax benefits from stock based compensation 1,769 -- Exercise of stock options 2,852 7,748 Issuance of common stock 222 246 --------- --------- Net cash provided by (used in) financing activities 617,137 (38,766) Effect of exchange rate changes on cash 194 (136) --------- --------- Decrease in cash and cash equivalents (12,981) (1,240) Cash and cash equivalents at beginning of period 35,022 11,659 --------- --------- Cash and cash equivalents at end of period $22,041 $10,419 ========= ========= Supplemental cash flow information: Interest paid during the period $24,997 $16,710 Income taxes paid during the period $155,221 $86,148 Non-cash investing and financing activities: Issuance of common stock and stock options in connection with acquisition of metals service center $360,453 $-- Issuance of common stock to employee retirement savings plan $2,830 $-- 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-----