-----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, BVCdfLojURcH5zqypUd428nwQd2Ji50+v04mTEAg4reD0BsZdu7E2Y/0Dawv5NpJ g1AyttukA0cxOtQlh22YPw== 0001157523-07-007008.txt : 20070719 0001157523-07-007008.hdr.sgml : 20070719 20070719085025 ACCESSION NUMBER: 0001157523-07-007008 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070719 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070719 DATE AS OF CHANGE: 20070719 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: 07987976 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 a5451210.txt RELIANCE STEEL & ALUMINUM CO. 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 19, 2007 ----------------- 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 19, 2007, the Company issued a press release announcing financial results for the quarter ended June 30, 2007. Attached hereto as Exhibit 99.1 is a copy of the Company's press release dated July 19, 2007 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 19, 2007 (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 19, 2007 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 19, 2007 (included herewith). EX-99.1 2 a5451210ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Reliance Steel & Aluminum Co. Reports Record 2007 Second Quarter Results Net Income up 22% LOS ANGELES--(BUSINESS WIRE)--July 19, 2007--Reliance Steel & Aluminum Co. (NYSE:RS) reported today its financial results for the second quarter and six months ended June 30, 2007. For the 2007 second quarter, net income was a record $122.8 million, up 22% compared with net income of $100.5 million for the 2006 second quarter. Earnings per diluted share were a record $1.59 for the 2007 second quarter, compared with $1.32 for the 2006 second quarter. 2007 second quarter sales were a record $1.90 billion, an increase of 22% compared with 2006 second quarter sales of $1.56 billion. The 2007 second quarter financial results include in cost of sales a pre-tax LIFO expense amount of $13.75 million, or $.11 per diluted share, compared with a pre-tax LIFO expense amount of $18.0 million, or $.15 per diluted share in the 2006 second quarter. All share and per share amounts have been adjusted for the two-for-one common stock split effective July 19, 2006. For the six months ended June 30, 2007, net income amounted to a record $234.5 million, up 36% compared with net income of $172.4 million for the same period in 2006. Earnings per diluted share were $3.06 for the six months ended June 30, 2007, compared with earnings of $2.41 per diluted share for the six months ended June 30, 2006. Sales for the 2007 year-to-date period were a record $3.74 billion, an increase of 47% compared with 2006 six month sales of $2.55 billion. The 2007 six month financial results include in cost of sales a pre-tax LIFO expense amount of $32.5 million, or $.26 per diluted share, compared with a pre-tax LIFO expense amount of $23.0 million, or $.20 per diluted share in the 2006 year-to-date period. David H. Hannah, Chief Executive Officer of Reliance, said, "We are proud to announce our record 2007 second quarter results. Customer demand and pricing for our products remain at relatively healthy levels in the markets where we operate although demand is down a bit from last year's levels for some of our products. "Earlier this month, we completed the acquisition of the outstanding capital stock of Clayton Metals, Inc. headquartered in Wood Dale, Illinois. Clayton Metals was founded in 1976 and specializes primarily in the processing and distribution of aluminum, stainless steel and red metal flat-rolled products, custom extrusions and aluminum circles through its four metals service center locations. Clayton Metal's net sales for the twelve months ended December 31, 2006 were about $123 million. Clayton Metals operates as a wholly owned subsidiary of Reliance. The addition of Clayton Metals to our Reliance family provides further diversification of our business by bringing new products and customers to important geographic areas," said Hannah. "We ended the quarter with a strong balance sheet and net debt-to-total capital of 37.6%. Additionally, our operating cash flow was up 40% to $99.5 million compared with the 2007 first quarter of $70.8 million. We are optimistic regarding business conditions and opportunities in our industry. We expect demand to soften somewhat in the third quarter only due to the normal seasonal summer slowdown, and expect pricing on some of our products to continue to soften slightly. As a result, we currently estimate earnings per diluted share for the 2007 third quarter in a range of $1.30 to $1.35," Hannah concluded. On April 18, 2007, the Board of Directors declared a regular quarterly cash dividend of $.08 per share of common stock. The 2007 second quarter dividend was paid on June 22 to shareholders of record June 1. The Company has paid regular quarterly dividends for 47 consecutive years. Reliance will host a conference call that will be broadcast live over the Internet (listen only mode) regarding the second quarter and six months results for the period ended June 30, 2007. All interested parties are invited to listen to the web cast on July 19, 2007 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 19, 2007 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 180 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 100,000 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 125,000 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 2007 "Fortune 500" List and the Fortune "100 Fastest Growing Companies" List and the Fortune 2007 List of "America's Most Admired Companies" and the 2007 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 Annual Report on Form 10-K for the year ended December 31, 2006 and other 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, ----------------------- ----------------------- 2007 2006 2007 2006 ----------- ----------- ----------- ----------- Income Statement Data: Net sales $1,896,036 $1,559,222 $3,737,926 $2,547,208 Gross profit 497,497 419,873 969,949 690,058 Operating profit(1) 216,497 179,908 417,250 301,975 EBITDA(2) 235,281 194,897 452,555 329,265 EBIT(2) 216,071 178,097 414,894 300,644 Pre-tax income 196,456 161,164 375,169 278,002 Net income 122,784 100,505 234,480 172,360 EPS - diluted(3) $1.59 $1.32 $3.06 $2.41 Weighted average 77,181,651 75,874,992 76,691,529 71,431,880 shares outstanding -- diluted(3) Gross margin 26.2% 26.9% 25.9% 27.1% Operating profit margin(1) 11.4% 11.5% 11.2% 11.9% EBITDA margin(2) 12.4% 12.5% 12.1% 12.9% EBIT margin(2) 11.4% 11.4% 11.1% 11.8% Pre-tax margin 10.4% 10.3% 10.0% 10.9% Net margin 6.5% 6.4% 6.3% 6.8% Cash dividends per share(3) $.08 $.05 $.16 $.10 June 30, December 31, 2007 2006 ----------- ------------ Balance Sheet Data: Current assets $2,035,513 $1,675,389 Working capital 1,354,852 1,124,650 Net fixed assets 781,798 742,672 Total assets 4,176,580 3,614,173 Current liabilities 680,661 550,739 Long-term debt(4) 1,246,524 1,088,051 Shareholders' equity 2,005,465 1,746,398 Capital expenditures (year-to-date) 58,645 108,742 Net debt-to-total capital(5) 37.6% 37.6% Return on equity(6) 23.9% 27.3% Current ratio 3.0 3.0 Book value per share(3) $26.29 $23.07 Cash flow from operations per share(3, 7) $5.74 $2.59 (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 $4,808 and $4,956 as of June 30, 2007 and December 31, 2006, 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. The 2006 calculation adjusted beginning shareholders' equity for $360.5 million of common stock and stock options 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 June 30, December 31, 2007 2006 -------------- ------------ (Unaudited) Current assets: Cash and cash equivalents $ 74,950 $ 57,475 Accounts receivable, less allowance for doubtful accounts of $19,720 at June 30, 2007 and $16,755 at December 31, 2006, respectively 837,936 666,273 Inventories 1,100,470 904,318 Prepaid expenses and other current assets 22,157 22,179 Income taxes receivable -- 25,144 -------------- ------------ Total current assets 2,035,513 1,675,389 Property, plant and equipment, at cost: Land 110,435 108,022 Buildings 407,469 385,851 Machinery and equipment 612,201 565,951 Accumulated depreciation (348,307) (317,152) -------------- ------------ 781,798 742,672 Goodwill 918,076 784,871 Intangible assets, net 382,836 354,195 Cash surrender value of life insurance policies, net 44,319 41,190 Other assets 14,038 15,856 -------------- ------------ Total assets $4,176,580 $3,614,173 ============== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 455,950 $ 340,356 Accrued expenses 51,542 36,481 Accrued compensation and retirement costs 80,282 92,905 Accrued insurance costs 36,812 34,475 Income taxes payable 1,918 -- Deferred income taxes 19,693 23,706 Current maturities of long-term debt 33,840 22,257 Current maturities of capital lease obligations 624 559 -------------- ------------ Total current liabilities 680,661 550,739 Long-term debt 1,241,716 1,083,095 Capital lease obligations 4,808 4,956 Long-term retirement costs and other long- term liabilities 54,576 46,111 Deferred income taxes 187,904 181,628 Minority interest 1,450 1,246 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 --76,281,228 at June 30, 2007 and 75,702,046 at December 31, 2006, respectively, stated capital 717,447 701,690 Retained earnings 1,274,574 1,046,339 Accumulated other comprehensive income/(loss) 13,444 (1,631) -------------- ------------ Total shareholders' equity 2,005,465 1,746,398 -------------- ------------ Total liabilities and shareholders' equity $4,176,580 $3,614,173 ============== ============ RELIANCE STEEL & ALUMINUM CO. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share amounts) Three Months Six Months Ended June 30, Ended June 30, --------------------- --------------------- 2007 2006 2007 2006 ---------- ---------- ---------- ---------- Net sales $1,896,036 $1,559,222 $3,737,926 $2,547,208 Other income, net 2,333 376 2,707 1,654 ---------- ---------- ---------- ---------- 1,898,369 1,559,598 3,740,633 2,548,862 Costs and expenses: Cost of sales (exclusive of depreciation and amortization shown below) 1,398,539 1,139,349 2,767,977 1,857,150 Warehouse, delivery, selling, general and administrative 264,549 225,352 520,101 362,447 Depreciation and amortization 19,210 16,800 37,661 28,621 Interest 19,615 16,933 39,725 22,642 ---------- ---------- ---------- ---------- 1,701,913 1,398,434 3,365,464 2,270,860 ---------- ---------- ---------- ---------- Income from continuing operations before income taxes 196,456 161,164 375,169 278,002 Provision for income taxes 73,672 60,659 140,689 105,642 ---------- ---------- ---------- ---------- Net income $122,784 $100,505 $234,480 $172,360 ========== ========== ========== ========== Earnings per share: Income from continuing operations - diluted $1.59 $1.32 $3.06 $2.41 ========== ========== ========== ========== Weighted average shares outstanding - diluted 77,181,651 75,874,992 76,691,529 71,431,880 ========== ========== ========== ========== Income from continuing operations - basic $1.61 $1.34 $3.08 $2.44 ========== ========== ========== ========== Weighted average shares outstanding - basic 76,219,670 75,115,438 76,041,932 70,721,890 ========== ========== ========== ========== Cash dividends per share $.08 $.05 $.16 $.10 ========== ========== ========== ========== Reconciliation of EBIT and EBITDA Income from continuing operations before income taxes $196,456 $161,164 $375,169 $278,002 Interest expense 19,615 16,933 39,725 22,642 -------- -------- -------- -------- EBIT 216,071 178,097 414,894 300,644 Depreciation expense 16,451 14,613 32,598 25,636 Amortization expense 2,759 2,187 5,063 2,985 -------- -------- -------- -------- EBITDA $235,281 $194,897 $452,555 $329,265 ======== ======== ======== ======== RELIANCE STEEL & ALUMINUM CO. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Six Months Ended June 30, --------------------- 2007 2006 ---------- ---------- Operating activities: Net income $ 234,480 $ 172,360 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 37,661 28,621 Debt premium amortization -- (892) Deferred income taxes (5,519) (1,244) Gain on sales of machinery and equipment (1,022) (401) Minority interest 204 132 Stock based compensation expense 4,680 2,712 Excess tax benefits from stock based compensation (5,929) (1,584) (Increase)/decrease in cash surrender value of life insurance policies (77) 352 Changes in operating assets and liabilities (excluding effect of businesses acquired): Accounts receivable (114,824) (118,886) Inventories (95,029) (126,208) Prepaid expenses and other assets 31,521 (8,372) Accounts payable and accrued expenses 84,093 (23,757) ---------- ---------- Net cash provided by (used in) operating activities 170,239 (77,167) Investing activities: Purchases of property, plant and equipment (58,645) (59,694) Acquisitions of metals service centers and net asset purchases of metals service centers, net of cash acquired (217,712) (343,924) Proceeds from sales of property and equipment 2,572 2,247 Net investment in life insurance policies (262) (238) ---------- ---------- Net cash used in investing activities (274,047) (401,609) Financing activities: Proceeds from borrowings 542,850 693,316 Principal payments on long-term debt and short- term borrowings (426,601) (235,591) Payments to former minority shareholders -- (1,291) Dividends paid (12,174) (7,081) Excess tax benefits from stock based compensation 5,929 1,584 Exercise of stock options 10,796 2,533 Issuance of common stock 281 222 ---------- ---------- Net cash provided by financing activities 121,081 453,692 Effect of exchange rate changes on cash 202 166 ---------- ---------- Increase/(decrease) in cash and cash equivalents 17,475 (24,918) Cash and cash equivalents at beginning of period 57,475 35,022 ---------- ---------- Cash and cash equivalents at end of period $ 74,950 $ 10,104 ========== ========== Supplemental cash flow information: Interest paid during the period $ 33,861 $ 27,802 Income taxes paid during the period $ 111,957 $ 95,999 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 or 213-576-2428 kfeazle@rsac.com investor@rsac.com -----END PRIVACY-ENHANCED MESSAGE-----