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
25, 2013
______________
RELIANCE STEEL & ALUMINUM CO.
(Exact
name of registrant as specified in its charter)
California | 001-13122 | 95-1142616 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number)
|
(I.R.S. Employer
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 25, 2013, the Company issued a press release announcing financial results for the quarter ended June 30, 2013. Attached hereto as Exhibit 99.1 is a copy of the Company’s press release dated July 25, 2013 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. |
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Not Applicable. |
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(b) |
Pro Forma Financial Information. |
|||
Not Applicable. |
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(c) |
Shell Company Transactions. |
|||
Not Applicable. |
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(d) |
Exhibits. |
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Exhibit No. |
Description | |||
99.1 | Press Release dated July 25, 2013 (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 25, 2013 |
By |
/s/ Karla R. Lewis |
Karla R. 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 25, 2013 (included herewith). |
Exhibit 99.1
Reliance Steel & Aluminum Co. Reports Second Quarter 2013 Financial Results
LOS ANGELES--(BUSINESS WIRE)--July 25, 2013--Reliance Steel & Aluminum Co. (NYSE: RS) today reported its financial results for the second quarter ended June 30, 2013.
Second Quarter 2013 Financial Highlights
Management Commentary
“Second quarter same store tons sold increased 3.7% compared to the prior quarter, due in part to an extra shipping day in the second quarter along with slight improvement in overall demand levels. However, the weak pricing environment continued, leading to a 2.7% reduction in our same store average price per ton sold, relative to the first quarter,” said David H. Hannah, Chairman and CEO of Reliance. “In general for the 2013 second quarter, both demand and pricing were a bit weaker than we anticipated at the end of the previous quarter. We remain highly focused on managing all aspects of the business that are within our control, which continues to mitigate much of the impact from these challenging market conditions. Inventory turns improved somewhat compared to the prior quarter and gross margins declined slightly but were solid in light of the weak pricing we experienced—each indicative of the strong operational performance of our managers in the field.”
Mr. Hannah continued, “While macro-economic factors have hampered organic growth in recent quarters, Reliance continues to extend its track-record of successful M&A activity. Most recently, the acquisition of Metals USA, our largest to date, was completed early in the second quarter and has helped the Company generate profitable growth in a challenging environment. Including acquisitions that were completed in 2012 and 2013, second quarter consolidated net sales were up 10.8% and tons sold were up 24.2% compared to the same period last year. We expect to continue to selectively acquire companies that are well-managed, complement our product offerings, grow our presence in targeted end-markets and fit our strategy for profitable growth. We believe Reliance is the acquirer of choice in our industry and our proven, well-executed acquisition strategy has consistently enhanced the performance of our acquired companies.”
Second Quarter 2013 Business Metrics
(tons in thousands; percent change) | |||||||||||||||||||||||||
Q2 2013 | Q1 2013 |
Sequential Quarter Change |
Q2 2012 |
Year-Over- Year Change |
|||||||||||||||||||||
Tons sold | 1,423.5 | 1,105.9 | 28.7 | % | 1,146.2 | 24.2 | % | ||||||||||||||||||
Tons sold (same store) | 1,132.9 | 1,092.2 | 3.7 | % | 1,143.1 | (0.9 | %) | ||||||||||||||||||
Average price per ton sold | $ | 1,718 | $ | 1,832 | (6.2 | %) | $ | 1,929 | (10.9 | %) | |||||||||||||||
Second Quarter 2013 Major Commodity Metrics
Tons Sold
(tons in thousands; percent change) |
Average Selling Price per Ton Sold (percent change) |
|||||||||||||||||||
Q2 2013 Tons Sold |
Q1 2013 Tons Sold |
Sequential Quarter Change |
Q2 2012 Tons Sold |
Year-Over- Year Change |
Sequential Quarter Change |
Year-Over- Year Change |
||||||||||||||
Carbon steel | 1,170.6 | 868.6 | 34.8 | % | 921.1 | 27.1 | % | (2.8 | %) | (10.5 | %) | |||||||||
Aluminum | 76.2 | 62.5 | 21.9 | % | 62.3 | 22.3 | % | (4.5 | %) | (7.0 | %) | |||||||||
Stainless steel | 72.4 | 61.8 | 17.2 | % | 60.1 | 20.5 | % | (4.5 | %) | (14.0 | %) | |||||||||
Alloy | 70.9 | 82.7 | (14.3 | %) | 76.6 | (7.4 | %) | 3.8 | % | (6.8 | %) | |||||||||
Sales ($ in millions; percent change) | |||||||||||||||||||||||||
Q2 2013 Sales | Q1 2013 Sales |
Sequential Quarter Change |
Q2 2012 Sales |
Year-Over- Year Change |
|||||||||||||||||||||
Carbon steel | $ | 1,325.6 | $ | 1,012.3 | 30.9 | % | $ | 1,164.9 | 13.8 | % | |||||||||||||||
Aluminum | $ | 395.5 | $ | 339.6 | 16.5 | % | $ | 347.6 | 13.8 | % | |||||||||||||||
Stainless steel | $ | 353.9 | $ | 316.7 | 11.7 | % | $ | 341.5 | 3.6 | % | |||||||||||||||
Alloy | $ | 216.8 | $ | 243.4 | (10.9 | %) | $ | 251.0 | (13.6 | %) | |||||||||||||||
Year-to-Date (6 month) 2013 Business Metrics
(tons in thousands) | |||||||||||||||
2013 | 2012 |
Year-Over- Year Change |
|||||||||||||
Tons sold | 2,529.4 | 2,319.9 | 9.0 | % | |||||||||||
Tons sold (same store) | 2,225.1 | 2,316.0 | (3.9 | %) | |||||||||||
Avg. price per ton sold | $ | 1,768 | $ | 1,945 | (9.1 | %) | |||||||||
Year-to-Date (6 month) 2013 Major Commodity Metrics
Tons Sold
(tons in thousands; percent change) |
Average Selling Price per Ton Sold (percent change) |
||||||||||||||
2013 Tons Sold | 2012 Tons Sold |
Year-Over-Year Change |
Year-Over-Year Change |
||||||||||||
Carbon steel | 2,039.2 | 1,858.6 | 9.7 | % | (10.3 | %) | |||||||||
Aluminum | 138.8 | 125.0 | 11.0 | % | (5.6 | %) | |||||||||
Stainless steel | 134.2 | 120.8 | 11.1 | % | (12.2 | %) | |||||||||
Alloy | 153.6 | 164.8 | (6.8 | %) | (7.0 | %) | |||||||||
Sales ($ in millions; percent change) | |||||||||||||||
2013 Sales | 2012 Sales |
Year-Over-Year Change |
|||||||||||||
Carbon steel | $ | 2,337.8 | $ | 2,373.2 | (1.5 | %) | |||||||||
Aluminum | $ | 735.2 | $ | 701.5 | 4.8 | % | |||||||||
Stainless steel | $ | 670.6 | $ | 687.5 | (2.5 | %) | |||||||||
Alloy | $ | 460.2 | $ | 530.6 | (13.3 | %) | |||||||||
End-market Commentary
Continued strong performance in auto (through the Company’s toll processing operations) along with solid but lower operating results in aerospace, energy (oil and gas) and manufactured goods including agriculture and heavy equipment continue to offset the slow recovery in non-residential construction.
Balance Sheet & Liquidity
As of June 30, 2013, total debt outstanding was $2.33 billion, or a net debt-to-total capital ratio of 37.6%. Year-to-date, the Company generated $283.9 million in cash flow from operating activities, compared to cash flow from operating activities of $21.2 million in the first half of 2012. Reliance remains pleased with its overall financial position and strong cash flow.
During the quarter, Reliance amended and restated its $1.5 billion unsecured revolving credit facility and secured a new $500 million term loan. The credit agreement includes an option to increase the revolving credit facility for up to an additional $500 million. Both facilities have terms of five years and allow for prepayments. In addition, Reliance sold $500 million of its 4.5% Senior Notes due 2023.
Corporate Developments
On April 12, 2013, Reliance completed the acquisition of Metals USA for $786 million paid in cash at closing to the holders of Metals USA stock, options and restricted stock, and the assumption of $466 million of net debt. This represented a Metals USA enterprise value of approximately $1.25 billion. Reliance funded the transaction and refinanced Metals USA indebtedness with a combination of proceeds from its amended $1.5 billion credit facility and new $500 million term loan in addition to proceeds from its $500 million senior notes offering.
On July 23, 2013, the Board of Directors declared a regular quarterly cash dividend of $0.33 per share of common stock, an increase of 10%. The dividend is payable on September 13, 2013 to shareholders of record as of August 16, 2013. The Company has increased its dividend 20 times since its initial public offering in 1994 and has paid regular quarterly dividends for 54 consecutive years.
Business Outlook
The Company expects global economic uncertainty will continue to present challenges to industrial growth in the third quarter of 2013 and expects only slight improvements in demand with pricing remaining relatively unchanged from second quarter levels. Additionally, third quarter business activity is typically negatively impacted by some seasonal slowness as compared to the second quarter. As a result, for the third quarter ending September 30, 2013, management currently expects GAAP earnings per diluted share to be in the range of $1.15 to $1.25.
Conference Call Details
A conference call and simultaneous webcast to discuss second quarter 2013 financial results and business outlook will be held today, July 25, 2013, at 11:00 a.m. Eastern / 8:00 a.m. Pacific. David Hannah, Reliance Steel & Aluminum Co.'s Chairman of the Board and Chief Executive Officer, Gregg Mollins, President and Chief Operating Officer and Karla Lewis, Executive Vice President and Chief Financial Officer, will host the call. To listen to the live call by telephone, please dial (888) 267-2845 (U.S. and Canada) or (973) 413-6102 (International) approximately 10 minutes prior to the start time and use the conference entry code: 1799. Additionally, a live webcast of the call will be available on the Investor Information section of Reliance’s web site at www.rsac.com. Participants are encouraged to visit the web site at least 15 minutes prior to the start of the call to register and to download and install any necessary audio software.
For those unable to participate during the live broadcast, a replay of the call will also be available beginning that same day at 1:30 p.m. Eastern Time until 11:59 p.m. Eastern Time on Thursday, August 8, 2013 by dialing (973) 528-0005 and entering the conference entry code: 1799. The webcast will remain posted on the Investor Information section of Reliance’s web site at www.rsac.com for 90 days.
About Reliance Steel & Aluminum Co.
Reliance Steel & Aluminum Co., headquartered in Los Angeles, California, is the largest metals service center company in North America. Through a network of more than 290 locations in 39 states and ten countries outside of the United States, the Company provides value-added metals processing services and distributes a full line of over 100,000 metal products to more than 125,000 customers in a broad range of industries.
Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking” statements, as defined under the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “intends,” “plans,” “projects,” “believes,” “estimates,” “forecasts” and similar expressions are used to identify these forward-looking statements. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements as a result of various important factors, including, but not limited to, those disclosed in Reliance’s reports on file with the SEC. As a result, these statements speak only as of the date that they were made, and Reliance undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional risks and uncertainties relating to Reliance and its business can be found in Reliance’s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC.
RELIANCE STEEL & ALUMINUM CO. SELECTED UNAUDITED FINANCIAL DATA (in millions, except share and per share amounts) |
||||||||||||||||||||||||
Three Months | Six Months | |||||||||||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||
Net sales | $ | 2,448.3 | $ | 2,209.7 | $ | 4,473.6 | $ | 4,498.0 | ||||||||||||||||
Gross profit1 | 621.6 | 569.4 | 1,150.4 | 1,147.2 | ||||||||||||||||||||
Operating income | 145.5 | 186.2 | 275.5 | 370.8 | ||||||||||||||||||||
Pre-tax income | 122.8 | 167.7 | 242.6 | 344.3 | ||||||||||||||||||||
Net income attributable to Reliance | 81.0 | 108.8 | 164.7 | 225.0 | ||||||||||||||||||||
Diluted earnings per share attributable to Reliance shareholders |
$ |
1.05 |
$ |
1.44 |
$ |
2.13 |
$ |
2.98 |
||||||||||||||||
Weighted average shares outstanding – diluted | 77,469,117 | 75,511,249 | 77,276,011 | 75,468,969 | ||||||||||||||||||||
Gross profit margin1 | 25.4 | % | 25.8 | % | 25.7 | % | 25.5 | % | ||||||||||||||||
Operating income margin | 5.9 | % | 8.4 | % | 6.2 | % | 8.2 | % | ||||||||||||||||
Pre-tax income margin | 5.0 | % | 7.6 | % | 5.4 | % | 7.7 | % | ||||||||||||||||
Net income margin - Reliance | 3.3 | % | 4.9 | % | 3.7 | % | 5.0 | % | ||||||||||||||||
Cash dividends per share | $ | 0.30 | $ | 0.15 | $ | 0.60 | $ | 0.30 | ||||||||||||||||
June 30, | December 31, | |||||||||||||||||
2013 | 2012* | |||||||||||||||||
Balance Sheet and Other Data: | ||||||||||||||||||
Current assets | $ | 2,932.5 | $ | 2,277.4 | ||||||||||||||
Working capital | 2,155.7 | 1,699.2 | ||||||||||||||||
Property, plant and equipment, net | 1,586.3 | 1,240.7 | ||||||||||||||||
Total assets | 7,575.6 | 5,857.7 | ||||||||||||||||
Current liabilities | 776.8 | 578.2 | ||||||||||||||||
Long-term debt | 2,219.9 | 1,123.8 | ||||||||||||||||
Total Reliance shareholders’ equity | 3,713.5 | 3,558.4 | ||||||||||||||||
Capital expenditures (year-to-date) | 74.3 | 214.0 | ||||||||||||||||
Cash provided by operations (year-to-date) | 283.9 | 601.9 | ||||||||||||||||
Net debt-to-total capital2 | 37.6 | % | 23.8 | % | ||||||||||||||
Return on Reliance shareholders’ equity3 | 9.6 | % | 12.8 | % | ||||||||||||||
Current ratio | 3.8 | 3.9 | ||||||||||||||||
Book value per share4 | $ | 48.29 | $ | 46.82 | ||||||||||||||
* Amounts were derived from audited financial statements.
________________________________________________________
1 Gross profit, calculated as net sales less cost of sales, and gross profit margin, calculated as gross profit divided by net sales, are non-GAAP financial measures as they exclude depreciation and amortization expense associated with the corresponding sales. The majority of our orders are basic distribution with no processing services performed. For the remainder of our sales orders, we perform “first-stage” processing which is generally not labor intensive as we are simply cutting the metal to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, are not significant and are excluded from our cost of sales. Therefore, our cost of sales is primarily comprised of the cost of the material we sell. We use gross profit and gross profit margin as shown above as measures of operating performance. Gross profit and gross profit margin are important operating and financial measures, as fluctuations in our gross profit margin can have a significant impact on our earnings. Gross profit and gross profit margin, as presented, are not necessarily comparable with similarly titled measures for other companies.
2 Net debt-to-total capital is calculated as total debt (net of cash) divided by total Reliance shareholders’ equity plus total debt (net of cash).
3 Calculations are based on the latest twelve months net income attributable to Reliance and beginning total Reliance shareholders’ equity.
4 Book value per share is calculated as total Reliance shareholders’ equity divided by outstanding common shares.
RELIANCE STEEL & ALUMINUM CO. UNAUDITED CONSOLIDATED BALANCE SHEETS (in millions, except share amounts) |
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ASSETS | |||||||||||||||||||
June 30,
2013 |
December 31,
2012* |
||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 100.8 | $ | 97.6 | |||||||||||||||
Accounts receivable, less allowance for doubtful accounts of $22.9 at June 30, 2013 and $20.5 at December 31, 2012 |
1,143.5 |
807.7 |
|||||||||||||||||
Inventories | 1,587.1 | 1,272.3 | |||||||||||||||||
Prepaid expenses and other current assets | 47.7 | 40.9 | |||||||||||||||||
Income taxes receivable | 17.6 | 28.4 | |||||||||||||||||
Deferred income taxes | 35.8 | 30.5 | |||||||||||||||||
Total current assets | 2,932.5 | 2,277.4 | |||||||||||||||||
Property, plant and equipment: | |||||||||||||||||||
Land | 170.8 | 155.6 | |||||||||||||||||
Buildings | 947.7 | 725.1 | |||||||||||||||||
Machinery and equipment | 1,388.5 | 1,124.7 | |||||||||||||||||
Accumulated depreciation | (920.7 | ) | (764.7 | ) | |||||||||||||||
1,586.3 | 1,240.7 | ||||||||||||||||||
Goodwill | 1,658.8 | 1,314.6 | |||||||||||||||||
Intangible assets, net | 1,313.9 | 936.5 | |||||||||||||||||
Cash surrender value of life insurance policies, net | 38.6 | 45.2 | |||||||||||||||||
Investments in unconsolidated entities | 16.0 | 15.5 | |||||||||||||||||
Other assets | 29.5 | 27.8 | |||||||||||||||||
Total assets | $ | 7,575.6 | $ | 5,857.7 | |||||||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Accounts payable | $ | 419.3 | $ | 255.6 | |||||||||||||||
Accrued expenses | 97.4 | 87.4 | |||||||||||||||||
Accrued compensation and retirement costs | 98.6 | 112.8 | |||||||||||||||||
Accrued insurance costs | 46.9 | 38.8 | |||||||||||||||||
Current maturities of long-term debt and short-term borrowings | 114.6 | 83.6 | |||||||||||||||||
Total current liabilities | 776.8 | 578.2 | |||||||||||||||||
Long-term debt | 2,219.9 | 1,123.8 | |||||||||||||||||
Long-term retirement costs | 100.9 | 94.9 | |||||||||||||||||
Other long-term liabilities | 34.1 | 27.1 | |||||||||||||||||
Deferred income taxes | 721.1 | 466.3 | |||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Equity: | |||||||||||||||||||
Preferred stock, no par value: |
|||||||||||||||||||
Authorized shares — 5,000,000 |
|||||||||||||||||||
None issued or outstanding | -- | -- | |||||||||||||||||
Common stock, no par value: |
|||||||||||||||||||
Authorized shares — 200,000,000 |
|||||||||||||||||||
Issued and outstanding shares – 76,920,713 at June 30, 2013 and 76,042,546 at December 31, 2012, stated capital |
779.1 | 722.2 | |||||||||||||||||
Retained earnings | 2,955.6 | 2,837.7 | |||||||||||||||||
Accumulated other comprehensive loss | (21.2 | ) | (1.5 | ) | |||||||||||||||
Total Reliance shareholders’ equity | 3,713.5 | 3,558.4 | |||||||||||||||||
Noncontrolling interests | 9.3 | 9.0 | |||||||||||||||||
Total equity | 3,722.8 | 3,567.4 | |||||||||||||||||
Total liabilities and equity | $ | 7,575.6 | $ | 5,857.7 | |||||||||||||||
* Amounts were derived from audited financial statements.
RELIANCE STEEL & ALUMINUM CO. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share amounts) |
||||||||||||||||||||||||
Three Months | Six Months | |||||||||||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Net sales | $ | 2,448.3 | $ | 2,209.7 | $ | 4,473.6 | $ | 4,498.0 | ||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||
Cost of sales (exclusive of depreciation | ||||||||||||||||||||||||
and amortization shown below) | 1,826.7 | 1,640.3 | 3,323.2 | 3,350.8 | ||||||||||||||||||||
Warehouse, delivery, selling, general and administrative |
426.0 |
346.7 |
783.7 |
704.4 |
||||||||||||||||||||
Depreciation and amortization | 50.1 | 36.5 | 91.2 | 72.0 | ||||||||||||||||||||
2,302.8 | 2,023.5 | 4,198.1 | 4,127.2 | |||||||||||||||||||||
Operating income | 145.5 | 186.2 | 275.5 | 370.8 | ||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Interest | (22.1 | ) | (15.0 | ) | (35.2 | ) | (29.5 | ) | ||||||||||||||||
Other (expense) income, net | (0.6 | ) | (3.5 | ) | 2.3 | 3.0 | ||||||||||||||||||
Income before income taxes | 122.8 | 167.7 | 242.6 | 344.3 | ||||||||||||||||||||
Income tax provision | 40.9 | 57.5 | 76.2 | 116.2 | ||||||||||||||||||||
Net income | 81.9 | 110.2 | 166.4 | 228.1 | ||||||||||||||||||||
Less: Net income attributable to noncontrolling interests |
0.9 |
1.4 |
1.7 |
3.1 |
||||||||||||||||||||
Net income attributable to Reliance | $ | 81.0 | $ | 108.8 | $ | 164.7 | $ | 225.0 | ||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||
Diluted earnings per common share attributable to Reliance shareholders |
$ |
1.05 |
$ |
1.44 |
$ |
2.13 |
$ |
2.98 |
||||||||||||||||
Basic earnings per common share attributable to Reliance shareholders |
$ |
1.06 |
$ |
1.45 |
$ |
2.15 |
$ |
3.00 |
||||||||||||||||
Cash dividends per share | $ | 0.30 | $ | 0.15 | $ | 0.60 | $ | 0.30 | ||||||||||||||||
RELIANCE STEEL & ALUMINUM CO. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) |
|||||||||||||||||||
Six Months Ended
June 30, |
|||||||||||||||||||
2013 |
2012 |
||||||||||||||||||
Operating activities: | |||||||||||||||||||
Net income | $ | 166.4 | $ | 228.1 | |||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||||||
Depreciation and amortization expense | 91.2 | 72.0 | |||||||||||||||||
Deferred income tax provision (benefit) | 0.6 | (2.5 | ) | ||||||||||||||||
Loss (gain) on sales of property, plant and equipment | 1.0 | (0.2 | ) | ||||||||||||||||
Equity in earnings of unconsolidated entities | (0.9 | ) | (1.1 | ) | |||||||||||||||
Dividends received from unconsolidated entities | 0.4 | 0.6 | |||||||||||||||||
Share-based compensation expense | 14.5 | 11.5 | |||||||||||||||||
Other | (0.5 | ) | 0.8 | ||||||||||||||||
Changes in operating assets and liabilities (excluding effect of businesses acquired): | |||||||||||||||||||
Accounts receivable | (133.2 | ) | (98.6 | ) | |||||||||||||||
Inventories | 62.8 | (183.4 | ) | ||||||||||||||||
Prepaid expenses and other assets | 11.3 | 8.8 | |||||||||||||||||
Accounts payable and other liabilities | 70.3 | (14.8 | ) | ||||||||||||||||
Net cash provided by operating activities | 283.9 | 21.2 | |||||||||||||||||
Investing activities: | |||||||||||||||||||
Purchases of property, plant and equipment | (74.3 | ) | (86.8 | ) | |||||||||||||||
Acquisitions, net of cash acquired | (794.7 | ) | (82.3 | ) | |||||||||||||||
Proceeds from sales of property, plant and equipment | 0.8 | 2.8 | |||||||||||||||||
Net proceeds from redemptions of life insurance policies | 6.9 | 0.7 | |||||||||||||||||
Other | 0.8 | (1.7 | ) | ||||||||||||||||
Net cash used in investing activities | (860.5 | ) | (167.3 | ) | |||||||||||||||
Financing activities: | |||||||||||||||||||
Net short-term debt repayments | (469.3 | ) | (29.4 | ) | |||||||||||||||
Proceeds from long-term debt borrowings | 2,257.9 | 458.0 | |||||||||||||||||
Principal payments on long-term debt | (1,191.6 | ) | (259.5 | ) | |||||||||||||||
Debt issuance costs | (10.3 | ) | -- | ||||||||||||||||
Payments to noncontrolling interest holders | (1.4 | ) | (1.4 | ) | |||||||||||||||
Dividends paid | (46.0 | ) | (22.5 | ) | |||||||||||||||
Tax (deficit) benefit from share-based compensation | (0.3 | ) | 0.2 | ||||||||||||||||
Exercise of stock options | 42.4 | 9.7 | |||||||||||||||||
Net cash provided by financing activities | 581.4 | 155.1 | |||||||||||||||||
Effect of exchange rate changes on cash | (1.6 | ) | -- | ||||||||||||||||
Increase in cash and cash equivalents | 3.2 | 9.0 | |||||||||||||||||
Cash and cash equivalents at beginning of year | 97.6 | 84.6 | |||||||||||||||||
Cash and cash equivalents at end of period | $ | 100.8 | $ | 93.6 | |||||||||||||||
Supplemental cash flow information: | |||||||||||||||||||
Interest paid during the period | $ | 29.9 | $ | 29.0 | |||||||||||||||
Income taxes paid during the period | $ | 65.7 | $ | 142.4 | |||||||||||||||
Non-cash investing and financing activities: | |||||||||||||||||||
Debt assumed in connection with acquisitions | $ | 529.9 | $ | 29.5 | |||||||||||||||
RELIANCE STEEL & ALUMINUM CO. NON-GAAP EARNINGS RECONCILIATION (in millions, except per share amounts) |
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Net Income (loss) | Diluted EPS | |||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||
June 30, 2013 | March 31, 2013 | June 30, 2012 | June 30, 2013 | March 31, 2013 | June 30, 2012 | |||||||||||||||||||||||||
Net income attributable to Reliance | $ | 81.0 | $ | 83.7 | $ | 108.8 | $ | 1.05 | $ | 1.09 | $ | 1.44 | ||||||||||||||||||
Acquisition and related charges | 9.3 | 3.1 | — | .12 | .04 | — | ||||||||||||||||||||||||
Restructuring and other charges | 1.0 | — | — | .01 | — | — | ||||||||||||||||||||||||
Income tax benefit, related to above items | (3.0 | ) | (.1 | ) | — | (.04 | ) | (.01 | ) | — | ||||||||||||||||||||
Net income attributable to Reliance, adjusted | $ | 88.3 | $ | 86.7 | $ | 108.8 | $ | 1.14 | $ | 1.12 | $ | 1.44 | ||||||||||||||||||
Our presentation of adjusted net income and adjusted EPS over certain periods is an attempt to provide meaningful comparisons to our historical performance for our existing and future shareholders. The significant costs we have incurred relating to our recent acquisition of Metals USA and restructuring activity make comparisons of our operating results difficult to discern using GAAP measures.
CONTACT:
Reliance Steel & Aluminum Co.
Brenda Miyamoto
Investor
Relations
(213) 576-2428
investor@rsac.com
or
Addo
Communications
(310) 829-5400