For the nine months ended September 30, 2010, net income amounted to $154.9 million, up 176% compared to 2009 nine-month net income of $56.1 million. Earnings per diluted share were $2.08 for the nine months ended September 30, 2010, compared with earnings of $.76 per diluted share for the nine months ended September 30, 2009. Sales for the 2010 nine months were $4.73 billion, up 17% from 2009 nine-month sales of $4.04 billion. The 2010 nine months financial results include in cost of sales a pre-tax LIFO charge, or expense of $24.75 million, compared with a pre-tax LIFO credit, or income of $217.5 million in the 2009 nine months.
Reliance’s tons sold for the 2010 third quarter were up 11% from the 2009 third quarter and up 1% from the 2010 second quarter. Average prices per ton sold in the 2010 third quarter were up 20% compared to the 2009 third quarter and up 1% compared to the 2010 second quarter. For the 2010 third quarter, carbon steel sales were 52% of net sales; aluminum sales were 18%; stainless steel sales were 16%; alloy sales were 8%; other sales were 4% and toll processing sales were 2%.
David H. Hannah, Chairman and CEO of Reliance said, “The operating environment during the 2010 third quarter was pretty steady with the 2010 second quarter. Mill pricing declined a bit more than we had anticipated during the quarter, pressuring our selling prices and causing our gross profit margins to narrow somewhat. Demand was a little better than we had expected as we typically see a seasonal decline in the third quarter compared to the second quarter. Overall we are pleased with our performance during the quarter in light of the existing market conditions.”
“Our balance sheet continues to be strong with our net debt-to-capital ratio at 25% as of September 30, 2010. We generated cash from operations of $83 million in the 2010 third quarter due to our stable profit levels and stringent working capital management,” stated Hannah.
“The non-residential construction market is still our weakest end market, and below even last year’s poor levels. It appears, though, that we have reached bottom. Business activity in most all of our other markets is better than a year ago; especially in the semiconductor and electronics, energy, agriculture, and aerospace industries. Acquisition opportunities have also improved,” continued Hannah.
“In the 2010 fourth quarter, we expect demand to decline somewhat due to normal holiday closures at our customers and we expect pricing to be steady to down for most products that we sell. Given these expectations, at this time, we estimate earnings per diluted share in a range of $.35 to $.45 for the 2010 fourth quarter,” Hannah concluded.
On October 1, 2010, Reliance acquired the outstanding capital securities of Diamond Consolidated Industries, Inc. and affiliated companies. The operating entities consist of Diamond Manufacturing Company located in Wyoming, Pennsylvania and Diamond Manufacturing Midwest in Michigan City, Indiana that specialize in the manufacture and sale of specialty engineered perforated materials; Perforated Metals Plus, a distributor of perforated metals located in Charlotte, North Carolina; and Dependable Punch Corporation, a manufacturer of custom punches for tools and dies also located in Wyoming, Pennsylvania. The original business was founded in 1915. Primary end markets are agriculture; office equipment; electronics; appliance; automotive and architectural. The combined sales of Diamond and its affiliated companies for the nine months ended September 30, 2010 were approximately $75 million.
On October 20, 2010, the Board of Directors declared a regular quarterly cash dividend of $.10 per share of common stock. The dividend is payable on December 22, 2010 to shareholders of record December 3, 2010. The Company has paid regular quarterly dividends for 51 consecutive years.
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 200 locations in 38 states and Belgium, Canada, China, Malaysia, Mexico, Singapore, South Korea, and the United Kingdom, 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.
This release may contain forward-looking statements. Actual results and events may differ materially as a result of a variety of factors, many of which are outside of Reliance Steel & Aluminum Co.’s control. Risk factors and additional information are included in Reliance Steel & Aluminum Co.’s reports on file with the Securities and Exchange Commission, including Reliance Steel & Aluminum Co.’s Annual Report on Form 10-K for the year ended December 31, 2009 and Quarterly Report on Form 10-Q for the quarters ended March 31, 2010 and June 30, 2010.
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 – 74,501,093 at September 30, 2010 and 73,750,771 at December 31, 2009, stated capital
Cost of sales (exclusive of depreciation and amortization shown below)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense