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Sector
Basic Materials
Size
Large Cap
Market Cap £7.26bn
Enterprise Value £7.97bn
Revenue £6.41bn
Position in Universe 931st / 6841

Reliance Steel & Aluminum Co. Reports Third Quarter 2020 Financial Results

Thu 22nd October, 2020 11:50am
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- Record gross profit margin of 32.4%
- EPS of $1.51, non-GAAP EPS of $1.87
- Pretax income of $127.0 million, non-GAAP pretax income of $158.0 million
- Generated cash flow from operations of $296.3 million
- Declared quarterly dividend of $0.625 per share

LOS ANGELES, Oct. 22, 2020 (GLOBE NEWSWIRE) -- Reliance Steel & Aluminum Co.
(NYSE: RS) today reported its financial results for the third quarter ended
September 30, 2020 (in millions, except tons which are in thousands and per
share amounts).

                                                                                                                                                                                                                  
                                                                                            Sequential        Nine Months Ended                            Year-Over-                             Year-Over-      
                                                                                            Quarter           September 30,                                Year                                   Year            
                                                  Q3 2020              Q2 2020              % Change               2020                    2019            % Change          Q3 2019              % Change        
 Income Statement Data:                                                                                                                                                                                           
 Net sales                                        $    2,085.6         $    2,019.3         3.3     %         $    6,677.8            $    8,526.0         (21.7   %)        $    2,685.9         (22.4   %)      
 Gross profit (1 )                                $    676.1           $    614.7           10.0    %         $    2,071.5            $    2,535.2         (18.3   %)        $    814.7           (17.0   %)      
 Gross profit margin (1 )                              32.4     %           30.4     %      2.0     %              31.0     %              29.7     %      1.3     %              30.3     %      2.1     %       
 Non-GAAP gross profit margin (1,2)                    32.4     %           30.4     %      2.0     %              31.6     %              29.7     %      1.9     %              30.3     %      2.1     %       
 Non-GAAP pretax income adjustments (2)           $    31.0            $    10.4            198.1   %         $    178.9              $    0.3             *                 $    (0.9     )      *               
 Pretax income                                    $    127.0           $    102.0           24.5    %         $    312.1              $    719.7           (56.6   %)        $    218.4           (41.8   %)      
 Non-GAAP pretax income (2  )                     $    158.0           $    112.4           40.6    %         $    491.0              $    720.0           (31.8   %)        $    217.5           (27.4   %)      
 Net income attributable to Reliance              $    97.6            $    80.2            21.7    %         $    239.5              $    535.9           (55.3   %)        $    162.7           (40.0   %)      
 Diluted EPS                                      $    1.51            $    1.24            21.8    %         $    3.66               $    7.90            (53.7   %)        $    2.40            (37.1   %)      
 Non-GAAP diluted EPS (2)                         $    1.87            $    1.36            37.5    %         $    5.71               $    7.90            (27.7   %)        $    2.39            (21.8   %)      
                                                                                                                                                                                                                  
 Balance Sheet and Cash Flow Data:                                                                                                                                                                                
 Cash provided by operations                      $    296.3           $    475.7           (37.7   %)        $    942.8              $    954.1           (1.2    %)        $    490.9           (39.6   %)      
 Free cash flow (3)                               $    258.1           $    434.7           (40.6   %)        $    808.1              $    771.3           4.8     %         $    432.0           (40.3   %)      
 Net debt-to-total capital (4)                         17.3     %           20.4     %                             17.3     %              22.6     %                             22.6     %                      
                                                                                                                                                                                                                  
 Capital Allocation Data:                                                                                                                                                                                         
 Capital expenditures                             $    38.2            $    41.0                              $    134.7              $    182.8                             $    58.9                            
 Acquisitions, net                                $    —               $    —                                 $    —                  $    1.0                               $    —                               
 Dividends                                        $    41.0            $    39.9                              $    122.8              $    113.3                             $    36.8                            
 Share repurchases                                $    0.2             $    —                                 $    300.2              $    50.0                              $    —                               
                                                                                                                                                                                                                  
 Key Business Metrics:                                                                                                                                                                                            
 Tons sold                                             1,283.5              1,211.8         5.9     %              3,964.1                 4,485.9         (11.6   %)             1,476.6         (13.1   %)      
 Tons sold (same-store)                                1,282.2              1,210.6         5.9     %              3,959.6                 4,485.9         (11.7   %)             1,476.6         (13.2   %)      
 Average selling price per ton sold               $    1,609           $    1,681           (4.3    %)        $    1,680              $    1,890           (11.1   %)        $    1,807           (11.0   %)      
 Average selling price per ton sold (same-store)  $    1,597           $    1,668           (4.3    %)        $    1,667              $    1,890           (11.8   %)        $    1,807           (11.6   %)      
                                                                                                                                                                                                                  
 * Not meaningful.                                                                                                                                                                                                
 Please refer to the footnotes at the end of this press release for additional information.                                                                                                                       
                                                                                                                                                                                                                  

Management Commentary
“Our third quarter results once again demonstrate the strength of
Reliance’s resilient business model. Our diverse product mix and end market
exposures, along with our decentralized operating structure, enabled us to
quickly respond to varied and fluid market conditions, achieving non-GAAP
earnings per diluted share of $1.87, a 37.5% increase from the prior
quarter,” said Jim Hoffman, President and Chief Executive Officer of
Reliance. “Our third quarter tons sold surpassed our expectations,
increasing 5.9% over the second quarter of 2020, due to improved demand in
many of our end markets as the economy continued to slowly reopen following
COVID-19 related customer shut-downs and project delays. I’d like to thank
our managers in the field for their continued efforts to increase the value we
provide to our customers during these challenging times, which contributed to
our increased earnings levels. Most importantly, our managers maintained their
focus on employee health and safety to ensure we continued to support our
employees and their families, our customers, our suppliers, and our
communities in a safe, positive, and sustainable manner.”

Mr. Hoffman continued, “Our third quarter record gross profit margin
expanded 200 basis points from the prior quarter to 32.4%, significantly
exceeding our estimated sustainable range of 28% to 30%, on net sales of $2.09
billion. A substantial rebound in our tolling businesses that service the
automotive market, along with shifts in our diverse product mix and announced
mill price increases for many of our products, collectively drove incremental
increases in our gross profit margin in the third quarter. We also again
benefitted from our sustainable higher margin business which we attribute to
our managers’ ability to successfully leverage our significant investments
in recent years to expand our value-added processing capabilities. Our higher
gross profit margin and diligent expense control increased our non-GAAP pretax
income by 40.6% sequentially to $158.0 million, which, along with effective
working capital management, generated strong cash flow from operations of
$296.3 million.”

Mr. Hoffman concluded, “The consistent execution of our resilient model is a
testament to not only our diversification of products, end markets and
geographies, but also our commitment to strong pricing discipline, diligent
expense control, when-needed inventory management, and investments in organic
growth and innovation. We believe customers realize increased value from our
model during challenging markets as they confidently rely on us to do more for
them, often in smaller sizes or on a more frequent basis. As Reliance
continues to evolve as a leading diversified metal solutions provider, we will
leverage both the knowledge we have acquired while navigating the pandemic and
our commitment to continuous improvement and innovation to provide enhanced
solutions to our customers and drive stockholder value through increased
efficiency and profitability.”

End Market Commentary
Reliance services diverse end markets and provides a wide range of products
and processing services, generally in small quantities on a when-needed basis.
During the third quarter of 2020, the Company experienced improving demand in
nearly all of the end markets it serves following customer shut-downs and
project delays in the second quarter of 2020 attributable to COVID-19.

Demand in non-residential construction, Reliance’s largest end market,
continued to slowly increase during the third quarter due to healthy bidding
activity for new projects and the restart of projects that had previously been
put on hold. Reliance is cautiously optimistic that demand for non-residential
construction activity will continue to improve in the fourth quarter of 2020
based on healthy backlogs and positive customer sentiment.

Demand for the toll processing services Reliance provides to the automotive
market rebounded significantly in the third quarter as automotive OEMs and
steel and aluminum mills continued to ramp production following COVID-19
shutdowns in the second quarter. Reliance increased its processing volumes at
its toll processing operations in both the U.S. and Mexico to support
increased activity and was very pleased to recall the majority of its
furloughed toll processing workforce servicing the automotive market. Reliance
continues to focus on growth and innovation in toll processing, including
expansion of its toll processing operations.

Demand in heavy industry for both agricultural and construction equipment
remained generally consistent with second quarter levels. Production schedules
have begun to steadily increase following customer re-openings from COVID-19
related shutdowns, and Reliance is cautiously optimistic that demand should
improve through the remainder of 2020.

Semiconductor demand in the third quarter of 2020 continued to improve
steadily compared to the second quarter of 2020. Reliance remains optimistic
that demand will remain strong through the remainder of the year.

While demand in the aerospace defense market remained fairly stable at solid
levels during the third quarter of 2020, commercial aerospace demand continued
to decline as a direct result of reduced air travel due to COVID-19. In
response to reduced commercial airplane build rates that are expected to
continue at low levels in the near term, Reliance further reduced its
workforce and recorded impairment and restructuring charges at certain of its
businesses serving the commercial aerospace market during the third quarter.
Reliance will continue to monitor and assess the health of its aerospace
businesses and take appropriate cost reduction actions if and when necessary
to ensure the continued long-term profitability of these businesses.  

Demand in the energy (oil and gas) market remains under significant pressure.
Reliance closed certain facilities earlier in 2020 and continues to implement
proactive cost reduction measures. The Company believes its remaining
businesses servicing the energy sector are well positioned to support any
future recovery in this market.

Balance Sheet & Cash Flow
As previously announced, in early August of 2020 Reliance completed the public
offering of $400 million aggregate principal amount of 1.30% senior notes due
2025 and $500 million aggregate principal amount of 2.15% senior notes due
2030. The Company used a portion of the net proceeds from the notes offering
to repay all outstanding indebtedness under its unsecured revolving credit
facility and its unsecured term loan and will utilize the remaining proceeds
for general corporate purposes. In addition, in September 2020, Reliance
amended and restated its $1.5 billion unsecured revolving credit facility for
a new five year term. The amended and restated credit facility includes an
increase option for up to an additional $1.0 billion.

At September 30, 2020, Reliance had total debt outstanding of $1.66 billion
with no outstanding borrowings under its new $1.5 billion revolving credit
facility. The Company’s net debt-to-total capital ratio was 17.3% on
September 30, 2020. During the third quarter of 2020, Reliance generated net
cash provided by operating activities of $296.3 million.

“We were very pleased to significantly strengthen our liquidity position and
extend our debt maturity profile during the third quarter of 2020 with the
successful execution of both our $900 million senior notes offering and the
amendment and restatement of our credit facility for a new five-year term,”
commented Karla Lewis, Senior Executive Vice President and Chief Financial
Officer of Reliance. “Reliance is positioned to continue operating from a
platform of financial strength through these ongoing extraordinary times and
to continue executing our flexible and opportunistic capital allocation
strategy concurrently focused on both growth and stockholder returns. During
the third quarter, Reliance invested $38.2 million in capital expenditures and
returned $41.2 million to our stockholders through dividends and share
repurchases.”

Stockholder Return Activity
On October 20, 2020, the Board of Directors declared a quarterly cash dividend
of $0.625 per share of common stock, payable on December 4, 2020 to
stockholders of record as of November 20, 2020. For 61 consecutive years,
Reliance has paid regular quarterly dividends without suspension or reduction
and has increased the dividend 27 times since its 1994 IPO.

During the third quarter of 2020, Reliance repurchased a total of $0.2 million
of its common stock. In the first nine months of 2020, the Company has
repurchased 3.3 million shares of its common stock at an average cost of
$90.10 per share, for a total of $300.2 million. At September 30, 2020,
approximately 3.1 million shares, or approximately 5% of the Company’s
common shares currently outstanding, remained available for repurchase under
Reliance’s stock repurchase program.

Business Outlook 
While macroeconomic uncertainty stemming from the COVID-19 pandemic continues,
based on current expectations and market conditions, Reliance management
anticipates overall demand to continue its slow improvement in the fourth
quarter of 2020. However, due to normal seasonal factors including customer
holiday-related shutdowns and fewer shipping days in the fourth quarter of
2020 compared to the third quarter of 2020, the Company expects shipping
volumes to decline but believes the impact of seasonal factors could be less
than in prior years. As a result, the Company estimates that tons sold will be
down 4% to 6% in the fourth quarter of 2020 compared to the prior quarter.
Further, the Company expects metals pricing, primarily for carbon steel
products, in the fourth quarter will improve due to mill price increases.
However, management believes these price increases will be partially offset
given Reliance’s diverse product mix and declining sales in certain markets
such as aerospace which typically involve higher priced products. As such,
management estimates its average selling price per ton sold for the fourth
quarter of 2020 will be flat to up 2% compared to the third quarter of 2020.
Based on these expectations, Reliance management currently anticipates
non-GAAP earnings per diluted share in the range of $1.30 to $1.40 for the
fourth quarter of 2020.

Conference Call Details
A conference call and simultaneous webcast to discuss Reliance’s third
quarter 2020 financial results and business outlook will be held today,
October 22, 2020 at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time. To
listen to the live call by telephone, please dial (877) 407-0792 (U.S. and
Canada) or (201) 689-8263 (International) approximately 10 minutes prior to
the start time and use conference ID: 13710955. The call will also be
broadcast live over the Internet hosted on the Investors section of the
Company's website at investor.rsac.com.

For those unable to participate during the live broadcast, a replay of the
call will also be available beginning that same day at 2:00 p.m. Eastern Time
until 11:59 p.m. Eastern Time on Thursday, November 5, 2020 by dialing (844)
512-2921 (U.S. and Canada) or (412) 317-6671 (International) and entering the
conference ID: 13710955. The webcast will remain posted on the Investors
section of Reliance’s website at investor.rsac.com for 90 days.

About Reliance Steel & Aluminum Co.
Founded in 1939 and headquartered in Los Angeles, California, Reliance Steel &
Aluminum Co. (NYSE: RS) is a leading global diversified metal solutions
provider and the largest metals service center company in North America.
Through a network of more than 300 locations in 40 states and 13 countries
outside of the United States, Reliance 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. Reliance focuses on
small orders with quick turnaround and increasing levels of value-added
processing. In 2019, Reliance’s average order size was $2,090, approximately
51% of orders included value-added processing and approximately 40% of orders
were delivered within 24 hours.

Reliance Steel & Aluminum Co.’s press releases and additional information
are available on the Company’s website at www.rsac.com. 

Forward-Looking Statements
This press release contains certain statements that are, or may be deemed to
be, forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may include, but are
not limited to, discussions of Reliance’s industry, end markets, business
strategies and expectations concerning future demand and metals pricing and
the Company’s results of operations, margins, profitability, impairment
charges, taxes, liquidity, litigation matters and capital resources. In some
cases, you can identify forward-looking statements by terminology such as
“may,” “will,” “should,” “could,” “would,” “expect,”
“plan,” “anticipate,” “believe,” “estimate,” “predict,”
“potential,” “preliminary,” “range” and “continue,” the
negative of these terms, and similar expressions.

These forward-looking statements are based on management's estimates,
projections and assumptions as of today’s date that may not prove to be
accurate. Forward-looking statements involve known and unknown risks and
uncertainties and are not guarantees of future performance. 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, actions taken by us, including restructuring or
cash-preservation initiatives, as well as developments beyond our control,
including, but not limited to, the impact of COVID-19 and changes in worldwide
and U.S. economic conditions that materially impact our customers and the
demand for our products and services. The extent to which the COVID-19
pandemic will continue to negatively impact our operations will depend on
future developments which are highly uncertain and cannot be predicted,
including the duration of the outbreak, new information which may emerge
concerning the severity or duration of the COVID-19 pandemic, the actions
taken to control the spread of COVID-19 or treat its impact, and changes in
worldwide and U.S. economic conditions. Further deteriorations in economic
conditions, as a result of COVID-19 or otherwise, could lead to a further or
prolonged decline in demand for our products and services and negatively
impact our business, and may also impact financial markets and corporate
credit markets which could adversely impact our access to financing, or the
terms of any financing. We cannot at this time predict the extent of the
impact of the COVID-19 pandemic and resulting economic impact, but it could
have a material adverse effect on our business, financial position, results of
operations and cash flows. Other factors which could cause actual results to
differ materially from our forward-looking statements include those disclosed
in reports Reliance has filed with the United States Securities and Exchange
Commission (the “SEC”). As a result, these statements speak only as of the
date that they are made, and Reliance disclaims any and all obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise. Important risks and
uncertainties about Reliance’s business can be found in “Item 1A. Risk
Factors” of the Company’s Annual Report on Form 10-K for the year ended
December 31, 2019, as updated in the Company’s Quarterly Report on Form 10-Q
for the quarter ended March 31, 2020, Form 10-Q for the quarter ended June 30,
2020 and in other documents Reliance files or furnishes with the SEC.

CONTACT: 
Brenda Miyamoto
Investor Relations
(213) 576-2428
investor@rsac.com

or Addo Investor Relations
(310) 829-5400

(Tables to follow)



                                                                                                                                                                                    
 Third Quarter 2020 Major Commodity Metrics                                                                                                                                         
                                                                                                                                                                                    
                  Tons Sold (tons in thousands; % change)                                                                                Average Selling                            
                                                                                                                                         Price per Ton Sold                         
                                                                                                                                         (% change)                                 
                  Q3 2020 Tons Sold        Q2 2020 Tons Sold        Sequential            Q3 2019 Tons Sold        Year-Over-Year        Sequential             Year-Over-Year      
                                                                    Quarter                                        Change                Quarter                Change              
                                                                    Change                                                               Change                                     
 Carbon steel     1,040.2                  987.3                    5.4     %             1,187.2                  (12.4     %)          (2.8    %)             (11.3     %)        
 Aluminum         70.5                     68.1                     3.5     %             85.3                     (17.4     %)          (3.1    %)             (10.5     %)        
 Stainless steel  70.3                     67.1                     4.8     %             78.1                     (10.0     %)          (3.0    %)             (2.3      %)        
 Alloy            28.3                     29.2                     (3.1    %)            48.2                     (41.3     %)          (5.9    %)             (3.3      %)        
                                                                                                                                                                                    
                  Sales ($'s in millions; % change)                                                                                                                                 
                  Q3 2020 Sales            Q2 2020 Sales            Sequential            Q3 2019 Sales            Year-Over-Year                                                   
                                                                    Quarter                                        Change                                                           
                                                                    Change                                                                                                          
 Carbon steel     $1,100.8                 $1,073.8                 2.5     %             $1,416.1                 (22.3     %)                                                     
 Aluminum         $394.3                   $393.4                   0.2     %             $532.4                   (25.9     %)                                                     
 Stainless steel  $341.8                   $336.4                   1.6     %             $388.7                   (12.1     %)                                                     
 Alloy            $91.0                    $99.9                    (8.9    %)            $160.7                   (43.4     %)                                                     
                                                                                                                                                                                    



                                                                                                           
 Year-to-Date (9 months) 2020 Major Commodity Metrics                                                      
                                                                                                           
                  Tons Sold (tons in thousands; % change)                     Average Selling              
                                                                              Price per Ton Sold           
                                                                              (% change)                   
                  2020               2019               Year-Over-Year        Year-Over-Year               
                                                        Change                Change                       
 Carbon steel     3,210.6            3,591.1            (10.6     %)          (14.1        %)              
 Aluminum         224.0              261.9              (14.5     %)          (8.6         %)              
 Stainless steel  216.6              234.6              (7.7      %)          (2.4         %)              
 Alloy            103.2              153.0              (32.5     %)          (1.4         %)              
                                                                                                           
                  Sales ($'s in millions; % change)                                                        
                  2020               2019               Year-Over-Year                                     
                                                        Change                                             
 Carbon steel     $3,490.8           $4,542.4           (23.2     %)                                       
 Aluminum         $1,299.9           $1,662.6           (21.8     %)                                       
 Stainless steel  $1,083.1           $1,202.4           (9.9      %)                                       
 Alloy            $342.3             $515.0             (33.5     %)                                       
                                                                                                           



                                                                                                                                                   
 RELIANCE STEEL & ALUMINUM CO.                                                                                                                     
 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME                                                                                                       
 (in millions, except number of shares which are reflected in thousands and per share amounts)                                                     
                                                                                                                                                   
                                                                                                                                                   
                                                                         Three Months Ended                    Nine Months Ended                   
                                                                         September 30,                         September 30,                       
                                                                         2020                 2019             2020                 2019           
 Net sales                                                               $     2,085.6        $     2,685.9    $     6,677.8        $     8,526.0  
                                                                                                                                                   
 Costs and expenses:                                                                                                                               
 Cost of sales (exclusive of depreciation and amortization shown below)        1,409.5              1,871.2          4,606.3              5,990.8  
 Warehouse, delivery, selling, general and administrative                      449.2                518.7            1,410.4              1,582.2  
 Depreciation and amortization                                                 56.4                 54.8             170.8                163.2    
 Impairment of long-lived assets                                               10.0                 —                107.9                1.2      
                                                                               1,925.1              2,444.7          6,295.4              7,737.4  
                                                                                                                                                   
 Operating income                                                              160.5                241.2            382.4                788.6    
                                                                                                                                                   
 Other expense:                                                                                                                                    
 Interest expense                                                              15.7                 20.5             47.2                 68.4     
 Other expense, net                                                            17.8                 2.3              23.1                 0.5      
 Income before income taxes                                                    127.0                218.4            312.1                719.7    
 Income tax provision                                                          28.7                 54.5             70.2                 179.9    
 Net income                                                                    98.3                 163.9            241.9                539.8    
 Less: Net income attributable to noncontrolling interests                     0.7                  1.2              2.4                  3.9      
 Net income attributable to Reliance                                     $     97.6           $     162.7      $     239.5          $     535.9    
                                                                                                                                                   
 Earnings per share attributable to Reliance stockholders:                                                                                         
 Diluted                                                                 $     1.51           $     2.40       $     3.66           $     7.90     
 Basic                                                                   $     1.53           $     2.44       $     3.71           $     8.01     
                                                                                                                                                   
 Shares used in computing earnings per share:                                                                                                      
 Diluted                                                                       64,688               67,704           65,503               67,868   
 Basic                                                                         63,758               66,656           64,578               66,941   
                                                                                                                                                   
 Cash dividends per share                                                $     0.625          $     0.55       $     1.875          $     1.65     
                                                                                                                                                   



                                                                                                                                                                        
 RELIANCE STEEL & ALUMINUM CO.                                                                                                                                          
 UNAUDITED CONSOLIDATED BALANCE SHEETS                                                                                                                                  
 (in millions, except number of shares which are reflected in thousands and par value)                                                                                  
                                                                                                                                                                        
                                                                                                                                                                        
                                                                                                                      September 30,             December 31,            
                                                                                                                      2020                      2019*                   
 ASSETS                                                                                                                                                                 
 Current assets:                                                                                                                                                        
 Cash and cash equivalents                                                                                            $      591.6              $      174.3            
 Accounts receivable, less allowance for credit losses of $22.8 at September 30, 2020 and $17.8 at December 31, 2019         943.9                     1,067.8          
 Inventories                                                                                                                 1,423.0                   1,645.7          
 Prepaid expenses and other current assets                                                                                   66.6                      85.2             
 Income taxes receivable                                                                                                     6.9                       37.2             
 Total current assets                                                                                                        3,032.0                   3,010.2          
 Property, plant and equipment:                                                                                                                                         
 Land                                                                                                                        258.2                     239.8            
 Buildings                                                                                                                   1,231.9                   1,195.1          
 Machinery and equipment                                                                                                     2,086.9                   2,044.4          
 Accumulated depreciation                                                                                                    (1,777.6  )               (1,684.1  )      
 Property, plant and equipment, net                                                                                          1,799.4                   1,795.2          
                                                                                                                                                                        
 Operating lease right-of-use assets                                                                                         195.0                     201.5            
 Goodwill                                                                                                                    1,924.8                   2,003.8          
 Intangible assets, net                                                                                                      955.8                     1,031.1          
 Cash surrender value of life insurance policies, net                                                                        29.6                      42.7             
 Other assets                                                                                                                62.1                      46.6             
 Total assets                                                                                                         $      7,998.7            $      8,131.1          
                                                                                                                                                                        
 LIABILITIES AND EQUITY                                                                                                                                                 
                                                                                                                                                                        
 Current liabilities:                                                                                                                                                   
 Accounts payable                                                                                                     $      260.0              $      275.0            
 Accrued expenses                                                                                                            103.2                     67.4             
 Accrued compensation and retirement costs                                                                                   137.5                     172.1            
 Accrued insurance costs                                                                                                     45.2                      43.4             
 Current maturities of long-term debt and short-term borrowings                                                              5.8                       64.9             
 Current maturities of operating lease liabilities                                                                           50.2                      52.5             
 Total current liabilities                                                                                                   601.9                     675.3            
 Long-term debt                                                                                                              1,638.3                   1,523.6          
 Operating lease liabilities                                                                                                 145.9                     149.5            
 Long-term retirement costs                                                                                                  87.3                      87.0             
 Other long-term liabilities                                                                                                 32.3                      12.3             
 Deferred income taxes                                                                                                       445.7                     469.3            
 Commitments and contingencies                                                                                                                                          
 Equity:                                                                                                                                                                
 Preferred stock, $0.001 par value:                                                                                                                                     
 Authorized shares — 5,000                                                                                                                                              
 None issued or outstanding                                                                                                  —                         —                
 Common stock and additional paid-in capital, $0.001 par value:                                                                                                         
 Authorized shares — 200,000                                                                                                                                            
 Issued and outstanding shares — 63,756 at September 30, 2020 and 66,854 at December 31, 2019                                11.1                      122.2            
 Retained earnings                                                                                                           5,125.5                   5,189.5          
 Accumulated other comprehensive loss                                                                                        (96.8     )               (105.1    )      
 Total Reliance stockholders’ equity                                                                                         5,039.8                   5,206.6          
 Noncontrolling interests                                                                                                    7.5                       7.5              
 Total equity                                                                                                                5,047.3                   5,214.1          
 Total liabilities and equity                                                                                         $      7,998.7            $      8,131.1          
                                                                                                                                                                        
 (*)Amounts were derived from audited financial statements.                                                                                                             
                                                                                                                                                                        



                                                                                                                                      
 RELIANCE STEEL & ALUMINUM CO.                                                                                                        
 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                      
 (in millions)                                                                                                                        
                                                                                                                                      
                                                                                                                                      
                                                                                         Nine Months Ended                            
                                                                                         September 30,                                
                                                                                         2020                     2019                
 Operating activities:                                                                                                                
 Net income                                                                              $    241.9               $    539.8          
 Adjustments to reconcile net income to net cash provided by operating activities:                                                    
 Depreciation and amortization expense                                                        170.8                    163.2          
 Impairment of long-lived assets                                                              107.9                    1.2            
 Provision for uncollectible accounts                                                         8.3                      5.2            
 Deferred income tax benefit                                                                  (26.7     )              (0.3      )    
 Stock-based compensation expense                                                             29.9                     37.3           
 Postretirement benefit plan settlement expense                                               19.4                     —              
 Other                                                                                        10.3                     5.2            
 Changes in operating assets and liabilities (excluding effect of businesses acquired):                                               
 Accounts receivable                                                                          114.4                    (14.2     )    
 Inventories                                                                                  221.9                    147.0          
 Prepaid expenses and other assets                                                            81.9                     59.7           
 Accounts payable and other liabilities                                                       (37.2     )              10.0           
 Net cash provided by operating activities                                                    942.8                    954.1          
                                                                                                                                      
 Investing activities:                                                                                                                
 Purchases of property, plant and equipment                                                   (134.7    )              (182.8    )    
 Acquisitions, net of cash acquired                                                           —                        (1.0      )    
 Other                                                                                        7.0                      11.9           
 Net cash used in investing activities                                                        (127.7    )              (171.9    )    
                                                                                                                                      
 Financing activities:                                                                                                                
 Net short-term debt borrowings                                                               0.7                      —              
 Proceeds from long-term debt borrowings                                                      1,673.7                  742.0          
 Principal payments on long-term debt                                                         (1,615.4  )              (1,304.3  )    
 Debt issuance costs                                                                          (6.4      )              —              
 Dividends and dividend equivalents paid                                                      (122.8    )              (113.3    )    
 Share repurchases                                                                            (300.2    )              (50.0     )    
 Noncontrolling interest purchased                                                            (8.0      )              —              
 Other                                                                                        (16.5     )              (13.2     )    
 Net cash used in financing activities                                                        (394.9    )              (738.8    )    
 Effect of exchange rate changes on cash and cash equivalents                                 (2.9      )              (5.6      )    
 Increase in cash and cash equivalents                                                        417.3                    37.8           
 Cash and cash equivalents at beginning of year                                               174.3                    128.2          
 Cash and cash equivalents at end of period                                              $    591.6               $    166.0          
                                                                                                                                      
 Supplemental cash flow information:                                                                                                  
 Interest paid during the period                                                         $    34.6                $    57.2           
 Income taxes paid during the period, net                                                $    68.3                $    173.7          
                                                                                                                                      



                                                                                                                                                                                                        
 RELIANCE STEEL & ALUMINUM CO.                                                                                                                                                                          
 NON-GAAP EARNINGS AND GROSS PROFIT RECONCILIATION                                                                                                                                                      
 (in millions, except per share amounts)                                                                                                                                                                
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                  Net Income                                                                Diluted EPS                                                                 
                                                  Three Months Ended                                                        Three Months Ended                                                          
                                                  September 30,            June 30,                  September 30,          September 30,               June 30,                   September 30,        
                                                  2020                     2020                      2019                   2020                        2020                       2019                 
 Net income attributable to Reliance              $      97.6              $      80.2               $      162.7           $      1.51                 $      1.24                $      2.40          
 Impairment and restructuring charges                    14.6                     5.6                       —                      0.22                        0.09                       —             
 Non-recurring settlement charges                        14.6                     4.8                       —                      0.23                        0.07                       —             
 Debt restructuring charge                               1.8                      —                         —                      0.03                        —                          —             
 Gains related to sales of non-core assets               —                        —                         (0.9   )               —                           —                          (0.01  )      
 Income tax benefit related to above items               (7.7   )                 (2.6   )                  0.2                    (0.12    )                  (0.04    )                 —             
 Non-GAAP net income attributable to Reliance     $      120.9             $      88.0               $      162.0           $      1.87                 $      1.36                $      2.39          
                                                                                                                                                                                                        
                                                                           Net Income                                       Diluted EPS                                                                 
                                                                           Nine Months Ended                                Nine Months Ended                                                           
                                                                           September 30,             September 30,          September 30,               September 30,                                   
                                                                           2020                      2019                   2020                        2019                                            
 Net income attributable to Reliance                                       $      239.5              $      535.9           $      3.66                 $      7.90                                     
 Impairment and restructuring charges                                             157.7                     1.2                    2.41                        0.02                                     
 Non-recurring settlement charges                                                 19.4                      —                      0.30                        —                                        
 Debt restructuring charge                                                        1.8                       —                      0.03                        —                                        
 Gains related to sales of non-core assets                                        —                         (0.9   )               —                           (0.02    )                               
 Income tax benefit related to above items                                        (44.7  )                  (0.1   )               (0.69    )                  —                                        
 Non-GAAP net income attributable to Reliance                              $      373.7              $      536.1           $      5.71                 $      7.90                                     
                                                                                                                                                                                                        
                                                  Three Months Ended                                                        Nine Months Ended                                                           
                                                  September 30,            June 30,                  September 30,          September 30,               September 30,                                   
                                                  2020                     2020                      2019                   2020                        2019                                            
 Pretax income                                    $      127.0             $      102.0              $      218.4           $      312.1                $      719.7                                    
 Impairment and restructuring charges                    14.6                     5.6                       —                      157.7                       1.2                                      
 Non-recurring settlement charges                        14.6                     4.8                       —                      19.4                        —                                        
 Debt restructuring charge                               1.8                      —                         —                      1.8                         —                                        
 Gains related to sales of non-core assets               —                        —                         (0.9   )               —                           (0.9     )                               
 Non-GAAP pretax income                           $      158.0             $      112.4              $      217.5           $      491.0                $      720.0                                    
                                                                                                                                                                                                        
                                                  Three Months Ended                                                        Nine Months Ended                                                           
                                                  September 30,            June 30,                  September 30,          September 30,               September 30,                                   
                                                  2020                     2020                      2019                   2020                        2019                                            
 Gross profit - LIFO                              $      676.1             $      614.7              $      814.7           $      2,071.5              $      2,535.2                                  
 Restructuring (credits) charges                         (0.2   )                 —                         —                      39.6                        —                                        
 Non-GAAP gross profit                                   675.9                    614.7                     814.7                  2,111.1                     2,535.2                                  
 LIFO income                                             (12.5  )                 (5.0   )                  (40.0  )               (37.5    )                  (75.0    )                               
 Non-GAAP gross profit - FIFO                     $      663.4             $      609.7              $      774.7           $      2,073.6              $      2,460.2                                  
                                                                                                                                                                                                        
 Gross profit margin - LIFO                              32.4   %                 30.4   %                  30.3   %               31.0     %                  29.7     %                               
 Restructuring (credits) charges as a % of sales         —                        —                         —                      0.6      %                  —                                        
 Non-GAAP gross profit margin                            32.4   %                 30.4   %                  30.3   %               31.6     %                  29.7     %                               
 LIFO income as a % of sales                             (0.6   %)                (0.2   %)                 (1.5   %)              (0.5     %)                 (0.8     %)                              
 Non-GAAP gross profit margin - FIFO                     31.8   %                 30.2   %                  28.8   %               31.1     %                  28.9     %                               
                                                                                                                                                                                                        
 Reliance Steel & Aluminum Co.'s presentation of non-GAAP pretax income, net income and EPS over certain time periods is an attempt to provide meaningful comparisons to the Company's historical performance for its existing and future stockholders. Adjustments include impairment and restructuring charges, mainly related to certain of the Company's energy-related businesses, closure of some of its locations and costs relating to COVID-19 downsizing, pension settlement charges, non-recurring expenses related to 
 the amendment of its credit agreement and gains on sales of non-core property, plant, and equipment, which make comparisons of the Company's operating results between periods difficult using GAAP measures. Reliance Steel & Aluminum Co.'s presentation of gross profit margin - FIFO, which is calculated as gross profit plus LIFO expense (or minus LIFO income) divided by net sales, is presented in order to provide a means of comparison amongst its competitors who may not use the same inventory valuation method. 
 Please see footnote 1 below for additional information on the Company's gross profit and gross profit margin.                                                                                          



 Footnotes           
                     
 (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. About half of Reliance's orders are basic distribution with no processing services performed. For the remainder of its sales orders, Reliance performs “first-stage” processing, which is generally not labor intensive as it is simply cutting the metal 
 to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, is not significant and is excluded from cost of sales. Therefore, Reliance's cost of sales is substantially comprised of the cost of the material it sells. Reliance uses gross profit and gross profit margin, as shown, as measures of operating performance. Gross profit and gross profit margin are important operating and financial measures, as their fluctuations can have a significant impact on 
 Reliance's earnings. Gross profit and gross profit margin, as presented, are not necessarily comparable with similarly titled measures for other companies. 
 (2)See accompanying Non-GAAP Earnings and Gross Profit Reconciliation. 
 (3)Free cash flow is calculated as cash provided by operations reduced by capital expenditures. 
 (4 )Net debt-to-total capital is calculated as total debt (net of cash) divided by total Reliance stockholders’ equity plus total debt (net of cash). 

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