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Reliance Reports Record Quarterly Sales

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Reliance Steel & Aluminum reported record sales of $4.68 billion in the second quarter. Revenue was up 4.4 percent compared with the prior quarter and 46.5 percent vs. the same quarter in 2021.

Net income in the quarter totaled $572.8 million, up 9.5 percent compared with the previous quarter and up 74.1 percent compared with the second quarter of the prior year.

“Reliance delivered an exceptional second quarter with record-setting financial performance and outstanding operational execution,” said Jim Hoffman, CEO of Reliance. “We achieved all-time high quarterly net sales of $4.68 billion, which, when combined with an enhanced gross profit margin of 31.9 percent and continued strong operating leverage, resulted in record quarterly earnings per share of $9.15 as well as significant cash flow to fuel our growth and stockholder return priorities.”
 
The company’s tons sold in the second quarter of 2022 increased 2.7 percent compared with the first quarter of 2022, surpassing Reliance’s expectations of flat to up 2 percent due to continued healthy demand throughout the quarter.

Demand in nonresidential construction improved steadily in the second quarter. Reliance remains cautiously optimistic that demand for non-residential construction activity in the key areas in which the company participates will remain steady into the third quarter of 2022.

Demand for the toll processing services Reliance provides to the automotive market remained steady during the second quarter despite ongoing supply chain challenges, including the continued impact of the global microchip shortage on new vehicle production levels. 

Demand across the broader manufacturing sectors Reliance serves, including industrial machinery and consumer products, declined compared with the first quarter of 2022. On a year-over-year basis, however, demand for industrial machinery improved and remains at healthy levels.

The company expects shipment levels to be impacted by normal seasonal patterns, which include a decline in shipping volumes due to planned customer shutdowns and vacation schedules. As a result, the company estimates tons sold will be down 3 to 5 percent in the third quarter of 2022 compared with the second quarter. In addition, Reliance expects its average selling price per ton sold for the third quarter of 2022 to be down 5 to 7 percent compared with the second quarter of 2022 driven by declines in pricing for many of its products, notably for carbon, stainless and aluminum flat-rolled products.

“As we begin to navigate an environment with overall declining metal prices, the core tenets of our model, including our value-added processing capabilities; product, end market and geographic diversity; and smaller order sizes with quick turnaround supported by our proprietary fleet of trucks, will collectively help provide a stabilizing effect to our selling prices and margins," Hoffman said.


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