EX-99 3 a4378074_ex9904.txt RELIANCE STEEL & ALUMINUM CO EXHIBIT 99.04 Reliance Steel & Aluminum Co. Reports 2003 First Quarter Financial Results; Sales up 4%, Net Income up 188% from 2002 Fourth Quarter LOS ANGELES--(BUSINESS WIRE)--April 17, 2003--Reliance Steel & Aluminum Co. (NYSE:RS) today reported its financial results for the three months ended March 31, 2003. For the 2003 first quarter, net income was $5.6 million, or $.18 earnings per diluted share. This compares with net income of $7.5 million and $.24 earnings per diluted share for the three months ended March 31, 2002. Sales for the 2003 first quarter totaled $450.8 million, an increase of 11% compared with 2002 first quarter sales of $405.5 million. The first quarter of 2003 did represent a sequential improvement from the fourth quarter of 2002. Compared to the prior quarter, sales were up 4% and net income increased 188%. The higher net income amount was driven mainly by sales growth and slightly better gross profit margins, along with some reduction in operating expenses. Reliance's Chief Executive Officer, David H. Hannah, said, "Our average daily sales for the first quarter of 2003 returned to levels comparable to October and November of 2002, after declining significantly in December of 2002. However, business conditions remain challenging across most markets with sluggish customer demand and increased competitive pressures. Economic uncertainty is producing cautious buying patterns by customers throughout the industry. "We will continue with our strategies that have proven successful, including diligent management of our working capital and seeking to acquire exceptional companies that would be immediately accretive to our earnings. Additionally, we will focus on managing well those things that we can control," stated Hannah. "We have not seen, and do not expect to see in the 2003 second quarter, any meaningful improvement in market conditions. Therefore, we do not expect the 2003 second quarter financial results to be materially higher or lower than the 2003 first quarter. If overall economic conditions should improve significantly, then we would expect our financial results to follow suit," said Hannah. On February 27, 2003, the Company announced its regular quarterly cash dividend payment of $.06 per share of common stock. The 2003 first quarter cash dividend was paid on March 31, 2003 to shareholders of record March 10, 2003. 2003 marks the 43rd consecutive year that Reliance has paid quarterly dividends to its shareholders. The Company was also proud to announce that it was named to the 2003 Forbes Platinum 400 List of America's Best Big Companies and ranked No. 1 in sales (five-year average) in the metals industry category and has also been named to the 2002, 2001 and 2000 lists. Reliance will host a conference call that will be broadcast live over the Internet (listen only mode) regarding the first quarter financial results for the period ended March 31, 2003. All interested parties are invited to listen to the web cast on April 17, 2003 at 11:00 a.m. Eastern Time at: http://www.rsac.com/investorinformation or http://www.streetevents.com. Player format: Windows Media. The web cast will remain on the Reliance web site at: www.rsac.com through May 17, 2003 and a printed transcript will be posted on the Reliance web site after the completion of the conference call. Reliance Steel & Aluminum Co., headquartered in Los Angeles, California, is one of the largest metals service center companies in the United States. Through a network of 99 processing and distribution centers in 27 states and Belgium, France and South Korea, the Company provides value-added metals processing services and distributes a full line of over 85,000 metal products. These products include galvanized, hot-rolled and cold-finished steel; stainless steel; aluminum; brass; copper; titanium and alloy steel sold to more than 85,000 customers in various industries. Reliance Steel & Aluminum Co.'s press releases and additional information are available on the Company's web site at www.rsac.com. This release may contain forward-looking statements relating to future financial results. Actual results may differ materially as a result of factors over which Reliance Steel & Aluminum Co. has no control. These risk factors and additional information are included in the Company's reports on file with the Securities and Exchange Commission. RELIANCE STEEL & ALUMINUM CO. SELECTED FINANCIAL DATA (In thousands except share and per share amounts) Three Months Ended March 31, ----------------------- 2003 2002 ----------- ----------- Income Statement Data: Net sales $450,823 $405,486 Gross profit 119,403 111,545 Operating income 14,321 17,443 EBITDA 22,307 24,594 EBIT 14,803 17,773 Pre-tax income 9,197 12,403 Net income 5,579 7,491 EPS -- diluted $.18 $.24 Weighted average shares outstanding -- diluted 31,755,609 31,728,721 Gross margin 26.5% 27.5% Operating margin 3.2% 4.3% EBITDA margin 5.0% 6.1% EBIT margin 3.3% 4.4% Pre-tax margin 2.0% 3.1% Net margin 1.2% 1.8% Cash dividends per share $.06 $.06 March 31, Dec. 31, 2003 2002 ----------- ----------- Balance Sheet and Other Data: Current assets $553,301 $532,544 Working capital 362,280 389,620 Net fixed assets 302,222 306,189 Total assets 1,155,181 1,139,247 Current liabilities 191,021 142,924 Long-term debt 308,940 344,080 Shareholders' equity 614,121 609,854 Capital expenditures 3,296 18,658 Net debt-to-total capital(a) 34.2% 35.5% Return on equity(b) 4.6% 5.2% Current ratio 2.9 3.7 Book value per share $19.33 $19.21 Cash flow from operations per share(c) $3.26 $2.85 (a) Net debt-to-total capital is calculated as total debt (net of cash) divided by shareholders' equity plus total debt (net of cash). (b) Return on equity calculation is based on latest twelve months. (c) 2003 cash flow from operations per share calculation is based on latest twelve months. RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED BALANCE SHEETS (In thousands except share amounts) ASSETS March 31, Dec. 31, 2003 2002 ---------- ---------- (Unaudited) Current assets: Cash and cash equivalents $12,168 $9,305 Accounts receivable, less allowance for doubtful accounts of $5,536 at March 31, 2003 and $5,158 at December 31, 2002, respectively 209,186 190,191 Inventories 305,449 307,385 Prepaid expenses and other current assets 11,709 10,874 Deferred income taxes 14,789 14,789 ---------- ---------- Total current assets 553,301 532,544 Property, plant and equipment, at cost: Land 52,479 52,469 Buildings 181,491 180,995 Machinery and equipment 239,759 237,912 Accumulated depreciation (171,507) (165,187) ---------- ---------- 302,222 306,189 Goodwill, net of accumulated amortization of $33,024 at March 31, 2003 and December 31, 2002 284,276 284,276 Other assets 15,382 16,238 ---------- ---------- Total assets $1,155,181 $1,139,247 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $105,524 $77,511 Accrued expenses 44,512 40,894 Wages and related accruals 14,626 20,160 Deferred income taxes 4,034 4,034 Current maturities of long-term debt 22,325 325 ---------- ---------- Total current liabilities 191,021 142,924 Long-term debt 308,940 344,080 Deferred income taxes 31,117 31,672 Minority interest 9,982 10,717 Commitments and contingencies -- -- Shareholders' equity: Preferred stock, no par value: Authorized shares -- 5,000,000 None issued or outstanding -- -- Common stock, no par value: Authorized shares -- 100,000,000 Issued and outstanding shares -- 31,766,497 at March 31, 2003 and 31,752,087 at December 31, 2002, respectively, stated capital 294,721 294,503 Retained earnings 320,862 317,189 Accumulated other comprehensive loss (1,462) (1,838) ---------- ---------- Total shareholders' equity 614,121 609,854 ---------- ---------- Total liabilities and shareholders' equity $1,155,181 $1,139,247 ========== ========== RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED STATEMENTS OF INCOME (In thousands except share and per share amounts) Three Months Ended March 31, --------------------- 2003 2002 --------- ---------- Net sales $450,823 $405,486 Cost of sales 331,420 293,941 ---------- ---------- Gross profit 119,403 111,545 Operating expenses: Warehouse, delivery, selling, general and administrative 97,884 87,709 Depreciation 7,198 6,393 ---------- ----------- Income from operations 14,321 17,443 Other income (expense): Interest expense (5,606) (5,370) Amortization expense (306) (428) Other income, net 563 634 ---------- ---------- Income before equity in earnings of 50%-owned company, minority interest and income taxes 8,972 12,279 Equity in earnings of 50%-owned company -- 124 Minority interest 225 -- ---------- ---------- Income before provision for income taxes 9,197 12,403 Provision for income taxes 3,618 4,912 ---------- ---------- Net income $5,579 $7,491 ========== ========== Earnings per share - diluted $.18 $.24 ========== ========== Weighted average shares outstanding - diluted 31,755,609 31,728,721 ========== ========== Earnings per share - basic $.18 $.24 ========== ========== Weighted average shares outstanding - basic 31,755,609 31,590,853 ========== ========== Cash dividends per share $.06 $.06 ========== ========== Reconciliation of EBIT and EBITDA Income before provision for income taxes $9,197 $12,403 Interest expense 5,606 5,370 ---------- ---------- EBIT $14,803 $17,773 ========== ========== Depreciation 7,198 6,393 Amortization expense 306 428 ---------- ---------- EBITDA $22,307 $24,594 ========== ========== RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Three Months Ended March 31, ------------------- 2003 2002 -------- -------- Operating activities: Net income $5,579 $7,491 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7,504 6,821 Gain on sales of machinery and equipment (45) (4) Equity in earnings of 50%-owned company -- (124) Minority interest (225) -- Changes in operating assets and liabilities: Accounts receivable (18,995) (25,656) Inventories 1,936 15,733 Prepaid expenses and other assets (286) 200 Accounts payable and accrued expenses 26,097 3,963 -------- -------- Net cash provided by operating activities 21,565 8,424 Investing activities: Purchases of property, plant and equipment, net (3,296) (3,936) Proceeds from sales of property and equipment 110 54 Dividends received from 50%-owned company -- 438 -------- -------- Net cash used in investing activities (3,186) (3,443) Financing activities: Proceeds from borrowings 4,035 5,000 Principal payments on long-term debt and short-term borrowings (17,175) (18,175) Payments to minority shareholders (378) -- Dividends paid (1,905) (1,896) Issuance of common stock 218 883 -------- -------- Net cash used in financing activities (15,205) (14,188) Effect of exchange rate changes on cash (311) (37) -------- -------- Increase (decrease) in cash and cash equivalents 2,863 (9,244) Cash and cash equivalents at beginning of period 9,305 9,931 -------- -------- Cash and cash equivalents at end of period $12,168 $687 ======== ======== Supplemental cash flow information: Interest paid during the period $995 $560 Income taxes paid during the period $309 $53 CONTACT: Reliance Steel & Aluminum Co. Kim P. Feazle Investor Relations 713/610-9937 213/576-2428 kfeazle@rsac.com investor@rsac.com