-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ko1GmSenN4L5LeMlv2m+H8rQiJAQIrL8K9V4RgyhezSFyZGd6SnqTA0xqlC4vzTS O4rwTfmJI4nO1cTzzWkPmw== 0001157523-03-002990.txt : 20030717 0001157523-03-002990.hdr.sgml : 20030717 20030717085016 ACCESSION NUMBER: 0001157523-03-002990 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030717 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030717 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RELIANCE STEEL & ALUMINUM CO CENTRAL INDEX KEY: 0000861884 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-METALS SERVICE CENTERS & OFFICES [5051] IRS NUMBER: 951142616 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13122 FILM NUMBER: 03790322 BUSINESS ADDRESS: STREET 1: 2550 EAST 25TH ST CITY: LOS ANGELES STATE: CA ZIP: 90058 BUSINESS PHONE: 2135822272 MAIL ADDRESS: STREET 1: 2550 E. 25TH STREET CITY: LOS ANGELES STATE: CA ZIP: 90058 8-K 1 a4436029.txt RELIANCE STEEL & ALUMINUM CO. 8-K FORM 8-K CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Date of Report (Date of earliest event reported): July 17, 2003 ------------- RELIANCE STEEL & ALUMINUM CO. (Exact name of registrant as specified in its charter) California 001-13122 95-1142616 -------------------------------------- ----------------- ---------------- (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification No.) 350 South Grand Avenue, Suite 5100 Los Angeles, California 90071 --------------------------------------------- (Address of principal executive offices) (213) 687-7700 ---------------------------------------------- (Telephone number) N/A ---------------------------------------------- (Former name or former address, if changed since last report.) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Businesses Acquired. No financial ------------------------------------------- statements are required to be filed under applicable rules. (b) Pro Forma Financial Information. No pro forma financial information ------------------------------- is required under applicable rules. (c) Exhibits. -------- 99.1 Press Release of the Company dated July 17, 2003. Item 12. Disclosure of Results of Operations and Financial Condition Attached to this Current Report on Form 8-K as Exhibit 99.1 is a copy of the Registrant's related press release dated July 17, 2003. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. RELIANCE STEEL & ALUMINUM CO. Dated: July 17, 2003 By: /s/ Karla McDowell ------------------------------- Karla McDowell Executive Vice President and Chief Financial Officer EXHIBIT INDEX 99.1 Press Release of the Company dated July 17, 2003 EX-99 3 a4436029_ex991.txt RELIANCE STEEL & ALUMINUM CO. EX. 99.1 Reliance Steel & Aluminum Co. Reports 2003 Second Quarter and First-Half Results LOS ANGELES--(BUSINESS WIRE)--July 17, 2003--Reliance Steel & Aluminum Co. (NYSE:RS) today reported its financial results for the three and six-months ended June 30, 2003. For the fiscal year 2003 second quarter, net income was $6.4 million, compared with net income of $10.8 million for the three months ended June 30, 2002. Earnings per diluted share were $.20 for the second quarter of 2003, compared with earnings of $.34 per diluted share for the 2002 second quarter. Sales for the 2003 second quarter totaled $456.3 million, compared with 2002 second quarter sales of $450.2 million. For the six-months ended June 30, 2003, net income amounted to $12.0 million, compared with net income of $18.3 million for the same period in 2002. Earnings per diluted share were $.38 for the six-months ended June 30, 2003, compared with earnings of $.57 per diluted share for the six-months ended June 30, 2002. Sales for the 2003 year-to-date period were $907.2 million, compared with 2002 six-month sales of $855.7 million. Reliance's Chief Executive Officer, David H. Hannah, said, "The second quarter of 2003 was not materially different from the 2003 first quarter. Overall, metals pricing weakened during the quarter, driven mostly by a decline in carbon steel flat-rolled prices, causing a slight reduction in gross profit margins. Business conditions remained challenging across most markets with sluggish customer demand and increased competitive pressures." "We continue to manage well those items that we can control. Our profitability, working capital management and cash flow during this challenging operating environment have allowed us to continue to grow the Company and position ourselves for the eventual economic recovery. We are also very excited about our recent acquisition of Precision Strip, Inc.," added Hannah. "At this time, we still do not see any evidence of meaningful improvement in either market conditions or the business climate. Additionally, business levels tend to soften slightly during the summer months in the Eastern portion of the country. However, with the inclusion of the contribution of Precision Strip's financial results beginning in the 2003 third quarter, we would expect the earnings per diluted share amount to be approximately 20% higher than the 2003 second quarter earnings per diluted share amount," said Hannah. On July 1, 2003, Reliance acquired Precision Strip, Inc. headquartered in Minster, Ohio. The Company purchased all of the stock of Precision Strip and its related entity for $220 million in cash, plus the assumption of approximately $26 million of debt. The acquisition was funded with borrowings on Reliance's existing $335 million syndicated bank line of credit and a new private placement of $135 million of senior secured notes. The acquisition is immediately accretive to Reliance's earnings. Precision Strip's sales for the fiscal year ended December 31, 2002 were $121.8 million. All current management and employee associates will remain in place at Precision Strip, a privately held metals processing company founded in 1977. Precision Strip operates as a wholly owned subsidiary of Reliance. Precision Strip's processing activities consist primarily of slitting and blanking flat-rolled products and include approximately 65% carbon steel, 20% aluminum and 15% stainless steel products on a "toll" basis, processing the metal for a fee, without taking ownership of the metal. The business has facilities in Minster, Kenton, Middletown, and Tipp City, Ohio; Anderson and Rockport, Indiana; Bowling Green, Kentucky and Talladega, Alabama. Precision Strip's customers include carbon steel, stainless steel and aluminum mills, as well as companies in the automotive, appliance, metal furniture and capital goods industries. Reliance's wholly owned subsidiary, AMI Metals, Inc., headquartered in Brentwood, Tennessee, is relocating one of its operations to the St. Louis, Missouri area. During the 2003 third quarter, AMI will close its Atlanta, Georgia facility and move into an existing 48,500 square-foot facility in St. Charles, Missouri to better serve the needs of its customers. AMI provides value-added, just-in-time, cut-to-size processing of aluminum products for the aerospace industry with six strategically located facilities in the United States and a new European facility based in Belgium. On April 23, 2003, the Company announced its regular quarterly cash dividend payment of $.06 per share of common stock. The 2003 second quarter cash dividend was paid on May 30, 2003 to shareholders of record May 9, 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 second quarter and six-months financial results for the period ended June 30, 2003. All interested parties are invited to listen to the web cast on July 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 August 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 107 processing and distribution centers in 29 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 Six Months Ended June 30, Ended June 30, 2003 2002 2003 2002 -------- -------- -------- -------- Income Statement Data: Net sales $456,329 $450,166 $907,152 $855,652 Gross profit 119,372 126,043 238,775 237,588 Operating income 15,005 23,019 29,326 40,464 EBITDA(1) 23,575 30,615 45,882 55,208 EBIT(1) 16,043 23,504 30,846 41,276 Pre-tax income 10,532 17,836 19,729 30,239 Net income 6,392 10,774 11,971 18,265 EPS - diluted $.20 $.34 $.38 $.57 Weighted average shares outstanding -- diluted 31,767,381 31,920,602 31,761,632 31,824,993 Gross margin 26.2% 28.0% 26.3% 27.8% Operating margin 3.3% 5.1% 3.2% 4.7% EBITDA margin(1) 5.2% 6.8% 5.1% 6.5% EBIT margin(1) 3.5% 5.2% 3.4% 4.8% Pre-tax margin 2.3% 4.0% 2.2% 3.5% Net margin 1.4% 2.4% 1.3% 2.1% Cash dividends per share $.06 $.06 $.12 $.12 June 30, Dec. 31, 2003 2002 -------- -------- Balance Sheet Data: Current assets $544,305 $532,544 Working capital 346,994 389,620 Net fixed assets 297,701 306,189 Total assets 1,140,732 1,139,247 Current liabilities 197,311 142,924 Long-term debt 283,175 344,080 Shareholders' equity 619,163 609,854 Capital expenditures 7,939 18,658 Net debt-to-total capital(2) 31.6% 35.5% Return on equity(3) 3.9% 5.2% Current ratio 2.8 3.7 Book value per share $19.49 $19.21 Cash flow from operations per share(4) $3.20 $2.85 (1) See CONSOLIDATED STATEMENTS OF INCOME for reconciliation of EBIT and EBITDA. (2) Net debt-to-total capital is calculated as total debt (net of cash) divided by shareholders' equity plus total debt (net of cash). (3) Return on equity calculation is based on latest twelve months. (4) 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 June 30, Dec. 31, 2003 2002 ------- ------- Current assets: (Unaudited) Cash and cash equivalents $19,063 $9,305 Accounts receivable, less allowance for doubtful accounts of $5,344 at June 30, 2003 and $5,158 at December 31, 2002, respectively 207,650 190,191 Inventories 291,679 307,385 Prepaid expenses and other current assets 11,124 10,874 Deferred income taxes 14,789 14,789 Total current assets 544,305 532,544 Property, plant and equipment, at cost: Land 52,016 52,469 Buildings 180,769 180,995 Machinery and equipment 242,447 237,912 Accumulated depreciation (177,531) (165,187) 297,701 306,189 Goodwill 284,304 284,276 Other assets 14,422 16,238 Total assets $1,140,732 $1,139,247 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $113,392 $77,511 Accrued expenses 41,955 40,894 Wages and related accruals 15,605 20,160 Deferred income taxes 4,034 4,034 Current maturities of long-term debt 22,325 325 Total current liabilities 197,311 142,924 Long-term debt 283,175 344,080 Deferred income taxes 31,190 31,672 Minority interest 9,893 10,717 Commitments -- -- 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 June 30, 2003 and 31,752,087 at December 31, 2002, respectively, stated capital 294,721 294,503 Retained earnings 325,348 317,189 Accumulated comprehensive loss (906) (1,838) Total shareholders' equity 619,163 609,854 Total liabilities and shareholders' equity $1,140,732 $1,139,247 RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED STATEMENTS OF INCOME (In thousands except share and per share amounts) Three Months Six Months Ended June 30, Ended June 30, 2003 2002 2003 2002 -------- -------- -------- -------- Net sales $456,329 $450,166 $907,152 $855,652 Cost of sales 336,957 324,123 668,377 618,064 Gross profit 119,372 126,043 238,775 237,588 Operating expenses Warehouse, delivery, selling, general and administrative 97,146 96,214 195,030 183,922 Depreciation 7,221 6,810 14,419 13,202 Income from operations 15,005 23,019 29,326 40,464 Other income (expense): Interest expense (5,511) (5,668) (11,117) (11,037) Amortization expense (311) (301) (617) (730) Other income, net 1,141 603 1,704 1,236 Income before equity in earnings of 50%-owned company, minority interest and income taxes 10,324 17,653 19,296 29,933 Equity in earnings of 50%- owned company -- 140 -- 263 Minority interest 208 43 433 43 Income before provision for income taxes 10,532 17,836 19,729 30,239 Provision for income taxes 4,140 7,062 7,758 11,974 Net income $6,392 $10,774 $11,971 $18,265 Earnings per share - diluted $.20 $.34 $.38 $.57 Weighted average shares outstanding - diluted 31,767,381 31,920,602 31,761,632 31,824,993 Earnings per share - basic $.20 $.34 $.38 $.58 Weighted average shares outstanding - basic 31,766,497 31,683,600 31,761,083 31,637,483 Cash dividends per share $.06 $.06 $.12 $.12 Reconciliation of EBIT and EBITDA Income before provision for income taxes $10,532 $17,836 $19,729 $30,239 Interest expense 5,511 5,668 11,117 11,037 EBIT $16,043 $23,504 $30,846 $41,276 Depreciation 7,221 6,810 14,419 13,202 Amortization expense 311 301 617 730 EBITDA $23,575 $30,615 $45,882 $55,208 RELIANCE STEEL & ALUMINUM CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Six Months Ended June 30, 2003 2002 ------- ------- Operating activities: Net income $11,971 $18,265 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,036 13,932 (Gain) loss on sales of machinery and equipment (818) 1 Equity in earnings of 50%-owned company -- (263) Minority interest (433) 173 Changes in operating assets and liabilities: Accounts receivable (17,459) (29,075) Inventories 15,706 23,880 Prepaid expenses and other assets 921 1,942 Accounts payable and accrued expenses 32,529 17,486 Net cash provided by operating activities 57,453 46,341 Investing activities: Purchases of property, plant and equipment, net (7,939) (8,664) Proceeds from sales of property and equipment 2,826 123 Acquisitions of metals service centers and net asset purchases of metals service centers, net of cash acquired -- (24,144) Dividends received from 50%-owned company -- 444 Net cash used in investing activities (5,113) (32,241) Financing activities: Proceeds from borrowings 8,305 62,800 Principal payments on long-term debt and short-term borrowings (47,210) (79,505) Payments to minority shareholders (378) (1,879) Dividends paid (3,812) (3,797) Issuance of common stock 218 3,475 Net cash used in financing activities (42,877) (18,906) Effect of exchange rate changes on cash 295 519 Increase (decrease) in cash and cash equivalents 9,758 (4,287) Cash and cash equivalents at beginning of period 9,305 9,931 Cash and cash equivalents at end of period $19,063 $5,644 Supplemental cash flow information: Interest paid during the period $11,258 $6,319 Income taxes paid during the period $3,771 $11,016 CONTACT: Reliance Steel & Aluminum Co. Kim P. Feazle Investor Relations 713-610-9937 213-576-2428 kfeazle@rsac.com investor@rsac.com -----END PRIVACY-ENHANCED MESSAGE-----