First Quarter 2015 Financial Highlights

• Sales were $2.61 billion, up 2.4% from $2.55 billion in the first quarter of 2014 and up 1.5% from $2.58 billion in the fourth quarter of 2014.
• Tons sold were up 0.8% from the first quarter of 2014 and up 5.1% from the fourth quarter of 2014, with the average selling price per ton sold up 0.9% from the first quarter of 2014 and down 3.6% from the fourth quarter of 2014.
• Net income attributable to Reliance was $101.3 million, up 16.2% from $87.2 million in the first quarter of 2014 and up 9.8% from $92.3 million in the fourth quarter of 2014.
• Earnings per diluted share were $1.30, up 17.1% from $1.11 in the first quarter of 2014 and up 10.2% from $1.18 in the fourth quarter of 2014.
• Non-GAAP earnings per diluted share were $1.30, up 9.2% from $1.19 in the first quarter of 2014 and up 28.7% from $1.01 in the fourth quarter of 2014.
• A pre-tax LIFO credit, or income, of $7.5 million, is included in cost of sales compared to a pre-tax LIFO charge, or expense, of $5.0 million in the first quarter of 2014 and an expense of $24.5 million for the fourth quarter of 2014.
• The effective tax rate was 31.7% compared to 34.5% in the first quarter of 2014 and 26.6% in the fourth quarter of 2014.
• Cash flow from operations was $171.4 million, up from $68.8 million for the first quarter of 2014, and net debt-to-total capital was 36.3% at March 31, 2015.
• Repurchased $184.9 million of Reliance common stock, or 4% of shares outstanding at December 31, 2014.
• Quarterly cash dividend increased to $0.40 per share during the quarter.

Management Commentary

"Our first quarter results were well ahead of our expectations, reflecting the resiliency of our operating model and strength of our local management teams, that allowed us to maintain solid gross profit margins in spite of continuing industry headwinds from the challenging metals pricing environment," said David H. Hannah, Chairman and CEO of Reliance.  "We benefitted from normal seasonal improvements in demand during the first quarter as compared to the fourth quarter of 2014 as well as expanded market share, with a 5.1% increase in our same store tons sold, that exceeded the MSCI industry average increase of 3.6%. With the exception of the energy market, overall demand improved throughout the quarter and was at levels relatively consistent with the first quarter of 2014. I am particularly encouraged by the improving demand momentum we are experiencing in the non-residential construction end markets as well as our increased toll processing activity related to the automotive market."

Mr. Hannah continued, "Pricing for all of our products continued to decline as the quarter progressed, and continues to do so today, primarily due to the historically high levels of imports, resulting in a 3.6% decline in our average selling price per ton sold compared to the prior quarter.  Nevertheless, Reliance's focus on quick-turn orders and value-added processing allowed us to maintain margins despite the challenging pricing environment.  Our first quarter FIFO gross profit margin of 25.4% was better than anticipated, remaining relatively even with our first quarter 2014 FIFO gross profit margin of 25.5%, but was achieved in a much more difficult pricing environment in the first quarter of 2015.  Once again, this was made possible by the strong operational execution of our managers in the field.  As a result of our strong gross profit margins and effective expense control, earnings per diluted share of $1.30 exceeded the high-end of our guidance range for the quarter."

Mr. Hannah concluded, "Cash provided by operating activities of $171 million in the first quarter was very strong and highlights Reliance's unique ability to consistently generate significant cash flow throughout industry cycles.  Our healthy liquidity position provides us with the flexibility and resources to continue simultaneously investing in the growth of our business through M&A and organic growth initiatives while also returning value to our shareholders.  In addition to increasing our regular quarterly cash dividend to $0.40 per share effective in the first quarter of 2015, which represents a 2.8% dividend yield based on yesterday's closing stock price, we also repurchased $185 million of our common stock during the quarter. Subsequent to quarter-end, we repurchased an additional $15 million of our common stock in early April, for a total of $200 million year-to-date.  Together with the $50 million repurchased in the 2014 fourth quarter, we have repurchased a total of $250 million of our common stock since October 2014. Our quarterly cash dividend and share repurchase program demonstrate our confidence in Reliance's growth prospects, strong cash flow generation and commitment to maximizing shareholder value." 

For the full report, visit www.rsac.com.

Reliance Steel & Aluminum Co., headquartered in Los Angeles, California, is the largest metals service center company in North America. Through a network of more than 300 locations in 39 states and 12 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.