Reliance Steel & Aluminum Co. reported net income of $44.1 million on record quarterly sales of $783.7 million for the third quarter and record net income of $126.8 million on record sales of record $2.2 billion for the nine months ended September 30, 2004.

Third Quarter Results—Net income of $44.1 million ($1.35 earnings per diluted share) compares with net income of $12.4 million ($.39 earnings per diluted share) for the three months ended September 30, 2003. Sales, a quarterly record $783.7 million, represent an increase of 60% compared with 2003 third quarter sales of $490.6 million. Financial results include a pre-tax LIFO expense amount of $32.5 million ($.60 per diluted share).

Nine Month Results—Net income, a record $126.8 million, compares with net income of $24.3 million for the same period in 2003. Earnings per diluted share, $3.88, compare with earnings of $.77 per diluted share for the nine months ended September 30, 2003. Sales were a record $2.2 billion, an increase of 57%, compared with 2003 nine-month sales of $1.4 billion. The 2004 year-to-date financial results include a pre-tax LIFO expense amount of $92.5 million, or $1.72 per diluted share.

Comments—David H. Hannah, CEO of Reliance, said, "The third quarter's operating results exceeded our range of earnings per diluted share that we previously stated during our second quarter conference call on July 15, 2004. This was the result of stronger-than-expected revenues from both increased pricing and healthier demand than we had forecast. Overall, the summer slowdown was not as pronounced as in prior years, and the expected softening of carbon steel prices did not occur in the third quarter. Our gross profit margins did contract somewhat during the third quarter compared to the second quarter, as we expected, since our average inventory costs increased more than our average selling prices.

"We have a very broad product base that gives us added flexibility in the marketplace during volatile pricing environments. Even though we expect pricing to ease slightly in the fourth quarter for carbon steel products that represent about 60% of our revenues, at the same time we also anticipate flat to increased metals pricing for the remaining 40% of our revenues. Customer demand and metals pricing continue to provide a favorable operating environment. All of our businesses are performing well, and we believe there is plenty of room for improvement in demand in many sectors of the industrial economy," said Hannah.

"We anticipate steady to improving demand for our products during the fourth quarter, with seasonal slowness due to the Holidays. We also expect our gross profit margins to contract very slightly through the fourth quarter. At this time, our best estimate for earnings per diluted share for the 2004 fourth quarter is a range of $.95 to $1.05," Hannah concluded.

Cash Dividend—On July 14, 2004, the Company's Board of Directors declared a 17% increase in the regular quarterly cash dividend to $.07 per share of common stock. The 2004 third quarter cash dividend was paid on August 27, 2004 to shareholders of record August 6, 2004. 2004 marks the 44th consecutive year that Reliance has paid quarterly dividends to its shareholders.

Headquartered in Los Angeles, Calif., Reliance Steel & Aluminum Co. is one of the largest metals service center companies in the United States. Through a network of 105 processing and distribution centers in 30 states and Belgium, France and South Korea, the company provides value-added metals processing services and distributes a full line of over 90,000 metal products. Products include galvanized, hot-rolled and cold-finished steel, stainless steel, aluminum, brass, copper, titanium, and alloy steel sold to more than 95,000 customers in various industries.