Reliance Steel & Aluminum reports Q4 and 2017 results
Reliance Steel & Aluminum reports Q4 and 2017 resultsReliance Steel & Aluminum Co has reported its financial results for the fourth quarter and full year ended December 31, 2017. Net sales were $2.38 billion, up 15.3% from $2.06 billion in the fourth quarter of 2016 and down 3.0% from $2.45 billion in the third quarter of 2017. Tons sold were up 6.3% from the fourth quarter of 2016 and down 4.6% from the third quarter of 2017, with the average selling price per ton sold up 8.8% from the fourth quarter of 2016 and up 1.8% from the third quarter of 2017. Gross profit margin was 28.6%, compared to 29.8% in the fourth quarter of 2016 and 28.0% in the third quarter of 2017. FIFO gross profit margin was 28.7%, compared to 29.0% in the fourth quarter of 2016 and 28.2% in the third quarter of 2017.
Net income attributable to Reliance was $301.4 million, compared to $61.7 million in the fourth quarter of 2016 and $97.3 million in the third quarter of 2017. The enactment of the Tax Cuts and Jobs Act (“Tax Reform”) in December 2017 resulted in a provisional/one-time income tax benefit of $207.3 million in the fourth quarter of 2017, or a benefit of $2.81 per diluted share. The Tax Reform impact reflects a provisional tax on accumulated overseas profits and the revaluation of deferred tax assets and liabilities. Excluding the impact of Tax Reform, net income attributable to Reliance was $94.1 million for the fourth quarter of 2017.
Full Year 2017 Financial Highlights
Net sales were $9.72 billion, up 12.9% from $8.61 billion in 2016 and the second highest in the Company’s history.
Tons sold were up 3.8% from 2016 and the average selling price per ton sold was up 9.1%.
Gross profit margin was 28.7%, compared to 30.1% in 2016. FIFO gross profit margin was 29.0%, compared to 29.8% in 2016. Highest ever gross profit dollars in the Company’s history at $2.79 billion.
Net income attributable to Reliance was $613.4 million, compared to $304.3 million in 2016. Excluding the impact of Tax Reform, net income attributable to Reliance was $406.1 million in 2017, up 33.5% from 2016, and the third highest net income in the Company’s history.
Gregg Mollins, President and Chief Executive Officer of Reliance, said “2017 was a fantastic year for Reliance. Our strong annual gross profit margin of 28.7% is near the high-end of our target range of 27% to 29%, and produced the highest gross profit dollars in our history of $2.79 billion. Continued modest growth in demand along with a positive pricing environment throughout most of the year enabled us to grow our 2017 net sales to $9.72 billion, $1.11 billion more than 2016 and second highest annual net sales in our Company’s history. Our managers in the field did an excellent job managing pricing fluctuations, growing our value-added services to our customers, controlling expenses and managing working capital. This resulted in our second highest annual diluted earnings per share of $5.44 (non-GAAP excluding the impact of Tax Reform), surpassed only by 2008.”
Mr. Mollins continued, “Although we experienced the normal seasonality we had expected in the fourth quarter with our tons sold down 4.6% compared to the third quarter of 2017, overall demand remained stronger than in 2016, with our shipments up 6.3% compared to the fourth quarter of 2016. Our average selling price in the fourth quarter of 2017 was higher than we had anticipated, increasing 1.8% compared to the third quarter of 2017 and outperforming our guidance of flat to down 2%. The higher selling prices resulted from continued mill price increases in the fourth quarter that have continued into 2018 and contributed to our stronger than anticipated earnings. For the full year, our tons sold were up 3.8% and our average selling price was up 9.1% compared to 2016 with overall customer sentiment growing increasingly optimistic in nearly all of the end markets we serve.”
Mr. Mollins concluded, “Looking ahead, while uncertainty still exists in the market, overall customer sentiment and demand have been substantially improving and we anticipate that an ongoing reduction in imports will continue to support higher metal pricing. We believe these factors, as well as the potential for meaningful infrastructure spending, would increase metal demand and pricing, which we expect will enhance our profitability and strong cash flows. Over the past five years, we have invested $2.26 billion to further our growth through capital expenditures and acquisitions and returned over $1.00 billion to our shareholders through dividends and share repurchases. We look forward to returning even greater value from these investments and continuing our strong shareholder return activities.”
Source : https://steelguru.com/steel/reliance-steel-aluminum-reports-q4-and-2017-results/503020