RELIANCE, INC. Q4 FY2024 earnings call

• Strong execution of the model and strategy led to solid financial results in a challenging market. • Grew same-store tons well above industry shipment levels, maintaining a 29.7% full-year gross profit margin. • Acquired four companies in 2024, expanding geographic footprint and processing capabilities with ~$400 million annualized net sales addition. • 2024 non-GAAP earnings per share of $15.92 reflected targeted growth strategies and value-added processing. • Maintained balanced capital deployment, investing $430M in CAPEX, $365M in acquisitions, $1.1B in share repurchases, and returning $250M in dividends. • Corporate developments included promoting Brenda Miyamoto to senior vice president of strategic planning and programs and appointing Scott Ramsbottom as vice president and CIO.

In the fourth quarter and full year 2024, Reliance Steel & Aluminum Co. showed strong financial performance. The full-year gross profit margin was 29.7%, within the sustainable annual range. The company acquired four businesses in 2024, adding approximately $400 million of annualized net sales. Same-store tons grew well above industry levels, and the 2024 non-GAAP earnings per share were $15.92.

• Anticipate Q1 2025 tons sold to increase 6%-8% compared to Q4 2024, with average selling price relatively flat. • Expect FIFO gross profit margin to improve in Q1 2025. • Estimate LIFO income of approximately $60M for 2025, reflecting carryover of specialty inventory. • 2025 capital expenditure budget is $325M, with total cash outlay expected to be $375M-$400M.

• Macro-economic uncertainty persists. • Dynamic trade policy landscape poses risks. • Tariffs could impact pricing and supply chain, though international business is a small portion of operations.

Q: Martin Englert asked about demand activity and attribution to seasonal gains, tariffs, and organic cyclical recovery.

A: Arthur Ajemyan and Stephen Koch responded, noting steady demand, January activity strength, and potential momentum in certain end markets like general manufacturing and infrastructure.

Q: Katja Jancic inquired about volume growth drivers and value-added processing.

A: Karla Lewis and Arthur Ajemyan and Stephen Koch responded, stating growth is from both organic and acquisitions, and value-added processing could increase due to reshoring and customer needs.

Q: Philip Gibbs asked about operating expenses and cash CapEx.

A: Karla Lewis and Arthur Ajemyan responded, discussing wage inflation, cost management, and 2025 CapEx budget.

Q: Mike Harris inquired about first quarter guide and working capital.

A: Karla Lewis and Arthur Ajemyan responded, mentioning conservative pricing guidance and seasonal working capital patterns.

Q: Alex Hacking asked about tariffs and exposure to Canada/Mexico.

A: Arthur Ajemyan and Stephen Koch responded, noting international business is small, but some toll processing in Mexico has import licenses.

Q: Philip Gibbs followed up on LIFO credit.

A: Arthur Ajemyan and Karla Lewis responded, explaining LIFO income timing related to specialty inventory and expected reduction in such inventory by year-end