Reliance Steel & Aluminum Co.: Down But Not Out
Posted on: June 21, 2009 - Email Article - Printable Version
“Reliance Steel & Aluminum Co. [RS: 39.82, +0.04 (+0.10%)] is one of the largest metals service center companies in the United States. Though a network of more than 200 locations in 38 states, Belgium, Canada, China, Mexico, Singapore, South Korea and the United Kingdom, the Company provides value-added metals processing services and distributes a full line of more than 100,000 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 125,000 customers in a broad range of industries. Some of these metal service centers provide processing services for specialty metals only.”
The challenge for Reliance, and all other metal service centers, is that lower demand for steel and aluminum is expected to continue through the first half of 2009. Perhaps, we will see the beginnings of a pick-up in demand by the end of the year. Data for the first six months is not available yet. However, it seems that pricing for some types of steel may have bottomed out in the first quarter while pricing for other metals has stabilized. There is a disconnect between selling prices and the spot market price of metals. Pricing will remain weak until the overall economy shows signs of recovery.
| Financial Statements | TTM | 12/2008 | 12/2007 | 12/2006 | 12/2005 | 12/2004 |
| Sales ($M) | 8,369.2 | 8,718.8 | 7,255.7 | 5,742.6 | 3,370.7 | 2,947.2 |
| Gross Income ($M) | 2,024.2 | 2,162.1 | 1,837.5 | 1,511.2 | 921.7 | 836.4 |
| R&D ($M) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Unusual?Extra ($M) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Oper Income ($M) | 711.6 | 770.4 | 644.8 | 565.7 | 341.9 | 279.1 |
| Interest Exp ($M) | 101.5 | 82.6 | 78.7 | 61.7 | 25.2 | 28.7 |
| PreTax Inc. ($M) | 624.0 | 765.7 | 654.4 | 571.1 | 333.2 | 270.0 |
| Net Income ($M) | 552.1 | 482.8 | 408.0 | 354.5 | 205.4 | 169.7 |
| Oper Cash Fl ($M) | 872.0 | 664.7 | 639.0 | 191.0 | 272.2 | 121.8 |
| CapEx ($M) | 131.0 | 151.9 | 124.1 | 108.7 | 53.7 | 36.0 |
| EPS Basic ($) | 7.55 | 6.60 | 5.39 | 4.85 | 3.12 | 2.61 |
| EPS Diluted ($) | 5.34 | 6.56 | 5.36 | 4.82 | 3.10 | 2.60 |
| EPS Diluted Cont $ | 5.34 | 6.56 | 5.36 | 4.82 | 3.10 | 2.60 |
| Div/Shr $ | 0.40 | 0.40 | 0.32 | 0.22 | 0.19 | 0.13 |
| Cash Flow/Shr $ | 9.21 | 7.89 | 6.41 | 5.67 | 3.81 | 3.28 |
| FCF/Shr $ | 9.72 | 6.57 | 6.45 | 0.90 | 3.11 | 1.18 |
| Cash & ST Inv $M | 33.6 | 52.0 | 77.0 | 57.5 | 35.0 | 11.7 |
| Goodwill/Intang $M | 1,800.2 | 1,807.2 | 1,350.4 | 1,139.1 | 429.1 | 358.5 |
| Total Assets $M | 4,807.5 | 5,195.5 | 3,983.5 | 3,614.2 | 1,769.1 | 1,563.3 |
| Total Liabilities $M | 2,364.5 | 2,764.0 | 1,877.2 | 1,867.8 | 739.2 | 740.8 |
| Book Val/Shr $ | 33.32 | 33.26 | 27.85 | 23.88 | 15.64 | 12.66 |
| Avg Shrs Out M | 73.3 | 73.1 | 75.6 | 73.1 | 65.8 | 64.9 |
| Multiples | TTM | 12/2008 | 12/2007 | 12/2006 | 12/2005 | 12/2004 |
| Price/Earnings | 8.0 | 6.9 | 9.5 | 8.1 | 8.2 | 6.7 |
| Price/Book Value | 1.2 | 1.3 | 1.8 | 1.6 | 1.6 | 1.3 |
| Price/Sales | 0.3 | 0.3 | 0.5 | 0.5 | 0.5 | 0.3 |
| Price/Cash Flow | 4.6 | 5.8 | 7.9 | 6.9 | 6.7 | 5.3 |
| Price/FCF | 4.4 | 6.9 | 7.9 | 43.4 | 8.2 | 14.8 |
| 0.9 | 0.9 | 0.6 | 0.6 | 0.7 | 0.7 |
| Ratios | TTM | 12/2008 | 12/2007 | 12/2006 | 12/2005 | 12/2004 |
| Gross Margin% | 24.2 | 24.8 | 25.3 | 26.3 | 27.3 | 28.4 |
| Operating Margin% | -13.3 | 8.8 | 8.9 | 9.9 | 10.1 | 9.5 |
| Net Margin% | 6.6 | 5.5 | 5.6 | 6.2 | 6.1 | 5.8 |
| 23.1 | 21.3 | 21.2 | 25.5 | 22.2 | 23.1 | |
| 10.7 | 10.5 | 10.7 | 13.2 | 12.3 | 11.6 | |
| Current Ratio | 3.5 | 3.5 | 2.9 | 3.0 | 2.5 | 2.7 |
| Payout Ratio% | 5.3 | 6.1 | 5.9 | 4.5 | 6.1 | 5.0 |
| 49.2 | 53.2 | 47.1 | 51.7 | 41.8 | 47.4 | |
| Asset Turnover X | 1.6 | 1.9 | 1.9 | 2.1 | 2.0 | 2.0 |
Since it appears that we have averted a depression and are currently experiencing a recession, we can consult our crystal ball and divine the future.
- Ronald Sommer
Disclosure: This article was taken from the website Measured Approach with the permission of the original author. Please refer to the original author for disclosure information.
The Following Stocks Were Mentioned In This Article: RS
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