Core Viewpoint - The market anticipates a year-over-year decline in earnings for Reliance due to lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Reliance is expected to report earnings of $3.66 per share, reflecting a year-over-year change of -0.4%, with revenues projected at $3.57 billion, down 1.9% from the previous year [3][12]. - The earnings report is scheduled for July 23, and better-than-expected results could lead to a stock price increase, while disappointing results may cause a decline [2]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4]. - Reliance's Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +2.38%, suggesting a bullish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 [10]. - Reliance currently holds a Zacks Rank of 1, enhancing the likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Reliance exceeded the expected earnings of $3.66 per share by delivering $3.77, resulting in a surprise of +3.01% [13]. - Over the past four quarters, Reliance has only beaten consensus EPS estimates once [14]. Conclusion - Reliance is positioned as a compelling candidate for an earnings beat, but investors should consider other influencing factors before making investment decisions [17].

Core Viewpoint - Reliance, Inc. will report its second quarter 2025 financial results on July 23, 2025, after market close, followed by a conference call on July 24, 2025, at 11:00 a.m. Eastern Time [1]. Group 1: Financial Reporting Details - The financial results for the second quarter of 2025 will be announced on July 23, 2025 [1]. - A conference call to discuss the results will take place on July 24, 2025, at 11:00 a.m. Eastern Time [1]. - The conference call will be accessible via the company's website and will also have a replay available until August 7, 2025 [2][3]. Group 2: Company Overview - Reliance, Inc. is a leading global diversified metal solutions provider and the largest metals service center company in North America [4]. - The company operates 320 locations across 41 states and 10 countries, serving over 125,000 customers with more than 100,000 metal products [4]. - In 2024, the average order size was $2,980, with approximately 50% of orders including value-added processing and 40% delivered within 24 hours [4].

Company Overview - Reliance is a leading global diversified metal solutions provider with over 85 years of operational experience[7,8] - The company serves over 125,000 customers with over 100,000 metal products[8,16] - In 2024, approximately 50% of orders included value-added processing[14] Financial Performance - Reliance achieved EPS of $15.56 in 2024, the 4th highest level in its history[20] - In 2024, the company reported cash flow from operations of $1.43 billion, the 3rd highest in its history[23] - For Q1 2025, net sales were $3.48 billion[67] - Q1 2025 saw a gross profit margin of 29.7%[69] Capital Allocation and Stockholder Returns - Since 2020, Reliance has repurchased $3.20 billion of its common stock[50] - In Q1 2025, $253.2 million of share repurchases resulted in a 2% reduction in outstanding shares[50] - The company's capital expenditures since 2020 total $1.74 billion[52] Market Position and Growth - Reliance's U S tons sold represented approximately 15% of total Metals Service Center Institute shipments in 2024[93] - In Q1 2025, Reliance's year-over-year growth in shipments outperformed MSCI by 9.5%[58] - 2024 acquisitions contributed approximately $400 million of annualized net sales[111]

Core Insights - Reliance, Inc. (RS) shares have increased by 12.7% over the past three months, outperforming the Zacks Mining-Miscellaneous industry's 9.6% rise and the S&P 500's approximately 7.4% increase during the same period [1] Group 1: Financial Performance - RS's shipment levels rose by around 9% year over year and 5.6% on a same-store basis, driven by organic growth and strong domestic mill relationships [3][8] - The company experienced an expansion in gross margins in the first quarter of 2025, supported by pricing improvements in the trade environment [3][8] - RS declared a 9.1% increase in its regular quarterly dividend, marking the 32nd increase since its 1994 IPO [6][8] - In the first quarter, RS repurchased 922,656 shares for a total of $253.2 million, ending the quarter with cash flow from operations of $64.5 million and cash and cash equivalents of $277.8 million, highlighting its financial flexibility [6] Group 2: Market Demand and Outlook - The non-residential construction sector, RS's largest end market, performed well, with expectations to maintain momentum due to ongoing new construction projects across various sectors [4] - The company anticipates stable demand across its diversified end markets in the second quarter, expecting tons sold to increase by 3-5% compared to the year-ago quarter [5]

Core Viewpoint - Reliance shares have increased by approximately 3.7% since the last earnings report, underperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1] Group 1: Earnings Report and Estimates - Fresh estimates for Reliance have trended upward over the past month, with the consensus estimate shifting by 16.54% [2] - The most recent earnings report indicates important drivers that may influence future performance [1] Group 2: VGM Scores - Reliance has a subpar Growth Score of D, a Momentum Score of C, and a Value Score of B, placing it in the second quintile for the value investment strategy [3] - The aggregate VGM Score for Reliance is C, which is relevant for investors not focused on a single strategy [3] Group 3: Outlook - The upward trend in estimates and the magnitude of revisions appear promising for Reliance [4] - Reliance holds a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [4]

Group 1 - The article highlights Reliance, Inc. (NYSE: RS) as a reliable operator, noting that its shares reached all-time highs despite lower sales and earnings reported in 2023 after a peak performance in 2022 [1] - The investing group "Value In Corporate Events" focuses on providing members with opportunities related to IPOs, mergers & acquisitions, earnings reports, and changes in corporate capital allocation, covering 10 major events a month [2]

Sales Performance - In Q1 2025, the company sold a record 1.63 million tons, a 9% increase year-over-year, while same-store tons sold rose by 5.6%[72] - Acquisitions in 2024 contributed $99.4 million to net sales in Q1 2025, compared to $16.1 million in Q1 2024[77] Financial Results - Net sales for Q1 2025 were $3,484.7 million, a decrease of 4.4% from $3,644.8 million in Q1 2024, primarily due to lower metals prices[79] - The gross profit margin for Q1 2025 was 29.7%, down from 31.0% in Q1 2024, reflecting a decline in average selling prices despite record tons sold[73] - Earnings per diluted share decreased to $3.74 in Q1 2025 from $5.23 in Q1 2024, attributed to lower metals prices[73] - Operating income for Q1 2025 was $274.4 million, or 7.9% of net sales, down from $393.1 million in Q1 2024, reflecting a 30.2% decline[90] Cash Flow and Investments - Cash flow from operations in Q1 2025 was $64.5 million, down from $126.3 million in Q1 2024, mainly due to lower net income[74] - Net cash provided by operations decreased to $64.5 million in Q1 2025, down $61.8 million from $126.3 million in Q1 2024, primarily due to a $103.3 million decline in net income[93] - Net cash used in investing activities decreased to $87.6 million in Q1 2025, down $89.8 million from $177.4 million in Q1 2024, mainly due to reduced capital expenditures[94] - Net cash used in financing activities decreased to $18.6 million in Q1 2025, down $71.7 million from $90.3 million in Q1 2024, with $330.0 million in net debt borrowings[96] Shareholder Returns - The company returned $318.4 million to stockholders in Q1 2025, including $253.2 million in share repurchases and $65.2 million in cash dividends, reflecting a 9.1% increase in the quarterly dividend rate[75] - The company declared a cash dividend of $1.20 per share for Q2 2025, marking a 9.1% increase from the previous dividend rate[97] - The company has remaining authorization to repurchase $1.02 billion of common stock under its $1.5 billion share repurchase program[99] Cost and Expenses - The cost of sales in Q1 2025 was $2,451.4 million, representing 70.3% of net sales, compared to 69.0% in Q1 2024[84] - SG&A expense for Q1 2025 was $690.2 million, representing 19.8% of net sales, an increase from 18.4% in Q1 2024, with a slight decrease in same-store SG&A expense[89] Market Conditions - The company experienced a decline in demand for its products due to lower commodity prices and economic uncertainties, impacting financial performance[67] - Gross profit margin declined from elevated levels in Q1 2024 but remained strong, with average selling price per ton sold improving in March 2025[87] Balance Sheet - As of March 31, 2025, the company had $277.8 million in cash and cash equivalents and a net debt-to-total capital ratio of 14.4%, up from 10.2% at the end of 2024[102] - Goodwill amounted to $2.17 billion as of March 31, 2025, representing approximately 21% of total assets and 30% of total equity[107] Pricing Trends - The average selling price per ton sold decreased by 12.2% to $2,143 in Q1 2025 from $2,442 in Q1 2024[79]

Core Viewpoint - Reliance, Inc. reported a decline in profits and net sales for the first quarter of 2025, but exceeded earnings estimates despite challenges in pricing and economic uncertainties [1][2][5]. Financial Performance - The company posted profits of $199.7 million or $3.74 per share, down from $302.9 million or $5.23 per share year-over-year [1]. - Net sales were $3,484.7 million, a decrease of approximately 4% year-over-year, but above the Zacks Consensus Estimate of $3,456.5 million [2]. - Earnings per share, excluding one-time items, were $3.77, down from $5.30 a year ago, but surpassed the Zacks Consensus Estimate of $3.66 [1][2]. Volumes and Pricing - Reliance reported a 9% year-over-year increase in shipments to 1,628.9 thousand tons, exceeding estimates [2]. - The average selling price per ton fell around 12% year-over-year to $2,143, which was lower than the estimated $2,175 [3]. Financial Position - At the end of the quarter, Reliance had cash and cash equivalents of $277.8 million, a decrease of about 13% from the previous quarter, and total outstanding debt of $1.48 billion [4]. - The company generated cash flow from operations of $64.5 million in the first quarter [4]. Q2 Outlook - Reliance expects stable demand across its diversified end markets in the second quarter, despite ongoing economic uncertainties [5]. - The company anticipates tons sold to be down 1% to up 1% compared to the first quarter, and up 3-5% from the year-ago quarter [6]. - Average selling price per ton is expected to increase by 1-3% compared to the first quarter, with adjusted earnings per share projected to be in the range of $4.50-$4.70 for Q2 [6]. Stock Performance - RS shares have declined by 1.9% over the past year, contrasting with an 11.3% decline in the Zacks Mining – Miscellaneous industry [7].

Financial Data and Key Metrics Changes - The company reported non-GAAP earnings per diluted share of $3.77, exceeding expectations and reflecting a gross profit margin increase of 140 basis points quarter over quarter [5][21][23] - Cash flow from operations was $64.5 million, despite a significant working capital investment [26][27] - The company revised its LIFO estimate for 2025 to reflect a $100 million expense, up from a prior estimate of $60 million income due to rising carbon steel and aluminum costs [24] Business Line Data and Key Metrics Changes - Tons sold in Q1 2025 reached a record, increasing 12.8% compared to Q4 2024, and 9% year-over-year, significantly outperforming the service center industry's decline of 0.5% [11][12] - The nonresidential construction market, which includes carbon steel tubing, plate, and structural products, represented about one-third of sales and showed strong growth [13] - The general manufacturing business also represented roughly one-third of total sales, with strong demand in industrial machinery and military sectors [15] Market Data and Key Metrics Changes - Demand in the nonresidential construction market remained solid, supported by data center construction and publicly funded infrastructure projects [14] - The aerospace sector saw stable demand, with commercial aerospace increasing sequentially and defense-related aerospace remaining strong [17] - The semiconductor industry faced pressure due to excess inventories, impacting shipments [19] Company Strategy and Development Direction - The company maintains a focus on growth and profitability, with a capital expenditure budget of $325 million for 2025, aiming for strategic acquisitions [6][31] - The management emphasized the importance of sourcing metal primarily from domestic producers, with over 95% of purchases made domestically [38] - The company is exploring opportunities for value-added processing and fabrication to better serve customer needs [64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties, highlighting strong customer relationships and operational execution [46][90] - The outlook for Q2 2025 anticipates stable demand across diversified end markets, with tons sold expected to be down 1% to up 1% compared to Q1 2025 [31][32] - Non-GAAP earnings per diluted share for Q2 2025 are projected to be in the range of $4.50 to $4.70, inclusive of LIFO expense [33] Other Important Information - The company funded stockholder return activities totaling $318 million, including a 9.1% increase in quarterly dividends [7][28] - Share repurchases have resulted in a cumulative 2.3% reduction in total shares outstanding since December 31, 2024 [29] Q&A Session Summary Question: Discussion on exposure within COGS and CapEx related to imports impacted by tariffs - Management confirmed that over 95% of metal purchases are from domestic producers, resulting in limited exposure to imports [38] Question: Impact of tariffs on long-term CapEx decisions - Management indicated that while tariffs can influence decisions, the majority of sourcing remains domestic, and no major shifts in CapEx strategy are anticipated [41] Question: Customer conversations regarding reshoring activity - Management noted increased discussions with customers about reshoring, with some experiencing higher volumes due to domestic manufacturing growth [44] Question: Changes in LIFO assumptions for aerospace - Management stated that baseline assumptions regarding LIFO income for aerospace remain relatively unchanged [52] Question: Current inventory levels and restocking needs - Management reported that inventory levels are slightly above target, with strong relationships with domestic mills ensuring access to inventory [82] Question: General market conditions and performance amidst economic challenges - Management acknowledged macroeconomic challenges but emphasized the company's ability to grow and service customers effectively [90]

Financial Data and Key Metrics Changes - The company reported non-GAAP earnings per share of $3.77, exceeding expectations, with a gross profit margin increase of 140 basis points quarter over quarter [5][15] - Cash flow from operations was generated despite a working capital investment to support growth efforts, with a capital expenditure budget of $325 million for 2025 [5][18] - The LIFO expense for the first quarter was $25 million, impacting earnings per share by $0.35, with a revised full-year LIFO estimate of $100 million [15][16] Business Line Data and Key Metrics Changes - Record tons sold increased by 12.8% compared to Q4 2024, with a 9% increase year over year, outperforming the service center industry's decline of 0.5% [8][9] - Non-residential construction products represented approximately one-third of Q1 sales, showing significant growth in shipments [10] - Aerospace products accounted for about 10% of sales, with stable demand despite supply chain challenges [12] Market Data and Key Metrics Changes - The company experienced strong demand in non-residential construction, driven by data center construction and publicly funded infrastructure projects [10] - General manufacturing demand remained robust, particularly in industrial machinery and military sectors, while consumer products showed weaker demand [11] - Semiconductor industry shipments faced pressure due to excess inventories, impacting overall market conditions [13] Company Strategy and Development Direction - The company remains focused on growth and profitability, with a commitment to executing additional acquisitions that align with strategic criteria [6][19] - The management emphasized the importance of maintaining strong relationships with domestic producers to mitigate risks associated with tariffs and imports [26][29] - The company is exploring opportunities for value-added processing and potential fabrication operations, while being selective to avoid competition with existing customers [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to maximize earnings power despite ongoing macroeconomic uncertainty, with positive pricing momentum expected [6][20] - The outlook for Q2 2025 anticipates stable demand across diversified end markets, with tons sold expected to be down 1% to up 1% compared to Q1 2025 [20] - Management noted that the current inventory levels are above target, with strong relationships with domestic mills ensuring access to inventory [64] Other Important Information - The company has $1 billion remaining for share repurchases under its $1.5 billion plan, with a cumulative 2.3% reduction in total shares outstanding since December 31, 2024 [19][18] - A quarterly dividend increase of 9.1% was announced, marking the 32nd increase since the company's IPO in 1994 [18] Q&A Session Summary Question: Exposure to COGS and CapEx regarding imports and tariffs - Management indicated that over 95% of metal purchases are from domestic producers, resulting in limited exposure to imports [26] Question: Long-term CapEx considerations due to tariffs - Management stated that while tariffs can influence decisions, the majority of sourcing remains domestic, and there are no major shifts in CapEx strategy [29] Question: Customer conversations regarding reshoring activity - Management noted increased discussions with customers about reshoring and bringing supply chains closer to U.S. operations [30] Question: LIFO calculation changes and aerospace assumptions - Management confirmed that the baseline assumption for aerospace remains unchanged, with LIFO expense indicating rising prices [39][40] Question: Current inventory levels and restocking needs - Management reported that inventory levels are slightly above target, with no immediate need for restocking due to strong relationships with domestic mills [64] Question: General steel market conditions and company performance - Management acknowledged macroeconomic challenges but emphasized the company's focus on growth and customer service [72]