Reliance(RS) - 2024 Q3 - Quarterly Report

PART I — FINANCIAL INFORMATION Presents Reliance, Inc.'s unaudited consolidated financial statements and management's discussion for Q3 and YTD 2024 Item 1. Financial Statements Presents unaudited consolidated financial statements for Reliance, Inc. for Q3 and YTD 2024 and 2023, with notes Unaudited Consolidated Statements of Income Details Reliance's net sales, operating income, net income, and EPS for the three and nine months ended September 30, 2024 and 2023 Consolidated Statements of Income (in millions, except per share amounts) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :---------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net sales | $3,420.3 | $3,623.0 | $10,708.4 | $11,468.6 | | Operating income | $273.4 | $389.5 | $1,018.2 | $1,414.4 | | Income before income taxes | $260.5 | $388.0 | $1,006.4 | $1,407.4 | | Net income attributable to Reliance | $199.2 | $295.0 | $769.9 | $1,063.2 | | Basic EPS attributable to Reliance | $3.64 | $5.05 | $13.68 | $18.13 | | Diluted EPS attributable to Reliance | $3.61 | $4.99 | $13.55 | $17.92 | - Net sales decreased by 5.6% for the three months ended September 30, 2024, and by 6.6% for the nine months ended September 30, 2024, compared to the respective prior year periods. Net income attributable to Reliance decreased by 32.4% for the three months and 27.6% for the nine months[4] Unaudited Consolidated Statements of Comprehensive Income Presents net income and other comprehensive income components, including foreign currency translation and postretirement adjustments Consolidated Statements of Comprehensive Income (in millions) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $199.9 | $296.0 | $772.0 | $1,066.7 | | Foreign currency translation gain (loss) | $19.3 | $(11.9) | $(3.8) | $(10.7) | | Postretirement benefit plan adjustments, net of tax | $(0.9) | $(0.9) | $(2.6) | $(2.4) | | Total other comprehensive income (loss) | $18.4 | $(12.8) | $(6.4) | $(13.1) | | Comprehensive income attributable to Reliance | $217.6 | $282.2 | $763.5 | $1,050.1 | - Comprehensive income attributable to Reliance decreased by 22.8% for the three months ended September 30, 2024, and by 27.3% for the nine months ended September 30, 2024, compared to the respective prior year periods. This was primarily driven by lower net income, despite a positive foreign currency translation gain in the current quarter[5] Unaudited Consolidated Balance Sheets Outlines Reliance's financial position, including assets, liabilities, and equity, as of September 30, 2024, and December 31, 2023 Consolidated Balance Sheets (in millions) | Asset/Liability/Equity | Sep 30, 2024 | Dec 31, 2023* | | :-------------------------------------- | :----------- | :------------ | | ASSETS: | | | | Cash and cash equivalents | $314.6 | $1,080.2 | | Accounts receivable, net | $1,566.7 | $1,472.4 | | Inventories | $2,205.8 | $2,043.2 | | Total current assets | $4,212.5 | $4,771.8 | | Property, plant and equipment, net | $2,503.0 | $2,248.4 | | Goodwill | $2,170.9 | $2,111.1 | | Intangible assets, net | $1,031.5 | $981.1 | | Total assets | $10,300.8 | $10,480.3 | | LIABILITIES AND EQUITY: | | | | Accounts payable | $440.9 | $410.3 | | Current maturities of long-term debt | $399.5 | $0.3 | | Total current liabilities | $1,272.5 | $843.6 | | Long-term debt | $867.8 | $1,141.9 | | Total liabilities | $2,939.6 | $2,747.5 | | Total Reliance stockholders' equity | $7,350.5 | $7,722.3 | | Total equity | $7,361.2 | $7,732.8 | | Total liabilities and equity | $10,300.8 | $10,480.3 | - Total assets decreased by 1.7% from December 31, 2023, to September 30, 2024, primarily due to a significant decrease in cash and cash equivalents. Total liabilities increased by 6.9%, mainly driven by a substantial increase in current maturities of long-term debt[8] Unaudited Consolidated Statements of Cash Flows Summarizes cash flows from operating, investing, and financing activities for the nine months ended September 30, 2024 and 2023 Consolidated Statements of Cash Flows (in millions) | Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :---------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $956.5 | $1,145.7 | | Net cash used in investing activities | $(673.4) | $(367.8) | | Net cash used in financing activities | $(1,048.7) | $(970.7) | | Decrease in cash and cash equivalents | $(765.6) | $(196.5) | | Cash and cash equivalents at end of period| $314.6 | $976.9 | - Net cash provided by operating activities decreased by 16.5% year-over-year. Net cash used in investing activities significantly increased by 83.1%, primarily due to higher acquisition spending in 2024. Net cash used in financing activities increased by 8.0%, driven by increased share repurchases[11] Unaudited Consolidated Statements of Equity Details changes in Reliance's equity, including net income, dividends, and share repurchases, for 2024 and 2023 Consolidated Statements of Equity (in millions, except per share amounts) | Equity Component | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :---------------------------------------------- | :----------------------------- | :----------------------------- | | Total equity, beginning balances | $7,732.8 | $7,095.9 | | Net income attributable to Reliance | $769.9 | $1,063.2 | | Cash dividends and dividend equivalents | $(188.5) | $(179.3) | | Repurchase of common shares | $(926.8) | $(202.3) | | Total Reliance stockholders' equity, ending balances | $7,350.5 | $7,724.3 | | Cash dividends declared per common share | $3.30 | $3.00 | - Total Reliance stockholders' equity decreased by 4.8% from the beginning of the year to September 30, 2024, primarily due to significant share repurchases totaling $926.8 million, partially offset by net income[13] Notes to Unaudited Consolidated Financial Statements Provides detailed explanations and disclosures supporting the unaudited consolidated financial statements Note 1. Summary of Significant Accounting Policies Outlines Reliance's key accounting principles, including inventory valuation and recently issued accounting standards - Reliance, Inc. (formerly Reliance Steel & Aluminum Co.) consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information. The majority of inventory is valued using the LIFO method. Recently issued accounting standards on segment reporting and income tax disclosures will be effective for fiscal years beginning January 1, 2024 (segment reporting for quarterly periods beginning Jan 1, 20