Reliance Steel & Aluminum (RS) Buys Cooksey Iron & Metal

Core Viewpoint - Reliance Steel & Aluminum Co. has acquired Cooksey Iron & Metal Co., enhancing its presence in the Southeastern market and expanding its service capabilities [1][2]. Company Overview - Cooksey Iron & Metal Co. is a metals service center that processes and distributes finished steel products, with annual net sales of approximately $90 million for the 12 months ending December 31, 2023 [1]. - Cooksey operates in multiple states including Georgia, Florida, Alabama, and South Carolina, serving a diverse customer base [1]. Market Position and Performance - The acquisition of Cooksey strengthens Reliance Steel's position in the fast-growing Southeastern market, known for premium customer service and high-quality products [2]. - Reliance Steel's shares have increased by 24.3% over the past year, contrasting with a 2.7% decline in its industry [2]. Demand and Sales Projections - Reliance Steel anticipates healthy underlying demand in its end markets for the fourth quarter of 2023, projecting year-over-year growth in tons sold between 3.5% and 5.5% [2]. - A sequential decline of 4-6% in tons sold is expected, consistent with typical seasonal patterns [2]. Pricing and Profit Margins - The company expects average selling prices per ton sold in the fourth quarter of 2023 to decrease by 4% to 6% compared to the third quarter [3]. - A temporary and modest reduction in gross profit margin is projected due to declining price trends [3]. Earnings Forecast - Reliance Steel projects adjusted earnings per share in the range of $3.70 to $3.90 for the fourth quarter [3].