Financial Performance - Net income for the third quarter of 2025 was $2.2 million, or $0.18 per diluted share, down from $2.7 million, or $0.23 per diluted share in the third quarter of 2024 [2] - Adjusted EBITDA for the third quarter of 2025 was $15.4 million, an increase from $13.0 million in the third quarter of 2024 [2] - Sales totaled $491 million in the third quarter of 2025, representing a 4.5% increase compared to $470 million in the third quarter of 2024 [3] Business Strategy and Outlook - The CEO highlighted the resilience of the business model despite softer demand due to trade and interest rate uncertainties, with all three business segments contributing to profitability [4] - The Specialty Metals segment achieved its strongest shipping quarterly volume in the past three years, indicating strong performance [4] - The company has been diversifying its business, focusing on higher-margin opportunities, and maintaining operational discipline to strengthen competitiveness [4] Dividend and Merger Announcement - The Board of Directors approved a regular quarterly cash dividend of $0.16 per share, payable on December 15, 2025, to shareholders of record as of December 1, 2025 [4] - A definitive merger agreement has been reached with Ryerson Holding Corporation, with the transaction expected to close in the first quarter of 2026, pending regulatory and shareholder approvals [5]

Core Insights - Reliance, Inc. reported net sales of $3.65 billion for Q3 2025, marking a 6.2% increase year-over-year with record tons sold [1][5] - The gross profit margin was 28.3%, while the non-GAAP FIFO gross profit margin was 29.0% [1][2] - The company experienced a LIFO expense of $25 million, contrasting with a LIFO income of $50 million in Q3 2024 [1][2] - Earnings per share (EPS) were reported at $3.59, with a non-GAAP EPS of $3.64 [1][2] - Reliance repurchased $60.9 million of common stock during the quarter [1][2] Financial Performance - Net sales for Q3 2025 were $3,651.2 million, a slight decrease of 0.2% from Q2 2025 but an increase of 6.8% from Q3 2024 [2][31] - Gross profit was $1,031.6 million, down 5.2% sequentially and 2.5% year-over-year [2][31] - The company reported a pretax income of $247.7 million, an 18.6% decrease from Q2 2025 and a 4.9% decrease from Q3 2024 [2][31] - Net income attributable to Reliance was $189.5 million, down 18.9% from Q2 2025 and 4.9% from Q3 2024 [2][31] Market Position and Strategy - Reliance's tons sold reached a record high in Q3 2025, outperforming the industry by approximately nine percentage points, increasing U.S. market share to 17.1% from 14.5% in 2023 [5][6] - The company attributed its success to a strong customer service approach and broad inventory capabilities, which helped offset declining industry shipment trends [5][6] - Management expressed confidence in maintaining a long-term sustainable gross profit margin range of 29% to 31% despite short-term headwinds [5][6] Demand and End Markets - Demand for non-residential construction, Reliance's largest end market, improved compared to Q3 2024, with expectations for continued healthy demand in Q4 2025 [7] - The broader manufacturing sector showed improved demand, particularly in military, industrial machinery, and consumer products [8] - Aerospace demand remained stable, but commercial aerospace is expected to remain soft due to excess inventory [9] - Demand for automotive toll processing services improved, with expectations for stability in Q4 2025 [10] Balance Sheet and Cash Flow - As of September 30, 2025, Reliance had cash and cash equivalents of $261.2 million and total debt of $1.39 billion [12][33] - The company generated cash flow from operations of $261.8 million in Q3 2025, reflecting strong cash generation capabilities [13] - Reliance's free cash flow was reported at $180.6 million, a 27.7% increase from Q2 2025 [13] Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $1.20 per share, payable on December 5, 2025 [15] - Reliance repurchased 211,873 shares at an average price of $287.71 per share, totaling $60.9 million in Q3 2025 [16]

Core Viewpoint - Ryerson's Q2 2025 financial results showed a decline in earnings and revenue, reflecting ongoing challenges in profit margins and industrial demand, despite some operational achievements in market share [1][5][12] Financial Performance - Diluted EPS (GAAP) was $0.06, missing estimates of $0.19, while revenue was $1.17 billion, slightly below the expected $1.18 billion [1][2] - Year-over-year revenue decreased by 4.6% from $1.23 billion in Q2 2024, and net income attributable to Ryerson fell 80.8% to $1.9 million from $9.9 million [2][9] - Adjusted EBITDA (excluding LIFO) increased by 5.6% year-over-year to $45 million, indicating some operational resilience [2][5] Business Overview and Strategy - Ryerson operates a broad metals service center network, distributing carbon steel, stainless steel, and aluminum products across various sectors, which helps mitigate dependence on any single market [3] - The company's strategy focuses on expanding value-added services and increasing market reach through organic growth and targeted acquisitions [4] Operational Highlights - Tons shipped were 501,000, a slight decrease of 1.4% year-over-year, but better than the 2.1% decline in the broader North American service center industry, indicating modest market share gains [5] - Average selling price per ton (GAAP) was $2,334, down 3.2% year-over-year, but showed improvement from the first quarter [6] Sales Mix and Cost Management - The company has shifted its sales mix towards more transactional business, with growth in transactional sales for five consecutive quarters, helping to offset declines in contractual OEM business [7] - Cost management efforts resulted in a 0.7% increase in warehousing, delivery, and administrative expenses from Q1 to Q2 2025, with expenses declining as a percentage of revenue [8] Future Guidance - For Q3 2025, management projects GAAP revenue between $1.14 billion and $1.18 billion, with shipments expected to fall 2% to 4% quarter-over-quarter [11] - Average selling price per ton is anticipated to rise by 1% to 3%, while adjusted EBITDA excluding LIFO is expected to be in the $40 million to $45 million range [11] - Management expressed cautiousness regarding manufacturing and industrial metal demand, particularly from large OEM customers [12]

Company Overview - Reliance is the largest metals service center company in North America, operating a network of 320 locations across 41 states and 10 countries outside the US [1] - The company serves more than a significant number of clients, indicating a robust market presence [1] Analyst Background - The analyst has over 10 years of experience researching companies across various sectors, including commodities and technology [1] - The focus has been on value investing, with a particular interest in metals and mining stocks, as well as other industries like consumer discretionary, REITs, and utilities [1]

Core Insights - Reliance, Inc. reported net sales of $3.48 billion for Q1 2025, a 9.0% increase year-over-year, with same-store tons sold up 5.6% [1][4] - The company achieved a strong gross profit margin of 29.7% and a diluted EPS of $3.74, with non-GAAP EPS at $3.77 [1][5] - Reliance repurchased $253.2 million of common stock during the quarter [1][17] Financial Performance - Net sales increased by 11.5% sequentially from Q4 2024 but decreased by 4.4% compared to Q1 2024 [2] - Gross profit rose to $1.03 billion, a 16.6% increase from Q4 2024, but down 8.4% from Q1 2024 [2] - The company reported a pretax income of $262.4 million, up 96.6% from Q4 2024 but down 33.8% from Q1 2024 [2][5] Operational Highlights - Reliance sold a record 1.63 million tons in Q1 2025, reflecting a 9.0% year-over-year increase and a 12.8% increase from Q4 2024 [4][7] - The average selling price per ton sold decreased slightly by 1.2% compared to Q4 2024, primarily due to a shift in product mix [4][5] - The company’s non-GAAP FIFO gross profit margin expanded to 30.4% from 28.8% in Q4 2024 [4] Market Demand - Demand for non-residential construction, Reliance's largest end market, improved, with expectations for continued healthy levels in Q2 2025 [8] - Broader manufacturing sector demand increased, particularly in industrial machinery and heavy construction equipment [9] - Demand in the semiconductor market remained depressed, with expectations for continued pressure in Q2 2025 [13] Balance Sheet and Cash Flow - As of March 31, 2025, Reliance had cash and cash equivalents of $277.8 million and total debt of $1.48 billion [14] - The company generated cash flow from operations of $64.5 million, a decrease of 86.4% from Q4 2024 [15] - Reliance's net debt-to-total capital ratio stood at 14.4% [2] Shareholder Returns - The company declared a quarterly cash dividend of $1.20 per share, marking a 9.1% increase from the previous quarter [16] - Reliance has repurchased approximately 16.3 million shares since 2020, totaling $3.2 billion [17] Business Outlook - Reliance anticipates stable demand across diversified end markets in Q2 2025, with tons sold expected to be down 1.0% to up 1.0% compared to Q1 2025 [19] - The company expects its average selling price per ton sold to increase by 1% to 3% in Q2 2025 [19] - Non-GAAP earnings per diluted share are projected to be in the range of $4.50 to $4.70 for Q2 2025 [19]