Reliance Steel & Aluminum, parent company for metalweb, delivered another strong set of results for the financial year ended 31st December 2015. Sales were $9.35 billion with cash flow from operations a record $1.0 billion, compared to $356.0 million in 2014.
“We were very pleased with our strong operational execution throughout 2015 despite a very challenging economic environment that continued to pressure metals pricing,” said Gregg Mollins, President and Chief Executive Officer of Reliance. “We finished the year generating record cash flow from operations of $1.0 billion, which affords us ample liquidity and financial flexibility to execute on our capital allocation priorities. We were also successful in reducing inventory, a key area of focus for Reliance in 2015, by an additional $193.3 million during the quarter, and $433.1 million for the year. We once again increased our fourth quarter FIFO gross profit margin to 26.7%, up 30 basis points from the prior quarter, and up 160 basis points from the fourth quarter of 2014. The ability of our managers in the field to increase our FIFO gross profit margin in each successive quarter of 2015, during a period when metals pricing declined each successive quarter, reflects the outstanding quality of people that we have throughout Reliance.”
Mr. Mollins continued, “Notwithstanding the slumping energy market and ongoing concerns over slowed growth in China, demand trends held up relatively well during the fourth quarter, yet were softer than anticipated. Fourth quarter demand also reflected the normal seasonal slowdown caused by fewer shipping days due to the holiday season and holiday-related closures by many of our customers. Our fourth quarter tons sold were down 7.1% from the third quarter, and once again outperformed the MSCI industry average decline of 10.1%. For the full year of 2015 compared to 2014, we outpaced the industry with a 2.8% decline in tons sold compared to the MSCI industry average decline of 7.5%. Pricing was also softer than anticipated in the fourth quarter, despite some recent price increases on flat-rolled carbon steel and plate. We had expected fourth quarter pricing to be down 1% to 2%; however, conditions continued to soften throughout the quarter resulting in our average selling price per ton sold declining 4.5% compared to the prior quarter, and 16.6% compared to the fourth quarter of 2014.”
Mr. Mollins concluded, “Despite the challenges we face in our industry at large, I am very pleased with our 2015 performance which reflected superior operational execution. Our performance enabled us to continue to grow our market share, increase our gross profit margins, generate significant cash to fund our growth strategy – including the acquisition of Tubular Steel, Inc. on January 1, 2016 – and return value to our stockholders. We remain optimistic about the year ahead and look forward to building upon our operational momentum.”
