RELIANCE INC
For the period ended Dec 31, 2024. Filed Feb 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 27, 2025
RS$417.00+0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-29.
0001558370-24-002166
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0001558370-25-001806
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 96 current paragraphs.
34 unchanged; 40 reworded; 19 added; 24 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 9 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
In 2024, demand was relatively healthy in the majority of our end markets, supported by same-store growth in tons sold compared to 2023. Despite growing our tons sold, our operating results declined mainly due to lower metals prices and our net sales of $13.84 billion declined 6.6% compared to $14.81 billion in 2023.
Current report
Our same-store and total tons sold increases of 1.0% and 4.0%, respectively, in 2024 compared to 2023 benefited from one additional shipping day and outperformed the 2.0% decline in industry shipments reported by the Metals Service Center Institute (“MSCI”). We believe our outperformance of industry peers is supported by our organic growth activities along with our customer service.
Current report
Gross profit margin was 29.7% in 2024 compared to 30.7% in 2023. Our gross profit margin remained strong but was impacted by declines in metals pricing. However, we believe the impact from the decline in metals pricing was mitigated by effective inventory management, our focus on small orders with quick turnaround and value-added processing services.
Current report
Earnings per diluted share of $15.56 in 2024 declined 31.3% compared to $22.64 in 2023. Despite increases in our same-store tons sold and total tons sold, our earnings per share declined mainly due to lower metals prices.
Current report
Returns to stockholders in 2024 totaled $1.34 billion, comprised of a record $1.09 billion of share repurchases which reduced our outstanding common shares by six percent year-over-year, and $249.7 million of cash dividends, which reflected a 10.0% increase in our regular quarterly dividend rate.
Current report
To further our growth strategy, we completed four acquisitions in 2024. The consideration of each acquisition in 2024 was funded with cash on hand. Our acquisition strategy enhances our product breadth and value-added processing capabilities, with a continued focus on the diversification of our products, end markets and geographies. Our 2024 acquisitions broaden our geographic base and processing capabilities in new and existing markets.
Current report
Our 2024 acquisitions contributed $286.2 million to our 2024 net sales.
Current report
We believe the increase in our level of orders that include value-added processing over time has provided stability to our gross profit margin during periods of declining metals prices and contributed to a higher sustainable gross profit margin level. We have made significant investments in capital expenditures in recent years that have expanded our value-added processing capabilities and increased the level of our sales orders that include value-added processing to at least 50%,
Current report
which we believe has been supportive to increases in our sustainable gross profit margin, which is currently estimated at 29%-31%. Our current processing and estimated sustainable gross profit margin level is significantly higher than what we believe to be our historical levels from approximately a decade ago in which our orders that included value-added processing ranged from 40%-45% and our gross profit margins were approximately 25%-27%.
Current report
Our same-store net sales declined from 2023 mainly due to declines in carbon steel pricing that lowered our average selling price per ton sold despite an increase in tons sold. Demand remained relatively healthy in the majority of the end markets we serve, supported by same-store growth in tons sold.
Current report
The decrease in cost of sales was attributable to lower average costs per ton sold, mainly due to declines in replacement costs for carbon steel products, partially offset by an increase in tons sold.
Current report
Our gross profit margin remained strong, but was pressured by lower metals pricing which we believe was mitigated by effective inventory management, our focus on small orders with quick turnaround and value-added processing services.
Current report
See*“Net Sales”* above for trends in both demand and costs of our products, and product pricing.
Current report
In addition, same-store SG&A expense in 2024 included non-recurring net settlement charges of $4.1 million, mainly related to our withdrawal from certain multiemployer pension plans, and 2023 included $3.8 million of nonrecurring gains related to the sale of non-core property, plant and equipment.
Current report
The increase in same-store depreciation and amortization expense is mainly due to significant increases in capital expenditures in 2023.
Current report
Included inExpenses are $11.7 million of impairment losses in 2024, which included $11.2 million related to the discontinued use of a trade name intangible asset in connection with an operational restructuring.
Current report
Operating income declined mainly as a result of lower metals pricing that decreased gross profit along with a moderate increase in same-store SG&A expense, partially offset by operating income contributions from acquisitions. Our operating income margin was lower mainly due to decreased operating leverage of our SG&A expense due to lower net sales and a lower gross profit margin.
Current report
Share Repurchase Plan
Current report
impairment charges. We recorded $0.5 million of impairment losses on property, plant and equipment in 2024. No impairment of long-lived assets was recognized in 2023 and 2022.
Removed paragraphs (24)
Previous report
In 2023, our earnings per diluted share of $22.64 and operating cash flow of $1.67 billion were the second highest in our history.
Previous report
Tons sold increased 3.7% in 2023 compared to 2022 due to healthy demand in our key end markets, including non-residential construction (our largest end market), automotive and aerospace, as well as contributions from our organic growth activities. The increase in our tons sold in 2023 significantly outperformed the 1.5% increase in shipments for the industry as reported by the Metals Service Center Institute (“MSCI”).
Previous report
Our net sales of $14.81 billion declined 13.0% in 2023 compared to record levels of $17.03 billion in 2022 due to a decline in our average selling price per ton sold of 16.4% that was partially offset by an increase in our tons sold.
Previous report
We believe record metals pricing in 2022 was largely driven by supply chain disruptions caused by the onset of the conflict between Russia and Ukraine, labor supply and microchip shortages, and impacts of the COVID-19 pandemic, including the omicron variant surge and lockdowns in China.
Previous report
Gross profit margin of 30.7% in 2023 compared to 30.8% in 2022.
Previous report
Second highest annual earnings per diluted share of $22.64 in 2023 compared to record earnings per diluted share of $29.92 in 2022. Lower gross profit, driven by lower metals prices that outweighed an increase in tons sold, contributed to a decrease in earnings per share from our 2022 record.
Previous report
Returns to stockholders totaled $717.6 million in 2023, comprised of $238.1 million of cash dividends and $479.5 million of share repurchases.
Previous report
On February 1, 2024, we acquired Cooksey Iron & Metal Company (“Cooksey Steel”), a metals service center that processes and distributes finished steel products, including tubing, beams, plates and bars, with cash on hand. Headquartered in Tifton, Georgia, Cooksey Steel operates three locations, servicing a diverse range of customers in Georgia, Florida, Alabama and South Carolina.
Previous report
On February 14, 2024, we announced that we had entered into a definitive agreement to acquire American Alloy Steel, Inc. (“American Alloy”) subject to regulatory approval and other customary closing conditions, which have not yet occurred. American Alloy is headquartered in Houston, Texas and is a distributor of specialty carbon and alloy steel plate and round bar, including pressure vessel quality (PVQ) material.
Previous report
Combined unaudited revenues for Cooksey Steel and American Alloy for the twelve months ended December 31, 2023 were approximately $400 million.
Previous report
2021 Acquisitions
Previous report
In the fourth quarter of 2021, we acquired each of United Pipe & Steel Corp. (formerly known as Merfish United, Inc.), Admiral Metals Servicenter Company, Incorporated, Nu-Tech Precision Metals Inc. and Rotax Metals Inc. with cash on hand for a combined transaction value of $440.3 million. Included in our net sales for the year ended December 31, 2023 were combined net sales of $722.1 million from our 2021 acquisitions.
Previous report
We have made significant capital expenditure investments totaling approximately $2.2 billion over the past nine years. These significant investments have expanded our value-added processing capabilities that our managers in the field have successfully leveraged to increase the percentage of our orders with value-added processing, which has significantly contributed to increased gross profit margins compared to our historical range. In 2023 and 2022, we performed value-added processing on approximately 50% to 51% of the orders we shipped, significantly higher than our historical range of 40% to 45%, with a gross profit margin of 30.7% in 2023 that was approximately 400 basis points higher than our historical range of 25% to 27%. For reference, in 2014 and 2013, our value-added processing percentages/gross profit margins were 45%/25.1% and 40%/26.0%, respectively.
Previous report
Our 2023 net sales declined from 2022 record levels due to declines in our average selling price per ton sold that were partially offset by increases in tons sold. The increases in our tons sold were due to healthy demand in our key end markets, including non-residential construction (our largest end market), aerospace, and automotive as well as contributions from our organic growth activities.
Previous report
Our average selling price per ton sold peaked in the second quarter of 2022 and subsequently declined thereafter, including throughout 2023. We believe record metals pricing in 2022 was largely driven by supply chain disruptions caused by the onset of the conflict between Russia and Ukraine, labor supply and microchip shortages, and impacts of the COVID-19 pandemic, including the omicron variant surge and lockdowns in China.
Previous report
Furthermore, cost of sales in 2022 included$8.1 million of non-recurring amortization of inventory step-up to fair value adjustments related to our 2021 acquisitions that decreased gross profit margin by 10 basis points.
Previous report
We were able to achieve stable gross profit margins despite the significantly different metals pricing environments in 2023 and 2022, with our year-over-year average selling price per ton sold declining 16.4% in 2023 compared to an 18.5% increase in 2022. We believe that our gross profit margins are supported by our product diversity, small order sizes, investments in value-added processing capabilities and healthy demand in the majority of end markets we serve.
Previous report
See*“Net Sales”* above for further discussion on product pricing trends.
Previous report
The increase in our SG&A expense in 2023 compared to 2022 was mainly due to higher variable costs associated with an increase in our tons sold, including increased headcount, and inflationary impacts on wages, which were partially offset by lower incentive-based compensation.
Previous report
The decrease in our operating income in 2023 as compared to 2022 was mainly a result of lower gross profit, driven by a lower average selling price per ton sold that outweighed an increase in tons sold, along with moderate increases in volume-related SG&A expenses and inflationary impacts on wages.
Previous report
Our 2023 gross profit margin was generally consistent with 2022 and consequently the decrease in our operating income margin in 2023 from a record level in 2022 was mainly due to lower net sales that decreased operating leverage of our SG&A expense.
Previous report
Our effective income tax rate in 2023 was 23.0%, compared to 24.1% in 2022. The decrease in our effective income tax rate was mainly due to the effects of company-owned life insurance policies and lower income taxes on our foreign earnings.
Previous report
Share Repurchases
Previous report
During the last five years, we reduced our issued and outstanding shares of common stock by 17.6% through the repurchase of approximately 11.8 million shares at an average cost of $154.59 per share, for a total of $1.82 billion.
Reworded paragraphs (40)
Previous wording
Cash flow from operations of $1.67 billion in 2023, also the second highest in our history, decreased from a record $2.12 billion in 2022 due to lower profitability, partially offset by lower working capital needs.
Current wording
Although cash flow from operations of $1.43 billion in 2024 was the third highest in our history, it decreased $241.5 million, or 14.4%, from $1.67 billion in 2023, the second highest in our history, mainly due to lower net income partially offset by lower working capital investment.
Previous wording
Organic growth activities were substantially comprised of capital expenditures of $468.8 million in 2023 compared to $341.8 million in 2022. We also acquired Southern Steel Supply, LLC (“Southern Steel”) in May 2023.
Current wording
Organic growth activities were substantially comprised of capital expenditures of $430.6 million in 2024 compared to $468.8 million in 2023. We also invested $364.6 million in four acquisitions in 2024.
Previous wording
Customer demand can have a significant impact on our results of operations. When volume increases, our revenue dollars generally increase, which contributes to increased gross profit dollars. Conversely, when volume declines, we typically produce fewer revenue dollars, which can reduce our gross profit dollars. Variable costs also increase with volume, primarily our warehouse, delivery, selling, general and administrative expenses. We can reduce certain variable expenses when volumes decline, but we cannot easily reduce our fixed costs.
Current wording
Customer demand has a significant impact on our results of operations. When volume increases, our revenue dollars generally increase, which contributes to increased gross profit dollars. Conversely, when volume declines, we typically produce fewer revenue dollars, which can reduce our gross profit dollars. Variable costs such as certain warehouse, delivery and selling, general and administrative expenses also increase with volume. While we can and do reduce certain variable expenses when volumes decline, we cannot easily reduce our fixed costs.
Previous wording
Pricing for our products generally has a much more significant impact on our results of operations than customer demand levels. As discussed above, our record profitability in 2022 was mainly driven by increases in metals prices to record levels and to a lesser extent the moderate increase in our tons sold. Our revenues generally increase as a result of pricing increases as overall customer demand is not usually impacted by typical mill pricing increases, although customer buying patterns may change. Our selling prices generally increase when the cost of the metals we purchase increase as we are typically able to pass higher prices on to our customers. If prices increase and we maintain the same gross profit percentage, we generate higher levels of gross profit and pretax income dollars for the same operational efforts. Conversely,
Current wording
Pricing for our products generally has a much more significant impact on our results of operations than customer demand. Our revenues generally increase as a result of pricing increases as overall customer demand is not usually impacted by typical mill pricing increases, although customer buying patterns may change. Our selling prices generally increase when the cost of the metals we purchase increase as we are typically able to pass higher metals costs on to our customers. If prices increase and we maintain the same gross profit percentage, we generate higher levels of gross profit and pretax income dollars for the same operational efforts. Conversely, if pricing declines, we will typically generate lower levels of gross profit and pretax income dollars. For more information, seeItem 1A. “Risk Factors”.
Previous wording
In addition, when volume or pricing increases, our working capital requirements typically increase which decreases operating cash flow. Conversely, when customer demand falls, our working capital needs typically decrease which has the effect of increasing operating cash flow.
Current wording
In addition, when volume or pricing increases, our working capital requirements typically increase which decreases operating cash flow. Conversely, when customer demand or pricing falls, our investment in working capital typically decreases which improves operating cash flow.
Previous wording
On May 1, 2023, we acquired Southern Steel with cash on hand. Southern Steel is headquartered in Memphis, Tennessee and offers merchant and structural steel, pipe and tube, steel plate, ornamental products and laser cut and fabricated parts. Included in our net sales for the year ended December 31, 2023 were net sales of $30.6 million from Southern Steel.
Current wording
On May 1, 2023, with cash on hand, we acquired Southern Steel Supply, LLC (“Southern Steel”). Headquartered in Memphis, Tennessee, Southern Steel distributes and processes merchant and structural steel, pipe and tube, steel plate, ornamental products and laser cut and fabricated parts. Southern Steel contributed $36.1 million to our 2024 net sales.
Previous wording
We continued to maintain our focus on internal growth by building new facilities, expanding existing facilities, replacing leased facilities with those we own and adding to our processing capabilities, upgrading processing equipment, improving the safety and energy efficiency of our operations and enhancing the working environments of our employees. Our capital expenditure budgets have been at historically high levels in recent years. Our 2024 capital expenditure budget is approximately $425 million.
Current wording
In 2024, we continued to maintain our focus on internal growth by building new facilities, expanding existing facilities, relocating leased facilities to facilities we own, expanding our processing capabilities and capacity, upgrading processing equipment to increase efficiency, improving the safety and energy efficiency of our operations and enhancing the working environments of our employees. Our capital expenditure budgets have been at historically high levels in recent years and, we believe, significantly contribute to our industry leading financial results. During 2024 and 2023, we spent $430.6 million and $468.8 million on capital expenditures.
Previous wording
We believe that our ability to make significant investments in processing equipment and facilities provides a competitive advantage for us, as we can provide our customers with a higher quality product and expand our services to them. We believe many metals service center company competitors do not have the ability to expand their processing services in response to their customers’ needs as quickly and at the same scale as Reliance.
Current wording
We believe that our ability to make significant investments in processing equipment and facilities is a competitive advantage, as we can expand our services and provide higher quality product to our customers. We believe many metals service center company competitors do not have the ability to expand their processing services in response to their customers’ needs as quickly and at the same scale as Reliance.
Previous wording
The following sets forth certain income statement data for each of the last three years ended December 31, 2023 (dollars are shown in millions, except per share amounts, and certain percentages may not calculate due to rounding):
Current wording
The following sets forth certain income statement data for each of the last three fiscal years (dollars are shown in millions, except per share amounts, and certain percentages may not calculate due to rounding):
Previous wording
Our tons sold and average selling price per ton sold exclude our tons toll processed. Our average selling price per ton sold includes intercompany transactions that are eliminated from our consolidated net sales.
Current wording
Our tons sold and average selling price per ton sold exclude our toll processed tons. Our average selling price per ton sold includes intercompany transactions that are eliminated from our consolidated net sales. Same-store amounts exclude the contributions from our 2024 and 2023 acquisitions.
Previous wording
Since we primarily purchase and sell our inventories in the spot market, our average selling prices generally fluctuate similarly with the changes in the costs of the various metals we purchase; the mix of products sold can also have an impact on our overall average selling price per ton sold. As carbon steel sales represented 53% of our gross sales in 2023, changes in carbon steel prices have the most significant impact on changes in our overall average selling price per ton sold. Year-over-year changes in the selling prices of our major commodity products and related mix of our tons sold are presented below:
Current wording
Since we primarily purchase and sell our inventories in the spot market, our average selling prices generally fluctuate with changes in replacement costs of the various metals we purchase. The mix of products sold can also have an impact on our overall average selling price per ton sold. As carbon steel sales represented 53% of our gross sales in 2024, changes in carbon steel prices have the most significant impact on changes in our overall average selling price per ton sold.
Previous wording
Gross profit in 2023 decreased from 2022 mainly due to lower sales as a result of a decrease in average selling price per ton sold that exceeded the increase in tons sold.
Current wording
Gross profit decreased despite contributions from four acquisitions and an increase in same-store tons sold mainly due to lower net sales as a result of a decrease in average selling price per ton sold.
Previous wording
In addition, we record in cost of sales non-cash adjustments to our LIFO method inventory valuation reserve that, in effect, reflects cost of sales at current replacement costs. The inventory caption of our consolidated balance sheet included a LIFO method inventory valuation reserve of $579.3 million at December 31, 2023.
Current wording
In addition, we record in cost of sales non-cash adjustments to our LIFO method inventory valuation reserve that, in effect, reflects cost of sales at current replacement costs. The inventory caption of our consolidated balance sheet includes a LIFO method inventory valuation reserve of $434.9 million at December 31, 2024.
Previous wording
Our SG&A expense is made up largely of compensation costs (approximately 60-65% historically), which fluctuate based on changes in our headcount levels in response to demand levels and general inflation, and the level of incentive-based compensation.
Current wording
Our SG&A expense is made up largely of compensation costs (approximately 60-65% historically), which fluctuate based on changes in our headcount levels in response to demand and general inflation, and incentive-based compensation.
Previous wording
Our 2023 SG&A expense as a percentage of sales increased compared to 2022 mainly due to lower sales levels.
Current wording
Same-store SG&A expense increased mainly due to higher costs associated with wage inflation and increased headcount related to our organic growth activities offset by lower incentive-based compensation resulting from lower profitability. Our SG&A expense as a percentage of sales increased mainly due to lower sales levels.
Previous wording
The change in other (income) expense, net in 2023 compared to 2022 was mainly due to an increase in interest income as a result of higher cash and cash equivalent balances and interest earned thereon. SeeNote 15—“Other (Income) Expense, Net”to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data" for further information on other (income) expense, net.
Current wording
The change in other income, net was mainly due to a decrease in interest income as a result of lower cash and cash equivalent balances and interest earned thereon. SeeNote 16—“Other (Income) Expense, Net”to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data" for further information on other (income) expense, net.
Previous wording
The difference between our 2023 effective income tax rate and the U.S. federal statutory rate of 21.0% was mainly due to state income taxes partially offset by the effects of company-owned life insurance policies. SeeNote 11—“Income Taxes”** to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data" for further information on the differences between our effective income tax rates and the U.S. federal statutory rate.
Current wording
Our effective income tax rate was 23.0% in 2024 and 2023. The difference between our effective income tax rate and the U.S. federal statutory rate of 21.0% was mainly due to state income taxes partially offset by the net effects of company-owned life insurance policies. SeeNote 12—“Income Taxes”** to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data" for further information on the differences between our effective income tax rates and the U.S. federal statutory rate.
Previous wording
Net cash provided by operations of $1.67 billion in 2023 decreased from $2.12 billion in 2022. The impact of lower profitability on operating cash flow was partially offset by lower working capital needs. To manage our working capital, we focus on our days sales outstanding and on our inventory turnover rate as receivables and inventory are the two most significant elements of our working capital. Our average days sales outstanding rate was 40.5 days in 2023 compared to 39.9 days in 2022. Our inventory turnover rate (based on tons) during 2023 was 4.7 times (or 2.6 months on hand) compared to 4.4 times (or 2.7 months on hand) in 2022.
Current wording
Net cash provided by operations of $1.43 billion in 2024 decreased $241.5 million from $1.67 billion in 2023. The decrease was mainly due to a $462.1 million decline in net income partially offset by lower working capital investment. To manage our working capital, we focus on our days sales outstanding and inventory turnover rate as receivables and inventory are the two most significant elements of our working capital. Our average days sales outstanding rates were 41.5
Previous wording
Income taxes paid were $386.3 million in 2023, a significant decrease from $692.4 million in 2022, mainly due to our lower pretax income.
Current wording
Income taxes paid of $244.9 million in 2024 decreased from $386.3 million in 2023, mainly due to our lower pretax income.
Previous wording
Net cash used in investing activities of $483.9 million in 2023 compared to $348.5 million in 2022 was substantially comprised of capital expenditures and the purchase price for an acquisition in 2023. Capital expenditures were $468.8 million in 2023 compared to $341.8 million in 2022. The majority of our capital expenditures in 2023 and 2022 were related to growth initiatives.
Current wording
Net cash used in investing activities of $803.7 million in 2024 increased $319.8 million compared to $483.9 million in 2023. The significant increase was mainly due to $364.6 million spent on acquisitions in 2024 compared to $24.0 million in 2023, partially offset by a $38.2 million decrease in capital expenditures. The majority of our capital expenditures in 2024 and 2023 were related to growth initiatives.
Previous wording
Net cash used in financing activities was $1.28 billion in 2023 compared to $892.6 million in 2022, mainly due to the redemption of $500.0 million aggregate outstanding principal amount of senior notes in January 2023 offset by decreased share repurchases. In 2023, we repurchased $479.5 million of our common stock, which reduced our common shares 3.2%, compared to $630.3 million of share repurchases in 2022. Our other stockholder returns in 2023 included an increase in our quarterly dividend rate of 14.3% with total dividend payments of $238.1 million compared to $217.1 million in 2022.
Current wording
Net cash used in financing activities of $1.38 billion in 2024 increased $94.1 million from $1.28 billion in 2023. The increase was mainly the result of increased share repurchases partially offset by decreased net debt repayments. Net debt repayments were $0.3 million in 2024 compared to $508.3 million in 2023, which included the redemption of $500.0 million of senior notes. In 2024, we repurchased a record $1.09 billion of our common stock compared to $479.5 million in 2023. Our returns to stockholders also included a 10% increase in our quarterly dividend rate in February 2024 with total dividend payments of $249.7 million in 2024 compared to $238.1 million in 2023.
Previous wording
We have paid regular quarterly dividends to our stockholders for 64 consecutive years and increased the quarterly dividend on our common stock 31 times since our IPO in 1994, with the most recent increase of 10.0% from $1.00 per share to $1.10 per share effective in the first quarter of 2024. We have never reduced or suspended our regular quarterly dividend.
Current wording
We have paid regular quarterly dividends to our stockholders for 65 consecutive years and increased the quarterly dividend on our common stock 32 times since our 1994 IPO, with the most recent increase of 9.1% from $1.10 per share to $1.20 per share effective in the first quarter of 2025. We have never reduced or suspended our regular quarterly dividend.
Previous wording
SeeNote 14—“Equity” to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data" for further information on our 2023 share repurchases.
Current wording
SeeNote 15—“Equity” to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data" for information on our share repurchases.
Previous wording
On October 24, 2023, our Board of Directors renewed our share repurchase program to increase the remaining repurchase authorization to $1.5 billion effective October 30, 2023. As of December 31, 2023, we had remaining authorization under the plan to repurchase $1.44 billion of shares of our common stock. The share repurchase program does not obligate us to repurchase any specific number of shares, does not have a specific expiration date and may be suspended or discontinued at any time.
Current wording
On October 22, 2024, our Board of Directors amended our share repurchase program to replenish the repurchase authorization to $1.5 billion. As of February 25, 2025, we had remaining authorization under the plan to repurchase$1.15 billion of our common stock. The share repurchase program does not obligate us to repurchase any specific number of shares in any prescribed period, does not have a specific expiration date and may be suspended or discontinued at any time.
Previous wording
We had $235.1 million of operating lease obligations as of December 31, 2023 for processing and distribution facilities, equipment, automobiles, trucks and trailers, ground leases and other leased spaces, such as depots, sales offices, storage and data centers. Our expected payments over the next 12 months under these operating leases are $64.9 million. SeeNote 10—“Leases” to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data" for information regarding the maturities of our operating lease obligations.
Current wording
We had $275.6 million of operating lease obligations as of December 31, 2024, for processing and distribution facilities, equipment, automobiles, trucks and trailers, ground leases and other leased spaces, such as depots, sales offices, storage and data centers. Our expected payments over the next 12 months under these operating leases are $72.5 million. SeeNote 11—“Leases” to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data" for information regarding the maturities of our operating lease obligations.
Previous wording
We have obligations pursuant to pension and postretirement benefit plans. A total of $16.4 million of net liabilities was recognized on the balance sheet at December 31, 2023 and the Company expects to make plan contributions and benefit payments totaling $0.8 million over the next 12 months. SeeNote 13—“Employee Benefits” to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data" for information regarding our expected payments under these plans.
Current wording
We have obligations pursuant to pension and postretirement benefit plans. A total of $10.7 million of net liabilities was recognized on the balance sheet at December 31, 2024 and the Company expects to make plan contributions of $0.8 million during 2025. SeeNote 14—“Employee Benefits” to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data" for information regarding our expected payments under these plans.
Previous wording
Our capital expenditures have been at elevated levels in recent years and our 2024 capital expenditure budget is $425 million. As of December 31, 2023, we had entered into contracts related to capital expenditures in the amount of $126.3 million, of which $111.1 million is expected to be paid over the next 12 months. Our actual capital expenditure spending over the next 12 months is ultimately dependent on market conditions, lead times and availability of property, plant and equipment when the capital project is initiated.
Current wording
As of December 31, 2024, we had entered into contracts related to capital expenditures in the amount of $97.7 million, of which $91.4 million is expected to be paid over the next 12 months. Our actual capital expenditure spending over the next 12 months is ultimately dependent on market conditions, lead times and availability of property, plant and equipment when the capital project is initiated.
Previous wording
We primarily purchase and sell in the spot market and consequently our purchase orders are based on our current needs and are typically fulfilled by our vendors within short time periods (lead times). In addition, some of our purchase orders represent authorizations to purchase rather than binding agreements. We do not have significant agreements for the purchase of goods specifying minimum quantities and set prices that exceed our expected requirements for three months. The total amount of commitments under long-term inventory purchase agreements is estimated at approximately $301.4 million, with amounts in 2024, 2025 and thereafter being $195.7 million, $54.7 million and $51.0 million, respectively.
Current wording
We primarily purchase and sell in the spot market and consequently our purchase orders are based on our current needs and are typically fulfilled by our vendors within short time periods (lead times). In addition, some of our purchase orders represent authorizations to purchase rather than binding agreements. We do not have significant agreements for the purchase of goods specifying minimum quantities and set prices that exceed our expected requirements for three months. The total amount of commitments under long-term inventory purchase agreements is estimated at approximately $276.2 million, with amounts in 2025, 2026 and thereafter being $193.4 million, $57.2 million and $25.6 million, respectively.
Previous wording
We have other contractual commitments under long-term service agreements, totaling $24.6 million at December 31, 2023, with amounts in 2024, 2025 and thereafter being $12.9 million, $6.9 million and $4.8 million, respectively.
Current wording
We have other contractual commitments under long-term service agreements, totaling $74.6 million at December 31, 2024, with amounts in 2025, 2026 and thereafter being $25.8 million, $22.1 million and $26.7 million, respectively.
Previous wording
We have a $1.5 billion unsecured revolving credit facility with no outstanding borrowings at December 31, 2023 under our Amended and Restated Credit Agreement (as amended, the “Credit Agreement”). We also had an aggregate of $1.15 billion principal amount of senior unsecured note obligations with various maturities through 2036 issued under indentures as of December 31, 2023.
Current wording
On September 10, 2024, we entered into a $1.5 billion unsecured five-year Second Amended and Restated Credit Agreement (“Credit Agreement”) that amended and restated our then-existing $1.5 billion unsecured revolving credit facility. There was no outstanding balance under our revolving credit facility at December 31, 2024 and 2023. We also had an aggregate of $1.15 billion principal amount of senior unsecured note obligations with various maturities through 2036 issued under indentures as of December 31, 2024.
Previous wording
We believe our primary sources of liquidity, including funds generated from operations, cash and cash equivalents and our Credit Agreement, will be sufficient to satisfy our cash requirements and stockholder return activities over the next 12 months and beyond. As of December 31, 2023, we had $1.1 billion in cash and cash equivalents and our net debt-to-total capital ratio (net debt-to-total capital is calculated as carrying amount of debt, net of cash, divided by total Reliance stockholders’ equity plus carrying amount of debt, net of cash) was 0.8%, down from 6.3% as of December 31, 2022.
Current wording
We believe our primary sources of liquidity, including funds generated from operations, cash and cash equivalents and our $1.5 billion revolving credit facility, will be sufficient to satisfy our cash requirements and stockholder return activities over the next 12 months and beyond. As of December 31, 2024, we had $318.1 million in cash and cash equivalents and our net debt-to-total capital ratio (net debt-to-total capital is calculated as carrying amount of debt, net of cash, divided by total Reliance stockholders’ equity plus carrying amount of debt, net of cash) was 10.2%.
Previous wording
As of December 31, 2023, we had $400.3 million of debt obligations coming due before our Credit Agreement matures on September 3, 2025.
Current wording
As of December 31, 2024, we had $401.1 million of debt obligations coming due before our $1.5 billion unsecured revolving credit facility matures on September 10, 2029, including $400.0 million of senior notes due in August 2025.
Previous wording
We believe that we will continue to have sufficient liquidity to fund our future operating needs and to repay our debt obligations as they become due. In addition to funds generated from operations and approximately $1.5 billion available under our revolving credit facility, we expect to continue to be able to access the capital markets to raise funds, if desired. We believe our sources of liquidity will continue to be adequate to maintain operations, make necessary capital expenditures, finance strategic growth through acquisitions and internal initiatives, pay dividends and repurchase shares. Additionally, we believe our investment grade credit ratings enhance our ability to effectively raise capital, if desired.
Current wording
We believe that we will continue to have sufficient liquidity to fund our future operating needs and to repay our debt obligations as they become due. In addition to funds generated from operations and approximately $1.5 billion available under our unsecured revolving credit facility, we expect to continue to be able to access the capital markets to raise funds, if desired. We believe our investment grade credit ratings enhance our ability to effectively raise capital. We believe our sources of liquidity will continue to be adequate to maintain operations, make necessary capital expenditures, finance strategic growth through acquisitions and internal initiatives, pay dividends and repurchase our common stock.
Previous wording
The Credit Agreement and indentures governing our debt securities include customary representations, warranties, covenants and events of default provisions. The covenants under the Credit Agreement include, among other things, two financial maintenance covenants that require us to comply with a minimum interest coverage ratio and a maximum leverage ratio. Our interest coverage ratio for the twelve-month period ended December 31, 2023 was 45.9 times compared to the debt covenant minimum requirement of 3.0 times (interest coverage ratio is calculated as earnings before interest and taxes (“EBIT”), as defined in the Credit Agreement, divided by interest expense). Our leverage ratio as of December 31, 2023, calculated in accordance with the terms of the Credit Agreement, was 11.4% compared to the debt covenant maximum amount of 60% (leverage ratio is calculated as total debt, inclusive of finance lease obligations and outstanding letters of credit, minus the lesser of cash held by our domestic subsidiaries and $200.0 million, divided by Reliance stockholders’ equity plus total debt).
Current wording
The Credit Agreement and indentures governing our debt securities include customary representations, warranties, covenants and events of default provisions. The covenants under the Credit Agreement include, among other things, a financial maintenance covenant that requires us to comply with a maximum total net leverage ratio. As of December 31, 2024, our total net leverage ratio, calculated in accordance with the Credit Agreement, was 13% compared to the debt covenant maximum of 60%.
Previous wording
We were in compliance with all financial maintenance covenants under our Credit Agreement at December 31, 2023.
Current wording
We were in compliance with the financial maintenance covenant under our Credit Agreement at December 31, 2024.
Previous wording
Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to $2.11 billion at December 31, 2023, or approximately 20% of total assets and 27% of total equity. Additionally, other intangible assets, net amounted to $1.0 billion at December 31, 2023, or approximately 9% of total assets and 13% of total equity. Goodwill and other intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment testsand further evaluation when certain events occur. Other intangible assets with finite useful lives are amortized over their useful lives. We review the recoverability of our long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Refer toCritical Accounting Estimates for further information regarding judgments involved in testing for recoverability of our goodwill and other intangible assets.
Current wording
Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to $2.16 billion at December 31, 2024, or approximately 22% of total assets and 30% of total equity. Additionally, other intangible assets, net amounted to $1.01 billion at December 31, 2024, or approximately 10% of total assets and 14% of total equity. Goodwill and other intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment testsand further evaluation when certain events occur. Other intangible assets with finite useful lives are amortized over their useful lives. We review the recoverability of our long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Refer toCritical Accounting Estimates for further information regarding judgments involved in testing for recoverability of our goodwill and other intangible assets.
Previous wording
required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of our accounting policies are critical due to the fact that they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Our most critical accounting estimates include those related to the recoverability of goodwill and other indefinite-lived intangible assets and long-lived assets. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.
Current wording
Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The Company’s significant accounting policies, including recently issued accounting pronouncements, are fully described inNote 1—“Summary of Significant Accounting Policies” to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data.” When we prepare these consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of our accounting policies are critical due to the fact that they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Our most critical accounting estimates include those related to the recoverability of goodwill and other indefinite-lived intangible assets and long-lived assets. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.
Previous wording
We test for impairment of goodwill and intangible assets deemed to have indefinite lives annually and, between annual tests, whenever significant events or changes occur based on an assessment of qualitative factors to determine if it is more likely than not that the fair value is less than the carrying value. The qualitative factors we review include a decline in our stock price and market capitalization, a decline in the market conditions of our products and viability of end markets, and developments in our business and the overall economy. We make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets, including calculating the fair value of a reporting unit using the discounted cash flow method, as necessary. We perform the required annual goodwill and indefinite-lived intangible asset impairment test as of November 1 of each year. No impairment of goodwill was determined to exist during the periods presented in the consolidated financial statements. We recorded $4.7 million of impairment losses on our intangible assets with indefinite lives in 2021. No impairment of intangible assets with indefinite lives was recognized in 2023 and 2022.
Current wording
We annually test for impairment of goodwill and intangible assets deemed to have indefinite lives and, between annual tests, whenever significant events or changes occur based on an assessment of qualitative factors to determine if it is more likely than not that the fair value is less than the carrying value. The qualitative factors we review include a decline in our stock price and market capitalization, a decline in the market conditions of our products and viability of end markets, and developments in our business and the overall economy. We make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets, including calculating the fair value of a reporting unit using the discounted cash flow method, as necessary. We perform the required annual goodwill and indefinite-lived intangible asset impairment test as of November 1 of each year. No impairment of goodwill was determined to exist during the periods presented in the consolidated financial statements. In 2024, we recorded an $11.2 million impairment loss on a trade name intangible asset with an indefinite life. No impairment of intangible assets with indefinite lives was recognized in 2023 and 2022. SeeNote 8—“Intangible Assets, Net” of*Part II, Item 8 “Financial Statements and Supplementary Data”*for further details of our impairment loss.
Previous wording
We periodically review the recoverability of our other long-lived assets, primarily property, plant and equipment and intangible assets subject to amortization. The evaluation is performed at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other assets. An impairment loss may be recognized if the estimated undiscounted cash flows are less than the carrying amount of the assets. We must make assumptions regarding estimated future cash flows and other factors to estimate the fair value of the respective assets to determine the amount of the impairment loss. If these estimates or their related assumptions change in the future, we may be required to record impairment charges. No impairment of long-lived assets was recognized during the periods presented in the consolidated financial statements.
Current wording
We periodically review the recoverability of our other long-lived assets, primarily property, plant and equipment and intangible assets subject to amortization. The evaluation is performed at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other assets. An impairment loss may be recognized if the estimated undiscounted cash flows are less than the carrying amount of the assets. We must make assumptions regarding estimated future cash flows and other factors to estimate the fair value of the respective assets to determine the amount of the impairment loss. If these estimates or their related assumptions change in the future, we may be required to record
Previous wording
Impairment tests inherently involve judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Additionally, considerable declines in the market conditions for our products from current levels as well as in the price of our common stock could also significantly impact our impairment analyses. An impairment charge, if incurred, could be material.
Current wording
Impairment tests inherently involve judgments as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Additionally, considerable declines in the market conditions for our products from current levels as well as in the price of our common stock could also significantly impact our impairment analyses. An impairment charge, if incurred, could be material.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The mix of our total sales by major commodity products and year-over-year changes in selling prices are presented below:
Current report — wording carried from elsewhere
Our 2024 acquisitions did not significantly impact the selling prices of our major commodity products.
Current report — wording carried from elsewhere
days and 40.5 days in 2024 and 2023, respectively. Our inventory turnover rate (based on tons) during 2024 was 4.6 times (or 2.6 months on hand) compared to 4.7 times (or 2.6 months on hand) in 2023.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
if pricing declines, we will typically generate lower levels of gross profit and pretax income dollars. For more information, seeItem 1A. “Risk Factors”.
Previous report — wording carried elsewhere
Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The Company’s significant accounting policies, including recently issued accounting pronouncements, are fully described inNote 1—“Summary of Significant Accounting Policies” to our consolidated financial statements inPart II, Item 8 "Financial Statements and Supplementary Data.” When we prepare these consolidated financial statements, we are