Reliance Steel & Aluminum Co President & Chief Executive Officer Mr Jim Hoffman said “Our resilient business model, favorable metal pricing trends and excellent execution combined to produce another quarter of record-setting financial results. The favorable pricing environment along with fundamentally strong underlying demand in many of the key end markets we serve drove record quarterly net sales of USD 3.85 billion. In addition, strict pricing discipline by our managers in the field helped us generate a strong gross profit margin of 31.5% which, when combined with our record sales, generated record quarterly gross profit dollars of USD 1.21 billion in the third quarter of 2021. Our continued focus on expense control led to a third consecutive quarter of record quarterly pretax income of USD 532.6 million.”Reliance services diverse end markets and provides a wide range of products and processing services, generally in small quantities on a when-needed basis. During the third quarter of 2021, the Company’s tons sold decreased 4.6% compared to the second quarter of 2021, generally in line with the typical third quarter seasonal decline, but below Reliance’s expectations of down 1% to up 1% due to various factors hindering economic activity such as continued supply disruptions, including limited metal availability, and labor shortages experienced by Reliance, its customers and its suppliers. The Company continues to believe underlying demand is stronger than its third quarter shipment levels reflect which bodes well for demand levels into 2022.Demand in non-residential construction (including infrastructure), Reliance’s largest end market, remained at solid levels after reaching pre-pandemic levels during the second quarter of 2021. Reliance is optimistic that demand for non-residential construction activity in the key areas in which the Company participates will continue to steadily improve through the remainder of 2021 and into 2022 based on healthy backlogs and solid quoting activity, positive customer sentiment and favorable key industry indicators.Demand for the toll processing services Reliance provides to the automotive market fell slightly from the prior quarter. However, the Company believes underlying demand is stronger than its third quarter trends reflect due to the continued impact of the global microchip shortage on production levels in certain automotive markets, which was partly offset by solid performance related to Reliance’s recent facility expansions in Indiana, Kentucky, Michigan and Texas. Reliance is cautiously optimistic that demand for its toll processing services will improve in 2022 and maintains its positive long-term outlook for this end market.Underlying demand in heavy industry for both agricultural and construction equipment remains strong. Reliance shipments declined in the third quarter compared to the prior quarter due to higher than anticipated seasonal shutdowns at many customers along with broad customer supply chain disruptions and labor constraints. Nevertheless, the Company’s third quarter shipments exceeded pre-pandemic levels. Reliance expects the strong underlying demand in the heavy equipment and manufacturing industries to continue into 2022.Semiconductor demand remains strong with Reliance’s third quarter shipments somewhat impacted by global supply chain issues, and Reliance expects strong demand to continue through 2022.Demand in commercial aerospace was impacted by normal seasonal factors, especially in Europe. Reliance is cautiously optimistic that demand in commercial aerospace will slowly improve throughout 2022 as build rates are increasing and excess inventory in the supply chain continues to decline. Demand in the military, defense and space portions of Reliance’s aerospace business remains solid with strong backlogs, and continued to exceed pre-pandemic levels. The Company anticipates strong demand in the non-commercial aerospace market will continue into 2022.Demand in the energy (oil and natural gas) market continued its slow improvement in the third quarter due to increased activity driven by higher oil and natural gas prices. Reliance is cautiously optimistic demand will continue to improve at modest levels for this end market into 2022.
Reliance Steel & Aluminum Co President & Chief Executive Officer Mr Jim Hoffman said “Our resilient business model, favorable metal pricing trends and excellent execution combined to produce another quarter of record-setting financial results. The favorable pricing environment along with fundamentally strong underlying demand in many of the key end markets we serve drove record quarterly net sales of USD 3.85 billion. In addition, strict pricing discipline by our managers in the field helped us generate a strong gross profit margin of 31.5% which, when combined with our record sales, generated record quarterly gross profit dollars of USD 1.21 billion in the third quarter of 2021. Our continued focus on expense control led to a third consecutive quarter of record quarterly pretax income of USD 532.6 million.”Reliance services diverse end markets and provides a wide range of products and processing services, generally in small quantities on a when-needed basis. During the third quarter of 2021, the Company’s tons sold decreased 4.6% compared to the second quarter of 2021, generally in line with the typical third quarter seasonal decline, but below Reliance’s expectations of down 1% to up 1% due to various factors hindering economic activity such as continued supply disruptions, including limited metal availability, and labor shortages experienced by Reliance, its customers and its suppliers. The Company continues to believe underlying demand is stronger than its third quarter shipment levels reflect which bodes well for demand levels into 2022.Demand in non-residential construction (including infrastructure), Reliance’s largest end market, remained at solid levels after reaching pre-pandemic levels during the second quarter of 2021. Reliance is optimistic that demand for non-residential construction activity in the key areas in which the Company participates will continue to steadily improve through the remainder of 2021 and into 2022 based on healthy backlogs and solid quoting activity, positive customer sentiment and favorable key industry indicators.Demand for the toll processing services Reliance provides to the automotive market fell slightly from the prior quarter. However, the Company believes underlying demand is stronger than its third quarter trends reflect due to the continued impact of the global microchip shortage on production levels in certain automotive markets, which was partly offset by solid performance related to Reliance’s recent facility expansions in Indiana, Kentucky, Michigan and Texas. Reliance is cautiously optimistic that demand for its toll processing services will improve in 2022 and maintains its positive long-term outlook for this end market.Underlying demand in heavy industry for both agricultural and construction equipment remains strong. Reliance shipments declined in the third quarter compared to the prior quarter due to higher than anticipated seasonal shutdowns at many customers along with broad customer supply chain disruptions and labor constraints. Nevertheless, the Company’s third quarter shipments exceeded pre-pandemic levels. Reliance expects the strong underlying demand in the heavy equipment and manufacturing industries to continue into 2022.Semiconductor demand remains strong with Reliance’s third quarter shipments somewhat impacted by global supply chain issues, and Reliance expects strong demand to continue through 2022.Demand in commercial aerospace was impacted by normal seasonal factors, especially in Europe. Reliance is cautiously optimistic that demand in commercial aerospace will slowly improve throughout 2022 as build rates are increasing and excess inventory in the supply chain continues to decline. Demand in the military, defense and space portions of Reliance’s aerospace business remains solid with strong backlogs, and continued to exceed pre-pandemic levels. The Company anticipates strong demand in the non-commercial aerospace market will continue into 2022.Demand in the energy (oil and natural gas) market continued its slow improvement in the third quarter due to increased activity driven by higher oil and natural gas prices. Reliance is cautiously optimistic demand will continue to improve at modest levels for this end market into 2022.
