Reliance Steel & Aluminum Co. 2008 Fourth Quarter Update
Posted by anzhuo on January 11th, 2016
Reliance Steel & Aluminum Co. RS announced last Friday that it is updating its outlook on current business conditions impacting its fourth quarter ending December 31, 2008. Reliance’s Chairman of the Board and Chief Executive Officer, David H. Hannah, said, “In our October 16, 2008 third quarter financial results conference call we stated that we were not comfortable providing earnings guidance for the 2008 fourth quarter because of the widespread uncertainty regarding the economy going forward. We further stated that we expected the business climate to be difficult over the next couple of quarters and that during the course of the quarter, we would communicate any meaningful information regarding our operations as it becomes available. We still are not comfortable providing earnings guidance, but our October results were solidly profitable and stronger than we had anticipated given the state of the economy. October sales were 8.2 million, our second highest monthly amount ever, with our tons sold per day down only 1.7% in October from September levels and our average selling price per ton down only 3.8%. Our FIFO gross profit margin deteriorated by 2.2% in October compared to September.” Hannah further commented that, “Through the first two weeks of November, the operating environment has worsened from October levels. Mill price decreases have accelerated and have been more substantial than in October, leading us to further reduce prices to our customers and causing our customers to significantly curtail their purchasing as economic uncertainty persists.
This has caused further deterioration in our gross profit margins as well as our operating income and net income amounts. However, the lower inventory costs and demand levels have allowed us to significantly reduce our working capital, which, along with our continued profitable operations, is producing a substantial amount of positive cash flow. We reduced our FIFO inventory levels during the month of October by 0 million. Also in the month of October, we reduced our borrowings on our credit facility by 7 million and through November 18, 2008 we had further reduced our borrowings by million. As of November 18, 2008, we had 0 million outstanding on our .1 billion syndicated credit facility. We are comfortable with our current liquidity position. “Please note that through the nine months ended September 30, 2008, we had already surpassed our previous full year records for net income and earnings per share. However, there remains significant uncertainty as to pricing and demand for the remainder of 2008. In light of the current conditions we expect to continue to reduce our inventories, reduce our expenses, and use our free cash flow to pay down debt. We have successfully managed through challenging business conditions in the past, and expect to do so again,” said Hannah. The Company will announce its financial results for the fourth quarter and twelve months ended December 31, 2008, on Thursday, February 19, 2009 prior to the opening of the New York Stock Exchange and will host a conference call web cast that same day at 11:00 a.m. Eastern Time at: www.rsac.com/investorinformation. Reliance Steel & Aluminum Co., headquartered in Los Angeles, California, is the largest metals service center company in North America. Through a network of more than 200 locations in 39 states and Belgium, Canada, China, Mexico, Singapore, South Korea and the United Kingdom, the Company provides value-added metals processing services and distributes a full line of over 100,000 metal products to more than 125,000 customers in a broad range of industries. Reliance Steel & Aluminum Co.’s press releases and additional information are available on the Company’s web site atwww.rsac.com. The Company was named to the 2008 “Fortune 500” List, the Fortune 2008 List of “America’s Most Admired Companies” the 2008 Forbes“America’s Best Managed Companies” List, the 2008 Forbes “Platinum 400 List of America’s Best Big Companies” and the 2008 Fortune “100 Fastest Growing Companies” List.
This release may contain forward-looking statements. Actual results and events may differ materially as a result of a variety of factors, many of which are outside of Reliance Steel & Aluminum Co.’s control. Risk factors and additional information are included in Reliance Steel & Aluminum Co.’s reports on file with the Securities and Exchange Commission, including Reliance Steel & Aluminum Co.’s Annual Report on Form 10-K for the year ended December 31, 2007, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2008, June 30, 2008 and September 30, 2008.
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