LOS ANGELES--Reliance Steel & Aluminum Co. reported today its financial results for the first quarter ended March 31, 2007. For the 2007 first quarter, net income was a record $111.7 million, up 55% compared with net income of $71.9 million for the 2006 first quarter. Earnings per diluted share were a record $1.46 for the 2007 first quarter, compared with $1.07 for the 2006 first quarter. 2007 first quarter sales were $1.84 billion, an increase of 86% compared with 2006 first quarter sales of $988 million. The 2007 first quarter financial results include in cost of sales a pre-tax LIFO expense amount of $18.8 million, or $.15 per diluted share, compared with a pre-tax LIFO expense amount of $5.0 million, or $.05 per diluted share in the 2006 first quarter. All share and per share amounts have been adjusted for the two-for-one common stock split effective July 19, 2006.
David H. Hannah, Chief Executive Officer of Reliance said, "We are very pleased with our 2007 first quarter results. Overall, customer demand was steady throughout the quarter at what we consider to be a healthy level. Our first quarter performance, as compared to 2006, was most significantly impacted by our 2006 and 2007 acquisitions that represented over $750 million of revenue in the 2007 first quarter."
"During the quarter, we completed three acquisitions. They include the Encore Group of metals service center companies (Encore Metals, Encore Metals (USA), Inc., Encore Coils, and Team Tube in Canada) headquartered in Edmonton, Alberta, Canada; Crest Steel Corporation, a metals service center company headquartered in Carson, CA and Industrial Metals and Surplus, Inc. a metals service center company headquartered in Atlanta, GA and a related company, Athens Steel, Inc. located in Athens, GA," Hannah said.
"We also managed our working capital well during the quarter that ended with net debt-to-total capital at 40.6%. Operating cash flow was strong at about $71 million, up 72% from the 2006 first quarter. In April of 2007, we exchanged the $600 million of notes that were issued in November of 2006 for publicly traded notes registered with the Securities and Exchange Commission," added Hannah.
"We believe that our major markets including aerospace, energy, non-residential construction, electronics and semiconductors, as well as rail car and ship building will continue to grow, but at a slower rate than in 2006. Additionally, we do not expect our costs and pricing to change significantly as the year progresses. As a result, we expect record sales and earnings in 2007 and currently estimate earnings per diluted share for the 2007 second quarter in a range of $1.45 to $1.55," Hannah concluded.
On February 14, 2007, the Board of Directors declared a 33% increase in the regular quarterly cash dividend to $.08 per share of common stock. The 2007 first quarter dividend was paid on March 30 to shareholders of record March 9. The Company has paid regular quarterly dividends for 47 consecutive years.
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