Reliance Steel & Aluminum Co. (RS, Financial) filed Quarterly Report for the period ended 2010-09-30.
Reliance Steel & Aluminum Co. has a market cap of $3.37 billion; its shares were traded at around $45.99 with a P/E ratio of 13.5 and P/S ratio of 0.6. The dividend yield of Reliance Steel & Aluminum Co. stocks is 1%. Reliance Steel & Aluminum Co. had an annual average earning growth of 21.8% over the past 10 years. GuruFocus rated Reliance Steel & Aluminum Co. the business predictability rank of 3.5-star.RS is in the portfolios of Robert Rodriguez of FPA Capital, First Pacific Advisors of First Pacific Advisors, LLC, Chuck Royce of Royce& Associates, NWQ Managers of NWQ Investment Management Co, Paul Tudor Jones of The Tudor Group, David Dreman of Dreman Value Management, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC.
Our LIFO reserve adjustment, which is included in our cost of sales and, in effect, reflects cost of sales at current replacement costs, resulted in a charge, or expense, of $9.8 million in the 2010 third quarter compared to a credit, or income, of $67.5 million in the 2009 third quarter. Our LIFO reserve adjustment in the 2010 nine-month period resulted in a charge, or expense of $24.8 million compared to a credit, or income, of $217.5 million in the 2009 nine-month period.
Gross Profit. Our gross profit increased 11.1% to $396.2 million for the 2010 third quarter, compared to $356.5 million in the 2009 third quarter. Our gross profit as a percentage of sales in the 2010 third quarter was 24.0%, compared to 28.7% in the 2009 third quarter, and 25.7% in the 2010 second quarter. Total gross profit increased 19.8% to $1.19 billion for the 2010 nine-month period compared to $993.8 million in the 2009 nine-month period. Our gross profit as a percentage of sales in the 2010 nine-month period was 25.2% compared to 24.6% in the 2009 nine-month period.
Operating Income. Our 2010 third quarter operating income was $88.2 million, resulting in an operating income margin of 5.3%, compared to $74.3 million, or a 6.0% operating income margin in the 2009 third quarter. Our 2010 nine-month period operating income was $282.6 million, resulting in an operating income margin of 6.0%, compared to $127.7 million, or a 3.2% operating income margin in the same period of 2009. The higher gross profit generated on higher sales offset by only moderate increases in S,G&A expenses increased our operating income in 2010.
Our primary sources of liquidity are generally our internally generated funds from operations and our $1.1 billion revolving credit facility. In the 2010 nine-month period, we generated cash from operations of $47.7 million, compared to generating $807.2 million of cash from operations in the same period of 2009. Our outstanding debt at September 30, 2010 was $1.10 billion, up from $935.8 million at December 31, 2009. At September 30, 2010, we had $270.0 million outstanding on our $1.1 billion revolving credit facility, which included borrowings for our acquisition that closed on October 1, 2010. This also resulted in a higher than normal cash balance at September 30, 2010.
We also had two separate revolving credit facilities for operations in Canada with a combined credit limit of CAD$35.0 million as of December 31, 2009. In January 2010, the Canadian credit facilities were combined into one unsecured facility with a credit limit of CAD$5.0 million. There were no borrowings outstanding on these revolving credit facilities as of September 30, 2010 or December 31, 2009. Various other separate revolving credit facilities are in place for our operations in Asia and Europe with total combined outstanding balances of $12.6 million and $8.1 million at September 30, 2010 and December 31, 2009, respectively.
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Reliance Steel & Aluminum Co. has a market cap of $3.37 billion; its shares were traded at around $45.99 with a P/E ratio of 13.5 and P/S ratio of 0.6. The dividend yield of Reliance Steel & Aluminum Co. stocks is 1%. Reliance Steel & Aluminum Co. had an annual average earning growth of 21.8% over the past 10 years. GuruFocus rated Reliance Steel & Aluminum Co. the business predictability rank of 3.5-star.RS is in the portfolios of Robert Rodriguez of FPA Capital, First Pacific Advisors of First Pacific Advisors, LLC, Chuck Royce of Royce& Associates, NWQ Managers of NWQ Investment Management Co, Paul Tudor Jones of The Tudor Group, David Dreman of Dreman Value Management, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC.
Highlight of Business Operations:
Cost of Sales. In the three months ended September 30, 2010, our cost of sales increased 41.8% to $1.26 billion compared to $886.9 million for the three months ended September 30, 2009. In the nine months ended September 30, 2010, our cost of sales increased 15.9% to $3.54 billion from $3.05 billion for the nine months ended September 30, 2009. The increases in cost of sales in the 2010 three- and nine-month periods are due to increases in tons sold as well as increased costs for most products we sell (see Net Sales above for trends in the costs of our products) from the same periods in 2009.Our LIFO reserve adjustment, which is included in our cost of sales and, in effect, reflects cost of sales at current replacement costs, resulted in a charge, or expense, of $9.8 million in the 2010 third quarter compared to a credit, or income, of $67.5 million in the 2009 third quarter. Our LIFO reserve adjustment in the 2010 nine-month period resulted in a charge, or expense of $24.8 million compared to a credit, or income, of $217.5 million in the 2009 nine-month period.
Gross Profit. Our gross profit increased 11.1% to $396.2 million for the 2010 third quarter, compared to $356.5 million in the 2009 third quarter. Our gross profit as a percentage of sales in the 2010 third quarter was 24.0%, compared to 28.7% in the 2009 third quarter, and 25.7% in the 2010 second quarter. Total gross profit increased 19.8% to $1.19 billion for the 2010 nine-month period compared to $993.8 million in the 2009 nine-month period. Our gross profit as a percentage of sales in the 2010 nine-month period was 25.2% compared to 24.6% in the 2009 nine-month period.
Operating Income. Our 2010 third quarter operating income was $88.2 million, resulting in an operating income margin of 5.3%, compared to $74.3 million, or a 6.0% operating income margin in the 2009 third quarter. Our 2010 nine-month period operating income was $282.6 million, resulting in an operating income margin of 6.0%, compared to $127.7 million, or a 3.2% operating income margin in the same period of 2009. The higher gross profit generated on higher sales offset by only moderate increases in S,G&A expenses increased our operating income in 2010.
Our primary sources of liquidity are generally our internally generated funds from operations and our $1.1 billion revolving credit facility. In the 2010 nine-month period, we generated cash from operations of $47.7 million, compared to generating $807.2 million of cash from operations in the same period of 2009. Our outstanding debt at September 30, 2010 was $1.10 billion, up from $935.8 million at December 31, 2009. At September 30, 2010, we had $270.0 million outstanding on our $1.1 billion revolving credit facility, which included borrowings for our acquisition that closed on October 1, 2010. This also resulted in a higher than normal cash balance at September 30, 2010.
We also had two separate revolving credit facilities for operations in Canada with a combined credit limit of CAD$35.0 million as of December 31, 2009. In January 2010, the Canadian credit facilities were combined into one unsecured facility with a credit limit of CAD$5.0 million. There were no borrowings outstanding on these revolving credit facilities as of September 30, 2010 or December 31, 2009. Various other separate revolving credit facilities are in place for our operations in Asia and Europe with total combined outstanding balances of $12.6 million and $8.1 million at September 30, 2010 and December 31, 2009, respectively.
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