Reliance Steel Aluminum Co.: Down But Not Out
Source: http://feedproxy.google.com/~r/bullishbankers/~3/CqrEwjY9epY/Posted on Sunday, June 21st, 2009 | In Financial, Market Commentary
“Reliance Steel & Aluminum Co. [RS: 39.95, -0.05 (-0.12%)] is one of the largest metals service center companies in the United States. Though a network of more than 200 locations in 38 states, 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 more than 100,000 metal products. These products include galvanized, hot-rolled and cold-finished steel, stainless steel, aluminum, brass, copper, titanium and alloy steel sold to more than 125,000 customers in a broad range of industries. Some of these metal service centers provide processing services for specialty metals only.”
The challenge for Reliance, and all other metal service centers, is that lower demand for steel and aluminum is expected to continue through the first half of 2009. Perhaps, we will see the beginnings of a pick-up in demand by the end of the year. Data for the first six months is not available yet. However, it seems that pricing for some types of steel may have bottomed out in the first quarter while pricing for other metals has stabilized. There is a disconnect between selling prices and the spot market price of metals. Pricing will remain weak until the overall economy shows signs of recovery.
| Financial Statements | TTM | 12/2008 | 12/2007 | 12/2006 | 12/2005 | 12/2004 |
| Sales ($M) | 8,369.2 | 8,718.8 | 7,255.7 | 5,742.6 | 3,370.7 | 2,947.2 |
| Gross Income ($M) | 2,024.2 | 2,162.1 | 1,837.5 | 1,511.2 | 921.7 | 836.4 |
| R&D ($M) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Unusual?Extra ($M) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Oper Income ($M) | 711.6 | 770.4 | 644.8 | 565.7 | 341.9 | 279.1 |
| Interest Exp ($M) | 101.5 | 82.6 | 78.7 | 61.7 | 25.2 | 28.7 |
| PreTax Inc. ($M) | 624.0 | 765.7 | 654.4 | 571.1 | 333.2 | 270.0 |
| Net Income ($M) | 552.1 | 482.8 | 408.0 | 354.5 | 205.4 | 169.7 |
| Oper Cash Fl ($M) | 872.0 | 664.7 | 639.0 | 191.0 | 272.2 | 121.8 |
| CapEx ($M) | 131.0 | 151.9 | 124.1 | 108.7 | 53.7 | 36.0 |
| EPS Basic ($) | 7.55 | 6.60 | 5.39 | 4.85 | 3.12 | 2.61 |
| EPS Diluted ($) | 5.34 | 6.56 | 5.36 | 4.82 | 3.10 | 2.60 |
| EPS Diluted Cont $ | 5.34 | 6.56 | 5.36 | 4.82 | 3.10 | 2.60 |
| Div/Shr $ | 0.40 | 0.40 | 0.32 | 0.22 | 0.19 | 0.13 |
| Cash Flow/Shr $ | 9.21 | 7.89 | 6.41 | 5.67 | 3.81 | 3.28 |
| FCF/Shr $ | 9.72 | 6.57 | 6.45 | 0.90 | 3.11 | 1.18 |
| Cash & ST Inv $M | 33.6 | 52.0 | 77.0 | 57.5 | 35.0 | 11.7 |
| Goodwill/Intang $M | 1,800.2 | 1,807.2 | 1,350.4 | 1,139.1 | 429.1 | 358.5 |
| Total Assets $M | 4,807.5 | 5,195.5 | 3,983.5 | 3,614.2 | 1,769.1 | 1,563.3 |
| Total Liabilities $M | 2,364.5 | 2,764.0 | 1,877.2 | 1,867.8 | 739.2 | 740.8 |
| Book Val/Shr $ | 33.32 | 33.26 | 27.85 | 23.88 | 15.64 | 12.66 |
| Avg Shrs Out M | 73.3 | 73.1 | 75.6 | 73.1 | 65.8 | 64.9 |
| Multiples | TTM | 12/2008 | 12/2007 | 12/2006 | 12/2005 | 12/2004 |
| Price/Earnings | 8.0 | 6.9 | 9.5 | 8.1 | 8.2 | 6.7 |
| Price/Book Value | 1.2 | 1.3 | 1.8 | 1.6 | 1.6 | 1.3 |
| Price/Sales | 0.3 | 0.3 | 0.5 | 0.5 | 0.5 | 0.3 |
| Price/Cash Flow | 4.6 | 5.8 | 7.9 | 6.9 | 6.7 | 5.3 |
| Price/FCF | 4.4 | 6.9 | 7.9 | 43.4 | 8.2 | 14.8 |
| 0.9 | 0.9 | 0.6 | 0.6 | 0.7 | 0.7 |
| Ratios | TTM | 12/2008 | 12/2007 | 12/2006 | 12/2005 | 12/2004 |
| Gross Margin% | 24.2 | 24.8 | 25.3 | 26.3 | 27.3 | 28.4 |
| Operating Margin% | -13.3 | 8.8 | 8.9 | 9.9 | 10.1 | 9.5 |
| Net Margin% | 6.6 | 5.5 | 5.6 | 6.2 | 6.1 | 5.8 |
| 23.1 | 21.3 | 21.2 | 25.5 | 22.2 | 23.1 | |
| 10.7 | 10.5 | 10.7 | 13.2 | 12.3 | 11.6 | |
| Current Ratio | 3.5 | 3.5 | 2.9 | 3.0 | 2.5 | 2.7 |
| Payout Ratio% | 5.3 | 6.1 | 5.9 | 4.5 | 6.1 | 5.0 |
| 49.2 | 53.2 | 47.1 | 51.7 | 41.8 | 47.4 | |
| Asset Turnover X | 1.6 | 1.9 | 1.9 | 2.1 | 2.0 | 2.0 |
Since it appears that we have averted a depression and are currently experiencing a recession, we can consult our crystal ball and divine the future.
- Ronald Sommer
Disclosure: This article was taken from the website Measured Approach with the permission of the original author. Please refer to the original author for disclosure information.
Last 5 posts by Bullish Bankers
- Boone Boosts Energtek - July 20th, 2009
- The Long and the Short of it All - July 15th, 2009
- The Banking System Is Sitting On It’s Hands - July 13th, 2009
- China Mobile: The Foreign Giant - July 12th, 2009
- McDonald’s New Angus Burger – A Green Shoot? - July 10th, 2009
alloy steel, Belgium, bullish bankers, Canada, China, cold-finished steel, Financial, Market Commentary, metal products, metal service centers, metals processing services, Mexico, Processing Services, Reliance Steel & Aluminum Co.;, Singapore, south korea, Stainless Steel, steel, United Kingdom, United States
 About Bullish Bankers (http://www.bullishbankers.com)
Bullish Bankers is a financial market and economic community focused on delivering original opinion, analysis and headlines to readers on a daily basis. In an effort to form a lasting online presence, a collaboration of two separate blogs resulted in what you see here today. Moving forward, we aim to provide fresh insight into the financial markets with the launch of Bullish Bankers dot com. On June 10th 2008, founders Jim Regan and Santosh Sankar began discussing plans to create a new stock market and economic resource website to serve the public. After recruiting seven fellow finance students from The Smeal College of Business and The Pennsylvania State University, Bullish Bankers began to take shape with a solid foundation of financial knowledge and excitement. With a background in online entrepreneurship and design, Jim Regan designed the website and publishing platform from the ground up in order to effectively publish articles and updates to the blog. With an official launch in late July 2008, Santosh Sankar and Jim Regan act as the leading editors and oversee coverage across all 10 sectors that comprise the S&P 500. Together, they aim to provide consistent, quality information in order to help readers understand the state of the financial markets through educated and refreshing opinion. In addition, Jim and Santosh oversee the executive board of editors at Bullish Bankers dot com, which includes fellow students Charles Petredis, Ryan Savitz and Steve Murray. |
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.