Reliance Steel & Aluminum Co., Los Angeles, reported net income of $701.5 million in 2019, a 10.7 percent increase from the prior year. The company’s net sales in 2019 were down 4.9 percent to $11 billion.
In the fourth quarter, Reliance’s net income nearly doubled to $165.6 million, while net sales declined 13 percent to $2.4 billion.
“We challenged ourselves to drive continuous improvements in our business in 2019 and we are extremely pleased with the outcome of our performance,” said Jim Hoffman, president and CEO of Reliance. “Following a record year in 2018, our unique business model enabled us to execute our strategy and achieve record earnings levels, despite both demand and pricing pressure on our topline.”
The company’s tons sold in the quarter declined 3.7 percent to 1.4 million, while the full-year sales were down 4.1 percent to 6.1 million. The average selling price in the quarter was down 10.3 percent to $1,763, while the full-year average declined 1.3 percent to $1,860.
“Our 2019 results once again demonstrate the strength of our proven business model, increased resilience to fluctuations in metal pricing and strong earnings power due to the diversity of our products, end markets and geographies, as well as our increased focus on value-added processing. Through our ongoing investments in equipment, we performed value-added processing on 51 percent of the orders we shipped in 2019, up from 49 percent in 2018 and our more historical rate of about 40 percent.”
Among end markets, Reliance expects strong performance in automotive and aerospace, and continued weakness in the oil and gas market in the first quarter.
Overall, the company expects that demand in the first quarter will remain relatively healthy, and estimates tons sold will be up 6 to 8 percent compared with the prior quarter, which includes the normal seasonal increase in shipping volumes. Reliance also expects that overall metals pricing will remain near current levels, which is estimated to result in its average selling price per ton sold for the first quarter of 2019 increasing 1 to 2 percent compared with the fourth quarter.