- Reliance Steel & Aluminum Co RS reported fourth-quarter sales growth of 86.9% year-over-year to $3.99 billion, beating the consensus of $3.83 billion.
- The gross margin contracted by 180 bps to 31.2%, and on an adjusted basis, declined by 140 bps to 31.5%.
- The operating income increased to $562.2 million from $183.4 million a year ago, and the margin expanded by 551 bps to 14.1%.
- Adjusted EPS improved to $6.83 from $2.01 in 4Q20, beating the consensus of $5.22.
- Carbon steel sales were $2.37 billion (+104.8% Y/Y), with total tons sold -0.6% Y/Y and an increase of 106.1% in average selling price per ton sold.
- Stainless steel sales were $653.3 million (+85.3% Y/Y), with total tons sold +7.6% Y/Y and an increase of 72.3% in average selling price per ton sold.
- Aluminum sales were $554.4 million (+43% Y/Y), with total tons sold +7.4% Y/Y and an increase of 33.1% in average selling price per ton sold.
- Alloy sales were $151.5 million (+60.8% Y/Y), with total tons sold +26.9% Y/Y and an increase of 26.8% in average selling price per ton sold.
- Reliance Steel & Aluminum generated cash from operating activities of $799.4 million in FY21, compared to $1.17 billion a year ago. Free cash flow was $562.8 million.
- The company had cash and equivalents of $300.5 million and total debt outstanding of $1.66 billion.
- Dividend: The company declared a quarterly cash dividend of $0.875 per share of common stock, an increase of 27.3% from the prior dividend of $0.6875, payable on March 25, 2022, to stockholders of record as of March 11, 2022.
- 1Q22 Outlook: Reliance Steel & Aluminum estimates tons sold to be up 5% - 7% sequentially due to seasonal shipping volume increases. However, the tons sold estimate is lower than the typical Q1 expectation due to softer demand in January and early February attributable to continued supply chain and labor disruptions.
- The company expects its average selling price per ton sold to be down 2% - 4% sequentially.
- It estimates non-GAAP EPS of $7.05 - $7.15 versus the consensus of $5.09.
- Price Action: RS shares closed higher by 0.90% at $168.20 on Wednesday.
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