Reliance Steel & Aluminum Co reported its financial results for the second quarter and six months ended June 30, 2012. For the 2012 second quarter, Reliance reported net income of $108.8 million, up 10% from 2011 second quarter net income of $98.7 million, and down 6% from 2012 first quarter net income of $116.2 million. Earnings per diluted share were $1.44 in the 2012 second quarter, up 10% from 2011 second quarter earnings per diluted share of $1.31 and down 6% from $1.54 in the 2012 first quarter. Sales for the 2012 second quarter were $2.21 billion, up 8% from 2011 second quarter sales of $2.05 billion, and down 3% from 2012 first quarter sales of $2.29 billion. The 2012 second quarter financial results include in cost of sales a pre-tax LIFO credit, or income, of $7.5 million, compared with a pre-tax LIFO charge, or expense, of $25.0 million for the 2011 second quarter and a charge of $7.5 million for the 2012 first quarter.
David H. Hannah, Chairman and CEO of Reliance, said, We were pleased with our 2012 second quarter results which were in line with our expectations, although general economic uncertainty in the marketplace along with declining costs for most all of our products negatively pressured both volumes and pricing. At the operating income level, our 2012 second quarter was up 1% over the 2012 first quarter, and up 12% compared to the 2011 second quarter. Underlying demand slowed slightly from the 2012 first quarter, but still represents solid improvement when compared to the 2011 periods. The declines in the costs of our products were supply, not demand, driven, as underlying cost inputs at the producer level decreased, imports were plentiful, and domestic overcapacity persisted.
We continue to see strength in energy (oil and gas), aerospace, farm and heavy equipment, and auto (through their toll processing business), and expect continued growth in these markets. Additionally, they grew further with our 2012 acquisitions of National Specialty Alloys, LLC (effective April 3, 2012) and McKey Perforating Co., Inc. (effective February 1, 2012) plus two strategic asset purchases. RS grew in specialty products and high value-added processing, as well as expanded into Australia, Hannah continued.
Effective April 3, 2012, the Company further extended its footprint in the energy market with the acquisition of National Specialty Alloys, LLC, a processor and distributor of premium stainless steel and nickel alloy bars and shapes based in Houston, Texas. Also in April, the assets of the Vonore, Tennessee Worthington Steel plant were purchased by the Companys Precision Strip, Inc. subsidiary, which expanded their toll processing network into that area.
Effective June 30, 2012, Reliance, through its newly-formed subsidiary Bralco Metals (Australia) Pty Ltd, acquired substantially all of the assets of Airport Metals (Australia) Pty Ltd, a subsidiary of Samuel Son & Co., Limited. Airport Metals (Australia), based in Melbourne, operates as a stocking distributor of aircraft materials and supplies. Terms were not disclosed.
-John Astarita
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