Reliance (RS) Q1 2025 earnings summary

Executive summary

• Achieved record tons sold in Q1 2025, up 9% year-over-year and 12.8% sequentially, driven by organic growth and 2024 acquisitions, despite lower metals prices and market uncertainty.

• Non-GAAP EPS reached $3.77, exceeding guidance, supported by operational execution and positive pricing momentum, despite a $0.57 per share unfavorable LIFO impact.

• Net sales were $3.48 billion, down 4.4% year-over-year due to lower commodity prices, offsetting volume gains.

• Gross profit margin was 29.7% (LIFO), up 140 basis points sequentially but down from 31.0% year-over-year; non-GAAP FIFO gross profit margin reached 30.4%.

• Repurchased $253.2 million of common stock and increased quarterly dividend by 9.1% to $1.20 per share.

Financial highlights

• Net income attributable was $199.7 million, down 34.1% year-over-year but up 89.6% sequentially.

• Operating income was $274.4 million, a 30.2% decrease from Q1 2024.

• Cash flow from operations was $64.5 million, reflecting working capital investment.

• LIFO expense of $25 million in Q1 2025, with full-year estimate revised to $100 million expense.

• Net debt-to-total capital increased to 14.4% from 10.2% at year-end 2024.

Outlook and guidance

• Q2 2025 tons sold expected to be down 1% to up 1% sequentially, but up 3%-5% year-over-year.

• Average selling price per ton anticipated to rise 1%-3% sequentially in Q2.

• Non-GAAP EPS guidance for Q2 2025 is $4.50-$4.70, including $25 million LIFO expense.

• FIFO gross profit margin expected to expand in Q2, supported by recent pricing improvements.

• Management expects sufficient liquidity from operations, cash, and a $1.5 billion revolving credit facility.