• Revenue from Acquisitions: Added approximately $400 million of net sales on an annualized basis from four acquisitions in 2024.
• Non-GAAP Earnings Per Share (EPS): $15.92 for the full year 2024.
• Cash Flow from Operations: $1.43 billion, the third highest in the company's history.
• Capital Expenditures: $430 million in 2024, with a 2025 budget of $325 million.
• Share Repurchases: $1.1 billion in 2024, resulting in a 6% reduction in outstanding shares.
• Dividends: $250 million returned to stockholders in 2024.
• Gross Profit Margin: 29.7% for the full year 2024.
• Fourth Quarter Tons Sold: Decreased 5.1% compared to Q3 2024, but increased 6.7% year-over-year.
• Average Selling Price per Ton: $2,170 in Q4 2024, a decline of 3.4% from Q3 2024.
• Non-GAAP SG&A Expense: Increased by 1.3% year-over-year in Q4 2024.
• Impairment Charges: $11.7 million in Q4 2024.
• Net Debt-to-EBITDA Ratio: Less than one.
• First Quarter 2025 Earnings Guidance: Non-GAAP EPS expected to be in the range of $3.30 to $3.50.

• Warning! GuruFocus has detected 4 Warning Sign with HNI.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Reliance Inc (NYSE:RS) achieved a strong full-year gross profit margin of 29.7%, within their sustainable annual range.
• The company successfully acquired and integrated four companies in 2024, adding approximately $400 million in net sales and expanding their geographic footprint.
• Reliance Inc (NYSE:RS) reported a non-GAAP earnings per share of $15.92, reflecting the benefits of targeted growth strategies and strong pricing discipline.
• The company generated the third highest annual cash flow from operations in its history, amounting to $1.43 billion.
• Reliance Inc (NYSE:RS) maintained a balanced and disciplined approach to capital deployment, investing significantly in capital expenditures, acquisitions, share repurchases, and dividends.

Negative Points

• Fourth quarter tons sold decreased by 5.1% compared to the third quarter of 2024, although this was better than the expected decline.
• The average selling price per ton declined by 3.4% in the fourth quarter compared to the third quarter of 2024.
• The semiconductor industry shipments remained restrained in the fourth quarter due to excess inventories in the supply chain.
• The company incurred impairment charges of $11.7 million in Q4 associated with the consolidation of operations to streamline efficiencies.
• Reliance Inc (NYSE:RS) experienced a sequential decline in fourth quarter gross profit margin due to the recognition of LIFO expense, impacting profitability.

Q & A Highlights

Q: How do you view the current demand activity in the US market for steel and metals, and what factors are influencing it? A: Karla Lewis, President and CEO, noted that Reliance's volumes remained steady through 2024, with growth in non-residential construction. Stephen Koch, COO, added that January 2025 activity was strong despite bad weather, and there is some customer activity due to impending tariffs. They are optimistic about the first quarter of 2025.

Q: What are your expectations for specific end markets in 2025? A: Karla Lewis mentioned that they expect improvements in general manufacturing and infrastructure, especially if permitting and funding become more efficient. There is also strength in data centers and electrical grid projects, with many Reliance companies involved in these areas.

Q: How do you plan to increase volumes in 2025, and will it be driven by organic growth or acquisitions? A: Karla Lewis stated that growth will come from both organic growth and acquisitions, similar to 2024. They focus on smart profitable growth, maintaining margins while increasing volume, which was beneficial in offsetting higher costs in 2024.

Q: What impact do you expect from potential tariffs and trade policies on your business? A: Karla Lewis explained that Reliance is a long-time domestic buyer, and historically, tariffs have led to price increases in the US, which is positive for them. They anticipate potential upside in pricing but are prepared for any disruptions.

Q: Can you provide more details on your capital expenditure plans for 2025? A: Karla Lewis mentioned that the capital expenditure budget for 2025 is $325 million, with an expected total cash outlay of $375 million to $400 million, including carryover projects from prior years.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.