Reliance Steel Aluminum Co (RS) has reported 21.15 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $111.70 million, or $1.52 a share in the quarter, compared with $92.20 million, or $1.27 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $111.30 million, or $1.52 a share compared with $74.60 million or $1.03 a share, a year ago. Revenue during the quarter grew 11.86 percent to $2,419.30 million from $2,162.70 million in the previous year period. Gross margin for the quarter expanded 39 basis points over the previous year period to 29.83 percent. Total expenses were 92.14 percent of quarterly revenues, down from 93.94 percent for the same period last year. This has led to an improvement of 180 basis points in operating margin to 7.86 percent.
Operating income for the quarter was $190.20 million, compared with $131.10 million in the previous year period.
"Improved demand, higher metal pricing and continued strong execution resulted in record quarterly gross profit dollars, driving our highest earnings per share and net income since the first quarter of 2012. Our FIFO gross profit margin of 30.2% increased from 29.4% in the first quarter of 2016 and 29.0% in the fourth quarter of 2016,” said Gregg Mollins, president and chief executive officer of Reliance. “In addition to positive pricing trends that contributed to our enhanced gross profit margin during the quarter as price increases were announced by the domestic mills, our higher, sustainable gross profit margin remains intact as a direct result of the investments we are making in value-added processing equipment. We have invested approximately $1 billion in capital expenditures over the past six years, with the majority of this amount spent on value-added processing equipment. These investments far outpace our peers and, along with our decentralized operating model, provide us with a significant competitive advantage to supply our customers the highest quality products and services on a just-in-time basis."
The company forecasts diluted earnings per share to be in the range of $1.50 to $1.60 for the second-quarter.
Operating cash flow turns negativeReliance Steel Aluminum Co has spent $20.70 million cash to meet operating activities during the quarter as against cash inflow of $155.40 million in the last year period. The company has spent $32 million cash to meet investing activities during the quarter as against cash outgo of $331.50 million in the last year period.
Cash flow from financing activities was $60.40 million for the quarter, down 68.16 percent or $129.30 million, when compared with the last year period.
Cash and cash equivalents stood at $133.80 million as on Mar. 31, 2017, up 11.04 percent or $13.30 million from $120.50 million on Mar. 31, 2016.
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