Reliance Steel & Aluminum
Annual Report 2018

Plain-text annual report

2 0 1 8 A N N U A L R E P O R T E X ECU T I NG OU R PL A N E X E C U T I N G O U R P L A N 1 We continued to execute our corporate strategy in 2018. Favorable market conditions buoyed our efforts, resulting in significant financial and operational milestones. Our dedication to relationships and commitment to our long-term plan helped Reliance deliver record-breaking results. Annual Net Sales $11.53 Billion Annual Gross Profit $3.28 Billion Annual Earnings Per Share $8.75 Pre-tax Income $850.6 Million S E T T I NG N E W R ECOR DS 1 EXECUTING OUR PLANConsistent with our growth and capital allocation strategies, we invested $77.6 million to complete three acquisitions that increase our value-added processing capabilities and expand our catalog of specialty products. We also invested a record $239.9 million in capital expenditures, demonstrating our commitment to organic growth, with a focus on state-of-the-art processing equipment. CON T I N UOUS G ROW T H A N D I N NOVAT ION 2 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORTOur internal peer-to-peer SMART Safety program helps ensure that we go home to our loved ones in the same condition as we arrived for work. This concentrated effort to enhance our safety culture resulted in a 6% decrease in recordable incidents in 2018. We care about our customers and provide best-in-class service at all levels, from innovating custom solutions to delivering materials on a just-in-time basis. We focus on small orders with value-added processing and quick turnaround. In 2018, we performed processing on approximately 49% of our orders and delivered about 40% of our orders within 24 hours. Our average order size was $2,130. PE A K PE R FOR M A NC E 3 EXECUTING OUR PLANReliance made record share repurchases of $484.9 million in 2018, demonstrating our confidence in our strategic plan and outlook. We also provided meaningful return to our stockholders through dividend payments, totalling $145.3 million in 2018. Reliance has paid regular quarterly cash dividends for 59 consecutive years; the 10% increase announced in the first quarter of 2019 is the 26th dividend increase since the Company went public in 1994. S T O C K H O L D E R R E T U R N S 4 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORTReliance's executive management team represents over a century of combined operational and management experience. Coupled with our deep bench of leaders across our Family of Companies, Reliance's expertise and experience is unparalleled. After more than a decade on the executive team following a 17-year tenure at one of our largest subsidiaries, Jim Hoffman became President and Chief Executive Officer effective January 1, 2019. L E A D E R S H I P S U C C E S S I O N 5 EXECUTING OUR PLANSelected Consolidated Financial Data In millions, except number of shares, which are reflected in thousands, and per share amounts. Year Ended December 31, Income Statement Data: Net sales Cost of sales (exclusive of depreciation and amortization expense) Gross profit(1) Warehouse, delivery, selling, general and administrative expense(2) Depreciation and amortization expense Impairment of long-lived assets Operating income Other expense (income): Interest expense Other expense (income), net(2) Income before income taxes Provision (benefit) for income taxes(3) Net income(3) Less: Net income attributable to noncontrolling interests 2018 2017 2016 2015 2014 $11,534.5 $9,721.0 $8,613.4 $9,350.5 $10,451.6 8,253.0 3,281.5 2,091.8 215.2 37.0 937.5 86.2 0.7 850.6 208.8 641.8 8.1 6,933.2 2,787.8 1,902.8 218.4 4.2 662.4 73.9 4.7 583.8 (37.2) 621.0 7.6 6,023.1 2,590.3 1,798.1 222.0 52.4 517.8 84.6 4.0 429.2 120.1 309.1 4.8 6,803.6 2,546.9 1,725.3 218.5 53.3 549.8 84.3 6.8 458.7 142.5 316.2 4.7 7,830.6 2,621.0 1,789.8 213.8 — 617.4 81.9 (10.8) 546.3 170.0 376.3 4.8 Net income attributable to Reliance(3) $633.7 $613.4 $304.3 $311.5 $371.5 Earnings Per Share: Diluted(3) Basic(3) Weighted average shares outstanding – diluted Weighted average shares outstanding – basic Other Data: $8.75 $8.85 72,441 71,621 $8.34 $8.42 73,539 72,851 $4.16 $4.21 73,121 72,363 $4.16 $4.20 74,902 74,096 $4.73 $4.78 78,616 77,683 Cash flow provided by operations $664.6 $399.0 $626.5 $1,025.0 $356.0 Capital expenditures Cash dividends per share Balance Sheet Data (December 31): Working capital Total assets Short-term debt(4) Long-term debt(4) Reliance stockholders' equity 239.9 2.00 161.6 1.80 154.9 1.65 172.2 1.60 190.4 1.40 $2,585.9 $2,347.6 $2,032.5 $1,564.5 $2,458.3 8,044.9 7,751.0 66.8 2,141.1 4,671.6 92.6 1,809.6 4,667.1 7,411.3 83.1 1,847.2 4,148.8 7,121.6 7,822.4 501.3 94.6 1,428.9 2,209.6 3,914.1 4,099.0 (1) Gross profit, calculated as net sales less cost of sales, is a non-GAAP financial measure as it excludes depreciation and amortization expense associated with the corresponding sales. About half of our orders are basic distribution with no processing services performed. For the remainder of our sales orders, we perform “first-stage” processing, which is generally not labor intensive as we are simply cutting the metal to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, is not significant and is excluded from our cost of sales. Therefore, our cost of sales is substantially comprised of the cost of the material we sell. We use gross profit as shown above as a measure of operating performance. Gross profit is an important operating and financial measure, as fluctuations in our gross profit can have a significant impact on our earnings. Gross profit, as presented, is not necessarily comparable with similarly titled measures for other companies. (2) The adoption of accounting rule changes in 2017 affected the presentation of pension costs. Prior year warehouse, delivery, selling, general and administrative expense and other expense (income), net have been retrospectively adjusted to conform to the current presentation. (3) 2017 includes a $207.3 million, or $2.82 per share, income tax benefit as a result of the Tax Cuts and Jobs Act of 2017. (4) Includes capital lease obligations. 6 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORT Fellow Stockholders 2018 was a record year for Reliance, marked by significant financial and operational milestones. Our field managers’ continued excellence in strategic execution was bolstered by healthy demand trends and improved pricing conditions in the marketplace. These forces synergized to achieve 2018 net sales of $11.5 billion – $1.8 billion over 2017 and the highest in Reliance’s history. Our annual gross profit margin of 28.4% (near the high-end of our estimated sustainable range of 27% to 29%) produced record gross profit dollars of $3.3 billion and our highest ever pre- tax income of $850.6 million. Importantly, our pre-tax income increased 45.7% year-over-year on an 18.7% increase in sales, demonstrating the strength of our business model and disciplined strategy of focusing on higher-margin business. As a result, we generated strong cash flow from operations of $664.6 million which we deployed by executing on our growth strategy while also providing meaningful returns to our stockholders. Notably, in 2018 we repurchased a record $484.9 million of our common stock, demonstrating our continued confidence in the strength of our business strategy and outlook. Our full-year non-GAAP earnings of $8.94 per diluted share grew 64.3% year-over-year, and set another Reliance record. Our earnings were supported by favorable pricing conditions stemming from solid demand trends and trade actions, which led to multiple mill price increases during the first nine months of the year. While we did not experience any notable price increases in the fourth quarter, the overall strong pricing environment resulted in a 17.9% increase in our average selling price in 2018 compared to 2017. Customer demand was healthy throughout the year, with our same- store tons sold up 0.8% year-over-year. Reliance credits much of our success to the emphasis we place on increasing value-added services to our customers, effective working capital management, and strict expense control. Our significant investments in cutting-edge, value-added processing equipment have enabled us to increase our gross profit margin, which in turn improves our earnings. Maintaining an efficient inventory position also benefits our gross profit margin by allowing us to concentrate on higher-margin business. In 2018, we performed value-added processing services on 49% of our orders, an increase of 400 basis points over the past five years, with our gross profit margin expanding 330 basis points over the same period. We were very pleased with our expense management in 2018: our full year expenses (warehouse, delivery, selling, general, and administrative), as a percent of sales, declined 150 basis points year-over-year on a $1.8 billion increase in sales. We continue to benefit from our long-term strategy of serving a broad spectrum of diverse end markets – including aerospace, automotive, non-residential construction, heavy industry, and energy – which helps mitigate volatility in any single end market. Further, Reliance’s decentralized operating structure allows us to concentrate on fulfilling small orders, as the majority of our customers purchase in smaller quantities on a just-in-time basis, and are generally less price sensitive than customers that place large volume orders with long lead times. In 2018, our average order size was $2,130 and approximately 40% of our orders were delivered within 24 hours. Aerospace remains one of our top-performing end markets and we continue to focus on 7 EXECUTING OUR PLAN growing our market share both domestically and abroad. Demand for automotive, which we service mainly through our toll processing operations in the U.S. and Mexico, also remains strong. We continue to invest in facilities and value-added processing equipment to meet the robust demand for the services we provide, especially those related to increased aluminum content in vehicles. Consistent with these efforts, in 2018 we commenced projects to further increase our aluminum processing capabilities in Kentucky and acquired complete ownership of Acero Prime, S. de R.L. de C.V., a toll processer in Mexico with four locations, from our joint venture partner. These investments allow us to better support our growth initiatives in automotive as we continue to capitalize on the positive demand environment. Demand in heavy industry – which includes rail car, truck trailer, ship building, barge manufacturing, tank manufacturers and wind and transmission towers – steadily improved throughout 2018. We benefitted from our customers’ higher capital spending budgets, evidenced by increased spending on both construction and agricultural equipment throughout the year. While still below peak levels in 2006, demand in the non-residential construction market – including infrastructure – also grew at a steady rate throughout 2018. We believe this market will continue to recover and that we are well positioned to support a higher volume of business. Finally, demand for the products we sell into the energy market, which is mainly oil and natural gas, improved in 2018, and we remain confident in our ability to service further increases in demand. Our overall outlook for 2019 remains positive, with feedback on demand trends in the various end markets we serve ranging from steady to strong. Reliance’s twofold growth strategy of capital expenditures to achieve organic growth and strategic acquisitions of well-managed metals service centers has driven the Company’s outstanding growth for decades. Over the last five years we have invested almost $1 billion in capital expenditures, with approximately 50% spent on new processing equipment. NET SALES (in millions) NET INCOME (in millions) $10,451.6 $9,350.5 $8,613.4 $9,721.0 $11,534.5 $613.4* $633.7 $371.5 $311.5 $304.3 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 *Includes a $207.3 million, or $2.82 per share, income tax benefit as a result of the Tax Cuts and Jobs Act of 2017. 8 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORT In 2018, our capital expenditures totaled a record $239.9 million and our 2019 budget is $230 million. The majority of our spending will be strategically focused on organic growth, investing in innovative technologies and equipment to further expand our value- added processing capabilities. Reliance also completed three acquisitions in 2018, bringing our total post-IPO acquisition count to 66. We continue to pursue acquisition opportunities that align with our proven strategy of acquiring well-run businesses that complement our diversification of products, services and geography and enhance our value-added processing services. We are very pleased with the robust pipeline of opportunities currently in the market, but will remain selective in regards to acquisition activity. Returning value to our stockholders through quarterly cash dividends and share repurchases remains core to our capital allocation philosophy. We have paid regular quarterly cash dividends for 59 consecutive years and have increased our dividend 26 times since our 1994 IPO, including our recent increase of 10% to $0.55 per share in the first quarter of 2019. Our record share repurchases in 2018, totaling $484.9 million, reflect the trust and confidence our Board and management have in our strong and consistent business strategy and outlook. In February, we celebrated Reliance’s 80th anniversary. Reliance was founded in 1939 based on the core principle of providing outstanding service to our customers. We have grown tremendously in our 80 year history, fueled by decades of expansion through organic growth and strategic acquisitions, with an emphasis on high-margin specialty products and value-added processing capabilities. Today, we are the largest metals service center company in North America, servicing our 125,000 plus customers from over 300 locations in 40 states and 13 countries outside of the U.S. Despite the exponential growth of our business, our founding commitment to customer service remains unchanged. Our ability to meet that fundamental commitment to our customers would not be possible without the hard work and dedication of our 15,000 plus RETURN ON EQUITY Based on beginning of the year equity. CASH FLOW FROM OPERATIONS (in millions) 14%* $1,025.0 10% 10%* 8%* 8% $626.5 $664.6 $356.0 $399.0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 *Return on Reliance stockholders' equity is based on the beginning of year equity amount, except for 2018 and 2015, which are adjusted for $484.9 million and $355.5 million of share repurchases, respectively, and 2017, which is adjusted for a $207.3 million income tax benefit as a result of the Tax Cuts and Jobs Act of 2017. 9 EXECUTING OUR PLANemployees around the world. That dedication is reciprocated; employees are our most important asset and we continue to focus on ensuring their safety every day on the job. In 2018, incident rates at Reliance improved 6% year-over-year. We attribute much of this success to our peer-to-peer based “SMART Safety” program, launched in 2017. With the 2019 theme “One Family, One Culture of SMART Safety”, safety will remain a key priority as we work to further embed a culture of safety across our Family of Companies. We also recognize the value of our employees by providing industry-leading benefits with rich healthcare and retirement plans. Complementing our long history of supporting national and international disaster relief organizations, Reliance established an employee assistance fund, “Reliance Cares,” specifically designed to support our employees impacted by natural disasters. Since its inception in 2017, employees across our Family of Companies have donated to the fund, and Reliance has matched all contributions dollar for dollar. Reliance Cares provided grants to help employees and their families rebuild after Hurricanes Harvey and Irma in 2017, and Hurricane Florence in 2018. In addition to helping our employees when they need it, Reliance is devoted to investing in and enriching the communities in which we live and work. We encourage our employees to engage in and initiate events to serve their communities, and often match their fundraising efforts. Among other activities, we support nonprofits that provide veteran transition services and participate in a national program focused on supporting members of the armed forces and their families. We continue to seek employee and community engagement opportunities, especially national initiatives, in which our Family of Companies can participate. Finally, we are committed to mitigating the impact our products EARNINGS PER SHARE (diluted) $8.34* $8.75 $4.73 $4.16 $4.16 2014 2015 2016 2017 2018 *Includes a $207.3 million, or $2.82 per share, income tax benefit as a result of the Tax Cuts and Jobs Act of 2017. 1 0 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORT and operations have on the environment. As part of our pledge to environmental sustainability, we continuously evaluate and implement initiatives focused on energy conservation, recycling, and other programs to reduce pollution and improve our environmental impact. In closing, Reliance is extremely proud of our record 2018 financial results, which were made possible by the excellent execution of our employees and supported by strong metal pricing and healthy demand trends in the end markets we service. Our 2018 results are a testament to our ability to produce record results under favorable market conditions. We remain optimistic about the current environment, in which we will continue to strive to maximize our earnings and increase value for our stockholders. On behalf of Reliance, we would like to express our gratitude to our loyal employees, customers, suppliers, and stockholders for their continued support. We look forward to another successful year in 2019. James D. Hoffman President and Chief Executive Officer Karla R. Lewis Senior Executive Vice President and Chief Financial Officer 1 1 EXECUTING OUR PLANS A L E S B Y PRODUC T Carbon steel plate Carbon steel tubing Carbon steel structurals Hot-rolled steel sheet and coil Carbon steel bar Galvanized steel sheet and coil Cold-rolled steel sheet and coil Heat-treated aluminum plate Aluminum bar and tube Common alloy aluminum sheet and coil Common alloy aluminum plate G EOG R A PH IC PR E S E NC E 12% 11% 9% 7% 6% 5% 3% 7% 5% 5% 1% Heat-treated aluminum sheet and coil Stainless steel bar and tube Stainless steel sheet and coil Stainless steel plate Alloy bar and rod Alloy tube Alloy plate, sheet, and coil Toll processing – aluminum, carbon steel, and stainless steel* Miscellaneous, including brass, copper, titanium, manufactured parts, and scrap 1% 6% 6% 2% 4% 1% 1% 4% 4% *Includes revenues for logistics services provided by our toll processing companies. I N T E R NAT IO NA L Australia Mexico Belgium Singapore Canada South Korea China France India Malaysia Turkey United Arab Emirates United Kingdom S TAT E S Alabama Florida Kentucky Georgia Louisiana Alaska Arizona Arkansas Montana Nevada Ohio Oklahoma Texas Utah Idaho Illinois Maryland New Hampshire Oregon Virginia Massachusetts New Jersey Pennsylvania Washington California Indiana Michigan New Mexico Rhode Island Wisconsin Colorado Iowa Minnesota New York South Carolina Connecticut Kansas Missouri North Carolina Tennessee 1 2 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORT S A L E S B Y R EG ION Mountain Pacific Northwest Northeast S A L E S B Y COM MODI T Y 3% 5% 6% Toll processing and logistics 4% Miscellaneous Alloy 4% 6% Mid-Atlantic 6% Stainless steel 14% International 8% Southeast 18% Aluminum 19% West/Southwest 22% Carbon steel 53% Midwest 32% 1 3 EXECUTING OUR PLANHistorical Financial Data In millions, except per share data Year Ended December 31, Income Statement Data: Net sales Operating income(1) Pre-tax income(2) Income taxes(3) Net income attributable to Reliance(3) Weighted average shares outstanding – diluted Balance Sheet Data (December 31): Current assets Working capital Net fixed assets Total assets(4) Current liabilities Short-term debt(4) Long-term debt(4) Reliance stockholders’ equity Per Share Data: Earnings – diluted(3) Dividends Book value(5) Ratio Analysis: Return on Reliance stockholders’ equity(6) Current ratio Net debt-to-total capital ratio(7) Gross profit margin(8) Operating income margin(1) Pre-tax income margin(2) Net income margin – Reliance(3) 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 $11,534.5 $9,721.0 $8,613.4 $9,350.5 $10,451.6 $9,223.8 $8,442.3 $8,134.7 $6,312.8 $5,318.1 $8,718.8 937.5 850.6 208.8 633.7 72.4 662.4 583.8 (37.2) 613.4 73.5 517.8 429.2 120.1 304.3 73.1 549.8 458.7 142.5 311.5 74.9 $3,285.0 $3,051.3 $2,688.5 $2,554.2 $2,738.9 $2,277.4 $2,274.7 $1,700.9 $1,390.9 $2,302.4 2,585.9 1,729.9 8,044.9 699.1 66.8 2,141.1 4,671.6 $8.75 $2.00 $69.83 13.9% 4.7 30.8% 28.4% 8.1% 7.4% 5.5% 2,347.6 1,656.3 7,751.0 703.7 92.6 1,809.6 4,667.1 $8.34 $1.80 $64.29 9.8% 4.3 27.2% 28.7% 6.8% 6.0% 6.3% 2,032.5 1,662.2 7,411.3 656.0 83.1 1,847.2 4,148.8 $4.16 $1.65 $57.07 7.8% 4.1 30.3% 30.1% 6.0% 5.0% 3.5% 1,564.5 1,635.5 7,121.6 989.7 501.3 1,428.9 3,914.1 $4.16 $1.60 $54.59 8.0% 2.6 31.8% 27.2% 5.9% 4.9% 3.3% 617.4 546.3 170.0 371.5 78.6 $3,121.1 2,458.3 1,656.4 7,822.4 662.8 94.6 2,209.6 4,099.0 554.3 478.3 153.6 321.6 77.6 2,165.5 1,603.9 7,323.6 573.4 36.8 2,055.1 3,874.6 661.6 609.4 201.1 403.5 75.7 1,699.2 1,240.7 5,846.7 578.2 84.0 1,113.0 3,558.4 $4.73 $1.40 $53.03 $4.14 $1.26 $5.33 $0.80 $49.99 $46.82 9.6% 4.7 34.9% 25.1% 5.9% 5.2% 3.6% 9.0% 4.8 34.1% 26.0% 6.0% 5.2% 3.5% 12.8% 3.9 23.6% 26.1% 7.8% 7.2% 4.8% 574.8 511.6 162.4 343.8 75.0 1,698.3 1,105.5 5,592.3 576.4 12.8 1,306.9 3,143.9 $4.58 $0.48 $41.92 12.2% 3.9 28.2% 24.4% 7.1% 6.3% 4.2% 364.6 296.5 98.6 194.4 74.5 1,192.3 1,025.3 4,659.1 508.6 87.0 848.0 254.8 195.5 46.3 148.2 73.7 973.3 981.3 4,293.5 417.6 87.1 839.3 2,823.7 2,606.4 $2.61 $0.40 $37.83 $2.01 $0.40 $35.34 7.5% 3.3 23.3% 25.1% 5.8% 4.7% 3.1% 6.1% 3.3 25.3% 26.3% 4.8% 3.7% 2.8% 858.5 766.6 282.9 482.8 73.6 1,652.2 998.7 5,184.8 650.2 94.5 1,664.9 2,431.4 $6.56 $0.40 $33.17 22.9% 3.5 41.3% 24.8% 9.8% 8.8% 5.5% (1) Operating income represents net sales less cost of sales, warehouse, delivery, selling, general and administrative expense, depreciation and amortization expense and impairment of long-lived assets. The calculation of operating income in years 2012 through 2018 includes various non-recurring charges and credits, including impairment charges in 2018, 2017, 2016, 2015, 2013 and 2012. Additionally, the adoption of accounting rule changes in 2017 affected the presentation of operating income. Prior year operating income and margin amounts have been retrospectively adjusted to conform to the current presentation. (2) The adoption of accounting rule changes in 2009 affected the presentation of noncontrolling interests. Prior year pre-tax income and margin amounts have been retrospectively adjusted to conform to the current presentation. (3) 2017 includes a $207.3 million, or $2.82 per share, income tax benefit as a result of the Tax Cuts and Jobs Act of 2017. (4) Short-term and long-term debt amounts include capital lease obligations. The adoption of accounting rule changes in 2015 affected the presentation of debt issuance costs. Prior year total assets, long-term debt and net debt-to-total capital ratio amounts have been retrospectively adjusted to conform to the current presentation. (5) Book value per share is calculated as Reliance stockholders’ equity divided by the number of common shares outstanding as of December 31 of each year. 1 4 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORT In millions, except per share data Year Ended December 31, Income Statement Data: Net sales Operating income(1) Pre-tax income(2) Income taxes(3) Net income attributable to Reliance(3) Weighted average shares outstanding – diluted Balance Sheet Data (December 31): Reliance stockholders’ equity Current assets Working capital Net fixed assets Total assets(4) Current liabilities Short-term debt(4) Long-term debt(4) Per Share Data: Earnings – diluted(3) Dividends Book value(5) Ratio Analysis: Current ratio Return on Reliance stockholders’ equity(6) Net debt-to-total capital ratio(7) Gross profit margin(8) Operating income margin(1) Pre-tax income margin(2) Net income margin – Reliance(3) $3,285.0 $3,051.3 $2,688.5 $2,554.2 937.5 850.6 208.8 633.7 72.4 2,585.9 1,729.9 8,044.9 699.1 66.8 2,141.1 4,671.6 $8.75 $2.00 $69.83 13.9% 4.7 30.8% 28.4% 8.1% 7.4% 5.5% 662.4 583.8 (37.2) 613.4 73.5 2,347.6 1,656.3 7,751.0 703.7 92.6 1,809.6 4,667.1 $8.34 $1.80 $64.29 9.8% 4.3 27.2% 28.7% 6.8% 6.0% 6.3% 517.8 429.2 120.1 304.3 73.1 2,032.5 1,662.2 7,411.3 656.0 83.1 1,847.2 4,148.8 $4.16 $1.65 $57.07 7.8% 4.1 30.3% 30.1% 6.0% 5.0% 3.5% 549.8 458.7 142.5 311.5 74.9 1,564.5 1,635.5 7,121.6 989.7 501.3 1,428.9 3,914.1 $4.16 $1.60 $54.59 8.0% 2.6 31.8% 27.2% 5.9% 4.9% 3.3% 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 $11,534.5 $9,721.0 $8,613.4 $9,350.5 $10,451.6 $9,223.8 $8,442.3 $8,134.7 $6,312.8 $5,318.1 $8,718.8 617.4 546.3 170.0 371.5 78.6 $3,121.1 2,458.3 1,656.4 7,822.4 662.8 94.6 2,209.6 4,099.0 554.3 478.3 153.6 321.6 77.6 661.6 609.4 201.1 403.5 75.7 574.8 511.6 162.4 343.8 75.0 364.6 296.5 98.6 194.4 74.5 254.8 195.5 46.3 148.2 73.7 858.5 766.6 282.9 482.8 73.6 $2,738.9 $2,277.4 $2,274.7 $1,700.9 $1,390.9 $2,302.4 2,165.5 1,603.9 7,323.6 573.4 36.8 2,055.1 3,874.6 1,699.2 1,240.7 5,846.7 578.2 84.0 1,113.0 3,558.4 $4.73 $1.40 $53.03 $4.14 $1.26 $5.33 $0.80 $49.99 $46.82 9.6% 4.7 34.9% 25.1% 5.9% 5.2% 3.6% 9.0% 4.8 34.1% 26.0% 6.0% 5.2% 3.5% 12.8% 3.9 23.6% 26.1% 7.8% 7.2% 4.8% 1,698.3 1,105.5 5,592.3 576.4 12.8 1,306.9 3,143.9 $4.58 $0.48 $41.92 12.2% 3.9 28.2% 24.4% 7.1% 6.3% 4.2% 1,192.3 1,025.3 4,659.1 508.6 87.0 848.0 973.3 981.3 4,293.5 417.6 87.1 839.3 2,823.7 2,606.4 $2.61 $0.40 $37.83 $2.01 $0.40 $35.34 7.5% 3.3 23.3% 25.1% 5.8% 4.7% 3.1% 6.1% 3.3 25.3% 26.3% 4.8% 3.7% 2.8% 1,652.2 998.7 5,184.8 650.2 94.5 1,664.9 2,431.4 $6.56 $0.40 $33.17 22.9% 3.5 41.3% 24.8% 9.8% 8.8% 5.5% (6) Return on Reliance stockholders' equity is based on the beginning of year equity amount, except for 2018 and 2015 , which are adjusted for $484 .9 million and $355.5 million of share repurchases, respectively, and 2017, which is adjusted for a $207.3 million income tax benefit as a result of the Tax Cuts and Jobs Act of 2017. (7) Net debt-to-total capital ratio is calculated as total debt (net of cash) divided by Reliance stockholders’ equity plus total debt (net of cash). (8) Gross profit, calculated as net sales less cost of sales, and gross profit margin, calculated as gross profit divided by net sales, are non-GAAP financial measures as they exclude depreciation and amortization expense associated with the corresponding sales. About half of our orders are basic distribution with no processing services performed. For the remainder of our sales orders, we perform “first-stage” processing which is generally not labor intensive as we are simply cutting the metal to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, is not significant and is excluded from our cost of sales. Therefore, our cost of sales is substantially comprised of the cost of the material we sell. We use gross profit margin as shown above as a measure of operating performance. Gross profit margin is an important operating and financial measure, as fluctuations in our gross profit margin can have a significant impact on our earnings. Gross profit margin, as presented, is not necessarily comparable with similarly titled measures for other companies. 1 5 EXECUTING OUR PLANReliance Locations R E L I A NC E DI V I S IONS Bralco Metals Los Angeles, CA – Headquarters 714-736-4800 Albuquerque, NM 505-345-0959 Dallas, TX 972-276-2676 Phoenix, AZ 602-252-1918 Seattle, WA 253-395-0614 Wichita, KS 316-838-9351 Affiliated Metals A Bralco Metals Company Salt Lake City, UT 801-363-1711 Olympic Metals A Bralco Metals Company Denver, CO 303-286-9700 Central Plains Steel Co. Wichita, KS 316-636-4500 MetalCenter Los Angeles, CA 562-944-3322 Reliance Aerospace Solutions Cypress, CA 877-727-6073 Reliance Metalcenter Colorado Springs, CO 719-390-4911 Dallas, TX 817-640-7222 Oakland, CA 510-476-4400 1 6 Phoenix, AZ 602-275-4471 Phoenix, AZ 480-986-6156 Salt Lake City, UT 801-974-5300 San Antonio, TX 210-661-2301 San Diego, CA 619-263-2141 Reliance Steel Company Albuquerque, NM 505-247-1441 Los Angeles, CA 323-583-6111 Smith Pipe & Steel Company Phoenix, AZ 602-257-9494 Tube Service Co. Los Angeles, CA – Headquarters 562-695-0467 Denver, CO 303-321-9200 Phoenix, AZ 602-267-9865 Portland, OR 503-944-5420 San Diego, CA 619-579-3011 San Jose, CA 408-946-5500 S U B S I DI A R I E S All Metal Services Limited A Subsidiary of Reliance Metals UK Holding Limited – Holding Company London, United Kingdom – Headquarters 44 189 544 4066 Belfast, United Kingdom 44 289 073 9648 Birmingham, United Kingdom 44 167 543 0307 Bolton, United Kingdom 44 194 284 0777 Bristol, United Kingdom 44 117 982 2484 Losse, France 33 558 936 800 Minworth, United Kingdom 44 167 543 0307 All Metal Services India Private Limited A Subsidiary of All Metal Services Limited Belagavi, India 91 802 837 9124 All Metal Services Ltd. (Xi’an) A Subsidiary of All Metal Services Limited Xi’an, People’s Republic of China 86 29 86125300 All Metal Services (Malaysia) Sdn. Bhd. A Subsidiary of All Metal Services Limited Selangor Darul Ehsan, Malaysia 60 378 035 643 All Metals Processing & Logistics, Inc. Spartanburg, SC – Headquarters 864-574-8050 Cartersville, GA 770-427-7379 All Metals Transportation and Logistics, Inc. Decatur, AL 877-877-7528 Allegheny Steel Distributors, Inc. Pittsburgh, PA 412-767-5000 American Metals Corporation Doing Business as American Steel Portland, OR – Headquarters 503-651-6700 Fresno, CA 559-266-0881 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORT Sacramento, CA 916-371-7700 Seattle, WA 253-437-4080 Haskins Steel Company A Division of American Metals Corporation Spokane, WA 509-535-0657 Lampros Steel A Division of American Metals Corporation Portland, OR 503-285-6667 LSI Plate A Division of American Metals Corporation Rancho Cucamonga, CA 877-877-7528 Alaska Steel Company A Subsidiary of American Metals Corporation Anchorage, AK – Headquarters 907-561-1188 Fairbanks, AK 907-456-2719 Kenai, AK 907-283-3880 AMI Metals, Inc. Nashville, TN – Headquarters 615-377-0400 Fort Worth, TX 817-831-9586 Los Angeles, CA 909-429-1336 Seattle, WA – Sales Office 253-735-0181 Spokane, WA 509-570-5880 St. Louis, MO 636-946-9492 Swedesboro, NJ 856-241-9180 Wichita, KS 316-945-7771 AMI Metals Aero Services Ankara Havacılık Anonim Şirketi A Subsidiary of AMI Metals, Inc. Ankara, Turkey 90 312 810 0000 AMI Metals Europe SPRL A Subsidiary of AMI Metals, Inc. Gosselies, Belgium 32 71 37 67 99 AMI Metals France A Subsidiary of AMI Metals, Inc. Figeac, France 33 565 503 460 AMI Metals UK Limited A Subsidiary of Reliance Metals UK Holding Limited — Holding Company Milton Keynes, United Kingdom – Headquarters 44 845 853 6149 Philadelphia, PA 610-705-0477 Portland, OR 503-228-3355 Chapel Steel Canada, Ltd. A Subsidiary of Reliance Metals Canada Holdings Limited – Holding Company Hamilton, Ontario, Canada 289-780-0570 Chatham Steel Corporation Savannah, GA – Headquarters 912-233-4182 Ellesmere Port, United Kingdom 44 151 355 6035 Birmingham, AL 205-791-2261 Best Manufacturing, Inc. Jonesboro, AR 870-931-9533 Bralco Metals (Australia) Pty Ltd Doing Business as Airport Metals (Australia) Melbourne, Australia 61 3 9310 5566 CCC Steel, Inc. Los Angeles, CA 310-637-0111 IMS Steel Co. A Division of CCC Steel, Inc. Salt Lake City, UT 801-973-1000 Chapel Steel Corp. Philadelphia, PA – Corporate Office 215-793-0899 Birmingham, AL 205-781-0317 Chicago, IL 815-937-1970 Chicago, IL – Sales Office 708-429-2244 Cleveland, OH 216-446-6840 Houston, TX 713-462-4449 Columbia, SC 803-799-8888 Durham, NC 919-682-3388 Orlando, FL 407-859-0310 Clayton Metals, Inc. Chicago, IL – Headquarters 630-860-7000 Elk Grove Village, IL 847-238-9265 Newark, NJ 973-588-1100 Continental Alloys & Services Inc. Houston, TX – Headquarters 281-376-9600 Lafayette, LA 337-837-9311 Continental Alloys & Services, Inc. A Subsidiary of Reliance Metals Canada Holding Limited — Holding Company Calgary, Alberta, Canada 403-216-5150 Continental Alloys & Services Limited A Subsidiary of Reliance Metals UK Holding Limited — Holding Company Brechin, Scotland 44 1356 625 515 Peterhead, Scotland 44 1779 480 420 1 7 EXECUTING OUR PLAN Continental Alloys & Services Pte. Ltd. A Subsidiary of Reliance Asia Holding Pte. Manchester, TN 931-723-3636 Cleveland, OH 330-425-1500 Perforated Metals Plus A Division of Diamond Manufacturing Cleveland, OH (Plate) 330-963-8150 Ltd. — Holding Company Jurong, Singapore 65 6690 0178 Continental Alloys & Services (Malaysia) Sdn. Bhd. A Subsidiary of Continental Alloys & Services Pte. Ltd. Senai, Johor, Malaysia 6 07 599 9975 Company Charlotte, NC 704-598-0443 Ferguson Perforating Company A Subsidiary of Diamond Manufacturing Company Providence, RI – Headquarters Continental Alloys Middle East FZE A Subsidiary of Reliance Steel & Aluminum Co. Dubai, United Arab Emirates 971 4 8809770 800-233-9601 New Castle, PA 401-941-8876 Crest Steel Corporation Riverside, CA 951-727-2600 Delta Steel, Inc. Houston, TX – Headquarters 713-635-1200 Cedar Hill, TX 817-701-5213 Cedar Hill, TX 972-299-6497 Chicago, IL 708-757-7198 Fort Worth, TX 817-293-5015 San Antonio, TX 210-661-4641 Tulsa, OK 918-234-7833 Diamond Manufacturing Company Wyoming, PA – Headquarters 800-233-9601 Cedar Hill, TX 972-291-8800 Michigan City, IN 219-874-2374 McKey Perforating Co. A Division of Diamond Manufacturing Company New Berlin, WI 800-233-9601 1 8 DuBose National Energy Fasteners & Machined Parts, Inc. Cleveland, OH 216-362-1700 DuBose National Energy Services, Inc. Clinton, NC – Headquarters 910-590-2151 Charlotte, NC – Sales Office 704-295-1060 Exton, PA – Sales Office 610-594-9413 Durrett Sheppard Steel Co., Inc. Baltimore, MD 410-633-6800 Earle M. Jorgensen Company Los Angeles, CA – Headquarters 323-567-1122 Atlanta, GA 678-894-7241 Birmingham, AL 205-814-0043 Boston, MA 508-435-6854 Charlotte, NC 704-588-3001 Chicago, IL 847-301-6100 Cincinnati, OH 513-771-3223 Dallas, TX 214-741-1761 Denver, CO 303-287-0381 Detroit, MI 734-402-8110 Hartford, CT 508-435-6854 Houston, TX 713-672-1621 Indianapolis, IN 317-838-8899 Kansas City, MO 816-483-4140 Lafayette, LA 713-672-1621 Memphis, TN 901-317-4300 Minneapolis, MN 763-784-5000 Oakland, CA 510-487-2700 Orlando, FL 704-421-7227 Philadelphia, PA 215-949-2850 Phoenix, AZ 602-272-0461 Portland, OR 503-283-2251 Quad Cities, IA 563-285-5340 Richmond, VA 804-732-7491 Rochester, NY 585-475-1050 Salt Lake City, UT 330-425-1500 Seattle, WA 253-872-0100 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORT St. Louis, MO 314-291-6080 Tulsa, OK 918-835-1511 Wrightsville, PA 215-949-2850 Team Tube A Division of Reliance Metals Canada Limited Charleston, SC 843-336-4107 Vancouver, British Columbia, Canada – Headquarters 604-468-4747 Calgary, Alberta, Canada 403-279-8131 Decatur, AL 256-845-5411 Fort Payne, AL (East) 256-845-5411 Encore Metals USA A Division of Earle M. Jorgensen Company Edmonton, Alberta, Canada 780-462-7222 Feralloy Processing Company A Joint Venture of Feralloy Corporation Portland, OR 503-620-8810 Salt Lake City, UT 801-383-3808 Steel Bar A Division of Earle M. Jorgensen Company Charlotte, NC 336-294-0053 Reliance Metals Canada Limited A Subsidiary of Earle M. Jorgensen Company Edmonton, Alberta, Canada – Corporate Office 780-801-4114 Earle M. Jorgensen (Canada) A Division of Reliance Metals Canada Limited Edmonton, Alberta, Canada – Headquarters 780-801-4015 Montreal, Quebec, Canada 450-661-5181 North Bay, Ontario, Canada 705-474-0866 Quebec City, Quebec, Canada 418-870-1422 Toronto, Ontario, Canada 905-564-0866 Montreal, Quebec, Canada 450-978-8877 Toronto, Ontario, Canada 905-878-1156 Earle M. Jorgensen (Asia) Sdn. Bhd. A Subsidiary of Reliance Asia Holding Pte. Ltd. — Holding Company Nusajaya, Malaysia 60 7 531 9155 FastMetals, Inc. Massillon, OH 833-327-8685 Feralloy Corporation Chicago, IL – Corporate Office 773-380-1500 Charleston, SC 843-336-4107 Decatur, AL 256-301-0500 Portage, IN 219-787-9698 Encore Metals A Division of Reliance Metals Canada Limited Vancouver, British Columbia, Canada – Acero Prime, S. de R.L. de C.V. A Subsidiary of Feralloy Corporation San Luis Potosí, Mexico – Headquarters Headquarters 604-940-0439 Calgary, Alberta, Canada 403-236-1418 Edmonton, Alberta, Canada 780-436-6660 Prince George, British Columbia, Canada 250-563-3343 Winnipeg, Manitoba, Canada 204-663-1450 52 444 870 7700 Monterrey, Mexico 52 818 000 5300 Ramos Arizpe, Mexico 52 844 450 6400 Toluca, Mexico 52 722 262 5500 GH Metal Solutions, Inc. A Subsidiary of Feralloy Corporation Fort Payne, AL – Headquarters 256-845-5411 51% Owned Portage, IN 219-787-8773 Indiana Pickling & Processing Company A Joint Venture of Feralloy Corporation 56% Owned Portage, IN 219-787-8889 Oregon Feralloy Partners A Joint Venture of Feralloy Corporation 40% Owned Portland, OR 503-286-8869 Fox Metals and Alloys, Inc. Houston, TX 281-890-6666 Infra-Metals Co. Wallingford, CT – Headquarters 203-294-2980 Atlanta, GA 404-419-3460 Baltimore, MD 410-355-1664 Hallandale, FL 954-454-1564 Marseilles, IL 815-795-5002 New Boston,OH 740-353-1350 Petersburg, VA 804-957-5900 Philadelphia, PA – Corporate Office 215-741-1000 Tampa, FL 813-626-6005 1 9 EXECUTING OUR PLAN Athens Steel A Division of Infra-Metals Co. Athens, GA 706-552-3850 IMS Steel A Division of Infra-Metals Co. Metals USA, Inc. Ft. Lauderdale, FL – Corporate Office 954-202-4000 Metals USA Carbon Flat Rolled, Inc. A Subsidiary of Metals USA, Inc. Northbrook, IL – Headquarters Atlanta, GA 404-577-5005 KMS FAB, LLC Luzerne, PA 570-338-0200 KMS South, Inc. W. Columbia, SC 803-796-9995 Liebovich Bros., Inc. Rockford, IL – Corporate Office 815-987-3200 Custom Fab Company A Division of Liebovich Bros., Inc. Rockford, IL 815-987-3210 Good Metals Company A Division of Liebovich Bros., Inc. Grand Rapids, MI 616-241-4425 Hagerty Steel & Aluminum Company A Division of Liebovich Bros., Inc. Peoria, IL – Headquarters 309-699-7251 Bridgeton, MO 309-699-7251 847-291-2400 Germantown, WI 262-255-4444 Horicon, WI 920-485-9750 Jeffersonville, IN 812-288-8906 Liberty, MO 816-415-0004 Randleman, NC 336-498-8900 Springfield, OH 937-882-6354 Walker, MI 616-453-9845 Wooster, OH 330-264-8416 Lynch Metals A Division of Metals USA Carbon Flat Rolled, Inc. Union, NJ – Headquarters 908-686-8401 Anaheim, CA 714-238-7240 Ohio River Metal Services, Inc. A Subsidiary of Metals USA Carbon Flat Liebovich Steel & Aluminum Company A Division of Liebovich Bros., Inc. Rockford, IL – Headquarters 815-987-3200 Rolled, Inc. Jeffersonville, IN 812-282-4770 Cedar Rapids, IA 319-366-8431 Green Bay, WI 920-759-3500 Rockford, IL 815-964-9471 Rockford, IL 815-874-8536 2 0 Metals USA Plates and Shapes, Inc. A Subsidiary of Metals USA, Inc. Langhorne, PA – Headquarters 267-580-2100 Ambridge, PA 724-266-7708 Bethlehem, PA 610-691-4270 Fairless Hills, PA 215-337-7000 Greensboro, NC 336-674-7991 Jacksonville, FL 904-766-0003 Mobile, AL 251-456-4531 Newark, NJ 973-242-1000 Oakwood, GA 770-536-1214 Philadelphia, PA 215-673-9300 Seekonk, MA 508-399-8500 Waggaman, LA 504-431-7010 York, PA 717-757-3549 Gregor Technologies, LLC A Subsidiary of Metals USA Plates and Shapes, Inc. Torrington, CT 860-482-2569 Metals USA Plates and Shapes Southcentral, Inc. A Subsidiary of Metals USA, Inc. Enid, OK 580-233-0411 Muskogee, OK 918-487-6800 Tulsa, OK 918-583-2222 The Richardson Trident Company, LLC A Subsidiary of Metals USA Plates and Shapes Southcentral, Inc. Richardson, TX – Headquarters 972-231-5176 Odessa, TX 432-561-5446 Tulsa, OK 918-252-5781 Altair Electronics, LLC A Subsidiary of The Richardson Trident Company, LLC Richardson, TX 972-231-5166 Metalweb Limited Birmingham, United Kingdom – Headquarters 44 121 328 7700 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORT London, United Kingdom 44 199 245 0300 Manchester, United Kingdom 44 161 483 9662 National Specialty Alloys, Inc. Houston, TX – Headquarters 281-345-2115 Anaheim, CA 714-870-7800 Buford, GA 770-945-9255 Las Vegas, NV 702-413-0067 Provo, UT 801-798-8676 Reno, NV 775-358-1441 Santa Clara, CA 408-988-3000 Stockton, CA 209-943-0513 Vancouver, WA 360-225-1133 Aleaciones Especiales de México, S. de R.L. de C.V. A Subsidiary of National Specialty Alloys, Inc. Cuautitlán, Mexico 52 55 2225 0835 Feralloy PDM Steel Service A Division of PDM Steel Service Centers, Inc. Stockton, CA 209-234-0548 Tampa, FL 813-626-8999 Aluminum & Stainless A Division of Phoenix Corporation Lafayette, LA 337-837-4381 New Orleans, LA 504-586-9191 Precision Flamecutting and Steel, Inc. Houston, TX 281-477-1600 Precision Strip Inc. Minster, OH – Headquarters 419-628-2343 Bowling Green, KY 270-282-8420 Northern Illinois Steel Supply Co. Channahon, IL 815-467-9000 Pacific Metal Company Portland, OR – Headquarters 503-454-1051 Billings, MT 406-245-2210 Boise, ID 208-323-8045 Eugene, OR 541-485-1876 Seattle, WA 253-796-2840 Spokane, WA 509-535-0326 PDM Steel Service Centers, Inc. Elk Grove, CA – Headquarters 916-513-4548 Denver, CO 303-297-1456 Fresno, CA 559-442-1410 Grand Junction, CO – Sales Office 970-858-3441 Phoenix Corporation Doing Business as Phoenix Metals Company Atlanta, GA – Headquarters 770-447-4211 Birmingham, AL 205-841-7477 Charlotte, NC 704-588-7075 Cincinnati, OH 513-727-4763 Fort Smith, AR 479-452-3802 Hammond, IN 219-886-2777 Kansas City, KS 913-321-5200 Nashville, TN 931-486-1456 Philadelphia, PA 215-295-9512 Richmond, VA 804-222-5052 Russellville, AR 479-452-3802 St. Louis, MO 636-379-4050 Dayton, OH 937-667-6255 Indianapolis, IN 765-778-4452 Kenton, OH 419-674-4186 Middletown, OH 513-423-4166 Portage, IN 219-850-5080 Rockport, IN 812-362-6480 Talladega, AL 256-315-2345 Toledo, OH 419-661-1100 Vonore, TN 423-884-2450 Woodburn, KY 270-542-6100 Woodhaven, MI 734-301-4001 Reliance Metalcenter Asia Pacific Pte. Ltd. A Subsidiary of Reliance Asia Holding Pte. Ltd. — Holding Company Jurong, Singapore 65 6265 1211 2 1 EXECUTING OUR PLAN Service Steel Aerospace Corp. Seattle, WA – Headquarters Tubular Steel, Inc. St. Louis, MO – Headquarters 253-627-2910 Canton, OH 330-833-5800 Wichita, KS 316-838-7737 314-851-9200 Katy, TX 281-371-5200 Hazelwood, MO 314-524-6600 Dynamic Metals International A Division of Service Steel Aerospace Corp. Lorain, OH 440-960-6100 Bristol, CT 860-688-8393 United Alloys Aircraft Metals A Division of Service Steel Aerospace Corp. Los Angeles, CA 323-588-2688 Siskin Steel & Supply Company, Inc. Chattanooga, TN – Headquarters New Haven, MO 800-325-0890 Rialto, CA 909-429-6900 Savannah, GA 912-748-2405 Staunton, IL 618-635-3695 Yarde Metals, Inc. Hartford, CT – Headquarters 860-406-6061 Greensboro, NC 336-500-0535 Long Island, NY 631-232-1600 Mansfield, MA 508-261-1142 Morristown, NJ 973-463-1166 Nashua, NH 603-635-1266 Philadelphia, PA 610-495-7545 Westmont, IL – Sales Office 630-515-5500 Valex Corp. Ventura, CA 805-658-0944 Valex China Co., Ltd. A Subsidiary of Valex Corp. Shanghai, People’s Republic of China 86 21 5818 3189 Valex Semiconductor Materials (Zhejiang) Co., Ltd. A Subsidiary of Valex Corp. Haiyan Economic Development Zone, People’s Republic of China 86 21 5818 3189 Valex Korea Co., Ltd. A 95% Owned Subsidiary of Valex Corp. Seoul, Republic of Korea 82 31 683 0119 Viking Materials, Inc. Minneapolis, MN – Headquarters 612-617-5800 Chicago, IL 847-451-7171 423-756-3671 Louisville, KY 502-716-5140 Nashville, TN 615-242-4444 Spartanburg, SC 864-599-9988 East Tennessee Steel Supply Co. A Division of Siskin Steel & Supply Company, Inc. Morristown, TN 423-587-3500 Sugar Steel Corporation Chicago, IL – Headquarters 708-757-9500 Evansville, IN 812-428-5490 Perrysburg, OH 419-661-8500 Sunbelt Steel Texas, Inc. Houston, TX – Headquarters 713-937-4300 Lafayette, LA 337-330-4140 2 2 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORT Tributes 1995 1998 2006 2011 2016 Gregg Mollins came to Reliance with a decade of experience in operations. After his success as a division manager, he went on to succeed Joe Crider as Reliance’s “fix-it” man. He applied his know-how to improve many of the Company’s early acquisitions, which positioned Reliance to successfully complete its 1994 IPO. Gregg has been involved in all 66 post-IPO acquisitions, the last seven of which he championed as President and CEO. Gregg has always believed in “doing the right thing,” an ethos that has earned him a reputation for integrity and unparalleled operational instinct in the metals service center industry. Across the Family of Companies, Gregg is known for caring deeply about our people. Reliance’s record performance in 2018 under his leadership is proof. The Reliance Family thanks Gregg for his 32 years of service and wishes him and his family the very best in his retirement. As the son of William Gimbel, who led Reliance for over 30 years, Thomas W. Gimbel essentially grew up alongside the Company. Tom’s service on the Reliance board for 20 years has been both strategic and sentimental. We salute the Gimbel legacy and send Tom into retirement with deep appreciation and best wishes. Douglas M. Hayes was the lead banker in Reliance's 1994 IPO, and since joining our Board in 1997, has provided investment perspective and strategic guidance. We thank Doug for over two decades of dedication to Reliance, which has helped us weather difficult times, undergo exponential growth, and accomplish record achievements. 2 3 EXECUTING OUR PLANCorporate Directory Corporate Information DI R EC T OR S OF F IC E R S James D. Hoffman President and Chief Executive Officer Karla R. Lewis Senior Executive Vice President and Chief Financial Officer William K. Sales, Jr. Executive Vice President, Operations Jeffrey W. Durham Senior Vice President, Operations Stephen P. Koch Senior Vice President, Operations Michael P. Shanley Senior Vice President, Operations William A. Smith II Senior Vice President, General Counsel, and Corporate Secretary Arthur Ajemyan Vice President and Corporate Controller Brenda S. Miyamoto Vice President, Corporate Initiatives Donald J. Prebola Vice President, Health, Safety, and Human Resources John A. Shatkus Vice President, Internal Audit Silva Yeghyayan Vice President, Tax Mark V. Kaminski (1), (2) Chairman of the Board Executive Chairman and Director Graniterock Sarah J. Anderson (1), (2), (4) Former Partner Ernst & Young LLP Karen W. Colonias (1), (2), (3) President and Chief Executive Officer Simpson Manufacturing Co., Inc. John G. Figueroa (1), (3), (4) Former Chief Executive Officer Genoa Healthcare Thomas W. Gimbel (1), (4) Former Trustee The Florence Neilan Trust David H. Hannah Former Executive Chairman of the Board Reliance Steel & Aluminum Co. Douglas M. Hayes (1), (2), (3), (4) President Hayes Capital Corporation Robert A. McEvoy (1), (3), (4) Former Managing Director Goldman Sachs Gregg J. Mollins Senior Advisor to the Chief Executive Officer Former President and Chief Executive Officer Reliance Steel & Aluminum Co. Andrew G. Sharkey, III (1), (3), (4) Former President and Chief Executive Officer American Iron and Steel Institute Douglas W. Stotlar (1), (2), (4) Former President and Chief Executive Officer Con-way Inc. (1) Independent Director (2) Member of the Audit Committee (3) Member of the Compensation Committee (4) Member of the Nominating and Governance Committee 2 4 2018 RELIANCE STEEL & ALUMINUM CO. ANNUAL REPORT Corporate Information TRANSFER AGENT & REGISTRAR American Stock Transfer & Trust Company 6201 15th Avenue Brooklyn, NY 11219 800-937-5449 718-921-8124 www.amstock.com INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM KPMG LLP Los Angeles, CA RELIANCE STEEL & ALUMINUM CO. CORPORATE HEADQUARTERS 350 South Grand Avenue Suite 5100 Los Angeles, CA 90071 213-687-7700 www.rsac.com ANNUAL MEETING 10:00 a.m. (Pacific) Wednesday, May 15, 2019 Millennium Biltmore Los Angeles 506 South Grand Avenue Los Angeles, CA 90071 All stockholders are invited to attend. FORM 10-K A copy of the Annual Report on Form 10-K, filed with the Securities and Exchange Commission, is available at: http://www.sec.gov or http://investor.rsac.com or upon request to: Karla R. Lewis Senior Executive Vice President and Chief Financial Officer Reliance Steel & Aluminum Co. 350 South Grand Avenue Suite 5100 Los Angeles, CA 90071 INVESTOR RELATIONS CONTACT Brenda S. Miyamoto 213-576-2428 investor@rsac.com SECURITIES LISTING Reliance Steel & Aluminum Co.’s common stock is traded on the New York Stock Exchange under the symbol “RS.” MARKET PRICE OF COMMON STOCK The high and low sales prices for the Company’s common stock in 2018 were $97.41 and $68.62. The following table sets forth the high and low sales prices of the Company’s common stock for the stated calendar quarters. 2018 HIGH $95.97 1Q $97.41 2Q $94.15 3Q $86.61 4Q LOW $79.84 $82.40 $83.12 $68.62 STOCKHOLDERS OF RECORD AND DIVIDEND POLICY As of February 22, 2019, there were 190 record holders of our common stock. We have paid quarterly cash dividends on our common stock for 59 consecutive years. Our Board of Directors has increased the quarterly dividend rate on a periodic basis 26 times since our IPO in 1994. FORWARD-LOOKING STATEMENTS This Annual Report includes statements that, to the extent they are not recitations of historical fact, may constitute forward-looking statements within the meanng of the federal securities laws, and are based on Reliance’s current expectations and assumptions. For a discussion identifying important factors that could cause actual results to vary materially from those anticipated in the forward-looking statements, see Reliance’s 2018 Form 10-K. As a result, these statements speak only as of the date that they are made, and Reliance disclaims any and all obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. 1 EXECUTING OUR PLAN R S A C . C O M 

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