What changed in RELIANCE, INC.'s 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of RELIANCE, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+254 added−62 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)
Top changes in RELIANCE, INC.'s 2025 10-K
254 paragraphs added · 62 removed · 34 edited across 1 sections
- Item 1A. Risk Factors+254 / −62 · 34 edited
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
34 edited+220 added−28 removed9 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
34 edited+220 added−28 removed9 unchanged
2024 filing
2025 filing
Biggest changeAs carbon steel sales represented 53% of our gross sales in 2024, changes in carbon steel prices have the most significant impact on changes in our overall average selling price per ton sold . The mix of our total sales by major commodity products and year-over-year changes in selling prices are presented below: Year Ended December 31, 2024 Sales by Average Selling Product Price Per (% of Ton Sold Total Sales) (% Change) Carbon steel 53% (10.6) % Aluminum 16% (5.2) % Stainless steel 14% (13.3) % Alloy 5% (3.9) % Our 2024 acquisitions did not significantly impact the selling prices of our major commodity products. 31 Table of Contents Cost of Sales and Gross Profit Year Ended December 31, 2024 2023 % of % of Dollar Percentage $ Net Sales $ Net Sales Change Change (dollars in millions) Cost of sales $ 9,728.4 70.3 % $ 10,258.6 69.3 % $ (530.2) (5.2) % Gross profit $ 4,106.6 29.7 % $ 4,547.3 30.7 % $ (440.7) (9.7) % LIFO income, included in cost of sales $ (144.4) (1.0) % $ (164.5) (1.1) % $ 20.1 The decrease in cost of sales was attributable to lower average costs per ton sold, mainly due to declines in replacement costs for carbon steel products, partially offset by an increase in tons sold. Gross profit decreased despite contributions from four acquisitions and an increase in same-store tons sold mainly due to lower net sales as a result of a decrease in average selling price per ton sold. Our gross profit margin remained strong, but was pressured by lower metals pricing which we believe was mitigated by effective inventory management, our focus on small orders with quick turnaround and value-added processing services. In addition, we record in cost of sales non-cash adjustments to our LIFO method inventory valuation reserve that, in effect, reflects cost of sales at current replacement costs.
Biggest changeAs carbon steel sales represent a majority of our gross sales, changes in carbon steel prices have the most significant impact on changes in our average selling price per ton sold. 2025 Form 10-K / 31 Table of Contents The mix of our total sales by major commodity products and year-over-year changes in selling prices are presented below: Sales by Average Selling Product Price Per (% of Ton Sold Year Ended December 31, 2025 Total Sales) (% Change) Carbon steel 53 % (2.2) % Aluminum 17 % 5.6 % Stainless steel 13 % (8.0) % Alloy 4 % 3.3 % Copper & brass 3 % 17.0 % Our 2024 acquisitions did not significantly impact the selling prices of our major commodity products. Cost of Sales and Gross Profit 2025 2024 % of % of Dollar Percentage Year Ended December 31, Net Sales Net Sales Change Change Cost of sales $ 10,186.8 71.3 % $ 9,728.4 70.3 % $ 458.4 4.7 % Gross profit $ 4,107.5 28.7 % $ 4,106.6 29.7 % $ 0.9 — % LIFO expense (income), included in cost of sales $ 113.7 0.8 % $ (144.4) (1.0) % $ 258.1 We record, in cost of sales, non-cash adjustments to our LIFO method inventory valuation reserve that, in effect, reflect cost of sales at current replacement costs.
Other intangible assets with finite useful lives are amortized over their useful lives. We review the recoverability of our long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
Other intangible assets with finite useful lives are amortized over their estimated useful lives. We review the recoverability of our long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
In addition to funds generated from operations and approximately $1.5 billion available under our unsecured revolving credit facility, we expect to continue to be able to access the capital markets to raise funds, if desired. We believe our investment grade credit ratings enhance our ability to effectively raise capital.
In addition to funds generated from operations and approximately $1.22 billion available under our unsecured revolving credit facility, we expect to continue to be able to access the capital markets to raise funds, if desired. We believe our investment grade credit ratings enhance our ability to effectively raise capital.
See Note 8—“Intangible Assets, Net” of Part II, Item 8 “Financial Statements and Supplementary Data” for further details of our impairment loss. Long-Lived Assets We periodically review the recoverability of our other long-lived assets, primarily property, plant and equipment and intangible assets subject to amortization.
See Note 8—“Intangible Assets, Net” of Part II, Item 8, “Financial Statements and Supplementary Data” for further details of our impairment losses. Long-Lived Assets We periodically review the recoverability of our other long-lived assets, primarily property, plant and equipment and intangible assets subject to amortization.
The mix of products sold can also have an impact on our overall average selling price per ton sold.
The mix of products sold can also have an impact on our average selling price per ton sold.
Our actual capital expenditure spending over the next 12 months is ultimately dependent on market conditions, lead times and availability of property, plant and equipment when the capital project is initiated. 34 Table of Contents We primarily purchase and sell in the spot market and consequently our purchase orders are based on our current needs and are typically fulfilled by our vendors within short time periods (lead times).
Our actual capital expenditure spending over the next 12 months is ultimately dependent on market conditions, lead times and availability of property, plant and equipment when the capital project is initiated. We primarily purchase and sell in the spot market and consequently our purchase orders are based on our current needs and are typically fulfilled by our vendors within short time periods (lead times).
We must make assumptions regarding estimated future cash flows and other factors to estimate the fair value of the respective assets to determine the amount of the impairment loss. If these estimates or their related assumptions change in the future, we may be required to record 36 Table of Contents impairment charges.
We must make assumptions regarding estimated future cash flows and other factors to estimate the fair value of the respective assets to determine the amount of the impairment loss. If these estimates or their related assumptions change in the future, we may be required to record impairment charges.
The covenants under the Credit Agreement include, among other things, a financial maintenance covenant that requires us to comply with a maximum total net leverage ratio.
The covenants under the Credit Agreement and Term Loan include, among other things, a financial maintenance covenant that requires us to comply with a maximum total net leverage ratio.
The Company’s significant accounting policies, including recently issued accounting pronouncements, are fully described in Note 1—“Summary of Significant Accounting Policies ” to our consolidated financial statements in Part II, Item 8 "Financial Statements and Supplementary Data.” When we prepare these consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The Company’s significant accounting policies, including recently issued accounting pronouncements, are fully described in Note 1—“Summary of Significant Accounting Policies ” to our 2025 Form 10-K / 35 Table of Contents consolidated financial statements in Part II, Item 8, "Financial Statements and Supplementary Data.” When we prepare these consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The difference between our effective income tax rate and the U.S. federal statutory rate of 21.0% was mainly due to state income taxes partially offset by the net effects of company-owned life insurance policies.
The differences between our effective income tax rates and the U.S. federal statutory rate of 21.0% were mainly due to state income taxes partially offset by the net effects of company-owned life insurance policies.
In addition, some of our purchase orders represent authorizations to purchase rather than binding agreements. We do not have significant agreements for the purchase of goods specifying minimum quantities and set prices that exceed our expected requirements for three months.
In addition, certain of our purchase orders are authorizations to purchase rather than binding contractual commitments. We do not have significant agreements for the purchase of goods specifying minimum quantities and set prices that exceed our expected requirements for three months.
We believe our sources of liquidity will continue to be adequate to maintain operations, make necessary capital expenditures, finance strategic growth through acquisitions and internal initiatives, pay dividends and repurchase our common stock. Covenants The Credit Agreement and indentures governing our debt securities include customary representations, warranties, covenants and events of default provisions.
We believe our sources of liquidity will continue to be adequate to maintain operations, make necessary capital expenditures, finance strategic growth through acquisitions and internal initiatives, and return capital to shareholders through dividends and share repurchases. Covenants The Credit Agreement, Term Loan and indentures governing our debt securities include customary representations, warranties, covenants and events of default provisions.
We recorded $0.5 million of impairment losses on property, plant and equipment in 2024. No impairment of long-lived assets was recognized in 2023 and 2022. Impairment tests inherently involve judgments as to assumptions about expected future cash flows and the impact of market conditions on those assumptions.
We didn’t recognize any impairment losses for long-lived assets in 2025 and 2023. We recorded $0.5 million of impairment losses on property, plant and equipment in 2024. Impairment tests inherently involve judgments as to assumptions about expected future cash flows and the impact of market conditions on those assumptions.
There have been no changes in our reportable segments; we have one reportable segment – metals service centers . 35 Table of Contents Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to $2.16 billion at December 31, 2024, or approximately 22% of total assets and 30% of total equity.
There have been no changes in our reportable segments; we have one reportable segment —metals service centers . Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to $2.17 billion as of December 31, 2025, or approximately 21% of total assets and 30% of total equity.
Additionally, considerable declines in the market conditions for our products from current levels as well as in the price of our common stock could also significantly impact our impairment analyses. An impairment charge, if incurred, could be material.
Additionally, considerable declines in the market conditions for our products from current levels as well as in the price of our common stock could also significantly impact our impairment analyses. An impairment charge, if incurred, could be material. 36 / 2025 Form 10-K Table of Contents Item 7A.
Our current processing and estimated sustainable gross profit margin level is significantly higher than what we believe to be our historical levels from approximately a decade ago in which our orders that included value-added processing ranged from 40%-45% and our gross profit margins were approximately 25%-27%. We believe that our ability to make significant investments in processing equipment and facilities is a competitive advantage, as we can expand our services and provide higher quality product to our customers.
Our current processing and estimated sustainable gross profit margin level is significantly higher than what we believe to be our historical levels from over a decade ago, in which the percentage of our orders that included value-added processing was closer to 40% and our gross profit margin level was under 27%. We believe that our ability to make significant investments in processing equipment and in new and improved facilities is a competitive advantage, as we can expand our services and provide higher quality products to our customers.
We have never reduced or suspended our regular quarterly dividend. Share Repurchase Plan See Note 15—“Equity ” to our consolidated financial statements in Part II, Item 8 "Financial Statements and Supplementary Data" for information on our share repurchases. On October 22, 2024, our Board of Directors amended our share repurchase program to replenish the repurchase authorization to $1.5 billion.
We have never reduced or suspended our regular quarterly dividend. Share Repurchase Plan See Note 15—“Equity ” to our consolidated financial statements in Part II, Item 8, "Financial Statements and Supplementary Data" for information on our share repurchases. As of December 31, 2025, we had $763.5 million remaining repurchase authorization under our $1.5 billion share repurchase program that was most recently amended by our Board of Directors on October 22, 2024.
Southern Steel contributed $36.1 million to our 2024 net sales. Internal Growth Activities In 2024, we continued to maintain our focus on internal growth by building new facilities, expanding existing facilities, relocating leased facilities to facilities we own, expanding our processing capabilities and capacity, upgrading processing equipment to increase efficiency, improving the safety and energy efficiency of our operations and enhancing the working environments of our employees.
We continued to maintain our focus on internal growth by building new facilities and expanding existing facilities, purchasing leased facilities, expanding our processing capabilities and capacity, upgrading processing equipment to increase efficiency, improving the safety and energy efficiency of our operations and enhancing the working environments of our employees.
No impairment of goodwill was determined to exist during the periods presented in the consolidated financial statements. In 2024, we recorded an $11.2 million impairment loss on a trade name intangible asset with an indefinite life. No impairment of intangible assets with indefinite lives was recognized in 2023 and 2022.
No impairment of goodwill was determined to exist during the periods presented in the consolidated financial statements. We recorded impairment losses on our intangible assets with indefinite lives in the amount of $9.9 million and $11.2 million in 2025 and 2024, respectively. No impairment of intangible assets with indefinite lives was recognized in 2023.
Additionally, other intangible assets, net amounted to $1.01 billion at December 31, 2024, or approximately 10% of total assets and 14% of total equity. Goodwill and other intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests and further evaluation when certain events occur.
Additionally, other intangible assets amounted to $960.1 million as of December 31, 2025, or approximately 9% of total assets and 13% of total equity. Goodwill and other intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests based on an assessment of qualitative factors and further evaluation when certain events occur.
See Note 12—“Income Taxes” to our consolidated financial statements in Part II, Item 8 "Financial Statements and Supplementary Data" for further information on the differences between our effective income tax rates and the U.S. federal statutory rate. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 See discussion in the “Results of Operations” and “Liquidity and Capital Resources” section of Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023. Financial Condition Operating Activities Net cash provided by operations of $1.43 billion in 2024 decreased $241.5 million from $1.67 billion in 2023.
See Note 12—“Income Taxes” to our consolidated financial statements in Part II, Item 8, "Financial Statements and Supplementary Data" for further information on the differences between our effective income tax rates and the U.S. federal statutory rate. Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 See discussion in the “Results of Operations” and “Liquidity and Capital Resources” section of Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024. Financial Condition As of December 31, 2025, we had $216.6 million in cash and cash equivalents and our net debt-to-total capital ratio (net debt-to-total capital is calculated as carrying amount of debt, net of cash, divided by total Reliance stockholders’ equity plus carrying amount of debt, net of cash) was 14.4% compared to 10.2% as of December 31, 2024.
See Note 14—“Employee Benefits ” to our consolidated financial statements in Part II, Item 8 "Financial Statements and Supplementary Data" for information regarding our expected payments under these plans. As of December 31, 2024, we had entered into contracts related to capital expenditures in the amount of $97.7 million, of which $91.4 million is expected to be paid over the next 12 months.
See Note 11—“Leases ” to our consolidated financial statements in Part II, Item 8, "Financial Statements and Supplementary Data" for information regarding the maturities of our operating lease obligations. As of December 31, 2025, we had entered into contracts related to capital expenditures in the amount of $38.3 million, that is expected to be paid in 2026.
During 2024 and 2023, we spent $430.6 million and $468.8 million on capital expenditures. We believe the increase in our level of orders that include value-added processing over time has provided stability to our gross profit margin during periods of declining metals prices and contributed to a higher sustainable gross profit margin level.
Our capital expenditure budgets have been at historically high levels in recent years and, we believe, significantly contribute to our industry-leading financial results. We believe the increase in our level of orders that include value-added processing over time has provided stability to our gross profit margin during periods of declining metals prices and contributed to a higher sustainable gross profit margin level.
Our average selling price per ton sold includes intercompany transactions that are eliminated from our consolidated net sales. Same-store amounts exclude the contributions from our 2024 and 2023 acquisitions. Our same-store net sales declined from 2023 mainly due to declines in carbon steel pricing that lowered our average selling price per ton sold despite an increase in tons sold.
Our average selling price per ton sold includes intercompany transactions that are eliminated from our consolidated net sales. Same-store amounts exclude the results of our 2024 acquisitions. Net sales in 2025 increased due to record tons sold that offset a moderate decline in average selling price per ton sold.
We have made significant investments in capital expenditures in recent years that have expanded our value-added processing capabilities and increased the level of our sales orders that include value-added processing to at least 50%, 29 Table of Contents which we believe has been supportive to increases in our sustainable gross profit margin, which is currently estimated at 29%-31%.
We have made significant investments in capital expenditures in recent years that have expanded our value-added processing capabilities and increased the level of our sales orders that include value-added processing to approximately 50%. We believe we have industry leading gross profit margins based on our peer group of publicly traded metal service center companies.
The majority of our capital expenditures in 2024 and 2023 were related to growth initiatives. Financing Activities Net cash used in financing activities of $1.38 billion in 2024 increased $94.1 million from $1.28 billion in 2023. The increase was mainly the result of increased share repurchases partially offset by decreased net debt repayments.
Our investments in capital expenditures also declined $101.7 million in 2025 compared to 2024. The majority of our capital expenditures in 2025 and 2024 were related to growth initiatives. Net cash used in financing activities of $620.2 million in 2025 decreased $756.2 million from $1.38 billion in 2024.
Our returns to stockholders also included a 10% increase in our quarterly dividend rate in February 2024 with total dividend payments of $249.7 million in 2024 compared to $238.1 million in 2023. We have paid regular quarterly dividends to our stockholders for 65 consecutive years and increased the quarterly dividend on our common stock 32 times since our 1994 IPO, with the most recent increase of 9.1% from $1.10 per share to $1.20 per share effective in the first quarter of 2025.
As of December 31, 2025, our total net leverage ratio, calculated in accordance with the Credit Agreement and Term Loan, was 17% compared to the debt covenant maximum of 60%. Dividends We have paid regular quarterly dividends to our stockholders for 66 consecutive years and increased the quarterly dividend on our common stock 33 times since our 1994 IPO, with the most recent increase of 4.2% from $1.20 per share to $1.25 per share effective in the first quarter of 2026.
The share repurchase program does not obligate us to repurchase any specific number of shares in any prescribed period, does not have a specific expiration date and may be suspended or discontinued at any time. Purchase Obligations We had $275.6 million of operating lease obligations as of December 31, 2024, for processing and distribution facilities, equipment, automobiles, trucks and trailers, ground leases and other leased spaces, such as depots, sales offices, storage and data centers.
The execution of repurchases may be affected by market conditions, business performance, liquidity considerations and other factors. Purchase Obligations We had $318.6 million of operating lease obligations as of December 31, 2025, for processing and distribution facilities, equipment, automobiles, trucks and trailers, ground leases and other leased spaces, such as depots, sales offices, storage and data centers.
We also had an aggregate of $1.15 billion principal amount of senior unsecured note obligations with various maturities through 2036 issued under indentures as of December 31, 2024. See Note 10—“Debt ” to our consolidated financial statements in Part II, Item 8 "Financial Statements and Supplementary Data" for further information on our amended credit agreement, debt maturities and indentures governing our debt securities. Liquidity and Capital Resources We believe our primary sources of liquidity, including funds generated from operations, cash and cash equivalents and our $1.5 billion revolving credit facility, will be sufficient to satisfy our cash requirements and stockholder return activities over the next 12 months and beyond.
Our returns to stockholders also included a 9.1% increase in 2025 Form 10-K / 33 Table of Contents our quarterly dividend rate effective in the first quarter of 2025; however, our total dividend payments of $254.7 million in 2025 were only slightly higher than the $249.7 million paid in 2024 as our share repurchase activity reduced outstanding shares. Liquidity and Capital Resources We believe our primary sources of liquidity, including funds generated from operations, cash and cash equivalents and our $1.5 billion revolving credit facility “Credit Agreement”), will be sufficient to satisfy our cash requirements and stockholder return activities over the next 12 months and beyond. Our material cash requirements over the next 12 months include operating lease payments, planned capital expenditures, interest payments on outstanding debt, dividends and discretionary share repurchases. As of December 31, 2025, we had $400.7 million of debt obligations due before our $1.5 billion revolving credit facility matures on September 10, 2029, consisting primarily of $400.0 million outstanding under our Term Loan due in 2028. See Note 10—“Debt ” to our consolidated financial statements in Part II, Item 8, "Financial Statements and Supplementary Data" for further information on our Credit Agreement, Term Loan, debt maturities and indentures governing our debt securities. We believe we will continue to have sufficient liquidity to fund our future operating needs and to repay our debt obligations as they become due.
Conversely, when customer demand or pricing falls, our investment in working capital typically decreases which improves operating cash flow. Acquisitions 2024 Acquisitions To further our growth strategy, we completed four acquisitions in 2024. The consideration of each acquisition in 2024 was funded with cash on hand.
Conversely, when customer demand or pricing falls, our investment in working capital typically decreases, which improves operating cash flow. Acquisitions 2024 Acquisitions With cash on hand, we acquired (i) Cooksey Iron & Metal Company on February 1, 2024; (ii) American Alloy Steel, Inc. on April 1, 2024; (iii) Mid-West Materials, Inc. on April 1, 2024; and (iv) certain assets of the FerrouSouth division of Ferragon Corporation on August 16, 2024.
Demand remained relatively healthy in the majority of the end markets we serve, supported by same-store growth in tons sold. Since we primarily purchase and sell our inventories in the spot market, our average selling prices generally fluctuate with changes in replacement costs of the various metals we purchase.
We believe these shifts in customer buying patterns, combined with our scale, diverse product offerings, extensive value-added processing capabilities, and high levels of customer service supported our record tons sold in 2025 which surpassed the industry performance reported by the MSCI by over 7 percentage points. Since we primarily purchase and sell our inventories in the spot market, our average selling prices generally fluctuate with the changes in replacement costs of the various metals we purchase.
Net debt repayments were $0.3 million in 2024 compared to $508.3 million in 2023, which included the redemption of $500.0 million of senior notes. In 2024, we repurchased a record $1.09 billion of our common stock compared to $479.5 million in 2023.
The decrease was mainly the result of decreased share repurchases partially offset by $277.0 million of net debt borrowings under our revolving credit facility. In 2025, we repurchased $594.1 million of our common stock compared to a record $1.09 billion in 2024.
The total amount of commitments under long-term inventory purchase agreements is estimated at approximately $276.2 million, with amounts in 2025, 2026 and thereafter being $193.4 million, $57.2 million and $25.6 million, respectively. We have other contractual commitments under long-term service agreements, totaling $74.6 million at December 31, 2024, with amounts in 2025, 2026 and thereafter being $25.8 million, $22.1 million and $26.7 million, respectively. Debt On September 10, 2024, we entered into a $1.5 billion unsecured five-year Second Amended and Restated Credit Agreement (“Credit Agreement”) that amended and restated our then-existing $1.5 billion unsecured revolving credit facility.
The total amount of minimum commitments based on current pricing is estimated at approximately $182.2 million, with amounts in 2026, 2027 and thereafter being $165.5 million, $5.3 million and $11.4 million, respectively. We have other contractual commitments under long-term service agreements, totaling $69.5 million as of December 31, 2025, with amounts in 2026, 2027 and thereafter being $32.8 million, $23.7 million and $13.0 million, respectively. Goodwill and Other Intangible Assets We have one reporting unit for goodwill impairment testing purposes.
The inventory caption of our consolidated balance sheet includes a LIFO method inventory valuation reserve of $434.9 million at December 31, 2024. See “Net Sales” above for trends in both demand and costs of our products, and product pricing. Expenses Year Ended December 31, 2024 2023 % of % of Dollar Percentage $ Net Sales $ Net Sales Change Change (dollars in millions) SG&A expense $ 2,666.2 19.3 % $ 2,562.4 17.3 % $ 103.8 4.1 % SG&A expense, same-store $ 2,593.8 19.2 % $ 2,557.0 17.3 % $ 36.8 1.4 % Depreciation and amortization expense $ 268.7 1.9 % $ 245.4 1.7 % $ 23.3 9.5 % Depreciation and amortization expense, same-store $ 260.0 1.9 % $ 244.7 1.7 % $ 15.3 6.3 % Impairment $ 11.7 0.1 % $ — — % $ 11.7 Our SG&A expense is made up largely of compensation costs (approximately 60-65% historically), which fluctuate based on changes in our headcount levels in response to demand and general inflation, and incentive-based compensation. Same-store SG&A expense increased mainly due to higher costs associated with wage inflation and increased headcount related to our organic growth activities offset by lower incentive-based compensation resulting from lower profitability.
See “Net Sales” above for trends in both demand and costs of our products, and product pricing. Expenses 2025 2024 % of % of Dollar Percentage Year Ended December 31, Net Sales Net Sales Change Change SG&A expense $ 2,806.7 19.6 % $ 2,666.2 19.3 % $ 140.5 5.3 % SG&A expense, same-store $ 2,711.3 19.5 % $ 2,602.0 19.2 % $ 109.3 4.2 % Depreciation and amortization expense $ 278.2 1.9 % $ 268.7 1.9 % $ 9.5 3.5 % Our same-store SG&A expense declined 1.0% on a per ton sold basis from 2024.
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Item 1A. “Risk Factors ”. 28 Table of Contents In addition, when volume or pricing increases, our working capital requirements typically increase which decreases operating cash flow.
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Item 1A. “Risk Factors ”. We primarily purchase and sell inventory in the spot market, with the majority valued using the last-in, first-out (“LIFO”) method. Under this method, cost of sales reflects current inventory costs associated with the corresponding sales.
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Our acquisition strategy enhances our product breadth and value-added processing capabilities, with a continued focus on the diversification of our products, end markets and geographies.
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During periods of fluctuating metals prices, we believe the LIFO method can provide stability in our reported gross profit margin as compared to the first-in, first-out (“FIFO”) method, which is used in our day-to-day operations and incentive-based compensation programs at many of our operating locations. In addition, when volume or pricing increases, our working capital requirements typically increase, which decreases operating cash flow.
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Our 2024 acquisitions broaden our geographic base and processing capabilities in new and existing markets. ● On February 1, 2024, we acquired Cooksey Iron & Metal Company (“Cooksey Steel”), a metals service center that processes and distributes finished steel products, including tubing, beams, plates and bars.
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Included in our net sales for 2025 and 2024 were combined net sales of $389.2 million and $286.2 million, respectively, from our 2024 acquisitions. Internal Growth Activities During 2025 and 2024, we spent $328.9 million and $430.6 million on capital expenditures, respectively.
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Headquartered in Tifton, Georgia, Cooksey Steel operates three locations, servicing a diverse range of customers. ● On April 1, 2024, we acquired American Alloy Steel, Inc. (“American Alloy”), a distributor of specialty carbon and alloy steel plate and round bar, including pressure vessel quality (PVQ) material.
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We believe many of our metals service center company competitors do not have 30 / 2025 Form 10-K Table of Contents the ability to expand their processing services in response to their customers’ needs as quickly or at the same scale as Reliance. Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 (in millions, except tons in thousands and average selling price per ton sold) Net Sales Dollar Percentage Year Ended December 31, 2025 2024 Change Change Net sales $ 14,294.3 $ 13,835.0 $ 459.3 3.3 % Net sales, same-store $ 13,905.1 $ 13,548.8 $ 356.3 2.6 % Tons Percentage Year Ended December 31, 2025 2024 Change Change Tons sold 6,388.1 6,013.2 374.9 6.2 % Tons sold, same-store 6,151.5 5,842.0 309.5 5.3 % Price Percentage Year Ended December 31, 2025 2024 Change Change Average selling price per ton sold $ 2,244 $ 2,303 $ (59) (2.6) % Average selling price per ton sold, same-store $ 2,267 $ 2,321 $ (54) (2.3) % Tons sold and average selling price per ton sold exclude our toll processed tons.
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Headquartered in Houston, Texas, American Alloy operates five domestic metals service centers and a plate fabrication business. ● On April 1, 2024, we acquired Mid-West Materials, Inc. (“MidWest Materials”), a flat-rolled steel service center that primarily services North American original equipment manufacturers.
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Our tons sold increases reflect market share gains during a period of ongoing trade policy uncertainty. We believe uncertainty in the market has led our customers to purchase more frequently and in smaller quantities which are core tenets of our operational strategy.
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Located in Perry, Ohio, MidWest Materials provides steel products including hot-rolled, high strength hot-rolled, coated, and cold-rolled products that are sold into the trailer manufacturing, agriculture, metal fabrication, and building products markets. ● On August 16, 2024, we acquired certain assets of the FerrouSouth division of Ferragon Corporation (“FerrouSouth”).
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The change in LIFO expense (income) was due to the rising metals pricing environment in 2025 compared to the declining metals pricing trend in 2024.
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Headquartered in Iuka, Mississippi, FerrouSouth is a toll processing operation providing flat-roll steel processing, logistical and warehousing services. Our 2024 acquisitions contributed $286.2 million to our 2024 net sales. 2023 Acquisition On May 1, 2023, with cash on hand, we acquired Southern Steel Supply, LLC (“Southern Steel”).
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As of December 31, 2025, the inventory balance in our consolidated balance sheet includes a LIFO method inventory valuation reserve of $548.6 million. See “Overview” for further discussion of the impact of tariff actions on LIFO expense and our gross profit margin.
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Headquartered in Memphis, Tennessee, Southern Steel distributes and processes merchant and structural steel, pipe and tube, steel plate, ornamental products and laser cut and fabricated parts.
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Our SG&A expense reflected inflationary wage adjustments and increased variable warehousing and delivery expenses associated with higher tons sold.
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Our capital expenditure budgets have been at historically high levels in recent years and, we believe, significantly contribute to our industry leading financial results.
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SG&A expense in 2025 also included higher incentive-based compensation due to an approximately 8.8% increase in FIFO pretax income profitability. Operating Income 2025 2024 % of % of Dollar Percentage Year Ended December 31, Net Sales Net Sales Change Change Operating income $ 1,012.7 7.1 % $ 1,160.0 8.4 % $ (147.3) (12.7) % Impairment and restructuring charges $ 28.4 0.2 % $ 25.1 0.2 % $ 3.3 13.1 % 32 / 2025 Form 10-K Table of Contents Operating income and margin declined mainly due to a 100-basis point decline in gross profit margin due to LIFO method inventory valuation adjustments that outweighed an increase in tons sold . See Note 20—“Impairment and Restructuring Charges” to our consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data” for further information on our impairment and restructuring charges. See “Net Sales ” above for discussion of trends in demand and product costs and “ Expenses ” for trends in our operating expenses. Income Tax Rate Our effective income tax rate of 23.5% in 2025 increased from 23.0% in 2024, primarily due to a reduced favorable impact from company-owned life insurance policies.
Removed
We believe many metals service center company competitors do not have the ability to expand their processing services in response to their customers’ needs as quickly and at the same scale as Reliance. Results of Operations The following sets forth certain income statement data for each of the last three fiscal years (dollars are shown in millions, except per share amounts, and certain percentages may not calculate due to rounding): Year Ended December 31, 2024 2023 2022 % of % of % of $ Net Sales $ Net Sales $ Net Sales Net sales $ 13,835.0 100.0 % $ 14,805.9 100.0 % $ 17,025.0 100.0 % Cost of sales (exclusive of depreciation and amortization expense shown below) (1) 9,728.4 70.3 10,258.6 69.3 11,773.7 69.2 Gross profit (2) 4,106.6 29.7 4,547.3 30.7 5,251.3 30.8 Warehouse, delivery, selling, general and administrative expense (“SG&A”) (3) 2,666.2 19.3 2,562.4 17.3 2,504.2 14.7 Depreciation expense 226.1 1.6 201.6 1.4 192.1 1.1 Amortization expense 42.6 0.3 43.8 0.3 48.1 0.3 Impairment 11.7 0.1 — — — — Operating income $ 1,160.0 8.4 % $ 1,739.5 11.7 % $ 2,506.9 14.7 % Net income attributable to Reliance $ 875.2 6.3 % $ 1,335.9 9.0 % $ 1,840.1 10.8 % Diluted earnings per share attributable to Reliance stockholders $ 15.56 $ 22.64 $ 29.92 (1) Cost of sales included $3.6 million of credits for the amortization of inventory step-down to fair value adjustments in 2024 and charges of $8.1 million for the amortization of inventory step-up to fair value adjustments in 2022, relating to acquisitions.
Added
The increase was primarily attributable to increased borrowings under our revolving credit facility. Cash Flows Net cash provided by operations of $831.4 million in 2025 decreased $598.4 million from $1.43 billion in 2024. The decrease was mainly due to a $136.4 million decline in net income and increased working capital requirements.
Removed
Cost of sales in 2024 and 2023 included $10.2 million and $0.2 million, respectively, of restructuring charges relating to operational changes at certain operations. (2) 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.
Added
Higher tons sold volume and the rising metals pricing environment in 2025 required a greater working capital investment (primarily accounts receivable and inventories) than in 2024 during which metals prices were declining. Income taxes paid, net of $163.7 million in 2025 decreased from $244.9 million in 2024, mainly due to lower pretax income. Net cash used in investing activities of $321.8 million in 2025 decreased $481.9 million compared to $803.7 million in 2024. $361.8 million of the decrease was due to the absence of acquisition activity in 2025 compared to four acquisitions completed in 2024.
Removed
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.
Added
The share repurchase program does not require the repurchase of any specific number of shares in any prescribed period, does not have a specific expiration date and may be suspended or discontinued at any time. 34 / 2025 Form 10-K Table of Contents Decisions regarding the timing and amount of share repurchases are made within the context of our overall capital allocation priorities, including funding operating needs, planned capital expenditures, strategic acquisitions, maintaining targeted leverage metrics and returning capital to stockholders.
Removed
Because of this, the amount of related labor and overhead, including depreciation and amortization, is not significant and is excluded from cost of sales. Therefore, our cost of sales is substantially comprised of the cost of the material we sell. We use gross profit and gross profit margin as shown above as measures of operating performance.
Added
Our expected payments over the next 12 months under these operating leases are $81.4 million.
Removed
Gross profit and gross profit margin are important operating and financial measures as their fluctuations can have a significant impact on our earnings.
Added
Quantitative and Qualitative Disclosures About Market Ris k In the ordinary course of business, we are exposed to various market risk factors, including changes in general economic conditions, domestic and foreign competition, foreign currency exchange rates, and metals pricing, demand and availability. Commodity price risk Metals prices are volatile due to, among other things, fluctuations in foreign and domestic production capacity, raw material availability, metals consumption, import levels into the U.S., trade policy, global economic factors and foreign currency exchange rates.
Removed
Gross profit and gross profit margin, as presented, are not necessarily comparable with similarly titled measures for other companies. (3) SG&A expense in 2024 included $4.1 million of non-recurring net settlement charges, mainly related to our withdrawal from certain multiemployer pension plans, and 2023 included $3.8 million of nonrecurring gains related to the sale of non-core property, plant and equipment. 30 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Net Sales Year Ended December 31, Dollar Percentage 2024 2023 Change Change (dollars in millions) Net sales $ 13,835.0 $ 14,805.9 $ (970.9) (6.6) % Net sales, same-store $ 13,512.7 $ 14,775.3 $ (1,262.6) (8.5) % Year Ended December 31, Tons Percentage 2024 2023 Change Change (tons in thousands) Tons sold 6,013.2 5,779.2 234.0 4.0 % Tons sold, same-store 5,816.5 5,760.0 56.5 1.0 % Year Ended December 31, Price Percentage 2024 2023 Change Change Average selling price per ton sold $ 2,303 $ 2,570 $ (267) (10.4) % Average selling price per ton sold, same-store $ 2,325 $ 2,573 $ (248) (9.6) % Our tons sold and average selling price per ton sold exclude our toll processed tons.
Added
We do not currently use financial derivatives to hedge our exposure to metals price volatility. Decreases in metals prices could adversely affect our revenues, gross profit and net income. We primarily purchase and sell in the spot market and consequently are generally able to react quickly to changes in metals pricing.
Removed
Our SG&A expense as a percentage of sales increased mainly due to lower sales levels. In addition, same-store SG&A expense in 2024 included non-recurring net settlement charges of $4.1 million, mainly related to our withdrawal from certain multiemployer pension plans, and 2023 included $3.8 million of nonrecurring gains related to the sale of non-core property, plant and equipment. The increase in same-store depreciation and amortization expense is mainly due to significant increases in capital expenditures in 2023. 32 Table of Contents Included in Expenses are $11.7 million of impairment losses in 2024, which included $11.2 million related to the discontinued use of a trade name intangible asset in connection with an operational restructuring. Operating Income Year Ended December 31, 2024 2023 % of % of Dollar Percentage $ Net Sales $ Net Sales Change Change (dollars in millions) Operating income $ 1,160.0 8.4 % $ 1,739.5 11.7 % $ (579.5) (33.3) % Operating income declined mainly as a result of lower metals pricing that decreased gross profit along with a moderate increase in same-store SG&A expense, partially offset by operating income contributions from acquisitions.
Added
This strategy also limits our exposure to commodity prices to our inventories on hand. In an environment of increasing material costs, our selling prices usually increase, and we typically generate higher levels of gross profit and pretax income dollars for the same operational efforts.
Removed
Our operating income margin was lower mainly due to decreased operating leverage of our SG&A expense due to lower net sales and a lower gross profit margin . See “Net Sales ” above for discussion of trends in demand and product costs and “ Expenses ” for trends in our operating expenses. Other (Income) Expense, Net Year Ended December 31, 2024 2023 % of % of Dollar $ Net Sales $ Net Sales Change (dollars in millions) Other income, net $ (20.2) (0.1) % $ (41.3) (0.3) % $ 21.1 The change in other income, net was mainly due to a decrease in interest income as a result of lower cash and cash equivalent balances and interest earned thereon.
Added
Conversely, if metals pricing declines, we will typically generate lower levels of gross profit and pretax income dollars.
Removed
See Note 16—“Other (Income) Expense, Net” to our consolidated financial statements in Part II, Item 8 "Financial Statements and Supplementary Data" for further information on other (income) expense, net. Income Tax Rate Our effective income tax rate was 23.0% in 2024 and 2023.
Added
In periods when demand deteriorates rapidly and metal prices are declining significantly in a compressed period of time, a portion of our inventory on hand may be at higher costs than our selling prices, causing a significant adverse effect on our gross profit and pretax income margins.
Removed
The decrease was mainly due to a $462.1 million decline in net income partially offset by lower working capital investment. To manage our working capital, we focus on our days sales outstanding and inventory turnover rate as receivables and inventory are the two most significant elements of our working capital.
Added
However, when prices stabilize and our inventories on hand reflect more current prices, our gross profit margins tend to return to more normalized levels. Foreign exchange rate risk Some of our sales to international customers are denominated in foreign currencies that are different than the primary economic environment of the Reliance metals service center serving them, which exposes our operations to foreign currency transaction gains and losses.
Removed
Our average days sales outstanding rates were 41.5 33 Table of Contents days and 40.5 days in 2024 and 2023, respectively.
Added
The currency effects of translating the financial statements of our foreign subsidiaries, which operate in local currency environments, are included in accumulated other comprehensive loss and do not impact earnings unless there is a liquidation or sale of those foreign subsidiaries.
Removed
Our inventory turnover rate (based on tons) during 2024 was 4.6 times (or 2.6 months on hand) compared to 4.7 times (or 2.6 months on hand) in 2023. Income taxes paid of $244.9 million in 2024 decreased from $386.3 million in 2023, mainly due to our lower pretax income. Investing Activities Net cash used in investing activities of $803.7 million in 2024 increased $319.8 million compared to $483.9 million in 2023.
Added
We do not currently hedge our net investments in foreign subsidiaries due to the long-term nature of the investments. Net foreign currency transaction gains and losses included in our earnings amounted to losses of $2.3 million, gains of $1.9 million; and losses of $1.3 million in 2025, 2024 and 2023, respectively. Interest rate risk We are exposed to market risk related to our fixed-rate and variable-rate long-term debt.
Removed
The significant increase was mainly due to $364.6 million spent on acquisitions in 2024 compared to $24.0 million in 2023, partially offset by a $38.2 million decrease in capital expenditures.
Added
Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates. Changes in interest rates may affect the market value of our fixed-rate debt.
Removed
As of February 25, 2025, we had remaining authorization under the plan to repurchase $1.15 billion of our common stock.
Added
Under our current policies, we do not use interest rate derivative instruments to manage exposure to interest rate changes and we do not currently anticipate repayment of our fixed-rate long-term debt prior to scheduled maturities. Market risk related to our variable-rate debt is estimated as the potential decrease in pretax earnings resulting from an increase in interest rates.
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