Reliance Steel & Aluminum Profile
Reliance, Inc. operates as a global diversified metal solutions provider.
The company is a network of companies providing diversified metal solutions and the largest metals service center company in North America (the U.S. and Canada).
Diversity of Products, Customers and Services
As of December 31, 2023, the company operated through a network of over 315 locations in 40 U.S. states and 12 foreign countries. The company distributes a full line of over 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium and other specialty steel products.
The company has more than 125,000 customers in a variety of industries, including general manufacturing, non-residential construction (including infrastructure and renewable energy), transportation (rail, truck trailer and shipbuilding), aerospace (commercial; military, defense and space), energy (oil and natural gas), electronics and semiconductor fabrication, and heavy industry (agricultural, construction and mining equipment). The company also services the auto industry, primarily through the company’s toll processing operations where the company processes the metal for a fee, without taking ownership of the metal.
Customer Relationships
The company’s focus on servicing customers with small order sizes and quick turnaround, along with the company’s growth and diversification strategy, has been instrumental in the company’s ability to produce industry-leading operating results among publicly traded metals service center companies in North America.
Value-Added Solutions Provider
The company provides a wide variety of processing services to meet its customers’ specifications and deliver products to fabricators, manufacturers and other end users. Few other metals service centers offer the broad range of processing services and metals that the company provides. The company’s primary processing services range from cutting, leveling or sawing to more complex processes, such as machining or electropolishing. The company generally only processes specific metals to non-standard sizes pursuant to customer purchase order specifications. In addition, the company typically acquires standard size and grade products that can be processed into many different sizes to meet the needs of many different customers.
The company primarily operates in the spot market for both the purchase and sale of the company’s products. The company strategically sources the vast majority of its metal purchases from domestic producers and the company is one of the largest customers of the North American primary metals producers (‘mills’).
Operational Strategy
The company’s primary business strategy is to provide the highest levels of quality and service to the company’s customers in the safest, most efficient operational manner. The core tenets of the company’s differentiated approach include commitment to safety; organic growth and innovation; diversification; decentralized operating; as-needed inventory management; and minimal contractual sales.
Growth Strategy
The company’s growth strategy is based on increasing its operating results through organic growth activities and strategic acquisitions that enhance the company’s product, customer and geographic diversification. The company’s focused growth strategy and increasing the level of value-added services the company provides its customers makes the company less vulnerable to regional or industry-specific economic volatility and somewhat lessens the negative impact of volatility experienced in cyclicality of the company’s customer end markets, as well as general economic trends.
Sales and Marketing
The company endeavors to acquire well-run businesses with strong customer relationships and solid reputations within the marketplace. Because of this, the company finds value in the acquired trade name and continues to use the business name and maintain the customer relationships.
Customers
Although the company has many large original equipment manufacturer customers, the majority of the company’s sales are to small machine shops and fabricators, in small quantities with frequent deliveries, ensuring as-needed logistics and helping them manage their working capital and credit needs more efficiently. The company’s metals service centers wrote and delivered over 4.6 million orders during 2023. Most of the company’s metals service center customers are located within 200 miles of the metals service center serving them. With the company’s fleet of approximately 1,750 trucks (some of which are leased), the company is able to service many smaller customers and provide quick turnaround deliveries with approximately 40% of the company’s orders delivered within 24 hours.
The company has built and opened international locations to service specific industries, typically making limited investments to support existing key U.S. customers that also operate in those international markets.
Seasonality
Some of the company’s customers are in seasonal businesses, especially customers in the construction industry and related businesses. The company’s overall operations have not shown any material seasonal trends as a result of the company’s geographic, product and customer diversity. Typically, revenues in the months of July, November and December have been lower than in other months because of a reduced number of working days for shipments of the company’s products, resulting from holidays observed by the company, as well as vacation and extended holiday closures at some of the company’s customers. The number of shipping days in each quarter also has an impact on the company’s quarterly sales and profitability.
Government Regulation
The company’s operations are subject to laws and regulations relating to workplace safety and worker health, principally the Occupational Safety & Health Administration and related regulations, which, among other requirements, establish noise, dust and safety standards.
The company is subject to the conflict mineral provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The company is required to undertake due diligence, disclose and report whether the products the company sells originate from the Democratic Republic of Congo and adjoining countries.
The company sells metals to foreign customers from its domestic locations and operates metals service centers in 12 foreign countries, subjecting the company to various countries’ trade regulations concerning the import and export of materials and finished products. The company’s operations are subject to the laws and regulations of the jurisdictions in which the company conducts its business that seek to prevent corruption and bribery in the marketplace, including the U.S. Foreign Corrupt Practices Act (the ‘FCPA’) and the United Kingdom’s Bribery Act 2010.
History
The company was founded in 1939 as a California corporation. It was incorporated in 2015 in the state of Delaware. In February 2024, the company changed its corporate name from Reliance Steel & Aluminum Co. to Reliance, Inc.
