Reliance Steel & Aluminum Co. (NYSE:RS) Q1 2015 Earnings Conference Call Transcript
Apr 23, 2015 • 11:00 am ET
Greetings, and welcome to the Reliance Steel & Aluminum Company First Quarter 2015 Earnings Conference Call. (Operator Instructions). As a reminder, this conference is being recorded.
I would now like to turn the conference over to Ms. Brenda Miyamoto, Investor Relations for Reliance. Thank you, Ms. Miyamoto. You may now begin.
Thank you, operator. Good morning, and thanks to all of you for joining our conference call to discuss our first quarter 2015 financial results. I'm joined by David Hannah, our Chairman and CEO; Gregg Mollins, our President and COO; Karla Lewis, our Executive Vice President and CFO; and Senior Vice President of Operations, Jim Hoffman and Bill Sales. A recording of this call will be posted on the Investors section of our website at investor.rsac.com.
[Forward-Looking Cautionary Statements]
I will now turn the call over to David Hannah, Chairman and CEO of Reliance.
Good morning, everyone, and thank you for joining us today. Our first quarter results were well ahead of our expectations, reflecting the resiliency of our operating model and the strength of our local management teams, which allowed us to maintain solid gross profit margins in spite of continuing industry headwinds from the challenging metals pricing environment.
We benefitted from normal seasonal improvements in demand during the first quarter as compared to the fourth quarter of 2014 as well as expanded market share, with a 5.1% increase in our same-store tons sold, which exceeded the MSCI industry average increase of 3.6%. With the exception of the energy market, overall demand improved throughout the quarter and was at levels relatively consistent with the first quarter of 2014.
We believe that our outperformance of the industry reflects our ongoing commitment to customer service as well as our continued investments in both organic growth and acquisitions, resulting in increased market share.
Pricing for all of our products continued to decline as the quarter progressed, and continues to do so today, primarily due to the historically high levels of imports supported in part by strength of the U.S. dollar. Our same-store average selling price per ton sold declined 3.9% for the first quarter of 2015, compared to the prior quarter and declined 1.7% from the first quarter of 2014.
Despite the downward pressure on pricing, Reliance's focus on small quick-turnaround orders and value-added processing helped us maintain our gross profit margins. Our FIFO gross profit margin of 25.4% was better than anticipated, remaining relatively consistent with our first quarter 2014 FIFO gross profit margin of 25.5%, but was achieved in a much more difficult pricing environment. Once again, our solid performance was made possible by the strong operational execution of our managers in the field. As a result of our strong gross profit margins and effective expense control, earnings per diluted share exceeded the high-end of our guidance range for the quarter.
First quarter net income attributable to Reliance was $101.3 million or $1.30 per diluted share. Earnings per share as reported were up 17.1% from $1.11 in the first quarter of