RELIANCE, INC.

Reliance, Inc. operates as a global diversified metal solutions provider and is the largest metals service center company in North America (U.S. and Canada) based on revenues, with 2025 net sales of $14.29 billion ¹. The company has been in business over 85 years since its original organization on February 3, 1939, operating a single metals service center in Los Angeles, California fabricating steel reinforcing bar. As of December 31, 2025, Reliance operated through a network of approximately 310 locations in 41 U.S. states and 10 foreign countries ². The metals service center industry is highly fragmented and competitive within localized areas or regions; according to IBISWorld Inc.'s January 2026 report on the U.S. Metals Wholesaling industry, there were approximately 10,700 metal wholesaling locations operated by approximately 8,400 companies in the U.S. in 2025 ³. Reliance's 2025 tons sold from its U.S. locations represented approximately 17% of the total tons sold by the U.S. metals service center industry compared to approximately 15% for 2024 ⁴, reflecting its position as the industry leader in a highly fragmented market.

The metals service center industry is highly fragmented and competitive within localized areas or regions. According to the MSCI reporting of U.S. metals service center industry shipments, Reliance's 2025 tons sold from its U.S. locations represented approximately 17% of the industry total, an increase from 15% in 2024 ⁵. The company has numerous competitors in each of its product lines and geographic locations, and competition is most frequently local or regional. Reliance's domestic service center competitors are generally smaller, but the company also faces strong competition from national, regional and local independent metals distributors and the mills themselves, some of which have greater resources. Reliance competes on price, service, quality, processing capability and availability of products and services. The company believes its relatively low market share in the highly fragmented metals service center industry leaves significant opportunity for further strategic growth ⁶. Reliance believes its industry-leading financial results in recent years are attributable to its strong financial condition, the high quality of products and services it is able to offer as a result of significant investments in facilities and equipment, as well as its continued focus on small order sizes with quick turnaround.

Reliance generates revenue by acquiring carbon steel, aluminum, stainless steel, alloy, and other metal products from mills and then processing and distributing these materials to meet customer specifications. The company primarily operates in the spot market for both the purchase and sale of its products, with minimal contractual sales as it primarily sells via customer purchase order ⁷. Reliance services more than 125,000 customers in a variety of industries, including consumer products, 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, industrial machinery and heavy industry (agricultural, construction and mining equipment), and the auto industry, primarily through its toll processing operations ⁸. The company's largest customer represented 0.6% of its net sales in 2025 ⁹. In 2025, Reliance delivered approximately 40% of its orders within 24 hours and maintained a high level of customer retention, with over 90% of its sales orders received from repeat customers ¹⁰. The company's average order size was $3,120 in 2025 ¹¹.

Reliance 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 ¹². The company provides a wide variety of processing services to meet customers' specifications, ranging from cutting, leveling or sawing to more complex processes such as machining or electropolishing. In 2025, carbon steel sales represented 53% of total sales, aluminum 17%, stainless steel 13%, alloy 4%, and copper and brass 3% ¹³. Carbon steel sales generated $7,903.2 million in 2025 ¹⁴, aluminum sales were $2,471.5 million ¹⁵, stainless steel sales were $1,949.4 million ¹⁶, alloy sales were $641.0 million ¹⁷, toll processing and logistics revenue was $646.9 million ¹⁸, and copper and brass sales were $376.7 million ¹⁹. The company believes expanding its value-added capabilities (including toll processing) and increasing the mix of higher margin orders that include value-added processing can mitigate volatility in its profitability during periods of unfavorable metals demand and/or raw material pricing. Reliance has made significant investments in capital expenditures in recent years that have expanded its value-added processing capabilities and increased the level of its sales orders that include value-added processing to approximately 50% ²⁰.

Reliance's primary processing services range from cutting, leveling or sawing to more complex processes such as machining or electropolishing. The company typically stocks standard size and grade metal products that can be processed into many different sizes to meet the needs of many different customers, and it generally only processes specific metals to non-standard sizes pursuant to customer purchase order specifications. Reliance's metals service centers wrote and delivered over 4.6 million orders during 2025 or an average of 18,110 per day, with an average price of approximately $3,120 per order ²¹. Most of the company's metals service center customers are located within 200 miles of the Reliance location supporting them ²². Reliance's fleet of approximately 1,800 trucks (which are mostly leased) delivered the majority of its 2025 sales orders ²³. The company believes that maintaining its own fleet of trucks and drivers provides a competitive advantage as there has been a shortage of qualified drivers and third-party freight costs have been at elevated levels in recent years. Sales from Reliance's foreign operations were approximately 6% of its net sales in 2025, or $864.6 million ²⁴, while sales to international customers (based on the shipping destination) were approximately 9% of consolidated 2025 net sales, or $1.26 billion ²⁵, with sales to Canadian customers representing approximately 28%, or $347.2 million of total international sales ²⁶.

During 2025, Reliance repurchased approximately 2.2 million shares of its common stock under its repurchase program at an average cost of $276.05 per share, for a total of $594.1 million ²⁷. As of December 31, 2025, the company had authorization to repurchase $763.5 million of common stock remaining under its share repurchase program ²⁸. On October 22, 2024, the Board of Directors amended the share repurchase program to authorize $1.5 billion of share repurchases under the program ²⁹. In February 2026, the Board of Directors increased the regular quarterly dividend amount by 4.2% to $1.25 per share from $1.20 per share ³⁰. Reliance has paid quarterly cash dividends on its common stock for 66 consecutive years and has never reduced or suspended its regular quarterly dividend ³¹. The company has increased its regular quarterly dividend rate 33 times since its IPO in 1994 ³². During 2025 and 2024, Reliance spent $328.9 million and $430.6 million on capital expenditures, respectively ³³. With cash on hand, the company acquired four businesses in 2024: Cooksey Iron & Metal Company on February 1, 2024; American Alloy Steel, Inc. on April 1, 2024; Mid-West Materials, Inc. on April 1, 2024; and certain assets of the FerrouSouth division of Ferragon Corporation on August 16, 2024. Included in net sales for 2025 and 2024 were combined net sales of $389.2 million and $286.2 million, respectively, from the 2024 acquisitions ³⁴.

Net sales were $14,294.3 million in 2025, an increase of 3.3% compared to $13,835.0 million in 2024 ³⁵, driven by record tons sold, which increased 6.2% and more than offset a 2.6% decline in average selling price per ton sold ³⁶. Net income attributable to Reliance was $739.4 million in 2025 compared to $875.2 million in 2024 ³⁷. Diluted earnings per share were $13.98 in 2025 compared to $15.56 in 2024, a decrease of 10.2% ³⁸. Operating income was $1,012.7 million in 2025 compared to $1,160.0 million in 2024 ³⁹. The LIFO gross profit margin was 28.7% in 2025, down 100 basis points year-over-year, mainly due to a swing in LIFO inventory valuation adjustments—from $144.4 million of income in 2024 to $113.7 million of expense in 2025 ⁴⁰. Cash flow from operations was $831.4 million in 2025, a decrease of $598.4 million from $1.43 billion in 2024 ⁴¹. Returns to stockholders totaled $848.8 million in 2025, consisting of $594.1 million of share repurchases and $254.7 million of cash dividends ⁴².

Reliance expects to continue growing its business through acquisitions and internal growth initiatives, particularly those that broaden its geographic footprint and processing capabilities in new and existing markets ⁴³. The company believes its relatively low market share in the highly fragmented metals service center industry leaves significant opportunity for further strategic growth ⁴⁴. Reliance has made significant investments in capital expenditures in recent years that have expanded its value-added processing capabilities and increased the level of its sales orders that include value-added processing to approximately 50% ⁴⁵. The company believes that expanding its value-added capabilities (including toll processing) and increasing the mix of higher margin orders that include value-added processing can mitigate volatility in its profitability during periods of unfavorable metals demand and/or raw material pricing. Reliance also believes that its ability to make significant investments in processing equipment and in new and improved facilities is a competitive advantage, as it can expand its services and provide higher quality products to its customers, and that many of its metals service center company competitors do not have the ability to expand their processing services in response to their customers' needs as quickly or at the same scale as Reliance ⁴⁶.

Reliance's growth strategy is based on increasing its operating results through organic growth activities and strategic acquisitions that enhance its product, customer and geographic diversification. The company believes its focused growth strategy and high level of value-added services make it less vulnerable to regional or industry-specific economic volatility and somewhat lessens the negative impact of volatility experienced in commodity pricing and market cyclicality, and general economic trends ⁴⁷. Reliance has made significant investments in its businesses in recent years, including investments in advanced, state-of-the-art value-added processing equipment that concurrently expand its metals processing capabilities and promote increased efficiencies ⁴⁸. The company's product mix has become more diverse mainly as a result of its targeted growth strategy that includes acquiring companies that broaden its geographic footprint and processing capabilities ⁴⁹. Reliance believes that the increase in its level of orders that include value-added processing over time has provided stability to its gross profit margin during periods of declining metals prices and contributed to a higher sustainable gross profit margin level ⁵⁰.

Reliance's same-store SG&A expense declined 1.0% on a per ton sold basis from 2024 ⁵¹. The company's SG&A expense reflected inflationary wage adjustments and increased variable warehousing and delivery expenses associated with higher tons sold. SG&A expense in 2025 also included higher incentive-based compensation due to an approximately 8.8% increase in FIFO pretax income profitability ⁵². Reliance believes that its ability to pass mill replacement cost increases on to its customers, when they occur, results in higher gross profit realization than if it priced its products under long-term contractual pricing arrangements, which tend to have a trailing effect ⁵³. The company's current processing and estimated sustainable gross profit margin level is significantly higher than what it believes to be its historical levels from over a decade ago, in which the percentage of its orders that included value-added processing was closer to 40% and its gross profit margin level was under 27% ⁵⁴.

Reliance's facilities currently operate at about 50-60% of capacity based upon a 24-hour seven-day week, with each location averaging approximately two shifts operating at full capacity for a five-day work week ⁵⁵. The company has the ability to increase its operating capacity significantly without further investment in facilities or equipment if demand levels increase ⁵⁶. As of December 31, 2025, Reliance had 15,700 employees worldwide, of which approximately 14,100 were employed in the U.S., and its total workforce of approximately 16,100 as of December 31, 2025 includes approximately 400 contract and temporary workers ⁵⁷. Approximately 11% of the company's employees were represented by unions under collective bargaining agreements as of December 31, 2025 ⁵⁸, with approximately 2% of employees covered by 15 different collective bargaining agreements that expire in 2026 unless renewed ⁵⁹. Reliance has entered into collective bargaining agreements with 38 union locals at 46 of its locations ⁶⁰.

Reliance spent $328.9 million on capital expenditures in 2025 ⁶¹. The company's capital expenditure budgets have been at historically high levels in recent years and, it believes, significantly contribute to its industry-leading financial results ⁶². As of December 31, 2025, Reliance had $763.5 million remaining repurchase authorization under its $1.5 billion share repurchase program that was most recently amended by the Board of Directors on October 22, 2024 ⁶³. 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 ⁶⁴. Reliance has paid regular quarterly dividends to its stockholders for 66 consecutive years and increased the quarterly dividend on its common stock 33 times since its 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 ⁶⁵. The company has never reduced or suspended its regular quarterly dividend ⁶⁶. Reliance expects to continue to declare and pay dividends in the future, if earnings are available to pay dividends, but also intends to continue to retain a portion of earnings for reinvestment in its operations and expansion of its businesses ⁶⁷.

Reliance faces structural headwinds from the cyclical nature of the metals service center industry, which is impacted by both market demand and metals supply. Periods of economic slowdown decrease the demand for its products and adversely affect its pricing ⁶⁸. The company sells many products to industries that are cyclical, such as the non-residential construction, semiconductor, energy, automotive, aerospace and heavy equipment industries ⁶⁹. Metals prices are volatile due to factors including fluctuations in foreign and domestic production capacity, raw material availability and related pricing, metals consumption, customer demand levels, tariffs, import levels into the U.S., governmental regulations, and the strength of the U.S. dollar relative to other currencies ⁷⁰. Reliance generally does not enter into long-term agreements with its suppliers or hedging arrangements that could lessen the impact of metal price fluctuations ⁷¹. The company also faces headwinds from global economic conditions, including inflation, elevated interest rates, and supply chain disruptions, which have adversely affected and could continue to adversely affect its operations ⁷². The war in Ukraine has led to disruptions in local, regional, national, and global markets and economies, including in the global steel market ⁷³.

Reliance faces constraints from the current system of tariffs, which is fluid and the ultimate impacts of which on its revenues, financial results and cash flows will be based on a number of variables that are not known at this time ⁷⁴. In early 2025, the U.S. government issued executive orders imposing Section 232 duties on steel and aluminum products from Canada and Mexico, eliminating the tariff rate quotas that had partially exempted imports from certain countries and eliminating product-specific exclusions, and increased the aluminum tariffs from 10% to 25% effective on and after March 12, 2025 ⁷⁵. Subsequently, in June 2025, the Section 232 steel and aluminum tariffs were generally increased to 50% ⁷⁶. On February 20, 2026, the Supreme Court ruled that the president is not authorized to impose tariffs under the International Emergency Economic Powers Act, though this ruling has no direct impact on the tariffs in place under Section 232, including tariffs on steel and aluminum ⁷⁷. Reliance expects that the current system of tariffs, while in effect, will discourage metal imports from non-exempt countries, and these tariffs have had a favorable impact to date on the prices of the products it sells and its results of operations ⁷⁸. If these or other tariffs or duties expire or are relaxed or repealed, or if relatively higher U.S. metals prices make it attractive for foreign metal producers to export their products to the U.S. despite the presence of duties or tariffs, then the resurgence of substantial imports of foreign metal could create downward pressure on U.S. metal prices ⁷⁹.

Reliance's profitability is largely dependent upon the prices of the steel, aluminum and other metals it sells, and metals prices are volatile due to factors including fluctuations in foreign and domestic production capacity, raw material availability, metals consumption, customer demand levels, tariffs, import levels into the U.S., governmental regulations, and the strength of the U.S. dollar relative to other currencies ⁸⁰. The company generally does not enter into long-term agreements with its suppliers or hedging arrangements that could lessen the impact of metal price fluctuations ⁸¹. During periods of rising metal costs, results may be negatively impacted if the company is unable to make equivalent increases in selling prices, particularly when higher costs are not driven by customer demand but by external factors such as tariff actions ⁸². When metals prices decrease, the company often cannot replace higher cost inventory with lower cost metal at a rate that would allow it to maintain a consistent gross profit margin ⁸³. As of December 31, 2025, the company had aggregate outstanding indebtedness of approximately $1.43 billion ⁸⁴, with a substantial portion bearing interest at rates that fluctuate with changes in SOFR; as of December 31, 2025, the company had a total of $677.0 million of outstanding borrowings under its revolving credit facility and a term loan that bore interest at variable rates based on SOFR ⁸⁵, and a hypothetical 100-basis point increase in SOFR would result in approximately $6.8 million of additional interest expense on an annual basis ⁸⁶. The company operates in a highly fragmented and competitive industry, and rapidly declining prices and/or demand levels may escalate competitive pressures, with service centers selling at substantially reduced prices, and sometimes at a loss, in an effort to reduce high-cost inventory and generate cash ⁸⁷. Excess capacity and over-production by foreign metal producers or decreases in tariffs could increase the level of metal imports into the U.S., resulting in lower domestic prices, which would adversely affect sales, margins and profitability ⁸⁸.

Management's message emphasizes that Reliance operates a unique and sustainable business model predicated on diversity of products, customers and services, customer relationships, value-added solutions, industry leadership, pricing power, purchasing power, and collaboration. Management highlights that in 2025, net sales increased 3.3% compared to 2024 and tons sold increased 6.2%, significantly outperforming the industry-wide decline of 1.0% reported by the Metals Service Center Institute by over 7 percentage points ⁸⁹. Management notes that the company's 2025 tons sold from its U.S. locations represented approximately 17% of the total tons sold by the U.S. metals service center industry compared to approximately 15% for 2024 ⁹⁰. Management states that the company's growth in tons sold during 2025 exceeded the industry-wide decline by more than 7 percentage points, and that the company believes its scale, diversified business model, and customer service capabilities enabled it to expand its market share despite a declining industry trend ⁹¹. Management emphasizes that the company's focus on small order sizes and customer service, including inventory availability and quick turnaround, earns customer loyalty and has been instrumental in its ability to produce industry-leading operating results ⁹². Management also highlights that the company has paid quarterly cash dividends on its common stock for 66 consecutive years and has never reduced or suspended its regular quarterly dividend ⁹³, and that the Board of Directors increased the regular quarterly dividend amount by 4.2% to $1.25 per share from $1.20 per share in February 2026 ⁹⁴.