Reliance, Inc.

What they do

Reliance operates a network of metals service centers that distribute a full line of alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium and other specialty steel products. It services more than 125,000 customers across industries including consumer products, general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and industrial machinery. The company also provides value-added processing services such as cutting, leveling, sawing, machining and electropolishing, and performs toll processing for the auto industry.

Revenue drivers

• Metals distribution — The core business sells over 100,000 metal products from approximately 310 locations, generating net sales of $14.29 billion in 2025. About half of orders are basic distribution with no processing services performed.
• Value-added processing — Reliance provides first-stage and more complex processing services, including cutting, leveling, sawing, machining and electropolishing, which typically carry higher margins than basic distribution. The company has increased value-added processing through acquisitions and equipment investments.
• Toll processing — Reliance processes customer-owned metal for a fee, primarily serving the auto industry. This service generates revenue without material cost of sales for the metal itself.
• Diversified end markets and geography — Sales are spread across consumer products, general manufacturing, non-residential construction, transportation, aerospace, energy, electronics, industrial machinery and heavy industry, with operations in 41 U.S. states and 10 foreign countries.

Recent performance

In the second quarter of 2026, Reliance reported net sales of $4.63 billion, up 15% sequentially and 26.5% year-over-year, with record tons sold of 1.79 million, up 7.0% sequentially. Gross profit was $1.30 billion, but gross profit margin declined 1.6 percentage points year-over-year to 28.1%, partly due to LIFO expense of $112.5 million. Pretax income rose 41% year-over-year to $429.8 million, and diluted EPS was $6.29, up 42.3% from $4.42 in the prior-year quarter. For the first six months of 2026, net sales increased 21.2% to $8.66 billion and diluted EPS rose 39.6% to $11.38.

Strategy

Reliance emphasizes a diversified business model by product, end market and geography to mitigate volatility in metals pricing and end market conditions. The company focuses on small order sizes, quick turnaround and customer service, delivering approximately 40% of orders within 24 hours in 2025 and generating over 90% of sales orders from repeat customers. Management has increased value-added processing capabilities through acquisitions and equipment investments to expand higher-margin orders. In 2025, tons sold grew 6.2% while the industry-wide volume declined 1.0%, which the company attributes to scale, processing capabilities and customer service.

Risks

• Tariff and trade policy uncertainty — Changes in U.S. and foreign trade policies, including tariffs on carbon steel and aluminum, can pressure gross profit margins and create volatility in metals pricing.
• Metals price volatility — Fluctuations in metals pricing affect revenue, gross profit and LIFO inventory accounting, as seen in 2025 when average selling price per ton sold declined 2.6% while tons sold increased.
• Economic and end market cyclicality — Deteriorating economic conditions, inflation, recession or slowdowns could reduce demand across Reliance's diversified end markets, particularly non-residential construction, its largest end market by tons.
• Customer and supplier concentration — Although Reliance is not dependent on any single customer or supplier, its business relies on maintaining relationships with over 125,000 customers and a broad supplier base.

Outlook

Management reported strong second quarter 2026 results with record tons sold and year-over-year earnings growth, but noted temporary tariff-related pressure on gross profit margins. The company's 2025 performance outperformed the industry with tons sold growth of 6.2% versus an industry decline of 1.0%. Reliance's diversification and value-added processing strategy is intended to mitigate volatility in metals pricing and end market conditions.