Moving Metal

ing both internally in current operations, and externally in new acquisitions. Several Reliance subsidiaries opened new facilities in the latter half of 2002. To create a consolidated and thus more efficient business, Chatham Steel Corporation combined its Jacksonville and Orlando facilities in Florida. Tennessee-based AMI Metals opened a European facility in Gosselies, Belgium, to better serve the aerospace industry. Phoenix Metals Company opened a newly-constructed plant for its Nashville, Tennessee, metals service center. Aiming to reach a larger customer base, California-based PDM Steel Service Centers, Inc. began building a new sales and distribution facility in Las Vegas, Nevada, to provide local customers with next-day delivery options—it opened the following February.

terrorist attacks of September 11, 2001 changed that. Com- mercial airlines were grounded for a few days, and when the skies reopened, ridership was down. With overcapacity in the nation’s fleet, most orders for aircraft components were cancelled. In all, manufacturing and construction companies reduced their purchases from the top 100 service centers by fifteen percent—nearly $5 billion worth—during 2001. “We saw pricing and demand come down on everything as the year progressed,” confirmed Hannah. While the market declined, Reliance stepped up its inventory turnover rates, controlled other costs, and paid down its debt. The earnings record ended in 2001, but the company still cleared more than $36 million in net income, making it one of the few publicly traded metals service center companies to come out ahead in the recession. In 2002, Reliance’s Board of Directors rewarded several members of the company’s senior management teamwith pro- motions for their excellent performance during the downturn. The promotions also better reflected their expanding job responsibilities and Reliance’s need to delegate responsibility for managing what was now a worldwide family of companies. Gregg Mollins was named President and COO; Karla Lewis became Executive Vice President and CFO; Jim MacBeth became Senior Vice President, Carbon Steel Operations; and Bill Sales was named Senior Vice President, Non-Ferrous Operations. There was no time to celebrate these promotions, for Reliance still faced a tough year in 2002. Metal prices remained low and same-store sales decreased six percent from 2001. Veterans of the metals service center industry considered the market to be in its worst state in two decades. Nevertheless, Reliance spent the year looking for more silver linings, invest-

The 2001 terrorist attacks on New York touched off a steep economic downturn, but Reliance stepped up inventory turns, controlled costs, and came out ahead despite the recession.

132