Moving Metal

first two months, Reliance laid off 850 employees; another 1,650 following during 2009. In total, about twenty-three percent of the entire company workforce was let go. Despite the onset of the Great Recession, 2008 ended up as a banner year of sorts, with sales reaching an all-time high of $8.7 billion and net income approaching $483 million, more than double what it had been just four years earlier. As it had in the earlier recession, Reliance used this available cash to pay down debt, helping ensure the company’s survival in tough times. In 2009, as the global economy continued to decline and the company continued to cut, there was little time to celebrate Reliance’s 70 th anniversary and its 15 th year as a publicly traded company. The company actually lost money during the period from April to June, but after that the emergency measures began to take hold. Sales declined thirty-nine percent to $5.3 billion and net income dropped to $148 million, but with its units running more efficiently (same-store operating expenses were down twenty-two percent from 2008) and its debt to capital ratio down to 25.6 percent (from 41.4 percent in 2008), Reliance was much stronger than it had been before the reces- sion. Indeed, it was the only publicly traded metals service center company in the United States that made money in 2009. The ratings agencies were so impressed that they maintained Reliance’s investment grade rating. “It was not a year that we will soon forget,” noted Tom Gimbel, while Gregg Mollins simply stated that the results were “pretty awesome.” WRITING THE STORY OF THE FUTURE Reliance entered 2010 a leaner and stronger company. The energy, automobile, appliance, and heavy equipment industries were all rebounding, bringing renewed demand

The year 2009 was a tough one, but on September 15, Reliance celebrated fifteen years on the New York Stock Exchange, earning Dave Hannah the right to ring the closing bell. From left: Richard Adamonis of NYSE Euronext, Kim Feazle of Reliance Investor Relations, Dave Hannah, Karla Lewis, and Gregg Mollins.

for carbon steel products. The electronics and aerospace industries were also coming to life, which was good news for Reliance’s non-ferrous operations. “We have survived the worst,” Hannah informed shareholders in April 2010, “and are now in a great position to take advantage of any improvement in business conditions.” There were no immediate plans for acquisitions; instead Reliance planned on growing internally in the short term, and “concentrating on the basics, keeping it simple, keeping our employees safe, and being honest and fair in all our dealings.” One thing still limiting the corporate appetite for invest- ment was continued weakness in non-residential construction, the largest single market for Reliance’s products. This was essentially a carbon steel market, and as a result Reliance

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