Metals service center company Reliance Steel & Aluminum Co. (RS) Wednesday reported a 2.5% decline in its July sales compared with June.
The company's July sales were $401.9 million. Tons sold per day declined 3% in July from June levels. Meanwhile, July FIFO gross profit increased to 21.4% of sales from 19.1% in June and 16.7% for the 2009 second quarter.
The Los Angeles, California-based company also said that FIFO inventory levels decreased $52 million in July from June 30, 2009.
Commenting on the results, Reliance's Chairman of the Board and Chief Executive Officer, David Hannah, said, "Our July results were in line with our expectations that demand may continue to soften somewhat but that our gross profit margins would improve."
"Because of our significant inventory reductions over the past several months in the face of rapidly falling demand and pricing, our inventory costs on hand are now more in line with current replacement costs allowing us to improve our gross profit margins from the historically low margins experienced in the most recent quarter. Also contributing to the improvement in our FIFO gross profit margin is the impact of mill price increases for many products that we sell," Hannah noted.
Hannah also said that the company is now focused more on profitability and less on shipping volumes and cash flow.
Reliance will announce its financial results for the third quarter and nine months ended September 30, on October 22.
RS is trading at $35.97, up $0.24, on a volume of 329,877 shares.
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