Best Manufacturing parent company reports drop in revenue, 11.9% gain in net income
by July 26, 2016 6:12 pm 140 views
Reliance Steel and Aluminum Company has announced its second quarter financial results for the period ending June 30, 2016. At the top of the highlights from the new parent company of Jonesboro, Ark.-based Best Manufacturing, are an increase in net income and quarterly shareholder dividends even as sales dipped lower than the same period in 2015.
Sales were $2.2 billion, down 9.1% from $2.42 billion in the second quarter of 2015 and up 1.9% from $2.16 billion in the first quarter of 2016. Gregg Mollins, president and CEO of Reliance, credited the company’s managers with maintaining strong results, particularly on the net income side where the $100.9 million figure was up 11.9% from $90.2 million in the second quarter of 2015 and up 9.4% from $92.2 million in the first quarter of 2016.
“I am extremely proud of our managers in the field and their outstanding execution which contributed to our sixth consecutive quarter of FIFO gross profit margin expansion to 31.1%,” Mollins said. “Our team has done an excellent job providing higher value to our customers through our significant investments in cutting-edge, value-added processing equipment, and effectively managing our inventory. These efforts, along with recent mill price increases in the marketplace, resulted in further improvement of our gross profit margin in the second quarter of 2016.”
Mollins said the metals pricing environment for carbon steel products was favorable in the second quarter of 2016, with continued mill price increases throughout the quarter.
He continued: “These increases were supported by stable demand, trade case filings by U.S. steel producers, disciplined domestic mill production capacity behavior, and increased raw material costs. However, the overall pricing environment remains below 2015 levels and far below peak levels, with our average selling price per ton sold in the second quarter of 2016 down 10.1% compared to the second quarter of 2015.”
As previously announced, on April 1 of this year, Reliance acquired all of the capital stock of Best Manufacturing, Inc., a custom sheet metal fabricator of steel and aluminum products on both a direct and toll basis. Best Manufacturing is headquartered in Jonesboro, Ark., with customers from many sectors, including trucking, agriculture and energy. Best Manufacturing’s net sales were approximately $20 million for the 12 months ended Dec. 31, 2015.