Reliance, Inc. (RS) Business Profile

What it does

Reliance, Inc. buys metal from producers, processes it to customer specifications and distributes it through a network of metals service centers. It is not a steel mill or other metals producer. Its products include carbon steel, aluminum, stainless steel, alloy, copper, brass and specialty metals. The company was founded in 1939, and Karla R. Lewis is its president and chief executive officer.

A metals service center acts as an intermediary between mills and metal users. Reliance stocks standard sizes and grades, then cuts, levels, saws or otherwise processes the metal to fit an order. More complex services include machining and electropolishing. It generally processes metal into non-standard sizes only after receiving a customer’s specifications.

Its customers include manufacturers, fabricators and machine shops that may need smaller quantities or more frequent deliveries than mills offer directly. Reliance also processes metal owned by customers for a fee, particularly for the auto industry. It serves industries ranging from construction and transportation to aerospace, energy, electronics and industrial machinery.

At December 31, 2025, Reliance operated approximately 310 locations in 41 U.S. states and 10 foreign countries. The company runs a decentralized structure, keeping operating decisions and resources close to customers, and often continues to use the trade names of businesses it acquires.

How it makes money

Reliance has one reportable segment, metals service centers. It earns revenue by selling metal products, often after processing them, and by charging fees to process and handle metal owned by customers. Its sales are generally made through customer purchase orders rather than long-term contracts.

In FY2025, metals service center revenue was $14.3 billion; in Q3 2026, sales increased 43% year over year.

Carbon steel was the largest product category in FY2025, with $7.9 billion of revenue and 55.3% of the total. Aluminum contributed $2.5 billion, while stainless steel contributed $1.9 billion. Toll processing and logistics generated $646.9 million. Reliance sells a range of other metals, including alloy, copper and brass.

The company primarily buys and sells in the spot market, rather than setting prices under long-term contracts. Selling prices generally move with the replacement cost of the metals it purchases, although product mix also affects the average price. Reliance says it can generally pass higher metal costs on to customers, but that does not always happen fully or immediately. In 2025, tariff-related cost increases that were not driven by demand contributed to margin pressure when higher costs were not fully passed through.

Processing is another part of the economics. Reliance says small, quickly delivered orders with more processing generate higher gross profit margins than large orders sold at volume prices. Approximately 50% of sales orders included value-added processing in 2025. Business is recurring in the sense of repeat orders rather than subscriptions: over 90% of sales orders in 2025 came from repeat customers. Higher sales volumes or metal prices also tend to require more cash in inventory and receivables.

Customers and how it sells

Reliance serves more than 125,000 customers across industries including general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and heavy equipment. Although it serves large original equipment manufacturers, most sales are to small machine shops and fabricators that order small quantities for frequent delivery.

Customer concentration is limited: the largest customer represented 0.6% of net sales in 2025. Reliance wrote and delivered over 4.6 million orders that year, with an average price of approximately $3,120 per order. Its sales personnel are organized by division or subsidiary, with outside staff maintaining and developing customer relationships and inside staff pricing and writing orders.

Most service center customers are within 200 miles of the Reliance location serving them. The company uses a fleet of approximately 1,800 trucks, most of them leased, and delivered approximately 40% of orders within 24 hours in 2025. It also operates internationally, often supporting U.S. customers with operations abroad.

Foreign operations generated approximately 6% of 2025 net sales. Sales to international customers, measured by shipping destination, represented approximately 9% of consolidated 2025 net sales.

Suppliers and costs

Reliance purchases most inventory from major domestic mills and says it has multiple suppliers for all of its products. Its purchasing relationships operate at both executive and local levels: local managers can make purchasing decisions while the company uses its combined size in supplier negotiations. Reliance says mill consolidation has reduced the number of available suppliers.

Metal inventory is a central cost. Reliance buys mainly in the spot market and has few long-term contracts to purchase metals. It stocks standard metal products and processes them at its service centers; it does not manufacture the primary metal itself. The majority of inventory is valued using the last-in, first-out accounting method, so changes in metal prices affect reported cost of sales and inventory adjustments.

Other costs include labor, warehousing, delivery and equipment. Some warehouse, delivery and selling expenses vary with volume, while fixed costs are harder to reduce when volume falls. In 2025, higher shipment volumes increased variable warehousing and delivery expenses, alongside inflationary wage adjustments. Reliance also invests in processing equipment and facilities to expand capacity and services.

Competitive position

Reliance competes with independent metals distributors and mills, as well as other service centers. Competition is frequently local or regional, and many competitors operate individual service centers. Some mills have greater resources than Reliance. The company does not identify individual competitors by name.

Companies compete on price, service, quality, processing capability and the availability of products and services. Reliance’s U.S. locations accounted for approximately 17% of U.S. metals service center industry tons sold in 2025, compared with approximately 15% in 2024. Its customers can order smaller quantities and request processing and delivery rather than buying directly from a mill.

Our reading: Reliance’s network, inventory and delivery capabilities provide a meaningful service advantage for customers that need metal quickly or in small quantities, though they do not remove local competition. In 2025, approximately 40% of orders were delivered within 24 hours and over 90% came from repeat customers.

Our reading: Processing equipment and supplier relationships are additional competitive strengths because they support customized orders and access to metal, but mills and distributors can still compete on price and availability. Reliance says its scale and relationships help it source inventory, while investments have expanded its processing capabilities.

Growth opportunities

Reliance’s growth strategy combines internal investment with acquisitions that broaden its product range, customer base, geographic reach and processing capabilities. It expects to continue pursuing acquisitions and internal initiatives in new and existing markets. The company sees room to expand in a fragmented industry: its U.S. operations represented approximately 17% of industry tons sold in 2025.

Internal spending has included new and expanded facilities, purchases of leased facilities, upgraded equipment and additional processing capacity. Reliance spent $328.9 million on capital expenditures in 2025. Its full-year 2026 capital expenditure outlook is approximately $300 million, with about half allocated to strategic growth investments. The company continues to evaluate acquisition opportunities.

Sales growth can also come from selling more metal and processing more orders for existing and new customers. In 2025, tons sold increased 6.2%, while average selling price per ton sold declined 2.6%. In Q3 2026, Reliance reported that sales increased 43% year over year, supported by shipments and pricing.

The U.S. Department of Homeland Security border wall contract contributed to third-quarter earnings as it ramped. Reliance expects to complete the $1.45 billion first phase sometime in Q2 2027 at its current run rate. It has received orders for over half of the estimated $800 million second phase, which had not been fully executed, and says the full second phase could extend the project into early 2028.

Structural risks

• Metal prices and margins: Metal costs fluctuate for reasons outside Reliance’s control. Results can suffer when cost increases are not supported by demand and cannot be fully passed to customers, or when prices fall before inventory costs can be reduced.

• Supply availability: Reliance has few long-term metal purchase contracts. Suppliers could curtail or discontinue deliveries with little or no notice. Reliance also expects tight supply could temper organic growth.

• Customer demand and fixed costs: Many customer industries are cyclical. Lower volumes generally reduce revenue and gross profit, while fixed costs cannot easily be reduced at the same pace.

• Acquisitions: Acquired businesses may perform below expectations or fail to deliver anticipated benefits. Reliance may also face integration costs, customer losses, unidentified liabilities or additional debt from acquisitions.

• Debt obligations: Reliance had approximately $1.43 billion of outstanding indebtedness at December 31, 2025. Debt service and covenant obligations can restrict funds available for operations and other purposes, while additional borrowing may increase leverage and interest expense.

Bottom line

Our reading

Our reading: Reliance is a metals distributor and processor whose business rests on inventory availability, local delivery and services tailored to small orders, rather than primary metal production. Its broad customer base and processing capabilities support that model, but metal prices, demand and supply availability remain material exposures. Growth depends on continuing to invest in facilities and equipment and finding acquisitions that deliver their intended benefits.