RS 10-K & 10-Q changes, risk factors and insider trading

The costs that we pay for metals fluctuate due to a number of factors beyond our control, and such fluctuations could adversely affect our operating results, particularly decreasesin periods in which metals prices.price increases are not supported by underlying demand and we are unable to fully pass our higher metal costs to our customers or during periods of declining metals prices and we are unable to quickly lower our inventory costs on hand.

We purchase large quantities of carbon steel, aluminum, carbon, stainless andsteel, alloy steelalloy, and other metals,metal products, which we sell to a variety of customers. Our profitability is largely dependent upon the prices of the steel, aluminum and other metals we sell to our customers. Pricing for our products generally has a much more significant impact on our results of operations than customer demand levels. If pricing declines, we will typically generate lower levels of gross profit and pretax income dollars. The price of metals we purchase and the price we charge our customers for the products we sell fluctuate based on many factors outside of our control, including general economic conditions (both domestic and international), competition, production levels, raw material costs, customer demand levels, governmental policies, import duties and other trade restrictions, currency fluctuations and surcharges imposed by our suppliers.

We maintain substantial inventories of metal to accommodate the short lead times and delivery requirements of our customers. Our customers typically purchase products from us pursuant to purchase orders and typically do not enter into long-term purchase agreements or arrangements with us. Accordingly, we purchase metal in quantities we believe to be appropriate to satisfy the anticipated needs of our customers based on information derived from customers, market conditions, historic usage and industry research. Commitments for metal purchases are generally at prevailing market prices in effect at the time orders are placed or at the time of shipment. During periods of rising metal costs, our results may be negatively impacted by increases in the costs of the metals we purchase if we are unable to make equivalent increases in the selling prices of the products we sell. We believe it is more challenging to fully pass on higher metal costs to our customers when the higher costs are not driven by customer demand, but by external factors such as tariff actions. In addition, when metalmetals prices decline,decrease, we often cannot replace our sellinghigher prices generally decline and, as we sellcost inventory purchasedwith the lower cost metal at highera costs,rate resultsthat inwould lowerallow us to maintain a consistent gross profit marginsmargin, which may reduce our gross profit margin and gross profit.profitability. Consequently, during periods in which we sellare thisselling existinginventory inventory,on hand that is costed above current replacement costs, the effects of changing metal prices couldwould adversely affect our operating results.results until our inventory costs on hand align with current replacement costs.

Our financial condition and results of operations are impacted by global markets and economic conditions over which we do not have control. A general global economic downturn or other adverse macroeconomic trends, including heightened inflation, capital markets volatility, currency rate fluctuations, trade policies, economic uncertainties, high unemployment levels, an economic slowdown or recession, or a slowing or stalled recovery therefrom, have in the past resulted in and may in the future result in unfavorable conditions that negatively affect demand and selling prices for our products and exacerbate some of the other risks that affect our business, financial condition and results of operations.

The war in Ukraine has led, is currently leading, and for an unknown period of time will continue to lead to disruptions in local, regional, national, and global markets and economies affected thereby, including in the global steel market. These disruptions caused by the war included, and may continue to include, political, social, and economic disruptions and uncertainties and material increases in certain commodity prices that may affect our business operations. In addition, the duration and impact of conflicts in the Middle East are unknown but could have global economic and political ramifications.

We expect that thesethe current system of tariffs, while in effect, will discourage metal imports from non-exempt countries. These tariffs have had a favorable impact to date on the prices of the products we sell and our results of operations. If these or other tariffs or duties expire or if others are relaxed or repealed, or if relatively higher U.S. metalmetals prices make it attractive for foreign metal producers to export their products to the U.S.,U.S. despite the presence of duties or tariffs, then the resurgence of substantial imports of foreign metal could create downward pressure on U.S. metal prices. If the Section 232 measures are removed or substantially lessened, whether through legal challenge, legislation, executive action or otherwise, then imports of foreign metals would likely increase and metal prices in the U.S. would likely fall, which could materially adversely affect our revenues, financial results and cash flows.

The metals service center industry is cyclical and impacted by both market demand and metals supply. Periods of economic slowdown (such as global or regional recessions) decrease the demand for our products and adversely affect our pricing. If either demand or pricing were to decline from the current levels, this could reduce our profitability and cash flows.

We compete with a large number of other general-line distributors and processors, and specialty distributors in the metals service center industry. Competition is based principally on price, inventory availability, timely delivery, customer service, qualityquality, processing capability and processingavailability capabilities.of products and services. Competition in the various markets in which we participate comes from companies of various sizes, some of which have more established brand names in the local markets that we serve. To compete for customer sales, we may lower prices or incur higher costs to offer increased services at a higher cost,services, which could reduce our profitability and cash flows. Rapidly declining prices and/or demand levels may escalate competitive pressures, with service centers selling at substantially reduced prices, and sometimes at a loss, in an effort to reduce their high-cost inventory and generate cash. Any increased and/or sustained competitive pressure could cause our share of industry sales to decline along with our profitability and cash flows.

We have few long-term contracts to purchase metals. Therefore, our primary suppliers of aluminum, carbon, stainless and alloy steel or other metals could curtail or discontinue their delivery of these metals to us in the 14 / 2025 Form 10-K quantities we need with little or no notice. Our ability to meet our customers’ needs and provide value-added inventory management services depends on our ability to maintain an uninterrupted supply of high-quality metal products from our suppliers. If our suppliers experience production problems, lack of capacity or transportation disruptions, the lead times for receiving our supply of metal products could be extended and the cost of our inventory may increase. If, in the future, we are unable to obtain sufficient amounts of the necessary metals at competitive prices and on a timely basis from our customary suppliers, we may not be able to obtain these metals from acceptable alternative sources at competitive prices to meet our delivery schedules. Even if we do find acceptable alternative suppliers, the process of locating and securing these alternatives may be disruptive to our business, which could have an adverse impact on our ability to meet our customers’ needs and reduce our profitability and cash flows. In addition, if a significant domestic supply source is discontinued and we cannot find acceptable domestic alternatives, we may need to find foreign sources of supply. Using foreign sources of supply could result in longer lead times, increased price volatility, less favorable payment terms, increased exposure to foreign currency movements and certain tariffs and duties and require greater levels of working capital. Alternative sources of supply may not maintain the quality standards that are in place with our current suppliers that could impact our ability to provide the same quality of products to our customers that we have provided in the past, which could cause our customers to move their business to our competitors or to file claims against us, and such claims may be more difficult to pass through to foreign suppliers.

We rely on mill certifications that attest to the physical and chemical specifications of the metal received from our suppliers for resale and generally, consistent with industry practice, we do not undertake independent testing of such metals unless independent tests are required by customers. We rely on customers to notify us of any metal that does not conform to the specifications certified by the supplying mill. Although our primary sources of products have beenare domestic mills, we have and will continue to purchase productproducts from foreign suppliers when we believe it is appropriate. In the event that metal purchased from domestic suppliers is deemed to not meet quality specifications as set forth in the mill certifications or customer specifications, we generally have recourse against these suppliers for both the cost of the products purchased and possible claims from our customers. However, such recourse will not compensate us for the damage to our reputation that may arise from substandard products and possible losses of customers. Moreover, there is a greater level of risk that similar recourse will not be available to us in the event of claims by our customers related to products from foreign suppliers that do not meet the specifications set forth in the mill certifications. In such circumstances, we may be at greater risk of loss for claims for which we do not carry, or carry insufficient, insurance.

There also has been increased stakeholder focus, including by U.S. and foreign governmental authorities, investors, customers, media and nongovernmental organizations, on environmental sustainability matters, such as climate change, the reduction of greenhouse gases and water consumption. Legislative, regulatory or other efforts to combat climate change or other environmental concerns could result in future increases in taxes, restrictions on or increases in the costs of supplies, transportation and utilities, any of which could increase our operating costs, and necessitate future investments in facilities and equipment. Further, our customers may impose emissions reduction or other environmental standards and requirements. As a result, we may experience increased compliance burdens, and the sourcing of our products may be adversely affected. These risks also include the increased pressure to make commitments, set targets, or establish additional goals to take actions to meet them, which could expose us to market, operational, execution and reputational costs or risks.

Our insurance coverage, customervendor indemnifications or other liability protections may be unavailable or inadequate to cover all of our significant risksrisks, or our insurers may deny coverage of or be unable to pay for material losses we incur, which could adversely affect our profitability and overall financial position.

In some circumstances we may be entitled to certain legal protections or indemnifications from our customersvendors through contractual provisions, laws, regulations or otherwise. However, these protections are not always available, are typically subject to certain terms or limitations, including the availability of funds, and may not be sufficient to cover all losses or liabilities incurred.

Portions of our business have been, and may in the future be, the subject of restructuring, realignment and cost reduction initiatives. While we may undertake these initiatives with the goal of realizing potential efficiencies, we may not be successful in achieving efficiencies and cost reduction benefits we expect in full or at all. Further, such benefits might be realized later than expected, and the ongoing costs of implementing these measures might be greater than anticipated. If these measures are not successful or sustainable, we might undertake additional realignment and cost reduction efforts, which could result in future charges. Moreover, our ability to achieve our other strategic goals and business plans might be adversely affected, and we could experience business disruptions,disruptions if our restructuring and realignment efforts and our cost reduction activities prove ineffective.

We are a decentralized company,company which presents certain risks.

With a diverse geographic footprint both in both North America and internationally, we believe our decentralized structure has catalyzed our growth and enabled us to remain responsive to opportunities and to our customers’ needs by leaving significant control and decision-making authority and accountability in the hands of local management. BecauseHowever, because we are decentralized, we may be slower to detect compliance-related problems (e.g., a rogue employee undertaking activities that are prohibited by applicable law or by our internal policies) and “company-wide” business initiatives, such as the integration of disparate information technology systems, are often more challenging and costly to implement than they would be in a more centralized 18 / 2025 Form 10-K environment. Depending on the nature of the problem or initiative in question, such failure could materially adversely affect our business, financial condition or results of operations.

Approximately seven percent6% of our 20242025 consolidated net sales were from operations outside the U.S., subjecting us to the risks of doing business on a global level. These risks include changes in tax rates, fluctuations in currency exchange rates, economic instability and disruptions, restrictions on the transfer of funds and the imposition of duties and tariffs. Additional risks from our multinational business include transportation delays and interruptions, war, terrorist activities, epidemics, pandemics, political instability, import and export controls, local regulation, changes in governmental policies, inflation, labor unrest and current and changing regulatory environments. International political and military conflict, such as the war in Ukraine, increasing tensions between Taiwan and China, or evolving conflicts in the Middle East could materially adversely affect the global economy. In addition, government policies on international trade and investment such as import quotas, tariffs, and capital controls, whether adopted by individual governments or addressed by regional trade blocs, can affect the demand for our customers’ products and services. The implementation of more restrictive trade policies, such as higher tariffs or new barriers to entry, in countries in which our customers sell large quantities of products and services could negatively impact our business, results of operations and financial condition. The Organization for Economic Cooperation and Development (“OECD”) has created a framework among 140 countries with the objective of implementing a global minimum effective tax rate of 15%. While we do not anticipate a material impact to our effective income tax rate under these changes, as additional jurisdictions adopt this legislation and the rules continue to evolve, our effective income tax rate and income taxestax paidpayments could increase in future years.

Our operating results could be negatively affected by the global laws, rules and regulations, as well as political environments in the jurisdictions in which we operate. For example, we are subject to the FCPA, and similar worldwide anti-bribery laws in non-U.S. jurisdictions such as the United Kingdom’s Bribery Act 2010, which generally prohibit companies and their intermediaries from corruptly paying, offering to pay, or authorizing the payment of money, a gift, or anything of value, to a foreign official or foreign political party, for purposes of 2025 Form 10-K / 19 obtaining or retaining business. A company can be held liable under these anti-bribery laws not just for its own direct actions, but also for the actions of its foreign subsidiaries or other third parties, such as agents or distributors. In addition, we could be held liable for actions taken by employees or third parties on behalf of a company that we acquire. If we fail to comply with the requirements under these laws and regulations, we may face possible civil and/or criminal penalties, which could have a material adverse effect on our business or financial results.

Given the unpredictability of the timing, nature and scope of security incidents such as cybersecurity attacks or potential disruptions, we are subject to production downtimes, operational delays, other detrimental impacts on our operations or ability to provide products and services to our customers, the compromising, misappropriation, destruction or corruption of data, unauthorized access to or acquisition of data, other manipulation or improper use of our systems or networks, financial losses from remedial actions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition. Any significant compromise of our information management systems and networks or data could impede or interrupt our business operations and may result in negative consequences including loss of revenue, fines, penalties, litigation, reputational damage, regulatory actions or increased regulatory scrutiny, inability to accurately and/or timely complete required filings with government entities including the SEC and the Internal Revenue Service, unavailability or disclosure of confidential information (including personal data), negative impact on our stock price, environmental damage, and personal injury or death. Furthermore, we may be required to expend 20 / 2025 Form 10-K significant attention and financial resources to protect against physical or security incidents that could result in the misappropriation of our information or the information of our employees and customers.

Under global data privacy and data protection regulations, the failure to maintain compliant data practices could result in consumer complaints, regulatory inquiry, civil or criminal penalties, litigation, legal liability, as well as brand impact or other harm to our business. In addition, increased consumer sensitivity to real or perceived failures in maintaining acceptable data practices could damage our reputation and deter current and potential users or customers from using our products and services. Because many of these laws are new, there is little clarity as to their interpretation, as well as a lack of precedent for the scope of enforcement. Other foreign, state and local jurisdictions have adoptedadopted, and are considering adopting,adopting laws and regulations imposing obligations regarding personal data. In some cases, these laws provide a private right of action that would allow customers to bring suit directly against us for mishandling their data or security incidents involving their personal information. The cost of compliance with these laws and regulations will be high and is likely to increase in the future.

We review the recoverability of goodwill and indefinite-lived intangible assets annually or whenever significant events or changes in circumstances occur that might impair the recovery of recorded costs. Factors that may be considered a change in circumstances, indicating that the carrying value of our goodwill or indefinite-lived intangible assets may not be recoverable, include a decline in stock price and market capitalization, declines in the market conditions for our products, viability of end markets, loss of customers, reduced future cash flow estimates, and slower growth rates in our industry. If prices for the products our 2025 Form 10-K / 21 customers sell fall substantially or remain low for a sustained period, we may be (i) unable to realize a profit fromoperate businesses that service such customers,customers profitably, (ii) required to record additional impairments, or (iii) required to suspend or reorganize operations that service such customers. An impairment charge, if incurred, could be material.

Our business substantially depends on the continued service of key members of our management and other key employees. The loss of the services of a significant number of members of our management or other key employees could have a material adverse effect on our business. Our future success also will depend on our ability to attract, retain and develop highly skilled personnel and skilled labor. Competition for these types of employees is intense and has increased recently,intense, and we could experience difficulty from time to time in hiring, developing and retaining the personnel necessary to support our business. If we do not succeed in retaining and developing our current employees and attracting new high-quality employees, our business could be materially adversely affected.

Our existing debt agreements contain financial and restrictive covenants that limit the total amount of debt that we may incur and may limit our ability to engage in other activities that we may believe are in our long-term best interests. Our failure to comply with these covenants may result in an event of default, which, if not cured or waived, could accelerate the maturity of our indebtedness or prevent us from accessing additional funds under our revolving credit facility. If the maturity of our indebtedness is accelerated, we may not have sufficient cash resources to satisfy our debt obligations and we may not be able to continue our operations as planned. See discussion regarding our financial covenants in the “Liquidity and Capital Resources” section of Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Because alla substantial portion of our available borrowing capacity on our revolving credit facilityindebtedness bears interest at rates that fluctuate with changes in certain prevailing short-term interest rates, if we increase our leverage in the future, we are vulnerable to increases in interest rates.

Returns to stockholders totaled $848.8 million in 20242025, totaled $1.34 billion, comprisedconsisting of a$594.1 record $1.09 billionmillion of share repurchases which reduced our outstanding common shares by six percent year-over-year, and $249.7$254.7 million of cash dividends, which reflectedreflecting a 10.0%9.1% increase in ourthe regular quarterly dividend rate.

Customer demand has a significant impact on our results of operations. When volume increases, our revenue dollars generally increase, which contributes to increased gross profit dollars. Conversely, when volume declines, we typically produce fewer revenue dollars, which can reduce our gross profit dollars. Variable costs such as certain warehouse, delivery and selling, general and administrative expenses also increase with 2025 Form 10-K / 29 volume. While we can and do reduce certain variable expenses when volumes decline, we cannot easily reduce our fixed costs.

In addition, when volume or pricing increases, our working capital requirements typically increaseincrease, which decreases operating cash flow. Conversely, when customer demand or pricing falls, our investment in working capital typically decreasesdecreases, which improves operating cash flow.

InDuring 2025 and 2024, we spent $328.9 million and $430.6 million on capital expenditures, respectively. We continued to maintain our focus on internal growth by building new facilities,facilities and expanding existing facilities, relocatingpurchasing leased facilities to facilities we own,facilities, expanding our processing capabilities and capacity, upgrading processing equipment to increase efficiency, improving the safety and energy efficiency of our operations and enhancing the working environments of our employees. Our capital expenditure budgets have been at historically high levels in recent years and, we believe, significantly contribute to our industry leadingindustry-leading financial results. During 2024 and 2023, we spent $430.6 million and $468.8 million on capital expenditures.

We believe the increase in our level of orders that include value-added processing over time has provided stability to our gross profit margin during periods of declining metals prices and contributed to a higher sustainable gross profit margin level. We have made significant investments in capital expenditures in recent years that have expanded our value-added processing capabilities and increased the level of our sales orders that include value-added processing to atapproximately least50%. 50%,We whichbelieve we believehave hasindustry been supportive to increases in our sustainableleading gross profit margin,margins whichbased ison currentlyour estimatedpeer atgroup 29%-31%.of publicly traded metal service center companies. Our current processing and estimated sustainable gross profit margin level is significantly higher than what we believe to be our historical levels from approximatelyover a decade agoago, in which the percentage of our orders that included value-added processing rangedwas fromcloser 40%-45%to 40% and our gross profit marginsmargin werelevel approximatelywas 25%-27%.under 27%.

We believe that our ability to make significant investments in processing equipment and in new and improved facilities is a competitive advantage, as we can expand our services and provide higher quality productproducts to our customers. We believe many of our metals service center company competitors do not have 30 / 2025 Form 10-K the ability to expand their processing services in response to their customers’ needs as quickly andor at the same scale as Reliance.

Year Ended December 31, 20242025 Compared to Year Ended December 31, 20232024 (in millions, except tons in thousands and average selling price per ton sold)

Our tonsTons sold and average selling price per ton sold exclude our toll processed tons. Our average selling price per ton sold includes intercompany transactions that are eliminated from our consolidated net sales. Same-store amounts exclude the contributionsresults fromof our 2024 and 2023 acquisitions.

Since we primarily purchase and sell our inventories in the spot market, our average selling prices generally fluctuate with the changes in replacement costs of the various metals we purchase. The mix of products sold can also have an impact on our overall average selling price per ton sold. As carbon steel sales representedrepresent 53%a majority of our gross sales in 2024,sales, changes in carbon steel prices have the most significant impact on changes in our overall average selling price per ton sold.

InWe addition, we recordrecord, in cost of salessales, non-cash adjustments to our LIFO method inventory valuation reserve that, in effect, reflectsreflect cost of sales at current replacement costs. The change in LIFO expense (income) was due to the rising metals pricing environment in 2025 compared to the declining metals pricing trend in 2024. As of December 31, 2025, the inventory captionbalance ofin our consolidated balance sheet includes a LIFO method inventory valuation reserve of $434.9$548.6 million at December 31, 2024.million.

See “Overview” for further discussion of the impact of tariff actions on LIFO expense and our gross profit margin. See “Net Sales” above for trends in both demand and costs of our products, and product pricing.

Our effective income tax rate wasof 23.5% in 2025 increased from 23.0% in 20242024, andprimarily 2023.due to a reduced favorable impact from company-owned life insurance policies. The differencedifferences between our effective income tax raterates and the U.S. federal statutory rate of 21.0% waswere mainly due to state income taxes partially offset by the net effects of company-owned life insurance policies. See Note 12—“Income Taxes” to our consolidated financial statements in Part II, Item 88, "Financial Statements and Supplementary Data" for further information on the differences between our effective income tax rates and the U.S. federal statutory rate.

Income taxes paidpaid, net of $163.7 million in 2025 decreased from $244.9 million in 2024 decreased from $386.3 million in 2023,2024, mainly due to our lower pretax income.

This report contains certain statements that are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forward-looking statements may include, but are not limited to, discussions of our: industry and end markets; business strategies; acquisitions; expectations concerning our future growth and profitability; ability to generate industry leading returns for our stockholders; future demand and metals pricing; results of operations; margins; profitability; taxes; liquidity; cash flows; capital expenditures; expectations for and impacts from macroeconomic conditions, including inflation, and the possibility of an economic recession or slowdown; anticipated effects from regulations and regulatory changes, including taxation, tariffs and other trade barriers; litigation matters and capital resources. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “preliminary,” “range,” “intend” and “continue,” the negative of these terms, and similar expressions. All statements contained in this report that are not statements of historical fact are forward-looking statements. These forward-looking statements are based on management’s estimates, projections and assumptions as of the date of such statements. We caution readers not to place undue reliance on forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties and are not guarantees of future performance. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements as a result of various important factors, including, but not limited to, actions taken by us, as well as developments beyond our control, including, but not limited to: changes in domestic and worldwide political and economic conditions; changes in U.S. and foreign trade policies and programs, including tariffs and trade policies and programs specifically affecting metal product markets and pricing; slowing economic growth, inflation, rising unemployment or other macroeconomic factors that could materially impact us, our customers and suppliers; metals pricing; demand for our products and services; the possibility that the expected benefits of government contracts, including the U.S. border wall project, acquisitions and capital expenditures may not materialize as expected; and the impacts of labor constraints and supply chain disruptions. Deteriorations in economic conditions, including as a result of tariffs or trade barriers, economic policies, inflation, economic recession, slowing growth, outbreaks of infectious disease, or geopolitical conflicts such as in Ukraine, IranUkraine and the Middle East,Iran, could lead to a decline in demand for our products and services and negatively impact our business, and may also impact financial markets and corporate credit markets which could adversely impact our access to financing, or the terms of any financing. Other factors which could cause actual results to differ materially from our forward-looking statements include those disclosed in this report and in other reports we have filed with the United States Securities and Exchange Commission (the “SEC”). Important risks and uncertainties about our business can be found elsewhere in this Quarterly Report on Form 10-Q and in Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC and in other documents Reliance files or furnishes with the SEC. The Company cannot at this time predict all of the impacts of domestic and foreign tariffs and trade policies, inflation, product price fluctuations, economic recession, outbreaks of infectious disease, geopolitical conflicts and related economic effects, but these factors, individually or in any combination, could have a material adverse effect on the Company’s business, financial position, results of operations and cash flows.

The following sets forth certain income statement data for the second quarters and first quartersix months of 2026 and 2025 (dollars are shown in millions, except per share amounts, and certain percentages may not calculate due to rounding):

GrowthOur second quarter of 2026 year-over-year growth in tons sold exceeded the industry-wide declineincrease of 5.1%5.5% reported by the Metals Service Center Institute (“MSCI”) by nearlyover 8five percentage points, continuing a multi-year trend of outperformance relative to industry shipments. We believe our scale, diversified business model, and customer service capabilities, including next-day delivery and value-added processing, enabled us to gain market share in a complex operating environment.

Carbon steel prices have benefited from tight supply conditions and solid underlying demand. Aluminum prices arecontinue to be at recordhistorically elevated levels, drivenlargely primarilydue byto the 50% tariff imposed under Section 232 in June 2025.

Operating cash flow in the first six months of 2026 increased $86.9$20.1 million to $151.4$313.6 million, primarilydespite duea significant working capital increase related to improvedstrong profitability.shipment volume and higher metals pricing.

We did not repurchase any shares in the second quarter of 2026. Returns to stockholders in the first six months of 2026 totaled $300.8$364.6 million, consisting of $234.2 million of share repurchases and $66.6$130.4 million of cash dividends, including a 4.2% increase in our regular quarterly dividend.dividend in the first quarter.

FirstSecond Quarter and Six Months Ended MarchJune 31,30, 2026 Compared to FirstSecond Quarter and Six Months Ended MarchJune 31,30, 2025 (in millions, except tons in thousands and average selling price per ton sold (“ASP”))

Tons sold and average selling price per ton soldASP exclude our toll processed tons. Our average selling price per ton soldASP includes intercompany transactions that are eliminated from our consolidated net sales.

Since we primarily purchase and sell our inventories in the spot market, our average selling pricesASP generally fluctuatefluctuates with the changes in replacement costs of the various metals we purchase. TheProduct mix of products sold can also have an impact on our averageASP. selling price per ton sold. AsBecause carbon steel sales represent a majority of our gross sales, changes in carbon steel prices have the most significant impact on changes in our average selling price per ton sold.ASP.

Carbon steel prices have benefited from tight supply conditions and solid underlying demand. Aluminum prices arecontinue to be at recordhistorically elevated levels, drivenlargely primarilydue byto the 50% tariff imposed under Section 232 in June 2025.

The following presents the mix of our total sales by major commodityproduct productscategory and year-over-year changes in selling prices are presented belowASP:

We record,record in cost of sales,sales noncash adjustments to our LIFO method inventory valuation reserve that, in effect, reflect cost of sales at current replacement costs. The increaseincreases in LIFO expense waswere due to more significant increases in metal pricing in 2026 compared to 2025. As of MarchJune 31,30, 2026, the inventory balance in our consolidated balance sheet includes a LIFO method inventory valuation reserve of $586.1$698.6 million.

See “Overview” and “Net Sales” above for further discussion of our LIFO and FIFO gross profit marginmargins and discussion of trends in both demand and costs of our products, and product pricing.

Our effective income tax rates for the firstsecond quarters ofand six months ended June 30, 2026 were 24.7% and 24.4%, respectively, compared to 23.0% and 23.3% for the respective 2025 were 24.0% and 23.6%, respectively.periods. The differences between our effective income tax rates and the U.S. federal statutory rate of 21.0% were mainly due to state income taxes partially offset by the net effects of company-owned life insurance policies.

As of MarchJune 31,30, 2026, we had $249.7$235.4 million in cash and cash equivalents, and our net debt-to-total capital ratio was 16.9%,16.2%, compared to 14.4% at December 31, 2025, reflecting increased borrowings under our revolving credit facility.

Net cash provided by operating activities in the first six months of 2026 increased $86.9$20.1 million year-over-year to $151.4$313.6 million, primarily due to improveda profitability.significant increase in profitability, which was largely offset by higher working capital requirements associated with stronger shipment volumes and higher metals pricing.

Net cash used in investing activities ofwas $70.0$146.8 million in the first quartersix months of 20262026, decreaseda $17.6decrease of $12.0 million comparedfrom to $87.6$158.8 million in 2025. OurThe investmentdecrease was primarily attributable to a $16.9 million reduction in capital expendituresexpenditures. declined $22.7 million in the first quarter of 2026 compared to 2025. The majority of our capitalCapital expenditures in theboth firstperiods quarterincluded ofsignificant 2026investments and 2025 were related toin growth initiatives.

Net cash used in financing activities ofwas $46.6$146.2 million in the first quartersix months of 20262026, increaseda $28.0decrease of $75.8 million from $18.6$222.0 million in 2025. The increasedecrease wasprimarily mainlyresulted thefrom result$98.9 ofmillion reducedlower share repurchases, partially offset by a $39.0 million decrease in net debt borrowings under our revolving credit facilityfacility. of $57.7 million, partially offset by a $19.0 million decrease in share repurchases. Our returnsReturns to stockholders also includedreflected a 4.2% increase in our quarterly dividend raterate, effective in the first quarter of 2026;2026. however, totalTotal dividend payments ofwere $66.6$130.4 million in the first quartersix months of 20262026, wereup consistentslightly withfrom 2025,the asfirst oursix months of 2025 due to the offsetting impact of share repurchase activity reduced outstanding shares by 3.0% year-over-year.activity.

As of MarchJune 31,30, 2026, we had $400.0 million outstanding under our Term Loan that matures prior to the September 10, 2029 maturity of our $1.5 billion unsecured revolving credit facility.

We believe we will continue to have sufficient liquidity to fund future operating needs and repay debt obligations as they become due. In addition to funds generated from operations and $950.0$980.0 million of remaining borrowing capacity under our unsecured revolving credit facility, we expect to be able to access the capital markets to raise funds, if desired. We believe our investment grade credit ratings enhance our ability to effectively raise capital. We believeexpect our sources of liquidity will continue to beremain adequate to maintain operations, make necessary capital expenditures, finance strategic growth through acquisitions and internal initiatives, and fund our stockholder return activities.

We were in compliance with the financial maintenance covenant under our Credit Agreement and Term Loan as of MarchJune 31,30, 2026.

On AprilJuly 17, 2026, our Board of Directors declared the 2026 secondthird quarter cash dividend of $1.25 per share.

As of MarchJune 31,30, 2026, we had $529.3 million of remaining authorization under our $1.5 billion share repurchase program that was most recently amended by our Board of Directors on October 22, 2024. The program does not require the repurchase of any specific number of shares in any prescribed period, does not have a specific expiration date and may be suspended or discontinued at any time.

Decisions regarding the timing and amount of share repurchases are made within the context of our overall capital allocation priorities, including funding operating needs, planned capital expenditures, strategic acquisitions, maintaining targetedfinancial leverage metricsflexibility and returning capital to stockholders. The execution of repurchases may be affected by market conditions, business performance, liquidity considerations and other factors.

During the quarter ended MarchJune 31,30, 2026, there were no material changes to our critical accounting estimates as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.