Reliance Inc.

Exceptional Q3 results; strong profitability and EPS surge (what’s good): - Record Q3 net sales; second-highest gross profit dollars; third-highest quarterly EPS. - Non-GAAP diluted EPS: $8.02, up 120% YoY (and above Q3 guidance $6.40–$6.60). - Net sales up 43% YoY, driven by better-than-expected shipments and pricing. - Record quarterly tons sold, up 4.3% sequentially; up 15.6% YoY vs industry +10.1% (Metals Service Center Institute). - Gross profit: $1.5B (2Q6 up 12%; vs 3Q5 up 41%); gross margin 27.9% (down 20 bps sequentially due to LIFO and mix).

Pricing + tight supply drove volumes/pricing; border wall was a major tailwind (what’s good/surprising): - Average selling price +8.2% vs 2Q6 (vs company expectation of flat to +2%), helped by tight supply, extended lead times, and strengthening demand. - Carbon steel led tons sold growth; management emphasized domestic mill relationships and reliable metal sourcing as key competitive differentiators in tight markets. - U.S. DHS border wall contract: another meaningful earnings contribution in Q3; $0.74 EPS contribution, above expected ~$0.60. - Border wall volume ramp appears to be at/near a steady run-rate: shipping began in April, and by Q3 they described a steady flow with no major disruptions.

LIFO headwind was worse than expected (what’s bad/negative): - Despite beating EPS guidance, the quarter saw materially higher LIFO expense than planned: - LIFO expense $2.74 per share vs $1.10 included in guidance = +$1.64 per share headwind. - Q3 LIFO expense recorded: $187.5M, vs estimate ~$75M. - Guidance LIFO outlook worsened: full-year LIFO expense increased to $450M (from prior estimate $300M). - Q4 includes LIFO expense of ~$112.5M (management notes this is about $1.64 per diluted share).