861884--2/26/2010--RELIANCE_STEEL_&_ALUMINUM

related topics

{debt, indebtedness, cash}

{stock, price, operating}

{condition, economic, financial}

{gas, price, oil}

{cost, regulation, environmental}

{customer, product, revenue}

{acquisition, growth, future}

{tax, income, asset}

{investment, property, distribution}

{stock, price, share}

{product, market, service}

{personnel, key, retain}

{system, service, information}

{provision, law, control}

Risks Related to Our Business and Industry Our indebtedness could impair our financial condition and reduce the funds available to us for other purposes and our failure to comply with the covenants contained in our debt instruments could result in an event of default that could adversely affect our operating results. We may not be able to generate sufficient cash flow to meet our existing debt service obligations. 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 if we cannot pass on higher metal prices to our customers. Our business could be adversely affected by economic downturns. The prices of metals are subject to fluctuations in the supply and demand for metals worldwide and changes in the worldwide balance of supply and demand could negatively impact our revenues, gross profit and net income. We operate in an industry that is subject to cyclical fluctuations and any downturn in general economic conditions or in our customers specific industries could negatively impact our revenues, gross profit and net income. We compete with a large number of companies in the metals service center industry, and, if we are unable to compete effectively, our revenues, gross profit and net income may decline. If we were to lose any of our primary suppliers or otherwise be unable to obtain sufficient amounts of necessary metals on a timely basis, we may not be able to meet our customers needs and may suffer reduced sales. We rely upon our suppliers as to the specifications of the metals we purchase from them. If we do not successfully implement our acquisition growth strategy, our ability to grow our business could be impaired. Acquisitions present many risks, and we may not realize the financial and strategic goals that were contemplated at the time of any transaction. As a decentralized business, we depend on both senior management and our key operating employees; if we are unable to attract and retain these individuals, our ability to operate and grow our business may be adversely affected. We are subject to various environmental, employee safety and health and customs and export laws and regulations, which could subject us to significant liabilities and compliance expenditures. Proposed legislation aimed at regulating and taxing carbon emissions may impact both the prices we pay for materials and the volume of business from our customers involved in fossil fuel exploration. Our operating results have fluctuated, and are expected to continue fluctuating, depending on the season. Ongoing tax audits may result in additional taxes. Damage to our computer infrastructure and software systems could harm our business. The value of your investment may be subject to sudden decreases due to the potential volatility of the price of our common stock. The volatility of the market could result in a material impairment of goodwill. Principal shareholders who own a significant number of shares may have interests that conflict with yours. We have implemented anti-takeover provisions that may adversely impact your rights as a holder of Reliance common stock. Risks Related to our Debt Securities Because our senior debt securities and the related guarantees are not secured and are effectively subordinated to the rights of secured creditors, the debt securities and the related guarantees will be subject to the prior claims of any secured creditors, and if a default occurs, we may not have sufficient funds to fulfill our obligations under the debt securities or the related guarantees. The guarantees may be unenforceable due to fraudulent conveyance statutes and, accordingly, the holders of our debt securities may not have a claim against the subsidiary guarantors. The guarantees will be released under certain circumstances. We depend on the receipt of dividends or other intercompany transfers from our subsidiaries to meet our obligations under the notes. Claims of creditors of our subsidiaries may have priority over your claims with respect to the assets and earnings of our subsidiaries. We are permitted to incur more debt, which may intensify the risks associated with our current leverage, including the risk that we will be unable to service our debt. The provisions in the indenture that governs the notes relating to change of control transactions will not necessarily protect the holders of our notes in the event of a highly leveraged transaction. Reliance may not be able to repurchase all of the notes upon a change of control repurchase event. Ratings of our notes may change and affect the market price and marketability of the notes.

Full 10-K form ▸

861884--2/26/2010--RELIANCE_STEEL_&_ALUMINUM_CO