SEC Filings

10-Q
RELIANCE STEEL & ALUMINUM CO filed this Form 10-Q on 11/13/2000
Entire Document
 
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                          RELIANCE STEEL & ALUMINUM CO.


             Notes to Consolidated Financial Statements (Unaudited)

                               September 30, 2000

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions of Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary for fair presentation, with respect to the interim financial
statements have been included. The results of operations for the three month and
nine month periods ended September 30, 2000 are not necessarily indicative of
the results for the full year ending December 31, 2000. For further information,
refer to the consolidated financial statements and footnotes thereto for the
year ended December 31, 1999, included in the Reliance Steel & Aluminum Co. Form
10-K.

2. ACQUISITIONS

On August 7, 2000, through its newly-formed company, United Alloys Aircraft
Metals, Inc. ("United"), the Company purchased the assets and business of the
Aircraft Division of United Alloys, Inc. United will operate as a wholly-owned
subsidiary of Service Steel Aerospace Corp., a wholly-owned subsidiary of the
Company. United is located in Vernon, California, and provides its customers
with value-added processed titanium products. The Aircraft Division of United
Alloys, Inc. had 1999 annual sales of approximately $18,000,000. The purchase of
United was funded with borrowings under the Company's line of credit.

On June 1, 2000, the Company acquired 100% of the outstanding stock of Toma
Metals, Inc. ("Toma"), a privately-held metals service center based in
Johnstown, Pennsylvania. Toma processes and distributes primarily stainless
steel flat-rolled products and had sales of approximately $9,800,000 for the six
months ended March 31, 2000. The acquisition of Toma was funded with borrowings
under the Company's line of credit.

Through its newly-formed company, Hagerty Steel & Aluminum Company ("Hagerty"),
the Company purchased the assets and business of the metals service center
division of Hagerty Brothers Company, located in Peoria, Illinois, on February
5, 2000. Hagerty processes and distributes primarily carbon steel products, and
operates as a wholly-owned subsidiary of Liebovich Bros., Inc., a wholly-owned
subsidiary of the Company. Net sales of the metals service center business of
Hagerty Brothers Company were approximately $30,000,000 for the year ended
December 31, 1999. The Hagerty assets were acquired with funds from borrowings
under the Company's line of credit.

All of the above transactions have been accounted for under the purchase method
of accounting. Accordingly, the accompanying consolidated statements of income
include the revenues and expenses of each acquisition since its respective
acquisition date. The consolidated financial statements reflect the preliminary
allocation of the purchase price. The allocations of purchase price were based
upon the preliminary fair values of the net assets purchased.


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