What Reliance, Inc. told the SEC could break it.

As a metals service center, Reliance's margins move with steel and aluminum prices; 2025 LIFO gross margin fell 100 bps on a swing to $113.7M of LIFO expense (driven partly by higher aluminum costs), while tariff-supported metal prices lifted FIFO margin.

“Our LIFO gross profit margin was 28.7% in 2025, down 100 basis points year-over-year, mainly due to a swing in LIFO inventory valuation adjustments—from $144.4 million of income in 2024 to $113.7 million of expense in 2025—driven in part by higher aluminum costs that had a disproportionate impact on LIFO expense. However, higher metal prices supported by tariff actions drove FIFO gross profit margin up 80 basis points to 29.5%.”

Section 232 duties on steel and aluminum were expanded and raised to 50% (June 2025) and extended to derivative articles; the Feb 2026 Supreme Court ruling against IEEPA tariffs does not touch Section 232, leaving a fluid tariff regime with uncertain net impact on Reliance's revenue, margins and cash flows.

“in early 2025, the U.S. government issued executive orders imposing Section 232 duties on steel and aluminum products from Canada and Mexico, eliminating the tariff rate quotas that had partially exempted imports from certain countries and eliminating product-specific exclusions. These executive actions also increased the aluminum tariffs from 10% to 25% effective on and after March 12, 2025. Subsequently, in June 2025, the Section 232 steel and aluminum tariffs were generally increased to 50%.”

Reliance's decentralized model depends on the continued service of key management and employees; losing a significant number of them, or failing to attract/retain skilled personnel and labor in a competitive market, could materially harm the business.

“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.”