8-K/A: Current report

FORM 8-K/A
CURRENT REPORT


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


Date of Report (Date of earliest event reported): July 1, 2003
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RELIANCE STEEL & ALUMINUM CO.
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(Exact name of registrant as specified in its charter)




California 001-13122 95-1142616
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)


350 South Grand Avenue, Suite 5100
Los Angeles, California 90071
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(Address of principal executive offices)



(213) 687-7700
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(Telephone number)



N/A
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(Former name or former address, if changed since last report.)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.

Effective July 1, 2003, the Registrant, through its wholly-owned
subsidiary RSAC Management Corp., a California corporation ("RSAC"), acquired
all of the outstanding securities of Precision Strip, Inc., an Ohio corporation
("Precision"), and its related entity, Precision Strip Transport, Inc., an Ohio
corporation ("Transport"), including both voting and non-voting common stock.
Prior to the closing, certain other entities, specifically Precision Strip
Leasing, Inc., an Ohio corporation; Precision Strip Kenton, Inc., an Ohio
corporation; Precision Strip Kenton, Ltd., an Ohio limited partnership; PSI
Limited partnership, an Ohio limited partnership; and the assets and liabilities
of John R. Eiting d/b/a J.E. Rentals, were combined with Precision either by
merger or by transfers of assets and assumptions of liabilities. After the
closing, all of the securities of Transport were contributed to Precision.
Transport will be operated as a wholly-owned subsidiary of Precision, and
Precision will be operated as a wholly-owned subsidiary of RSAC. (The combined
entities are hereafter referred to as "Precision Strip".) RSAC paid an aggregate
purchase price of $220 million in cash to John R. Eiting, Marie Eiting, Patricia
Eiting Chapa, Caroline M. Eiting, and Katherine A. Eiting, the shareholders of
Precision Strip (collectively, "Sellers"), except that a portion of the purchase
price will be retained in escrow for a certain period of time. RSAC also repaid
approximately $26 million of debt of Precision Strip.

Precision Strip operates a toll metals processing company headquartered in
Minster, Ohio and with additional facilities in Kenton, Middletown, and Tipp
City, Ohio; Anderson and Rockport, Indiana; Bowling Green, Kentucky; and
Talladega, Alabama. Precision Strip had revenues of approximately $121.8 million
for the fiscal year ended December 31, 2002. Precision Strip will continue to
engage in the toll metals processing business at the same locations as prior to
the acquisition.

Prior to the closing, the Sellers and the officers and directors of
Precision Strip were not affiliated with or related to the Registrant in any
way. The purchase price was determined by negotiations between Registrant and
RSAC, on the one hand, and the Sellers, on the other. To fund the purchase price
and the repayment of debt, the Registrant and RSAC used proceeds from a private
offering of senior secured notes and drew the balance from their syndicated bank
revolving line of credit with nine banks, for which Bank of America N.A. is the
lead lender. (See Item 5 below.)

ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.

On July 1, 2003, concurrently with the acquisition described in Item 2
above, the Registrant issued $135 million in senior secured notes to six
insurance companies. The senior secured notes were issued in two series; Series
L in the aggregate amount of $60 million will mature in 2011 and bear interest
at the rate of 4.87% per annum and Series M in the aggregate amount of $75
million will mature in 2013 and bear interest at the rate of 5.35% per annum.
Banc of America Securities acted as the placement agent. All of the Registrant's
material corporate subsidiaries guaranteed the Registrant's obligations under
the separate and several Note Purchase Agreements and the senior secured notes.

Also concurrently with the acquisition, the Registrant and RSAC amended
the Credit Agreement dated as of October 24, 2001 to provide, among other
things, for the borrowers and all their guarantors to grant a security interest
in certain personal property to the Lenders named therein. This amendment
required a similar amendment to all outstanding Note Purchase Agreements from
the Registrant's prior issuances of senior notes. The Registrant and all of its
material subsidiaries entered into a Security Agreement and pledged certain
personal property as security for the Registrant's debt under the senior notes,
as well as the Credit Agreement. The Lenders under the Credit Agreement and the
Purchasers under the separate and several Note Purchase Agreements entered into
a Collateral Agency and Intercreditor Agreement, pursuant to which Bank of
America N.A. will act as the Collateral Agent. The Registrant is not a party to
the Collateral Agency and Intercreditor Agreement. The personal property pledged
as collateral includes, but is not limited to, the outstanding securities of
each of the Registrant's material corporate subsidiaries, all of which is owned
directly either by the Registrant or by RSAC. (American Steel L.L.C. (a 50.5%
owned subsidiary of the Registrant) is not a guarantor under these agreements.)
The security interest will terminate when the Registrant meets certain
conditions, including a required leverage ratio.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements of Businesses Acquired.


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(1) Precision Strip's audited combined balance sheets at December
31, 2002 and 2001 and audited combined statements of income,
cash flows and shareholders' equity for the years ended
December 31, 2002 and 2001 and notes thereto and Report of
Independent Auditors attached as Exhibit 99.1.

(2) Precision Strip's audited combined balance sheets at June 30,
2003 and December 31, 2002 and audited combined statements of
income, cash flows and shareholders' equity for the six months
ended June 30, 2003 and year ended December 31, 2002 and notes
thereto and Report of Independent Auditors attached as Exhibit
99.2.

(b) Pro Forma Financial Information.

The following unaudited pro forma combined financial statements and
related notes have been prepared to illustrate the effect of the
acquisition of Precision Strip on the Registrant's financial statements.
The unaudited pro forma combined balance sheet assumes that the
acquisition was completed as of June 30, 2003 and the unaudited pro forma
combined statements of income as of June 30, 2003 and December 31, 2002
assume that the acquisition was completed at the beginning of each
respective period. The pro forma information is based upon the historical
consolidated financial statements of the Registrant and the historical
combined financial statements of Precision Strip, giving effect to the
acquisition under the purchase method of accounting and the assumptions,
estimates and adjustments described in the notes to the unaudited pro
forma combined financial statements. The assumptions, estimates and
adjustments are preliminary and have been made solely for the purposes of
developing such pro forma information.

The unaudited pro forma financial statements are presented for
illustrative purposes only and are not necessarily indicative of the
consolidated financial position or consolidated results of operations of
the Registrant that would have been reported had the acquisition occurred
on the date indicated, nor do they represent a forecast of the
consolidated financial position of the Registrant at any future date or
the consolidated results of operations of the Registrant for any future
period. Furthermore, no effect has been given in the unaudited pro forma
combined statements of income for operating benefits that may be realized
through the combination of the entities. Amounts allocated to the assets
and liabilities of Precision Strip are based on their estimated fair
market values as of the acquisition closing date. The purchase price
allocation for this acquisition has not been finalized, pending completion
of valuations of real and personal property and intangibles. The unaudited
pro forma combined financial statements, including the notes thereto,
should be read in conjunction with the historical consolidated financial
statements, including the notes thereto, and management's discussion and
analysis of financial condition and results of operations of the
Registrant included in the Registrant's Annual Report on Form 10-K for the
year ended December 31, 2002 and in the Registrant's Form 10-Q for the
three and six months ended March 31, 2003 and June 30, 2003, respectively,
all filed with the Securities and Exchange Commission, and the historical
financial statements, including the notes thereto, of Precision Strip,
included herein as Exhibits 99.1 and 99.2. In addition, consideration
should be given to those risk factors discussed in the Registrant's Annual
Report on Form 10-K which could affect the Registrant's results and over
which the Registrant has no control.


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RELIANCE STEEL & ALUMINUM CO.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 2003
(In thousands)