You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: I will begin today with a high-level overview of our first quarter performance and capital allocation priorities.
Karla will then speak to our operating results and demand trends by end market, and Arthur will conclude with a review of our first quarter 2021 financials.
Our resilient business model, coupled with outstanding execution in a favorable market, resulted in record financial performance during the first quarter of 2021.
We experienced ongoing strength in metals pricing during the first quarter, led by multiple price increases for carbon steel products, along with improving demand in many markets, and leveraged our decentralized operating structure, small order sizes and diversification of products, end markets and geographies to achieve record gross profit margin for the third consecutive quarter of 33.6%, up 60 basis points from the fourth quarter of 2020 and up 330 basis points from the first quarter of 2020.
Our record quarterly gross profit margin, combined with average selling prices well above our expectations and our continued focus on expense control, contributed to record pre-tax income of $359 million in the first quarter of 2021, up over 100% from the prior quarter and up over 300% from the prior year period.
Our quarterly earnings per diluted share of $4.12 were also a record and substantially exceeded our outlook.
Our strong earnings and effective working capital management resulted in cash flow from operations of $161.8 million in the first quarter of 2021 despite $182.8 million of working capital investment.
This is a significant result as we typically use cash in the first quarter as we rebuild working capital from seasonal low fourth quarter levels, compounded by the significant increases in metals costs we are experiencing.
We improved our inventory turn rate to 5.4 times, surpassing our 2020 annual rate and companywide turn goal of 4.7 times.
Our ability to cross-sell inventory among our family of companies, which we believe is the key advantage and differentiator of our model and scale, was a significant contributor to our improved inventory management.
Despite extended mill lead times and inventory shortages, collaboration among our family of companies and strong long-standing relationships with our domestic mills enabled us to source the metal needed by our customers.
Our managers in the field effectively supported our valued customers by ensuring inventory availability while maximizing margin on opportunistic orders.
Our strong cash flow generation and significantly enhanced liquidity position enables us to maintain a flexible capital allocation strategy focused on both growth and stockholder returns.
Our 2021 capital expenditure budget of $245 million includes new buildings and other projects to expand, upgrade and maintain many of our existing operating facilities.
However, when factoring in project delays and extended lead times for equipment due to COVID-19, we believe our potential cash flow outlays for our capital expenditure will be closer to $300 million in 2021 due to the prior year holdover spending.
During the first quarter of 2021, we invested $43.7 million back into our business through capital expenditures, including several growth opportunities to address and exceed our customers' and suppliers' needs.
For instance, we've invested in toll processing expansions in Texas and Kentucky given the significant demand we've experienced in our toll processing capabilities throughout our footprint.
Operations at our Kentucky facility commenced in November 2020 and have been steadily ramping ever since.
Construction continues in Texas on our new greenfield facility focused on carbon steel tolling, which will support increased capacity of our toll processing customers who are primarily metals producers and their end customers.
We're very excited about these opportunities to expand our toll processing service offerings and see many more possibilities in the future for our toll processing capabilities moving forward.
As mentioned on our last call, we are installing energy-efficient lighting and solar panels in certain of our facilities as well as investing in additional innovative processing equipment to continue providing our customers with the highest quality products and services.
We continue to see a healthy pipeline of prospective opportunities, including in adjacent businesses in addition to traditional metals service center businesses as we've broadened our universe of potential acquisition candidates.
Nevertheless, we will maintain our strict transaction criteria, including our focus on quality of earnings when we evaluate any prospective targets to ensure a strong fit within our family of companies.
I will now turn to our stockholder return activity.
During the first quarter of 2021, we paid $44.8 million in dividends to our stockholders.
We've maintained our payment of regular quarterly dividends for 62 consecutive years without ever suspending payments or reducing our dividend rate.
In fact, we've increased our dividend 28 times since our 1994 IPO, including the most recent increase of 10% in the first quarter of 2021.
At March 31, 2021, approximately 2.8 million shares remained available for repurchase under our stock repurchase program.
We expect to remain a prudent allocator of capital by maintaining our flexible approach focused on both growth, which remains our top priority; and stockholder return activities, including opportunistic repurchases of our common stock.
In summary, I am inspired by the strong operational execution demonstrated by the entire Reliance team during the first quarter of 2021.
Our unwavering focus on the core elements of the Reliance business model, including health and safety, pricing discipline, diligent expense control when needed, inventory management, organic growth and innovation, enables us to perform from a position of strength in both good times and bad.
In the current environment characterized by extremely high metal pricing, strong demand from many of our customers and limited metal availability, we believe Reliance remains well positioned to continue generating strong earnings.
Given our strong liquidity position, we look forward to continuing to support the growth and needs of our customers and suppliers while also returning value to our stockholders.
We will continue to support our colleagues, customers, suppliers and communities in a sustainable manner through both the challenges and opportunities that lie ahead.
We remain confident that America is going to need Reliance to rebuild.
Strong demand conditions in the majority of our end markets resulted in our tons sold increasing 11.3% compared to the fourth quarter, which was within our guidance range of up 10% to 12% and above the typical seasonal improvement in shipping volumes we experienced in the first quarter.
While demand is healthy and continues to improve in most markets, our first quarter shipments did not reach pre-pandemic levels and were down 4% from the first quarter of 2020.
However, on a per day basis, our tons sold were down only 2.5%.
We believe underlying demand is stronger than our shipment levels reflect, given many factors holding back economic activity for us, our customers and our suppliers, including metal supply constraints, supply chain disruptions for various components and materials and labor and trucking shortages.
The good news is we expect to fill this demand in future periods and these factors support increased metal pricing.
This strengthened demand, coupled with rising input costs and limited metal availability, resulted in metal prices accelerating throughout the first quarter for many of the products we sell, most notably carbon steel products.
Our average selling price increased 20% compared to the fourth quarter of 2020, exceeding our guidance of up 12% to 14% by a significant margin.
These robust demand and pricing conditions contributed to an all-time high quarterly gross profit margin of 33.6%.
On a non-GAAP FIFO basis, which we believe is the best measure of our day-to-day operating performance, we achieved a record gross profit margin of 37.1%, an increase of 350 basis points compared to the prior quarter and up 600 basis points from the first quarter of 2020.
Way to go, team Reliance.
Our record gross profit margin was the result of outstanding execution by our managers in the field who once again effectively implemented price increases at the time of mill announcement prior to receiving the higher-cost metal into inventory, maintained their focus on higher-margin orders and were very selective given limited metal supply, which enabled us to capture an incremental margin benefit in excess of already strong levels.
I'll now turn to a high-level overview of our key end markets.
Demand for nonresidential construction, which includes infrastructure and is the largest end market we serve, continue to improve with first quarter shipments approaching pre-pandemic levels.
We continue to experience strong quoting activity for projects for big-box retailers, healthcare facilities, schools, large warehouses and data processing centers, among others.
And given our healthy backlogs, quoting activity and positive customer sentiment, we believe demand will remain steady at current solid levels.
We saw continued strength in demand for the toll processing services we provide to the automotive market, surpassing activity levels in both the fourth and first quarters of 2020 with automotive OEMs and steel and aluminum mills continuing to ramp production.
Importantly, our tolling operations serving the automotive market saw only minimal impacts to date as a result of the global microchip shortage, and we expect tool processing volumes to remain strong.
Demand in heavy industry for both agricultural and construction equipment continued to improve in the first quarter as our customers increased production levels to meet customer demand and replenish dealer inventories.
Demand for industrial machinery used in manufacturing processes was also strong in the first quarter of 2021.
Absent disruptions for our customers that impact their production, we expect demand to continue at strong levels.
Semiconductor demand during the first quarter continued to strengthen from the fourth quarter, and we expect this to continue.
The semiconductor space continues to be one of our strongest end markets.
Demand in commercial aerospace began to experience limited signs of improvement compared to the fourth quarter of 2020, which we believe was the trough of the current cycle.
We expect limited improvement throughout 2021.
On the other hand, demand in the military, defense and space portions of our aerospace business remains strong with backlog improving during the quarter.
We anticipate strong demand continuing in the noncommercial aerospace market for the balance of the year.
Finally, demand in the energy sector, which is mainly oil and natural gas, saw a modest recovery toward the end of the first quarter of 2021.
We anticipate a slight improvement in the second quarter given current oil prices and customers needing to replenish inventory for certain products.
We entered the second quarter of 2021 with strong demand and pricing momentum that creates an environment for us to optimize our model and deliver strong results.
We remain dedicated to partnering with our key customers and suppliers during these extraordinary times, and we can only do this with the continued commitment to health and safety and operational excellence that our Reliance colleagues have demonstrated every day throughout very challenging times.
I'll start with a recap of our quarterly results.
Strong pricing, healthy demand and record gross profit margin contributed to record gross profit dollars, which in turn drove record pre-tax income and record earnings per share.
Turning to our sales.
The significant increase in metal pricing and healthy demand resulted in our first quarter sales increasing 33% over the fourth quarter of 2020.
Compared to the prior year period, our first quarter sales were up over 10%, supported by the strong pricing momentum for most carbon steel products.
As Jim and Karla mentioned, the strong pricing environment, along with our focus on higher-margin orders and continued investments in value-added processing capabilities, collectively resulted in record quarterly gross profit of $953.7 million and a record gross profit margin of 33.6% in the first quarter of 2021.
We incurred LIFO expense of $100 million in the first quarter of 2021.
This compares to LIFO income of $20 million in the first quarter of 2020 and LIFO expense of $15.5 million in the fourth quarter of 2020.
At the end of the first quarter, our LIFO reserve on our balance sheet was $215.6 million.
We revised our annual LIFO expense estimate to $400 million from $340 million primarily due to higher-than-anticipated costs for certain carbon steel products.
Consistent with our accounting policy, we allocate our annual estimate on a pro rata basis in each quarter.
As such, our current projected LIFO expense for the second quarter of 2021 is $100 million.
As in prior years, we will update our expectations each quarter based upon our inventory cost and metal pricing trends.
Now turning to our expenses.
Our SG&A expense was generally consistent with traditional seasonal trends, increasing $54.9 million or 11.8% compared to the fourth quarter of 2020 due to strong volume and pricing momentum.
The quarter-over-quarter increase was mainly a result of higher incentive-based compensation given our record gross profit and pre-tax income.
Overall, our head count remained relatively consistent with year-end levels.
In comparison to the prior year period, SG&A expense was roughly flat due to lower wages as a result of reduced head count, which was down approximately 8% year-over-year, and was offset by higher incentive compensation due to record earnings levels in the first quarter of 2021 and to a lesser extent, inflationary increases.
We will maintain our disciplined approach to expense management and continue to monitor our expense structure as we progress further into 2021.
Our non-GAAP pre-tax income of $357.1 million in the first quarter of 2021 was the highest in our company's history and represents an increase of $136.5 million or 61.9% from the first quarter of 2020 due to favorable demand and pricing conditions, strong execution and diligent expense management.
Our non-GAAP pre-tax income margin of 12.6% was also a record and exceeded the prior year period by 400 basis points.
Our effective income tax rate for the first quarter of 2021 was 25.3%, up from 24.3% in the first quarter of 2020 mainly due to higher profitability.
We currently anticipate a full year 2021 effective income tax rate of 25%.
As a result of all these factors, we generated record quarterly earnings per share of $4.12 in the first quarter of 2021 compared to $0.92 in the first quarter of 2020.
On a non-GAAP basis, our first quarter earnings of $4.10 per share significantly exceeded our outlook and were up 104% from $2.01 in the fourth quarter of 2020 and up 67.3% from $2.45 in the first quarter of 2020.
Turning to our balance sheet and cash flow.
Our operations continue to generate cash despite significantly higher working capital needs.
We generated strong cash flow from operations of $161.8 million during the first quarter of 2021 due to our profitable operations and effective working capital management, including our focus on inventory turns.
As of the end of the first quarter, our total debt outstanding was $1.66 billion, resulting in a net debt-to-EBITDA multiple of 0.85.
We had no borrowings outstanding on our $1.5 billion revolving credit facility, providing us with ample liquidity to continue executing on all areas of our capital allocation strategy while maintaining our investment-grade credit rating.
I'll now turn to our outlook.
While macroeconomic uncertainty stemming from the COVID-19 pandemic continues, we remain optimistic about business conditions with strong underlying demand in the majority of the end markets we serve.
However, factors impacting shipment levels in the first quarter of 2021 such as metal supply constraints and supply chain disruptions for many of our customers will continue to persist in the second quarter of 2021.
Despite these factors, we estimate tons sold will be flat to up 2% in the second quarter of 2021 compared to the first quarter of 2021.
We expect metal pricing will remain near current levels with the potential for further upside in certain products.
Since current metal prices are substantially higher than the average selling price in the first quarter of 2021, we estimate our average selling price per ton sold for the second quarter of 2021 will be up 5% to 7%.
Given the strong demand and pricing fundamentals, we anticipate continued strength in our gross profit margin in the second quarter of 2021.
Based on these expectations, we currently anticipate non-GAAP earnings per diluted share in the range of $4.20 and to $4.40 for the second quarter of 2021.
In closing, we're extremely pleased with our record first quarter 2021 operational and financial performance, supported by strong pricing and demand trends as well as excellent execution by all of our colleagues in the field.
These factors collectively resulted in yet another quarter of robust profitability and cash flow, enabling us to continue executing on our capital allocation priorities of investing in the growth of our business and returning value to our stockholders.

user
q1 earnings per share $4.12.
sees q2 non-gaap earnings per share $4.20 to $4.40.
qtrly non-gaap diluted earnings per share $4.10.
estimates its average selling price per ton sold for q2 of 2021 will be up 5% to 7%.
company anticipates continued strength in its gross profit margin in q2 of 2021.
factors impacting shipment levels in q1 of 2021 will continue to persist in q2 of 2021.

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