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 with a high-level overview of our second 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 second quarter 2021 financials.
Our resilient business model, coupled with favorable market conditions, drove a second consecutive quarter of record financial performance.
I'm inspired by the ongoing operational excellence and performance demonstrated by all of my colleagues within the Reliance family of companies.
Despite lingering disruptions associated with the global pandemic, including limited metal availability and various other supply chain constraints, our managers in the field executed tremendous execution and, most importantly, maintained a relentless focus on safety.
During the second quarter, we continued to experience considerable strength in metals pricing led by multiple mill price increases for carbon and stainless steel products in particular.
The favorable pricing environment, along with continued strong underlying demand in the majority of the end markets we serve, drove record quarterly net sales of $3.42 billion.
Our business model, which is strategically highly diversified in terms of our products, end markets and geographies, and focused on small order sizes with quick turnaround is particularly effective during periods of tight supply and volatile pricing.
In addition, despite metal supply constraints, our strong, long-standing relationships with the domestic mills and our unique ability to cross-sell inventory among the family of companies allowed us to source the metal we needed to satisfy our valued customers.
Through continued price discipline by our managers in the field, we generated a strong gross profit margin of 31.7%, which, when combined with our record sales, resulted in a record quarterly gross profit of $1.08 billion in the second quarter of 2021.
Both our record quarterly gross profit and our continued focus on expense control contributed to our second consecutive quarter of record quarterly pre-tax income of $444.1 million.
Our quarterly earnings per diluted share of $5.08 were both another record and substantially in excess of our guidance as well as up 23.3% from our prior quarter.
Our resilient continuously improving business model has enabled us to maintain industry-leading gross profit margins throughout various metals pricing and demand cycles.
We most recently increased our long-term sustainable gross profit margin range to 28% to 30% during the first quarter of 2020.
And we have remained above this range throughout the uncertain COVID-19 pandemic environment.
We believe our sustainable outperformance resulted from our managers' disciplined approach to pricing and increased value-added processing that led to a greater focus on high-quality-high-margin business.
Today, we are very pleased to announce that we are once again increasing our estimated sustainable gross profit margin range to 29% to 31%.
We are confident in our ability to maintain this higher range on an annual basis as a result of our sustainable impacts the investments we have made in our business are having on our gross profit margins.
Let me touch on this a little bit more in detail.
Over the past five years, we have invested nearly $1 billion into our company through capital expenditures.
Approximately half of which was directly -- was directed toward state-of-the-art value-added processing equipment across the family of companies.
These investments not only introduced new processing capabilities and helped us increase the percentage of orders with processing from our historic levels of about 40% to our current level of about 50%, but also enhanced and upgraded our existing value-added processing equipment to improve the quality of our service offerings to our customers.
Our investments within our family of companies enables our managers in the field to provide additional value to our customers at an appropriate price, which further supports our increased sustainable gross profit margin range.
Looking ahead, we will continue to prioritize investing in our company's growth as a key element of our capital allocation strategy.
We maintain a flexible capital allocation strategy that is focused on both reinvesting in our company's growth and stockholder returns.
Beyond the significant investments, we are continuing to make in value-added processing equipment, our 2021 capital expenditures will also be focused on both new facilities and projects to expand, upgrade and maintain many of our existing operations.
As such, we are increasing our 2021 capital expenditure budget from $245 million to a new record of $310 million due to various key projects, including a significant expansion of our operation in South Korea that services the semiconductor and biochem and pharma markets, new expansion -- with new expanded toll processing capacity and increased investments in renewable energy at many of our existing facilities.
During the second quarter of 2021, we invested $80.1 million in capital expenditures.
Turning to our other avenue of growth, acquisitions.
We have a healthy pipeline of prospective opportunities, including both traditional metal service center businesses and adjacent businesses.
As always, we will adhere to our strict transaction criteria when evaluating prospective targets to ensure a strong fit within our family of companies.
In regard to stockholder returns, we returned $67.8 million to our stockholders during the second quarter of 2021 through the payment of $43.8 million in dividends and the repurchase of $24 million of Reliance common stock.
Since 2018, we have repurchased approximately $900 million of our common stock at a weighted average cost at $85.52 per share.
We expect to remain a prudent allocator of capital by maintaining our flexible approach focused on both growth which remains a top priority as well as stockholder return activities.
Finally, I would like to briefly comment on our recently announced executive officer succession matters.
Effective January 2022, Bill Sales will retire from Reliance following 24 years of service with our company.
As of July 1, Bill transitioned from his role as Executive Vice President of Operations to Special Adviser, where he will provide support on special projects and facilitate the transition of his responsibility.
Bill's deep industry experience and relationships have contributed significantly to Reliance and our success over the years.
And on behalf of all of us at Reliance, wish you the very best in your retirement.
Relatedly, as a part of our deliberate succession planning process, I'd also like to congratulate both Sean Mullins, who has been promoted to Senior Vice President, Operations; and Brian Yamaguchi, who has been promoted to Vice President, Supplier Development.
Both Sean and Brian have a long-standing history with Reliance as well as a significant industry experience and a passion for our business.
I applaud both of you for your well-deserved new roles.
In summary, I am beyond inspired by the outstanding operational execution demonstrated by the entire Reliance team and our unwavering focus on the core elements of our resilient business model, which drove our second consecutive quarter of record financial performance.
And in an environment characterized by extremely high metals pricing, strong demand from our customers and limited metal availability, we believe Reliance remains well positioned to continue supporting the growth and needs of our customers and our suppliers while generating strong earnings and returning value to our stockholders.
We remain confident that America is going to need Reliance to rebuild, and we will continue to support our colleagues, customers, suppliers and community in our collective efforts to do so.
Additionally, I'd like to extend my appreciation to our customers for their ongoing trust in Reliance and our mill partners for their continued support.
Turning now to our second quarter operational performance.
Continued strong underlying demand in the majority of our end markets resulted in our tons sold increasing 1% compared to the first quarter, which was within our guidance range of flat to up 2%.
We continue to believe, however, that underlying demand is stronger than our second quarter 2021 shipment levels reflect due to factors hindering economic activity such as metal supply constraints, labor shortages and other supply chain disruptions we are experiencing in our business as well as impacts on our customers and suppliers.
And we look forward to fulfilling this pent-up demand in future periods.
Disruptive supply chain factors, however, do support increased metal pricing resulting in ongoing metal price escalation for many of the products we sell during the second quarter, most notably for carbon and stainless steel products.
Our average selling price in the second quarter reached a new all-time high an increased 19.7% compared to the first quarter of 2021 and exceeded our guidance of up 5% to 7% by a significant amount.
As Jim noted, the robust demand and favorable pricing conditions contributed to record quarterly gross profit dollars of $1.08 billion in the second quarter of 2021 and a strong gross profit margin of 31.7%.
On a FIFO basis, which we believe better reflects our current operating performance, we achieved a record gross profit margin of 37.5%, our second consecutive record FIFO gross profit margin quarter.
To our managers in the field, we greatly appreciate your superb performance and continued focus on high-quality high-margin business.
We also applaud the level of cooperation you have exhibited across our family of companies to provide creative solutions to our customers.
In the current environment, we are experiencing even more business opportunities from new and existing customers.
Our size and scale combined with strong collaboration among our family of companies and support from our key mill partners have collectively helped ensure that we are able to meet our valued customers' needs.
I'll now turn to a high-level overview of our key end market trends on a sequential quarter basis.
Demand for nonresidential construction, which includes infrastructure and is the largest end market we serve, continue to gain strength.
Our second quarter tons sold surpassed first quarter shipments and reached pre-pandemic levels.
We continue to experience solid quoting activity for projects in the areas of distribution and fulfillment centers, data processing and manufacturing facilities, big-box retail and the like.
Due to supply constraints, and increased pricing, we are also experiencing an uptick in smaller projects that can be completed quickly.
Given our healthy backlogs, solid quoting activity, positive customer sentiment and favorable key industry indicators, we are optimistic demand will continue to strengthen through the remainder of 2021.
Demand for the toll processing services Reliance provides to the automotive market softened slightly from first quarter levels.
Nevertheless, we believe underlying demand is stronger than our second quarter trends reflect due to the impact of global microchip shortages on production levels in certain automotive markets.
We are continuing to provide solutions to support our automotive customers' increased transportation and storage challenges through recent investments which include purchasing a new facility in Michigan and opening a new tolling facility in Indiana.
This increased capacity will allow us to service many new opportunities for our tolling business.
And looking ahead, we are cautiously optimistic that our tolling volumes to the auto market will strengthen in the back half of the year as we ramp up our expanded capacity and if auto production increases.
Importantly, we remain confident about the long-term strength of our toll processing business as evidenced by our ongoing investments in growth and innovation in this area.
As a reminder, our greenfield Kentucky tolling operation commenced production in November 2020 and has been steadily ramping ever since.
Construction also continues on our greenfield tolling facility in Texas which we expect will commence operations in the fourth quarter of 2021 and ramp throughout 2022.
We're very excited about these opportunities to expand our tolling presence.
Demand in heavy industry for both agricultural and construction equipment improved significantly during the second quarter, with our shipments exceeding pre-pandemic levels.
Demand for machinery use in manufacturing processes was also very strong in the second quarter of 2021, and we expect demand in the heavy equipment and manufacturing industries to continue at solid levels through the rest of the year.
Semiconductor demand during the second quarter continued to improve from solid first quarter levels.
The semiconductor space remains one of our strongest end markets, and we expect this trend to continue well into 2022.
With regard to aerospace, demand in commercial aerospace, which is roughly half of our aerospace exposure, softened in the second quarter compared to our first quarter shipment levels due to increased COVID-19 related shutdowns in Europe.
We believe we are slowly exiting the trough of the demand cycle and expect limited gradual improvement throughout the remainder of 2021.
Demand in the military, defense and space portions of our aerospace business, while also down from the first quarter due to COVID-19-related shutdowns in Europe remained solid with strong backlogs and exceeded our pre-pandemic shipment levels.
We anticipate strong demand in the noncommercial aerospace market will continue for the balance of the year.
Finally, demand in the energy sector, which we define as mainly oil and natural gas, improved slightly in the second quarter as a result of increasing oil prices and rig counts, along with customer inventory replenishments.
We expect demand in the energy sector that continue to improve at modest levels in the second half of the year.
In summary, the first half of 2021 was distinguished by back-to-back quarters of record financial performance.
Today, early in the third quarter of 2021, positive momentum in both demand and pricing continue, which, when combined with our proven and resilient business model, positions us to optimize our performance and deliver strong results once again.
I'll start with a recap of our quarterly results.
Once again, record pricing levels, healthy demand and strong gross profit margins contributed to record gross profit dollars, which in turn drove record pre-tax income and record earnings per share.
The significant increase in metal pricing and ongoing strength in demand resulted in record quarterly sales of $3.42 billion, up 20.4% from the first quarter of 2021 and up 69.3% from the second quarter of 2020.
Strong pricing momentum for most carbon and stainless steel products contributed to the 19.7% increase in our average selling price per ton over the first quarter of 2021.
As Jim and Karla mentioned, the continued pricing discipline and focus on higher-margin orders by our managers in the field, along with our ongoing investments in value-added processing capabilities collectively resulted in record quarterly gross profit of $1.08 billion and a strong gross profit margin of 31.7% in the second quarter of 2021.
Our non-GAAP FIFO gross profit margin of 37.5% in the second quarter of 2021 was a record and exceeded the prior quarter by 40 basis points, and the prior year period by 730 basis points.
We incurred LIFO expense of $200 million or $2.31 per share in the second quarter of 2021 compared to LIFO expense of $100 million or $1.16 per share in the first quarter of 2021.
As a result of higher-than-anticipated costs for certain carbon and stainless steel products, we revised our annual LIFO expense estimate to $600 million from $400 million for 2021.
Consistent with our accounting policy, we allocate our annual estimate on a pro rata basis in each quarter.
and had to true up to our new annual estimate in the second quarter of 2021 by incurring $200 million of LIFO expense, bringing our six-month 2021 LIFO expense to $300 million.
Our current projected LIFO expense for the third quarter of 2021 is $150 million based on this revised annual LIFO expense estimate.
As in prior years, we will update our expectations each quarter based upon our inventory cost and metal pricing trends.
At the end of the second quarter of 2021, our LIFO reserve on our balance sheet was $415.6 million and is projected to be $715.6 million at December 31, 2021, based on our current $600 million annual LIFO expense estimate.
This reserve can benefit earnings in future periods that include declining metal prices.
Now turning to our expenses.
Our second quarter SG&A expense increased $44.8 million or 8.6% compared to the first quarter of 2021.
The bulk of the quarter-over-quarter increase was a result of higher incentive-based compensation, given our record gross profit and pre-tax income levels.
Additionally, inflation contributed to increased variable expenses, most notably for fuel and freight as well as packaging costs.
In comparison to the prior year period, SG&A expense was up $124.8 million or 28.5% primarily as a result of higher incentive-based compensation, variable plant and delivery expenses associated with a 17.5% increase in shipments, and to a lesser extent, inflationary increases.
Overall, our headcount was relatively flat compared to both the first quarter of 2021 and the second quarter of 2020.
Our non-GAAP pre-tax income of $442.8 million in the second quarter of 2021 was the highest in our company's history.
Our non-GAAP pre-tax income margin of 13% was also a record.
Our effective income tax rate for the second quarter of 2021 was 25.6%, up from 20.9% in the second quarter of 2020, mainly due to higher profitability.
We currently anticipate a full year 2021 effective income tax rate of 25.5%.
We generated record quarterly earnings per share of $5.08 in the second quarter of 2021 compared to $4.12 in the first quarter of 2021 and $1.24 in the second quarter of 2020.
Now turning to our balance sheet and cash flow.
Our operations continue to generate cash despite significantly higher working capital needs attributable to rising metal costs.
In the second quarter, we again generated strong cash flow from operations of $101.6 million despite over $300 million in additional working capital requirements.
In addition, our second quarter of 2021 cash flow from operations was impacted by approximately $174 million of income tax payments compared to $7 million in the first quarter of 2021.
As of June 30, 2021, our total debt outstanding was $1.66 billion, resulting in a net debt to EBITDA multiple of 0.7 times.
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 ratings.
I'll now turn to our outlook.
We remain optimistic about business conditions in the current environment with strong underlying demand in the majority of the end markets we serve.
However, we expect factors impacting shipment levels in the second quarter of 2021, such as metal supply constraints, labor shortages and other supply chain disruptions will continue to persist in the third quarter of 2021.
As such, we estimate tons sold will be down 1% to up 1% in the third quarter of 2021 compared to the second quarter of 2021.
We expect metal pricing trends to remain strong in the third quarter.
As metal prices at the beginning of the third quarter of 2021 are higher than the average for the second quarter of 2021, we estimate our average selling price per ton sold for the third quarter of 2021 will be up 7% to 9%.
Based on these expectations, we currently anticipate non-GAAP earnings per diluted share in the range of $5.55 to $5.75 for the third quarter of 2021.
In closing, we are thrilled with our operational and financial performance in the second quarter, supported by strong pricing and demand trends as well as outstanding execution by all of our colleagues in the field who continue supporting our customers' needs.
These factors, coupled with our resilient business model, resulted in yet another quarter of record financial performance and solid cash flow, enabling us to continue executing on our capital allocation priority of investing in the growth of our business and returning value to our stockholders.

user
reliance steel & aluminum q2 earnings per share $5.08.
sees q3 non-gaap earnings per share $5.55 to $5.75.
q2 earnings per share $5.08.
q2 sales $3.42 billion versus refinitiv ibes estimate of $3.17 billion.

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