russel metals inc. ( tsx : rus ) is one of the largest north american suppliers of metal products , with operations across canada and the united states .

the company was originally established in 1785 by john russel ( a scottish immigrant to canada ) as john russel & co . the company was formally incorporated in 1916 as hugh russel & sons ltd . the company started to expand into the united states in 1979 , until 1997 russell metals was the owner of the yukon and white pass railroad which shipped freight between whitehorse , yukon territory and skagway , alaska .

russel metals

contact your russel metals representative and they will assist with all of your inquiries .
russel metals inc . ( russel metals or the company ) is one of the largest metals distribution and processing companies in north america . the company primarily distributes steel products and conducts its distribution business in three principal business segments : metals service centers ; energy products and steel distributors .
russel metals continues to be a leader in the metals distribution business in north america and in september 2015 was ranked # 3 of the top 50 service center giants by metals center news .
russel metals inc . ( russel metals or the company ) is one of the largest metals distribution and processing companies in north america . the company primarily distributes steel products and conducts its distribution business in three principal business segments : metals service centers , energy tubular products and steel distributors . for the year ended december 31 , 2005 , russel metals had consolidated revenues of $ 2 . 6 billion .
russel metals inc is a metals distribution and processing company . it distributes steel products and conducts its distribution business in three business segments that are metals service centers ; energy products , and steel distribution .
please contact any of the russel metals locations below to place orders and get answers to your questions .
russel metals stresses working capital management to ensure working capital is minimized and leverage reduced over the economic cycle .
please contact any of the russel metals locations below to place orders or discuss possible material solutions for your business .
when the securities of russel metals are in the course of a distribution pursuant to a short - form prospectus or when a preliminary short - form prospectus has been filed in respect of a distribution of russel metals ' securities , russel metals will provide to any person , upon request to the assistant secretary of russel metals at the address noted above , one copy of this annual information form , the annual report of russel metals , any interim financial statements , the management proxy circular and any other document that is incorporated by reference into the preliminary short form prospectus or the short form prospectus .
the committee shall review and approve all related party transactions in which russel is involved or which russel proposes to enter into .
the following is a list of the major subsidiaries of russel metals at december 31 , 2005 , all of which are wholly owned .
in 1784 john russel immigrated to montreal ( qc ) , canada from scotland , where he set up a merchant business known as john russel & co .
review and approve the policy setting out the restrictions on russel hiring partners , employees and former partners and employees of russel ' s current or former external auditor .
by 1988 federal industries had become the largest steel distributor in canada . in the 1990 ' s a decision was made to focus on the metals distribution business and on june 1 , 1995 federal industries changed its name to russel metals inc .
growth from selective acquisitions is also a core management philosophy . the company focuses on investment opportunities in businesses that have strong market niches or provide mass to existing russel metals operations .
( d ) the performance of russel ' s internal audit function and the external auditor .
the rationalization of duplicate acier leroux and russel metals operations in eastern canada has impacted certain russel metals locations . russel metals ' locations are incurring restructuring costs related to plant closures , employee severances and inventory moves . generally accepted accounting principles in canada and the u . s . require that these charges be included in the income statement in the period that they occur . rationalization costs related to the acier leroux facilities have been charged to goodwill . during the first quarter of 2004 , the company recorded a charge of $ 832 , 000 related to restructuring at the russel metals locations . the company anticipates restructuring charges or income will continue to be reported in subsequent quarters related to the restructuring of the ontario region of russel metals not completed at march 31 , 2004 , operating costs related to facilities held for sale and a potential gain on the sale of assets held . the maritimes and quebec restructuring is substantially completed .
additional financial information is provided in russel metals ' consolidated financial statements and its managements discussion and analysis of financial condition and results of operations for the year ended december 31 , 2005 .
russel metals is one of the largest metal distribution companies in north america based on revenues and tons sold . the company conducts business primarily in three metals distribution business segments : service centers ; energy sector related pipe , tube , valves and fittings ; and steel import / export .
russel metals ' service center inventory turns can be compared with the service center industry turns estimated to be 4 . 0 for the three months ended february 29 , 2004 as derived from the monthly metals activity report published for the united states by the metals service center institute . it is management ' s goal to achieve service center inventory turns at higher levels than the industry norm .
russel metals ' normal capital expenditures are mainly related to maintenance capital , the purchase of additional processing equipment across a broad base of the operations and upgrades to its existing facilities and computer systems .
as at the date hereof , the directors and executive officers of russel metals as a group beneficially own , directly or indirectly , or exercise control or direction over 2 % of the outstanding common shares .
an interruption in sources of metals supply could have a material adverse effect on our results of operations .
our business may be affected by the cyclicality of the metals industry and the industries that purchase our products .
russel metals has a bank credit facility with a syndicate of canadian and u . s . banks . the $ 253 . 8 million credit facility expires on june 19 , 2005 . the company may extend this facility with the consent of the banks . the company is currently discussing with the banks the renewal of this facility and may reduce the facility to $ 200 million to reduce standby fees on unused availability . russel metals is entitled to borrow under this facility , on a revolving basis , up to an amount equal to the sum of specified percentages of eligible accounts receivable and inventories , to a maximum of $ 253 . 8 million . at march 31 , 2004 , russel metals was entitled to borrow $ 253 . 8 million , including letters of credit under this facility . at march 31 , 2004 , russel metals had no borrowings and had $ 23 . 6 million in letters of credit under this facility . at march 31 , 2003 , russel metals had borrowings of $ 0 . 9 million and $ 6 . 7 million in letters of credit under this facility .
( b ) the confidential , anonymous submission by employees of russel of concerns regarding questionable accounting or auditing matters .
a copy of the foregoing documents together with a copy of this annual information form and any interim financial statements issued by russel metals subsequent to december 31 , 2005 may be obtained on request to the assistant secretary , russel metals inc . , suite 210 , 1900 minnesota court , mississauga , ontario l5n 3c9 . these documents are also posted regularly to our web site located at urltoken and filed on sedar at http : / / www . sedar . com .
the following management ' s discussion and analysis of financial condition and results of operations of russel metals inc . and its subsidiaries ( russel metals or the company ) provides information to assist the reader and should be read in conjunction with the interim consolidated financial statements for the three months ended march 31 , 2004 and 2003 and the management ' s discussion and analysis and the audited consolidated financial statements for the year ended december 31 , 2003 , including the notes thereto , contained in the company ' s fiscal 2003 annual report of the company . in the opinion of management such interim information contains all adjustments necessary for a fair presentation of the results for such periods . the results of operations for the periods shown are not necessarily indicative of what the company ' s results will be for the full year . statements contained in this document that relate to russel metals ' beliefs or expectations as to certain future events are not statements of historical fact and are forward - looking statements . russel metals cautions readers that there are important factors , risks and uncertainties , including but not limited to economic , competitive and governmental factors affecting russel metals ' operations , markets , products , services and prices that could cause the company ' s actual results , performance or achievements to be materially different from those forecasted or anticipated by russel metals in such forward - looking statements . all dollar references in this report are in canadian dollars unless otherwise stated .
the address of russel metals ' head office is suite 210 , 1900 minnesota court , mississauga , ontario l5n 3c9 , tel . no . ( 905 ) 819 - 7777 , fax no . ( 905 ) 819 - 7409 . unless the context otherwise requires , references to
company
,
we
,
us
or
our
as used herein refers to russel metals inc . and its subsidiaries . all dollar references are in canadian dollars unless otherwise stated .
the effect of regulatory and accounting initiatives , as well as off - balance sheet structures on russel ' s financial statements .
· all relationships between the external auditor and russel ( for the purposes of assessing the external auditor ' s independence ) .
russel metals inc . is the successor corporation to federal grain limited , which was incorporated under the laws of canada in 1929 and subsequently amalgamated with searle grain company limited on august 1 , 1967 to continue under the name federal grain limited . the name was changed to federal industries ltd . on april 16 , 1973 and the company was continued under the canada business corporations act on may 5 , 1980 . on june 1 , 1995 , the name was changed to russel metals inc . on january 1 , 2002 , russel metals inc . was formed upon the amalgamation of its predecessor of the same name with a . j . forsyth and company limited , a subsidiary with canadian service center operations , and three non - operating subsidiaries .
our metals service centers sell plate , flat rolled carbon and other general line carbon steel products , as well as some stainless steel , aluminum and other non - ferrous specialty metal products in a wide range of sizes , shapes and specifications . general line steel products consisting of plate , structurals , bars , sheet , pipe , tubing and hollow structural steel tubing , are used by end users in a wide variety of industries . within canada , our metals service centers operate under the names russel metals , métaux russel , a . j . forsyth , acier leroux , acier loubier , acier richler , b & t steel , leroux steel , mégantic métal , mccabe steel , russel leroux , and york - ennis . our u . s . service center operations are conducted under the names russel metals williams bahcall and baldwin international . the williams bahcall operation focuses primarily on the distribution of general line carbon products through three facilities in wisconsin . baldwin international distributes specialty alloy products through its facility in ohio .
in 1866 the majority of the metal industry needs were sourced from overseas , as such john russel ' s great nephew , hugh russel , set up a one man iron trading operation in montreal ( qc ) . in 1916 , the business was incorporated as hugh russel & sons ltd . and introduced the steel warehousing concept , which today we call
a metal service center
.
the committee shall discuss russel ' s major financial risk exposures and the steps management has taken to monitor and control such exposures .
russel metals inc . is the successor corporation to federal industries ltd . ( formerly known as federal grain limited ) . we are a publically traded canadian company , with our common shares listed on the toronto stock exchange under the trading symbol
rus
.
the ebitda and the adjusted ebitda to interest expense ratios are provided to assist readers in determining the ability of russel metals to generate cash from operations to cover its financial charges , income taxes and items not considered to be in the ordinary course of business .
in 2005 , our metals service centers segment handled an average of approximately 3 , 262 transactions per day with an average revenue of approximately $ 1 , 888 per transaction . typically , our metals service centers sales are made on an individual purchase order basis .
the company provides processing and distribution services to a broad base of more than 18 , 000 end users through a network of 58 canadian locations . in addition , the company has 4 u . s . locations . the company ' s network of service centers carries a broad line of products in a wide range of sizes , shapes and specifications , including carbon hot rolled and cold finished steel , pipe and tubular products , stainless steel and aluminum . russel metals purchases these products primarily from steel producers in north america and processes and packages them in accordance with end user specifications . the company services all major geographic regions of canada and the midwest region of the united states . within canada , the service centers operate under the names russel metals , métaux russel , drummond mccall , a . j . forsyth , acier leroux , acier dollard , acier loubier , ennisteel , leroux steel , russel leroux , poutrelles delta and vantage laser . heavy gauge flat rolled operations are conducted by b & t steel and mccabe steel , both located near hamilton , ontario . russel metals ' u . s . service center operations are conducted under the names russel metals williams bahcall and baldwin international . the williams bahcall operations focus primarily on the distribution of general line carbon products through three facilities in wisconsin . baldwin international distributes specialty alloy products from its facility in ohio .
all directors serve one - year terms and are elected at the annual meeting of shareholders of the company . the term of office of each of the current directors of the company will expire at the annual meeting of shareholders of russel metals to be held in may 2006 .
from 1965 through 1968 hugh russel & sons made various acquisitions , establishing a steel distribution network through to the west coast of canada . in 1977 hugh russel & sons changed its name to russelsteel ltd . in 1979 russelsteel acquired its first u . s . metal service center .
the committee shall determine , and russel shall pay , the ordinary expenses of the committee that are necessary or appropriate in carrying out their duties .
the metals distribution business is a segment of a mature , cyclical industry . the use of distributors by both manufacturers and end users of steel continues to grow . this is evidenced by the growth in the percentage of total steel shipments from steel producers to distributors . as the distribution segment ' s share of steel industry shipments continues to grow , steel distributors such as russel metals can grow their business over the course of a cycle .
the russel metals results for the first quarter of 2003 do not include any acier leroux results . the u . s . operations , which consists of one location which the company expects to sell in 2004 , are reported as discontinued operations and thus are not included in the service center segment .
ms . britton is an executive officer of the company . ms . britton is a chartered accountant . in 1984 , ms . britton joined marshall drummond mccall and joined russel metals in 1987 when drummond mccall was acquired . from 1987 to 1994 , ms . britton was responsible for financial management for the metals operations . in 1994 , ms . britton assumed the role of vice president and corporate controller of russel metals . in 2004 , ms . britton ' s title changed to vice president and chief accounting officer . since 1994 , ms . britton has been responsible for the financial reporting of the company . in addition , she has assisted with debt and equity financings and the merging of the company ' s three major acquisitions with its current operations .
in the energy and import / export segments , all of the business units in the russel metals group have significant operations in the market niche that they service . consistent with our acquisition philosophy , any new acquisitions in these areas could likely be either major stand - alone operations or complements to existing operations .
to be a proactive , agile , top performing metals distribution business , seeking to create value through diligent emphasis on bottom line performance and effective asset management .
russel metals ' steel import / export business primarily imports foreign steel products into canada and the united states . it also exports steel from canada and the united states . the international presence provides the company ' s other business segments with valuable insight regarding international pricing trends and their potential impact on steel markets in north america .
in 1987 federal industries acquired russel metals ' then largest competitor , drummond mccall . drummond mccall similarly was started in 1881 by two partners , george drummond and james mccall , in montreal ( qc ) , canada . during the succeeding 100 years drummond mccall opened operations in nine provinces , the yukon and the northeastern united states .
since the mid 1990s , russel metals has acquired several companies in the metals distribution business , including : comco pipe ( 1994 ) , pioneer pipe ( 1994 ) , sunbelt group ( 1997 ) , triumph tubular & supply ( 2000 ) , spartan steel products ( 2001 ) , a . j . forsyth ( 2001 ) , arrow steel processors ( 2002 ) , williams steel ( 2002 ) , acier leroux ( 2003 ) , jms ( 2007 ) , norton ( 2008 ) , siemens laserworks ( 2012 ) , alberta industrial metals ( 2012 ) , apex distribution ( 2012 ) , monarch supply ( 2013 ) and western fiberglass pipe sales ( 2015 ) .
being our customers ' one stop shop for carbon and non - ferrous products and various value added services , we pride ourselves in partnering with our customers and helping them grow their business and customer base . we can source many other products and services from other divisions within the russel metals group and from our trusted and reliable suppliers .
the committee may invite directors , officers and employees of russel or any other person to attend meetings of the committee to assist in the discussion and examination of the matters under consideration by the committee . the external auditor shall receive notice of each meeting of the committee and shall be entitled to attend any such meeting at russel ' s expense .
mr . siegel is the president and chief executive officer of the company . mr . siegel ' s career in the metals industry began in 1965 when he joined the titan industrial corporation , a steel trading company based in new york . as senior vice president , his primary responsibility was for the tubular products division . in 1985 , mr . siegel joined duferco inc . as a vice president , with responsibility for starting a tubular products operation and for augmenting duferco ' s trading of steel products worldwide . in february 1987 , mr . siegel joined russel metals as a vice president with responsibility for the export of prime and secondary materials from canadian steel mills and for the import of semi - finished material to canadian mills . over the succeeding 13 years , mr . siegel assumed various responsibilities eventually becoming president and chief executive officer of russel metals inc . in 1997 .
capital expenditures in the first quarter of 2004 were $ 6 . 7 million compared to $ 4 . 2 million in the first quarter of 2003 . approximately $ 4 . 6 million of these expenditures in 2004 were for the completion of the new b & t steel facility and the restructuring of facilities related to the russel metals and acier leroux merger .
we are atlantic canada ' s oldest metals warehouse and distribution supplier . serving customers in the atlantic region for over 70 years . we carry a broad line of metal products in a wide range of sizes , shapes and specifications , including carbon hot rolled and cold finished steel , pipe and tubular products , stainless steel , aluminum and other non - ferrous specialty metals .
( d ) procedures for review . the committee shall be satisfied that adequate procedures are in place for the review of russel ' s disclosure of financial information extracted or derived from russel ' s financial statements ( other than financial statements , md & a and earnings press releases , which are dealt with elsewhere in this charter ) and shall periodically assess the adequacy of those procedures .
our metals service centers also provide customized processing services to satisfy specifications established by end users . by providing these services , as well as by offering inventory management and just - in - time delivery , we enable end users to reduce their overall production costs and decrease capital required for raw materials and metals processing equipment . our value added processes include , but are not limited to :
multiple business segments and diversified service center customer base . we operate in three segments of the metals distribution business , each with a distinct customer base and business cycle : metals service centers , energy tubular products and steel distributors . our largest segment , metals service centers , has a diversified customer base across a wide variety of industries , including machinery and equipment manufacturing , construction , shipbuilding and natural resources , such as mining and petroleum . our focused segments , energy tubular products and steel distributors , are not significantly dependent on any one customer . in 2005 , our metals service center average order size was $ 1 , 888 . in addition , in 2005 , none of our approximately 19 , 000 service center customers accounted for more than 3 % of our total revenues .
( a ) authority with respect to external auditor . as a representative of russel ' s shareholders , the committee shall be directly responsible for the appointment , compensation and oversight of the work of the external auditor engaged for the purpose of preparing or issuing an audit report or performing other audit , review or attest services for russel . in the discharge of this responsibility , the committee shall :
the committee shall instruct management to promptly bring to its attention any services performed by the external auditor which were not recognized by russel at the time of the engagement as being non - audit services .
russel metals inc . ( rus - tsx ) announced voting results from its 2018 annual meeting of shareholders held on may 2 , 2018 . a total of 35 , 473 , 135 common shares were represented at the meeting in person or by proxy , representing 57 . 25 % of the 61 , 965 , 644 issued and outstanding common shares as of the record date on march 20 , 2018 .
between the years of 1941 and 1947 , hugh russel & sons opened offices in winnipeg ( mb ) , vancouver ( bc ) , saint john ( nb ) , windsor and toronto ( on ) .
net loss from discontinued operations was $ 54 , 000 for the quarter . the loss relates to the u . s . operations of acier leroux . russel metals announced it would discontinue the u . s . operations of acier leroux at the time the company made its offer to purchase acier leroux . all u . s . branches except plattsburgh , new york have been closed and the related facilities sold .
( b ) the external auditor ' s attestation , and report ( if any ) , on the assessment made by management of the effectiveness of russel ' s internal control structure and procedures for financial reporting .
the company has made several acquisitions over the last three years and believes it can continue to grow by acquisition . russel metals believes it has the ability to fund these acquisitions through the utilization of the existing bank facilities and the issuance of new equity , if required . due to the high level and quality of accounts receivable and inventory the company could also select to finance working capital growth and acquisitions through an asset - backed facility .
the provisions of this charter are subject to the provisions of russel ' s by - laws and to the applicable provisions of the canada business corporations act ( the
act
) , and any other applicable legislation .
no member of the committee may earn fees from russel or any of its subsidiaries other than directors ' fees ( which fees may include cash and / or shares or options or other in - kind consideration ordinarily available to directors , as well as all of the regular benefits that other directors receive ) . for greater certainty , no member of the committee shall accept , directly or indirectly , any consulting , advisory or other compensatory fee from russel .
mr . hedges is an executive officer of the company . mr . hedges is a chartered accountant . he has been employed with the company since 1994 . his business career encompasses the positions of chief financial officer , president and ceo of gandalf technologies , as well as chief financial officer of teleglobe inc . both companies were involved in the canadian international telecommunications industry . during his earlier years at russel metals , mr . hedges oversaw the divestitures of non - metals operations and the restructuring from a holding company ( known as federal industries ltd . ) to a metal distribution operating company . mr . hedges is responsible for the financial and support activities of the company ' s operations .
the following paragraphs summarize significant environmental litigation , regulatory action and remediation in which we are presently involved . the anticipated expenditures on these sites all relate to previously divested or discontinued operations and do not relate to the metals distribution business .
in addition , certain u . s . subsidiaries of russel metals have their own one - year bank credit facility . the maximum borrowing under this facility is us $ 35 . 0 million . at march 31 , 2004 , these subsidiaries had no borrowings and letters of credit of us $ 12 . 6 million . at march 31 , 2003 , these subsidiaries had borrowings of us $ 10 . 4 million and letters of credit of us $ 3 . 0 million .
these operations distribute pipe , tube , valves and fittings , primarily to the energy sector in western canada and the western united states , from 5 canadian and 2 u . s . locations . russel metals purchases these products either from the pipe processing arms of north american steel mills or from independent manufacturers of pipe and pipe accessories . the energy sector operates under the names comco pipe and supply company , fedmet tubulars , triumph tubular & supply , pioneer pipe and spartan steel .
our primary goals are to continue to be a leading metals distribution company , increase our market share , expand services to customers and improve operating profits and cash flows . our business strategies , aimed at achieving our goals , consist of the following :
on july 3 , 2003 , we purchased 99 . 52 % of the issued and outstanding class a shares and 97 . 53 % of the issued and outstanding class b shares of acier leroux inc . for cash of $ 48 . 9 million and 3 , 546 , 874 common shares of russel metals inc . on august 19 , 2003 , under the provisions of the companies act ( quebec ) , we acquired the remaining shares of acier leroux for $ 1 . 2 million in cash .
we believe we operate the largest metals service centers operation in canada . during 2005 , we processed and distributed products to a broad base of approximately 19 , 000 customers through a network of 52 locations across canada . in addition , we have four u . s . locations . our network of metals service centers carries a broad line of metal products in a wide range of sizes , shapes and specifications , including carbon hot rolled and cold finished steel , pipe and tubular products , stainless steel and aluminum . we purchase these products primarily from north american steel producers , and package and sell them to end users in accordance with their specific needs . our metals service centers operations accounted for $ 1 . 5 billion , or 59 % , of our total revenues in 2005 .
the measures used by the company are specifically defined where they are first used in this management ' s discussion and analysis but generally the company adjusts earnings measures to exclude , net of tax , foreign exchange gains or losses , restructuring costs related to the rationalization of acquisitions , debt restructuring costs and discontinued operations . the company has completed several acquisitions in the last three years , which have resulted in restructuring costs for the russel metals branches closed . these costs have been excluded because they do not impact the ongoing profitability of the company .
successful acquisition track record . over the last five years , we have successfully integrated a number of acquisitions . for example , in october 2001 , we acquired a . j . forsyth and company limited , the leading service center operation in british columbia , and in july 2003 , we acquired acier leroux inc . , the leading service center operation in quebec . these acquisitions strengthened our canadian service center market presence and were immediately accretive to russel metals . once we have completed an acquisition , we rationalize the operations and balance sheet and reinforce the best practices found in our combined operations .
our metals service centers operations provide products and services to end users in a wide variety of industries , including machinery and equipment manufacturing , construction , shipbuilding and natural resources , such as mining and petroleum . during 2005 , no individual service center customer accounted for more than 3 % of our total revenue .
correspondence to : russel j reiter ; department of cellular structural biology ; the university of texas ; health science center ; 7703 floyd curl drive ; san antonio , tx 78229 usa ; tel . : 210 . 567 . 3859 ; fax : 210 . 567 . 6948 ; email : ude . ascshtu @ retier
( a ) annual financial statements . the committee shall review and discuss with management and the external auditor , russel ' s audited annual financial statements and related md & a together with the report of the external auditor thereon and , if appropriate , recommend to the board that it approve the audited annual financial statements .
russel , w . r . , hoyles , l . , flint , h . j . , and dumas , m . ( 2013 ) . colonic bacterial metabolites and human health . curr . opin . microbiol . 16 , 246–254 . doi : 10 . 1016 / j . mib . 2013 . 07 . 002
russelsteel was sold to federal industries ltd . in 1984 . federal industries was incorporated in canada in 1929 and was involved in terminal and grain elevator operations . throughout the 1980 ' s federal industries expanded its operations through acquisitions and became a conglomerate owning metals distribution operations , transportation businesses , retail operations and industrial manufacturing businesses .
experienced management team . our senior executives and other key members of our management team have an average of 27 years of experience in the metals distribution business . to facilitate an entrepreneurial culture , our compensation policies , at both senior and local management levels , are based on the profitability and asset utilization of our business units .
( b ) definition of financial literacy .
financially literate
means the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by russel ' s financial statements .
( b ) interim financial statements . the committee shall review and discuss with management and the external auditor and , if appropriate , approve , russel ' s interim unaudited financial statements ( including , without limitation , its quarterly unaudited financial statements and any other unaudited special purpose financial statements intended for publication ) and related md & a .
superior service and product selection . we believe that we have a reputation for superior and timely service , and diverse product selection . each of our metals service centers has the ability to offer one stop shopping to our customers . we also provide customized processing services and offer just - in - time delivery to quickly satisfy end user specifications . we have developed strong relationships with our customers and are able to identify their needs early so we can respond to short lead times or just - in - time delivery requirements common in the industry . because local managers have significant operational control , our metals service centers can react quickly to changes in local markets and customer demands .
the metals service center industry is intensely competitive . generally , the metals service center industry competes on price and the ability to provide customers with value - added services such as product selection , timely delivery , reliability , quality and processing capability . there has been significant consolidation in the industry in both the united states and canada over the past decade . many of our competitors are small companies , often owner - operated , with limited product lines , inventory and geographic customer bases . many of these small , owner - operated businesses have limited access to capital for modernization and expansion , have not had a viable exit strategy , and have been left with limited liquidity options .
russel , d . a . , rossa , r . p . , fitzgerald , g . f . , and stantona , c . ( 2011 ) . metabolic activities and propionic potential of bifidobacteria . int . j . food microbiol . 149 , 88–105 . doi : 10 . 1016 / j . ijfoodmicro . 2011 . 06 . 003
prudent inventory management . we manage our inventory to avoid unnecessary commitments of working capital while maintaining sufficient supply to respond quickly to customer orders . we tailor our inventory and processing services at each service center location to the needs of that particular market . the negotiation of purchase agreements with suppliers is centralized to leverage our buying power and global market insights ; however , the branch management team determines actual supply of inventory to each of our locations . local monitoring allows us to more accurately assess inventory requirements at each metals service center . we believe our decentralized inventory management , combined with our global market insights , has allowed us to react more quickly than many of our competitors to changing metals prices and customer needs , and to optimize our use of working capital . as a result of our prudent inventory management , our metals service centers turn their inventory 4 to 5 . 5 times per year while the industry average is lower . given the particular importance of inventory management in the price - sensitive service center business , we believe that this gives us a significant competitive advantage .
north american steel mills are the primary source of supply for our metals service centers . in addition , we purchase steel from international sources when steel is either not available or is not priced on a competitive basis in north america . this includes circumstances where the particular product is in short supply or where north american mills do not produce the particular product . we have developed an effective coordinated purchasing program that allows us to derive economies of scale through volume purchases , and also allows us to access metal supplies globally . substantially all of our purchases are made under existing purchase orders and we have no material long - term metal supply contracts . we believe that alternate suppliers are available with respect to all of our product lines and our metals service centers operations generally maintain multiple suppliers for all product lines .
russel metals strives to deal with the cyclical nature of the business by operating with the lowest possible net assets throughout the course of a cycle . in addition , its aim is to be more profitable through the various successive peaks and troughs as the steel cycles progress . in order to achieve this , management emphasizes profitability rather than revenue growth . this intensive asset management reduces borrowings and therefore interest expense in declining periods in the economic cycle and creates higher more stable returns on net assets over the course of the cycle . our conservative management approach creates relatively stronger trough earnings but could cause peak earnings to be somewhat muted . management strongly believes that it is more prudent to be profitable throughout a cycle , without the spikes in earnings caused by less emphasis on asset management , and have average earnings over the full range of the cycle in the top decile of the industry .
metals service centers bridge the gap between the capabilities of large metal producers , who manufacture large volumes of steel , aluminum and specialty metals in standard sizes and configurations and require long lead times , and the specific needs of end users by acquiring large volumes of metal from producers and packaging and processing the metal in accordance with end user specifications . many end users purchase metal products from service centers because their requirements are smaller than the minimum order quantities available from the producers or because such end users require specialized metal processing services , a commitment to reliable just - in - time delivery and flexibility to meet their changing product and manufacturing requirements that large producers are either unwilling or unable to provide . service centers also allow end users to reduce their total production cost by shifting the responsibility for pre - production processing to service centers , which , through economies of scale , can achieve greater operational efficiency from the processing equipment .
the most serious environmental insults are agricultural and industrial contaminations . some contaminants such as heavy metals and extremely long half - life chemicals are difficult to remove from the soil and water using conventional methods or by natural decomposition . phytoremediation provides a promising alternative for decontamination . theoretically , if a plant can tolerate these pollutants , the plant may be a potential candidate in phytoremediation to remove these toxic substances . the water hyacinth has been used successfully in phytoremediation due to its high tolerance to many environmental toxins . 19 , 20 since the water hyacinth has high levels of melatonin and afmk when grown under natural sun light , we hypothesize that the elevated concentration of these natural antioxidants may be associated with the high tolerance of this plant to pollutants and to its utility in phytoremediation . as highly effective antioxidants , 10 , 21 melatonin and afmk likely assist this plant in defending against the environmental stresses caused by heavy metals or toxic chemicals .
the remaining non - metals operation , thunder bay terminals , covers an area of approximately 290 acres at its location in thunder bay , ontario . most of the property is under long - term leases . a coal handling system is located at the site and comprises a number of structures , including structures which trains enter to be unloaded , and ship docking facilities . coal storage structures and equipment are also located at the site . all the structures and most of the equipment are owned by thunder bay terminals .
the price we pay for , and availability of , steel and various specialty metals ( such as aluminum ) , and the prices we can charge for such products , fluctuate due to numerous factors beyond our control , including canadian , american and international economic conditions , currency exchange rates , global demand for steel and other metal products , including demand in high - growth markets such as china , trade sanctions , tariffs , labor costs , competition and over capacity of steel producers , including price surcharges . substantially all of our revenues are derived from the sale of steel and specialty metals . as a result , fluctuations in availability and cost of steel and specialty metals and the prices we can charge for our products may materially adversely affect our business , financial condition , results of operations and cash flows . we have no material long - term , fixed - price purchase contracts . our commitments for metal purchases are generally at prevailing market prices in effect at the time that we place our orders . during periods of rising raw materials pricing , we may be unable to pass such increases , which may include surcharges by our suppliers , on to end users . to the extent we are not able to pass on to our customers any increases , our business , financial condition , results of operations and cash flows will be materially adversely affected . when metal prices decline , end user demands for lower prices and competitors ' responses to those demands could result in lower sale prices and , consequently , lower margins as we use existing inventory .
significant increases in bifidobacterial numbers were observed in response to gfb in the fecal microbiota of healthy and celiac donors . bif are recognized as one of the most important bacterial groups associated with human health , providing beneficial effects in the large intestine ( gibson and wang , 1994 ; russel et al . , 2011 ) ; the positive effect on bifidobacterial , as well as the slight effect on the lactic acid bacteria in the fecal microbiota of the celiac donors 1 , confirmed previous results ( bevilacqua et al . , 2016 ) .
we face significant competition in our metals service centers and energy tubular products operations . in canada , our primary competitors are other service centers and energy products distributors , which are regional and local in geographic coverage . in the united states , we compete with other service centers and energy product distributors , which are national , regional and local in geographic coverage . we also compete with steel producers which are larger than we are , that typically sell to very large end users requiring regular shipments of large volumes of metals . competition is based on price , product availability and quality , processing capability and on - time delivery . some of our competitors may have lower steel costs and fewer environmental and government regulations , as well as lower public company regulatory compliance obligations and related costs , than we do . in addition , some of our competitors may be less leveraged than we are and therefore may have greater financial resources and flexibility than we have . increased competition could reduce our profitability by forcing us to lower our prices or to offer increased services at a higher cost to us .
the e . coli strains used in this study were as follows : jm96 ( cysh ) , jm81a ( cysc92 , tfr - 8 ) , and jm221 ( pro - 50 , lac − , tsx − , galt47 , trp - 74 , his - 97 , cysd91 , arga − , rpsl − , mal − , xyl − , mtl − , ilva − ) , all provided by the e . coli genetic stock center ( yale university ) . a522 ( trx , grx : : tn 10 ) was provided by marjorie russel and peter model ( rockefeller university ) ( 27 ) . dh5α or mv1193 were used for plasmid propagation .
we provide processing and distribution services to a broad base of customers . we service all major geographic regions of canada and the southeastern and midwestern regions in the united states . to service our customer base we carry a broad line of metal products in a wide range of sizes , shapes and specifications , including carbon hot rolled and cold finished steel , pipe and tubular products , stainless steel , aluminum and other non - ferrous specialty metals . we purchase these products primarily from north american steel producers and package and sell them to end users in accordance with their specific needs . we service a wide variety of industries , including machinery and equipment manufacturing , construction , shipbuilding and natural resources , such as mining and petroleum .
the scfas produced by gut microbiota in the colon have an important role . butyric acid is often associated as an energy source for the epithelial cells and acetic acid plays an important role in controlling inflammation and controlling pathogen invasion ( russel et al . , 2013 ) . in addition , other effects attributed to butyrate are the improvement of the gut barrier function by stimulation of the formation of mucin , antimicrobial peptides , and tight - junction proteins , the interaction with the immune system and the reduction of the oxidative stress in the colon ( rivière et al . , 2016 ) . therefore , the increase of butyrate found in the vessel 2 inoculated with the microbiota of a celiac donor could be of interest and deserves further efforts and experiments .
strong supplier relationships and unique market insight . we are among the largest purchasers of steel in north america and have well - established relationships with north america ' s largest steel producers , which enable us to ensure multiple sources for steel products and services . we believe that our steel distributors operation is one of the largest independent steel importers in north america . our steel distributors enable us to augment our product lines at our metals service centers when product is not available or when we can obtain steel competitively by purchasing abroad . through our steel distributors operations , we regularly purchase from multiple suppliers in 20 countries around the world . this enables us to monitor global steel supply and assess its impact on north american steel demand and pricing trends . this timely access to market information and global outlook allows us to proactively manage inventory levels and prices in our service center operations and make low cost purchases of steel imports when available .
we purchase our principal inventory , including carbon steel , stainless steel , alloy steel , aluminum and a variety of other metals on a frequent basis from a number of producers , primarily in north america to keep our inventory levels to a minimum . we have no long - term contracts to purchase metal . if , in the future , we are unable to obtain sufficient amounts of steel and other metal products at competitive prices or on a timely basis from our traditional suppliers , we may not be able to obtain such products from alternative sources at competitive prices to meet our delivery schedules , which could materially adversely affect our business , financial condition , results of operations and cash flows . production time and the cost of our products could increase if we were to lose one of our primary suppliers . any interruption or reduction in the supply of any of these products may make it difficult or impossible to satisfy customers ' just - in - time delivery requirements , which could materially adversely affect our business , financial condition , results of operations and cash flows .
the metals distribution business experiences significant swings in cash flow to fund working capital . inventory and accounts receivable represent over 70 % of the total assets employed by the company and vary with the cycle . at march 31 , 2004 they represented 74 % . the existing bank credit facilities are used to fund the growth in working capital caused by demand or steel price increases , which require higher inventory and accounts receivable levels to support the higher activity levels . based on the company ' s recent experience , a $ 100 million increase in revenues would require approximately $ 30 million of net working capital to support the higher activity levels . the increased price of steel during the first quarter of 2004 resulted in a utilization of non - cash working capital of $ 55 . 3 million on an annualized revenue increase of approximately $ 400 million . we anticipate a further use of non - cash working capital as we replace the inventory with higher priced steel . when the demand weakens , or the price of steel declines , cash is generated from the reduction of inventory and lower accounts receivable levels . this cash is used to reduce the borrowings under the bank credit facilities .
the isolated conjugative plasmids are large in size and contain numerous orfs , but at present , they have to be regarded as cryptic . this might be caused by the fact that only 25 % of the deduced gene products revealed similarities to known proteins . apart from tra genes and those implicated in plasmid replication and maintenance , the functions of the orfs could not be assigned . although genes potentially encoding a pts or conferring heavy metal resistance have been identified on pye854 , we were not able to demonstrate the respective functions . perhaps additional genes essential for functionality are lacking on the plasmid , or we did not test for the right compounds ( e . g . , heavy metals ) . however , it has also been reported that ptss are sometimes associated with bacterial virulence ( 53 ) . the question of whether pye854 plays a role in the virulence of yersinia cannot be answered at the moment . besides the pts genes , the plasmid contains two genes ( orf 62 and orf 73 ) whose products are similar to a hyaluronate lyase and a glucuronyl hydrolase , respectively , of vibrio , proteins which are suggested to be virulence factors of some gram - positive pathogens ( 34 , 40 ) . nevertheless , the finding that y . enterocolitica 29854 can be cured from its conjugative plasmid without any consequences for growth in broth suggests that pye854 and , presumably , also pye966 are not pivotal for the bacteria under laboratory conditions .