Reliance Steel & Aluminum Co

Greetings and welcome to the Reliant Steel and Aluminum Company fourth quarter and full year 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Kim Orlando, with Addo Invest Relations. Thank you. You may begin.

Thank you, Operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's fourth quarter and full year of 2021 financial results. I am joined by Jim Hoffman, CEO, Carla Lewis, President, and Arthur Ajemian, Senior Vice President and CFO. A recording of this call will be posted on the Investors section of our website at investor.rsac.com. The press release and the information on this call may contain certain forward-looking statements which are based on a number of assumptions that are subject to change and involve known and unknown risks, uncertainty, or other factors, including the impacts of the COVID-19 pandemic and related economic conditions on our future operations, which may not be under the company's control and may cause the actual results, performance, or achievement of the company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K for the year ended December 31st, 2020 under the caption Risk Factors, disclosure in our press release this morning, and other documents, reliance files, or furnishers with the Securities and Exchange Commission. The press release and the information on this call speak only as of today's date, and the company disclaims any duty to update the information provided therein in hearing. I will now turn the call over to Jim Hoffman, CEO of Reliance.

Thanks, Kim. Good morning, everyone, and thank you for joining us today to discuss our fourth quarter and full year 2021 financial results. I will begin with an overview of our 2021 performance in capital allocation activities. Carla will then speak to our operating results and demand trends by end market, and Arthur will conclude with a review of our financial results. Reliance finished the year strong with record financial performance across nearly every metric. driven by the resilience of our business model and exceptional execution by all of my colleagues throughout the Reliance family of companies. I continue to be inspired by their passion and dedication to operational excellence and their steadfast commitment to safety, a core value of our company. The durability and effectiveness of our model is apparent in our results despite macroeconomic challenges including the continuing pandemic, supply chain disruptions, and a tightening labor market. Strong demand and favorable metal pricing trends throughout 2021, combined with our highly diverse mix of products and end markets and strong relationships with our domestic mill partners, helped us generate record annual sales of $14.09 billion and record earnings per share of $21.97. Our gross profit margin remains bolstered by our managers in the field who continue to appropriately price the value of the products and services we provide our customers. Much of that value streamed from the significant investments we have made to enhance and expand our value-added processing capabilities to support the increasing needs of our customers. In 2021, we performed value-added processing services on just over 50% of our orders, up from 49% in 2020. Our value-added processing capabilities not only support our strong gross profit margin levels, but also help stabilize our margin in times of declining prices and or demand. We invested $236.6 million into our business through capital expenditures in 2021, more than half of which was for growth opportunities. Today, we are pleased to announce our 2022 capital expenditure budget of $350 million that includes projects to expand, upgrade, and maintain many of our operating facilities. Our 2022 budget includes the purchase and installation of over 200 new pieces of metal processing equipment as well as energy efficient lighting and solar panels in certain of our locations. Turning to M&A, we completed four acquisitions in the fourth quarter of 2021 with aggregate purchase consideration of approximately $439 million. As discussed on our last call, we completed the acquisition of Murphish United, a leading master distributor of tubular building products in the U.S. on October the 1st. We also completed three additional acquisitions in December. First, New Tech Precision Metals, headquartered in Ottawa, Ontario, that enhances our product offering in specialty metals in the nuclear industry. aerospace, and defense markets along with others. Second, we acquired Admiral Metals, a distributor servicing the Northeastern United States. Admiral Metals expands our product offering into specially non-ferrous products and fits well within our business model given its end markets diversification, high level of customer service, and next day delivery standards. Third, we acquired Rotax, a single location metal service center in Brooklyn, New York that specializes in copper, bronze, and brass. Each of these acquisitions aligns with both our business model as well as our strategy of investing in immediately accretive, high-quality businesses that expand our product and market and geographic diversity. The four additions to our family of companies increase the total number of acquisitions we have completed since our 1994 IPO to 71. Concurrent with our combined $676 million of growth related investments through capital expenditures and acquisitions in 2021, we also returned over $500 million to shareholders through dividends and repurchases of Reliance common stock. On that note, We are pleased to announce today that we increased our dividend by 27% for the first quarter of 2022. Arthur will elaborate more on this capital allocation shortly. Before I conclude, I'd like to recognize both Arthur Gemien and Susie Bonner for their well-deserved promotions. Arthur has been promoted from Vice President to Senior Vice President and Chief Financial Officer following his 2021 promotion to CFO. Suzy has also been promoted from Vice President to Senior Vice President, Chief Information Officer. We look forward to continuing to benefit from their wealth of knowledge and expertise. In closing, I want to recognize the outstanding performance of my colleagues throughout 2021. Their execution of our highly resilient business model, which is strategically designed to perform throughout industry cycles, generated record-setting financial results in 2021. In addition, our highly diversified product mix, strong value-added processing capabilities, and decentralized operational structure coupled with our focus on small order sizes and quick turnaround times were particularly effective in delivering value to our customers and promoting a strong and stable margin profile. Our model generates strong cash flow to fund continued execution of our capital allocation priorities of growth and stockholder returns. Looking ahead, we will continue to execute our proven business model despite macroeconomic challenges and maintain our focus on continuous improvement to support our customers, suppliers, and communities. We are confident that America needs Reliance to Rebuild. Thank you for your time and attention today. I will now turn the call over to Carla, who will review our operating results and demand trends.