Reliance Steel & Aluminum Co

And welcome to the Reliance Steel and Aluminium Company first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Kim Arlano with Idaho Investor Relations. Please go ahead.

Thank you, Operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's first quarter 2023 financial results. I am joined by Carla Lewis, President and Chief Executive Officer, Steve Cook, Executive Vice President and Chief Operating Officer, and Arthur Jemmian, Senior Vice President and Chief Financial Officer. A recording of this call will be posted on the investor 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, uncertainties, or other factors, including the impacts of inflation, geopolitics, and 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, 2022 under the caption risk factors, disclosure in our press release this morning, and other documents Reliance files or furnishes 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 and herein. I will now turn the call over to Carla Lewis, President and CEO of Reliance.

Good morning, everyone, and thank you all for joining us today to discuss our first quarter 2023 financial results. I'll begin with an overview of our performance and capital allocation strategy. Steve will then speak to our operating results and demand trends by end market, and Arthur will conclude with a review of our financial results and outlook for the second quarter of 2023. Beginning with our first quarter performance, We started the year off strong as our highly diversified business model continued to yield favorable results in an uncertain business environment. Our first quarter net sales of $3.97 billion increased approximately 10% from the fourth quarter of 2022. Our sales benefited from solid demand in the vast majority of our end markets, with our tons sold up 17.7% from the fourth quarter of 2022, which were partially offset by a lower average selling price. This was the highest sequential increase from the fourth quarter we've seen in our tons sold in the last decade. Our strong volumes, which benefited from our investments in organic growth, a robust gross profit margin of 30.9%, and disciplined expense control helped drive pre-tax income of $508.5 million and diluted earnings per share of $6.43, well ahead of our expectations. Our strong profitability, along with effective working capital management, enabled us to generate significant first quarter operating cash flow of $384.6 million. Turning to capital allocation, our consistent cash generation continues to fuel our strategy of investing in growth activities and returning capital to our stockholders. Our capital expenditure budget for the full year 2023 remains a record $500 million with spend of $102.9 million in the first quarter and an expected total cash outlay of approximately $400 to $450 million this year. We expect approximately two-thirds of this budget will be invested in growth projects, up from roughly 50% historically, as we continue to invest in various facility upgrades, efficiencies, and expansion into new markets. Our investments include new cutting-edge equipment to expand our value-added processing capabilities to further bolster our market position and margin profile. as well as investments to provide safer working environments for our employees. While we did not complete any acquisitions during the first quarter, the pipeline remains healthy. We continue to evaluate a wide variety of prospective opportunities and remain well positioned to pursue those that meet our discipline criteria for high-quality growth. Concurrent with our growth initiatives, we returned $100.9 million to our stockholders in the first quarter through a combination of dividends and share repurchases. Since 2018, we have allocated over $2 billion of capital towards organic growth and acquisitions, and nearly $2.8 billion towards stockholder returns in the form of dividends and share repurchases. In summary, we are very pleased with our first quarter performance, both operationally and financially. We continue to execute our strategy in a dynamic environment with metal pricing volatility, ongoing inflationary headwinds, recessionary concerns, supply chain disruptions, and labor shortages. Nevertheless, our managers in the field continue to do an excellent job upholding our superior levels of service and providing increasing levels of value to our customers. We maintain our belief that Reliance remains very well positioned to capitalize on opportunities resulting from the infrastructure bill, the CHIPS Act, and the Inflation Reduction Act in an environment with relatively higher metal pricing versus historical levels. Thank you to our extraordinary team at Reliance for your commitments to working safely and successfully executing our model. Thank you all for your time today. I'll now turn the call over to Steve, who will review our first quarter operating results and demand trends.