Reliance Steel & Aluminum Co

Greetings and welcome to the Reliant Steel and Aluminum Corp third 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 you to your host, Kim Orlando, with Addo Investor Relations. Thank you, Kim. You may begin.

Thank you, operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's third 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 Ajemian, Senior Vice President and Chief Financial Officer. A recording of this call will be posted on the Investor section of our website at investor.rfac.com. Please read the forward-looking statement disclosures included in our earnings release issued this morning and note that it applies to all statements made during this teleconference. The reconciliations of the adjusted numbers are included in the non-GAAP reconciliation part of our earnings release. I will now turn the call over to Carla Lewis, President and CEO of Reliance.

Good morning, everyone, and thank you for joining us today to discuss our third quarter 2023 results. Reliance's business model is designed to provide resilient performance throughout economic cycles, including both pricing and market demand fluctuations present in the metals industry. The unique facets of our business model, highlighted by strong pricing and inventory management discipline, a highly diversified product mix that is sold into various end markets and geographies, small order sizes, quick delivery, value-added processing, and increasing collaboration across our family of companies collectively support our ability to deliver consistent, profitable results and generate cash flow. I'd like to commend the entire Reliance team for successfully executing our strategy during challenging times and delivering another quarter of solid financial performance. Our overall financial performance in the third quarter was in line with our expectations. While our tons sold were down slightly more than anticipated, we outperformed broader service center industry trends and delivered year-over-year growth. As expected, our average selling price declined throughout the quarter across virtually all of our major commodity products, but our pricing discipline and industry-leading value-added processing capabilities provided us with gross margin stability and lessened the impact of falling prices on our gross profit margin. As a result, we delivered non-GAAP earnings per share of $5, in line with our guidance. Our profitability, coupled with effective working capital management, generated strong operating cash flow of $466 million for the quarter. Investing in growth remains our top capital allocation priority with approximately $125.5 million of capital expenditures. Our capital expenditure budget for the full year 2023 remains unchanged at a record $520 million, with approximately two-thirds directed towards growth projects to advance our value-added processing capabilities, upgrade facilities, and expand into new markets. Our total 2023 CapEx cash outlay is expected to be in the range of of $450 to $475 million. While we did not complete any acquisitions during the third quarter, the pipeline remains robust. We will pursue opportunities that meet our discipline criteria of well-managed companies that would be complementary to our diversification strategy and immediately accretive to earnings. Our acquisition strategy is supported by our strong balance sheet and consistent ability to generate cash throughout industry cycles. Along with growth, returning value to our stockholders remains a core element of our capital allocation strategy. During the third quarter, we returned $185.1 million to our stockholders through a combination of dividends and share repurchases, and we continue to opportunistically repurchase shares in the fourth quarter. Since 2018, we have invested over $2.3 billion in organic growth and acquisitions and returned nearly $3.1 billion to our stockholders through dividends and share repurchases, far surpassing our metal service center peers. In summary, we are very pleased with and thankful for the ongoing efforts of our entire Reliance team. all of whom expertly execute Reliance's strategy on a day-to-day basis, operate safely, and produce industry-leading results through all operating environments. We will continue to leverage our strong balance sheet and significant liquidity to fund profitable growth and return value to our stockholders. We are excited about the many growth activities underway and that we anticipate a rising under the Infrastructure Bill, the CHIPS Act, and the Inflation Reduction Act, as well as on-shoring and near-shoring activities in the markets we serve. Thank you all for your time today. I'll now turn the call over to Steve, who will review our third quarter demand and pricing trends.