Reliance Steel & Aluminum Co

Greetings and welcome to Reliance Inc. 4th Quarter and Full Year 2023 Earnings Conference 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. It is now my pleasure to introduce Kim Rolando, Atto Investor 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 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 Gemmian, Senior Vice President and Chief Financial Officer. A recording of this call will be posted on the Investors section of our website at investor.reliance.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 fourth quarter and full year 2023 results. Before I dive into our performance, I'd like to begin by highlighting today's exciting announcement of our corporate name change to Reliance, Inc. To coincide with this announcement, please note that our website has also been updated to reflect our new domain name, Reliance.com. Over the years, retaining the words steel and aluminum in our corporate name has limited the perception of our company because Reliance has evolved to be so much more than metal. We are a family of companies committed to providing diversified metal solutions and increasing levels of value to our customers, opportunities to our employees, and returns to our stockholders. Reliance has made investments in our business far in excess of our peers while consistently generating industry-leading results. We have become stronger and more diversified, collaborative, and focused as we further differentiate Reliance as a best-in-class company. We believe these developments, as well as our long-standing reputation for credibility with all of our stakeholders, have made Reliance a name that stands alone. We are proud of our 85-year history and 30 years as a public company and will remain anchored to our core business model and values as we move forward into the future. Turning to our results, Reliance delivered strong operational and financial performance in 2023 in a challenging environment. I'd like to recognize and thank our dedicated team throughout our family of companies for consistently executing our resilient business model and providing increasing levels of value to our customers while maintaining their focus on keeping each other safe. These collective efforts led to annual earnings per share of $22.64, the second highest in our history. We increased our volumes through continued market share gains while maintaining our full-year gross profit margin of 30.7% near the top end of our estimated sustainable range due to our strong pricing discipline and significant capital reinvestment to increase our capacity and value-added processing capabilities. Reliance generated annual cash flow from operations of $1.67 billion and invested a record $468.8 million back into our business through capital expenditures. Our CapEx budget for calendar year 2024 is $425 million, with approximately two-thirds dedicated to growth projects that will further enhance our value-added capabilities, upgrade and improve our operating facilities, and fund expansion into new markets. We expect our total 2024 CapEx cash outlay will be approximately $500 million, which includes some carryover projects from 2023 and prior years due to extended lead times throughout the supply chain. We also continue to execute on our capital return priorities in 2023, returning $717.6 million to our stockholders through dividends and share repurchases. In addition to our organic growth efforts, we announced two acquisitions in the first quarter of 2024. On February 1st, we welcomed Cooksey Iron and Metal to the Reliance family of companies. Cooksey is a well-known metal service center based in Tifton, Georgia, with a strong reputation for premium customer service and rapid delivery standards which is in direct alignment with the Reliance model. Cooksey's three locations generated approximately $90 million of net sales in 2023, and their addition to the Reliance family of companies strengthens and expands our position in the fast-growing southeastern market. And on February 14, 2024, we announced that we had entered into a definitive agreement to acquire American Alloy Steel, a leading distributor of specialty carbon and alloy steel plate and round bar, including pressure vessel quality material. American Alloy adds specialty carbon steel plate to our product portfolio, as well as new fabrication capabilities. American Alloy's six locations generated approximately $310 million of net sales in 2023. The transaction is expected to close within the next 60 days, subject to regulatory approval and customary closing conditions. We continue to see a broad array of M&A opportunities in the pipeline, and we'll pursue those that meet our discipline criteria for well-managed companies that enhance our diversification by product and market and geography and are immediately accretive to our earnings. In summary, we are very pleased with our 2023 results that were achieved in a challenging operating environment. Our longstanding and continuously improving business model enables resilient execution throughout economic cycles, including both pricing and end market demand fluctuations present in the metals industry. In addition, the increasing level of collaboration we continue to see across our family of companies creates excitement for our future as we work together to capitalize on the many opportunities in front of us. 2024 is another milestone year for Reliance. We will celebrate our 85th anniversary and our 30th anniversary as a public company. While we are changing our company name and logo, Reliance captures the essence of who we always have been and always will be to our suppliers, customers, investors, and employees. We are more than metal. We are a family of companies. We are industrial strength. Thank you all for your time today. I'll now turn the call over to Steve, who will review our 2023 demand and pricing trends.