Reliance Steel & Aluminum Co

Greetings and welcome to the Reliance Inc. Second Quarter 2024 Earnings Conference Call. At this time, all participants are in the 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 Orlando, thank you, and you may begin.

Thank you, Operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's second quarter 2024 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 Investors section of our website at investors.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 the earnings release. I will now turn the call over to Carla Lewis, President and CEO of Reliance.

Thanks, Kim. Good morning, everyone, and thank you all for joining us today to discuss our second quarter 2024 results. Our second quarter performance once again highlighted the attractiveness of our business model through various market cycles, delivering solid results in a challenging pricing environment. Reliance's growth and diversification strategies, coupled with our focus on customer service and relationships, increased our shipments ahead of industry levels. Our new acquisitions and focus on smart, profitable growth increased our tons shipped. However, carbon steel pricing during the second quarter declined further than anticipated, offsetting the benefits of our increased tonnage. Declining metal pricing was the primary driver of our gross profit margin decrease and sequential reduction in earnings per diluted share, $4.67. Despite these challenges, our teams across the company maintain a strong gross profit margin of 29.8% within our long-term sustainable range of 29 to 31%, driven in part by the significant investments we have made in value-added processing capabilities in recent years. Our cash flow from operations is helped fund two acquisitions in the second quarter and three year-to-date, which collectively added nearly $500 million in annualized net sales based on 2023 results. I will comment more on our acquisitions in a moment. We also invested $98.2 million in capital expenditures during the second quarter, the majority of which were directed toward growth by improving our value-added processing capabilities and increasing our capacity to support future growth. Our CapEx budget for the calendar year 2024 remains $440 million with an expected total cash outlay of approximately $425 to $450 million. In regard to stockholder returns, we repurchased $519.3 million of common stock during the second quarter and $165.4 million in July, underscoring the confidence our board and management team have in our future, and we paid $62.6 million in dividends to our valued stockholders. In addition to acquiring Cooksey Steel on February 1, followed by American Alloy and Midwest Materials on April 1, on July 15, we announced the acquisition of certain toll processing assets of the Faro South division of Faragon Corporation. Subject to customary closing conditions, this will mark our 76th acquisition since our 1994 IPO. We look forward to welcoming Faro South as a division of our wholly owned subsidiary, Faralloy Corporation. Faro South's tolling operations will expand Faralloy's toll processing capabilities and provide additional capacity to Fairloy's existing footprint in the southeastern United States. The completed acquisitions expand our product offerings to our customers and enhance our geographic reach and unique processing capabilities. The M&A pipeline remains robust, and we continue to seek additions to our family of companies that fit our criteria of being immediately accretive to earnings, and well-positioned for growth with solid management teams in place. In summary, I'd like to thank our team at Reliance for their dedication to working safely, servicing our customers, and growing and managing our business as well through uncertain markets. It is because of our entire Reliance family that we're able to consistently post solid results throughout economic cycles. While we continue to execute through near-term headwinds in demand and pricing affecting certain of our markets, we remain excited about the opportunities that lie ahead and confident in our talented team's ability to successfully continue executing our robust and resilient business model. Thank you all for your time today. I'll now turn the call over to Steve, who will review our second quarter demand and pricing trends.