Reliance Steel & Aluminum Co

Ladies and gentlemen, good morning and welcome to the ReliantSync 3rd Quarter 2024 Awnings Conference 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 and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kim Orlando, Addo 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 third 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 our earnings release. 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 third quarter 2024 results. Our businesses continue to execute well through challenging market conditions in the third quarter, once again outperforming industry shipments while maintaining gross profit margin within our sustainable range, which we refer to as smart, profitable growth. Although metals pricing declined more than anticipated, the inherent resilience of our business model, servicing diverse end markets with expansive value-added processing capabilities and quick-turn orders, as well as increased volume from our targeted growth efforts, helped mitigate the impact of lower pricing on our gross profit margin and on our earnings level, resulting in non-GAAP earnings per diluted share of $3.64 in line with our guidance. In the third quarter, we generated $463.9 million in cash flow from operations, underpinned by strong profitability and effective working capital management through cyclical markets. Our consistently strong cash flow continues to fuel execution in all elements of our capital allocation strategy. We invested $112.8 million in capital expenditures, the majority of which was directed toward growth activities. Our CapEx budget for the calendar year 2024 remains $440 million, with an expected total cash outlay of approximately $425 to $450 million. Since our 1994 IPO, we have completed 76 acquisitions that support our growth strategy, expanding our product diversification and value-added processing capabilities. We have completed four acquisitions to date in 2024, including our August acquisition of certain toll processing assets of the Faro South Division of Faragon Corporation, and the M&A pipeline remains active. We will continue to seek acquisition candidates that align with our standards for well-managed service centers and metals processors that possess strong brand equity and solid reputations in the marketplace and are immediately accretive to our earnings. During the quarter, we repurchased $432 million of our common stock reducing our total shares outstanding by nearly 3% as we opportunistically repurchased shares amid the broader pullback in equity prices across the metal space. In addition, we paid $60.6 million in dividends, highlighting our ongoing commitment to our valued stockholders. Next, I'd like to acknowledge some previously announced updates regarding our Board of Directors. We appointed Jim Kamsikas as an independent director, effective October 1st, increasing our board to nine members. We look forward to Jim's contributions from his experience and expertise in industrial manufacturing and safety. Consistent with corporate governance best practices and our strategic and deliberate long-term succession plan, Mark Kaminsky will step down as our non-executive chair on January 1st, 2025. Mark will continue to serve as an independent board member, and we thank him for his many contributions as chair since 2016. Doug Stotler, a director since 2016, will succeed Mark as our independent non-executive chair effective January 1, 2025. Before my closing remarks, I'd like to acknowledge all who have been impacted by the severe weather events these past few weeks. While Hurricane Helene and Hurricane Milton had minimal impacts on our consolidated results, many of our employees were personally impacted and we're very grateful to report that all Reliance personnel and their families are safe. In closing, I'd like to recognize our dedicated team at Reliance for their strong execution through challenging and increasingly competitive market dynamics and their continued commitment to working safely. Just last month, we celebrated 85 years in business and our 30th anniversary as a publicly traded company, which would not have been possible without the daily focus and contributions from each member of our Reliance family. While heightened near-term uncertainty in the fourth quarter is contributing to headwinds in demand and pricing, our resilient business model and positive long-range view support our confidence in in our ability to continue executing our strategic growth and stockholder return priorities. 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.